PROSPECTUS
Dated December 7, 2021
Please read Section 32 of the Companies Act 2013
100% Book Built Offer

ANANDRATHI

Private Wealth. uncomplicated

ANAND RATHI WEALTH LIMITED

(FORMERLY “ANAND RATHI WEALTH SERVICES LIMITED!

“AMFI-Registered Mutual Fund Distributor”

‘Our Company was originally incomporated as a private limited company under the Companies Act, 19S6 in the name of ‘Hitkar Finvest Private Limited” on March 22, 1995. It was thereafter renamed as ‘AR Venture Funds Management
Private Limited", and a ftesh certificate of incorporation consequent upon a change of name was issued by the RoC on April 6, 2005, which was later converted from a private limited company to a public limited company under the
Companies Act, 1956, withthe name ‘AR Venture Funds Management Limited’, and a fresh certificate of incorporation consequent upon a change of name was issued by the RoC: on March 8, 2007. Subsequently, “AR. Venture Funds
Management Limited” was converted toa private limited company with the name “AR Venture Funds Management Private Limited’, and a fresh certificate of incorporation consequent upon a change of name was issued by the RoC on July 7,
2015. Thereafler, “AR Venture Funds Management Private Limited” was again converted toa public limited company with name “AR. Venture Funds Management Limited’, and a fresh certificate of incorporation consequent upon a change of
name was issued by the RoC on April 3, 2017. Subsequently “AR Venture Funds Management Limited’ was renamed as ‘Anand Rathi Wealth Services Limited” and received a fresh certificate of incorporation fom the RoC: on July 6, 2017
Thereafter, Anand Rathi Wealth Services Limited was renamed as ‘Anand Rathi Wealth Limited’ and received a fresh certificate of incorporation from the RoC on January 7, 2021. For further details, in relation to change in name and
Registered Office of our Company, see “History and Certain Corporate Matters” on page 182 ofthis Prospectus.
Registered Office: Express Zone, A Wing, 10° Floor, Westem Express Highway, Goregaon (E), Mumbai 400 063, Maharashra, India. Corporate Office: 11 Floor, Times Tower, Kamala City, Senapati Bapat Marg, Lower Parel, Mumbai
400-013, Maharashira, India Contact Person: Mr. Ashish Chauhan, Company Secretary and Compliance Officer Telephone: +91 (22) 6281 7000; Email: csarwsl@rathi.com; Website: www.rathi.comv/wealth
Corporate Identity Number: U67120MH1995PL.C086696

PROMOTERS OF OUR COMPANY: MR. ANAND RATHI, MR. PRADEEP GUPTA AND ANAND RATHI FINANCIAL SERVICES LIMITED
INITIAL PUBLIC OFFERING OF UP TO 12,000,000 EQUITY SHARES OF FACE VALUE % 5 EACH (“EQUITY SHARES”) OF ANAND RATHI WEALTH LIMITED (OUR “COMPANY” OR THE “ISSUER”) FOR
CASH AT A PRICE OF 2 550* PER EQUITY SHARE INCLUDING A SHARE PREMIUM OF @ 545% PER EQUITY SHARE (THE “OFFER PRICE"), AGGREGATING UP TO 2 6,593.75*” MILLION, COMPRISING AN
OFFER FOR SALE OF: (A) UP TO 9,285,000 EQUITY SHARES AGGREGATING UP TO 2 5,101.91 MILLION BY ANAND RATHI FINANCIAL SERVICES LIMITED, UP TO 375,000 EQUITY SHARES
AGGREGATING UP TO & 206.05** MILLION BY MR. ANAND RATHI AND UP TO 375,000 EQUITY SHARES AGGREGATING UP TO & 206,05" MILLION BY MR. PRADEEP GUPTA (TOGETHER, THE
“PROMOTER SELLING SHAREHOLDERS”) AND (B) UP TO 375,000 EQUITY SHARES AGGREGATING UP TO & 206.05* MILLION BY MR. AMIT RATHI, UP TO 375,000 EQUITY SHARES AGGREGATING UP
‘TO & 206.05* MILLION BY MS. PRITI GUPTA, UP TO 375,000 EQUITY SHARES AGGREGATING UP TO & 206.05* MILLION BY MS, SUPRIYA RATHI, UP TO 375,000 EQUITY SHARES AGGREGATING UP TO
% 206,05*” MILLION BY RAWAL FAMILY TRUST, ACTING THROUGH MR. RAKESH RAWAL, UP TO 90,000 EQUITY SHARES AGGREGATING UP TO 2 49.45*” MILLION BY MR. JUGAL MANTRI AND UP TO
375,000 EQUITY SHARES AGGREGATING UP TO @ 206.05* MILLION BY MR. FEROZE AZEEZ (TOGETHER, THE “OTHER SELLING SHAREHOLDERS") (AS DEFINED HEREINAFTER, AND TOGETHER
WITH THE PROMOTER SELLING SHAREHOLDERS, THE “SELLING SHAREHOLDERS”) (THE “OFFER"). THE OFFER CONSTITUTED 2883 % OF THE FULLY DILUTED POST OFFER PAID-UP EQUITY
SHARE CAPITAL OF OUR COMPANY. THE OFFER INCLUDED A RESERVATION OF UP TO 250,000 EQUITY SHARES AGGREGATING UP TO & 131.25*/ MILLION (CONSTITUTING UP TO 0.60 % OF THE POST-
OFFER PAID-UP EQUITY SHARE CAPITAL) FOR SUBSCRIPTION BY ELIGIBLE EMPLOYEES (THE “EMPLOYEE RESERVATION PORTION"). THE OFFER LESS THE EMPLOYEE RESERVATION PORTION IS
HEREINAFTER REFERRED TO AS THE. “NET OFFER” . THE OFFER AND THE NET OFFER WOULD CONSTITUTE 28.8 %" AND 28.23 9%, RESPECTIVELY, OF OUR COMPANY POST-OFFER PAID-UP EQUITY
SHARE CAPITAL.

   

 

 

   

‘THE OFFER PRICE IS 2 550PER EQUITY SHARE AND IS 110 TIMES THE FACE VALUE OF THE EQUITY SHARES AND THE ANCHOR INVESTOR PRICE IS 2 550 PER EQUITY SHARE.
*A discount of & 25 per Equity Share was offered to Eligible Employees bidding in the Employee Reservation Portion.
Subject to finalisation of Basis of Allotment

 

 

This Offer was made in terms of Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957, as amended (“SCRR"), read with Regulation 31 of SEBI ICDR Regulations. The Offer was made through the Book Building Process in
terms of Regulation 6(1) of the SEBI ICDR Regulations, wherein not more than 50% of the Net Offer was available for allocation on a proportionate basis to Qualified Institutional Buyers ("QUBs”), provided that our Company, in
consultation with the BRLMSs, allocated up to 60% of the QUB Portion to Anchor Investors on a discretionary basis, out of which one-third was reserved for domestic Mutual Funds only, subject to valid Bids having been received from
domestic Mutual Funds at or above the Anchor Investor Offer Price, in accordance with the SEBI ICDR Regulations. 5% of the Net QIB Portion was available for allocation on a proportionate basis to Mutual Funds only, and the remainder of
the QIB Portion was available for allocation on a proportionate basis to all QUB Bidders (other than Anchor Investors), including Mutual Funds, subject to valid Bids having been received at or above the Offer Price. However, if the aggregate
‘demand from Mutual Funds was less than 5% of the QIB Portion, the balance Equity Shares available for allocation in the Mutual Fund Portion was added to the remaining QUB Portion for proportionate allocation to QIBs. Further, not less
than 15% of the Net Offer was available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Net Offer was available for allocation to Retail Individual Investors in accordance with the SEBI ICDR
Regulations, subject to valid Bids having been received from them at or above the Offer Price Further, Equity Shares was allocated on a proportionate basis to Eligible Employees applying under the Employee Reservation Portion, subject to
valid Bids having been received from them at or above the Offer Price. All Bidders (except Anchor Investors) were mandatorily required to utilise the Application Supported by Blocked Amount (“ASBA") process providing details of their
respective bank accounts and UPI ID in case of RIBS, as applicable, pursuant to which their corresponding Bid Amount was blocked by the Self Certified Syndicate Banks ("SCSBs") or under the UPI Mechanism, as the case may be. Anchor
Investors were not permitted to participate in the Anchor Investor Portion through the ASBA Process. For further details, see “Offer Procedure” on page 378 of this Prospectus.

RISKS IN RELATION TO FIRST OFFER
This being the first public issue of Equity Shares of our Company, there has been no formal market for the Equity Shares of our Company. The face value of the Equity Shares is @ 5 each. The Offer Price as determined and justified by our
‘Company, the Selling Shareholders in consultation with the BRLMs, in accordance with the SEBI ICDR Regulations, as stated under “Basis for Offer Price” on page 107 should not be taken to be indicative of the market price of the Equi
Shares after the Equity Shares are listed. No assurance can be given regarding an active or sustained wading in the Equity Shares of our Company, or regarding the price at which the Equity Shares will be raded after listing

GENERAL RISK

Investment in equity and equity-related securities involve a degree of risk and Bidders should not invest any funds in the Offer unless they can afford to take the risk of losing their investment. Bidders are advised to read the Risk Factors
carefully before taking an investment decision in the Offer. For taking an investment decision, Bidders must rely on their own examination of our Company and the Offer, including the risks involved. ‘The Equity Shares offered in the Offer
have not been recommended or approved by the Securities and Exchange Board of India (“SEBI”), nor does SEBI guarantee the accuracy or adequacy of the contents of this Prospectus. Specific attention of the Bidders is invited to “Risk
Factors” beginning on page 26.

 

 

 

 

COMPANY'S AND THE SELLING SHAREHOLDERS’ ABSOLUTE RESPONSIBILITY
‘Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Prospectus contains all information with regard to our Company and the Offer, which is material in the context of the Offer, that the
information contained in this Prospectus is rue 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 Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. Further, Each of the Selling Shareholders, severally and not jointly, accept
responsibility for and confirm that the statements specifically made or confirmed by such Selling Shareholders in this Prospectus to the extent of information specifically pertaining to itself and its portion of the Equity Shares offered in the
Offer for Sale and assume responsibility that such statements are true and correct in all material respects and not misleading in any material respect. Each of the Selling Shareholders, severally and not jointly, assume no responsibility for any
other statement, including, inter alia, any of the statements made by or relating to our Company or any other Selling Shareholders.
LISTING

The Equity Shares, when offered through the Red Herring Prospectus and this Prospectus; are proposed to be listed on the Stock Exchanges. Our Company has received ‘in-principle’ approvals from the BSE and the NSE for the listing of the
Equity Shares pursuant to leters dated August 10, 2021 and September 6, 2021, respectively. For the purposes of the Offer, the Designated Stock Exchange shall be BSE. A signed copy of the Draft Red Herring Prospectus has been filed and
signed copy of the Red Herring Prospectus has been and this Prospectus shal be filed with the RoC in accordance with the Companies Act, 2013. For details of the material contracts and documents which were made available for inspection
from the date of the Red Herring Prospectus until the Bid/Offer Closing Date, see “Material Contracts and Documents for Inspection beginning on page 418.

 

 

REGISTRAR TO THE OFFER

 

 

®Equirus

onward upward

BNP PARIBAS

OIIFL secures

LINK intine

 

Equirus Capital Private Limited
12" Floor, C Wing, Marathon Futurex,
NAM. Joshi Marg, Lower Parel, Mumbai
4400 013, Maharashtra India

‘Telephone: +91 (22) 4332 0700
Email: arwlipo@equirus.com
Investor Grievance
investorsgrievance@equirus.com
Website: www.equirus.com
‘Contact Person: Ms. Mrinmayee Dethe
SEBI Registration No.: INMO00011286

Email:

 

BNP Paribas
BNP Paribas House, I-North Avenue,
Maker Maxity, Bandra Kurla Complex
Bandra (E), Mumbai 400 051

Telephone: +91 (22) 3370 4000

E-mail: d.ipo.arwl@asia.bnpparibas.com
Investor Grievance E-mail:
indiainvestors.care@asia.bnpparibas.com
‘Contact Person: Mr. Mehul Golwala
‘Website: www.bnpparibas.co.in

‘SEBI Registration No.: INM000011534

 

TIFL Securities Limited
10* Floor, IFL Centre, Kamala City, Senapati
Bapat Marg, Lower Parel (West)

‘Mumbai 400 013, Maharashtra, India
Telephone: +91 (22) 4646 4600

E-mail: arwL.ipo@iifleap.com

Website: www.liflap.com

Investor grievance Email: ig ib@iifleap.com
Contact Person: Mr. Pinak Bhattacharyya /
‘Me, Harshvardhan Jain

SEBI Registration No.: INMO00010940

 

“Anand Rathi Advisors Limited™
10* Floor, Trade Tower D, Kamala City,
Senapati Bapat Marg, Lower Parel

Mumbai - 400013, Maharashtra, India
Telephone: +91 22 6626 6666

Fax number: +91 22 6626 6544
E-mail: alpha.ipo@rathi.com

Investor Grievance
grievance.ecm@rathi.com

Contact Person: Ms. Astha Daga / Mr. V
Prashant Rao

Website: www.rathi.com

SEBI Registration Number: INM000010478

Email

 

Link Intime India Private Limited
C-101, Ist Floor, 247 Park, Lal Bahadur
Shastri Marg, Vikhroli (West), Mumbai 400
083,

Maharashtra , India

Telephone: +91 22 4918 6000

E-mail: anandrathi.ipo@linkintime.co.in
Website: www.linkintime.co.in

Investor grievance
anandrathi.ipo@linkintime.co.in
Contact person: Ms, Shanti Gopalkrishnan
SEBI Registration No,: INROO0004058

 

‘OFFER PROGRAMME

 

 

FOR ALL BIDDERS, BID/ OFFER* OPENED ON:

[ Thursday, December 2, 2021

[BID/OFFER CLOSED ON

[ Monday, December 6, 2021

 

7 The cho esr Big Dr war one Waring Dy lar oe Bil Ofer Oprag Die Le Wed

 

hcampln ih be rove Ruan 14 oft scan Exchange Bardo nd Seca ener) Reus, 182, «amended od wih proviso eplaicn 2) of he EBL ICDR Ruts, Aan Rathi Advis ined winced only mating of he Of

 
This page is intentionally left blank
TABLE OF CONTENTS

SECTION I: GENERAL......

 

DEFINITIONS AND ABBREVIATIONS ........:cssecssesssesssesssessnessneessecsnecssecssecesecsnecsneesseessecsneesseesseesnecsneenneeanees 1
CERTAIN CONVENTIONS, PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA 15
FORWARD-LOOKING STATEMENTS .....
SUMMARY OF THE OFFER DOCUMENT...

SECTION II: RISK FACTORS...

 

 

 

 

SECTION III: INTRODUCTION....

 

SUMMARY OF FINANCIAL INFORMATION.
THE OFFER
GENERAL INFORMATION
CAPITAL STRUCTURE...
OBJECTS OF THE OFFER
BASIS FOR OFFER PRICE.
STATEMENT OF TAX BENEFITS

SECTION IV: ABOUT OUR COMPANY......

 
 
  
  
 
 
 
 
 
 
 
  
 
 
 
 

INDUSTRY OVERVIEW
OUR BUSINESS.......
KEY REGULATIONS AND POLICIES IN INDIA
HISTORY AND CERTAIN CORPORATE MATTERS
OUR SUBSIDIARIES .
OUR MANAGEMENT
OUR PROMOTERS AND PROMOTER GROUP
OUR GROUP COMPANIES
DIVIDEND POLICY...

SECTION V: FINANCIAL INFORMATION

FINANCIAL INFORMATION...
OTHER FINANCIAL INFORMATION.
CAPITALISATION STATEMENT....

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS. ....csccssesssesssesssesssesssecssecssscssecssecssscssecssecssscsuscsssssnecsnessnscsneessessnecsussneesneesneesnecanecaneesseeseeesneennees 297
FINANCIAL INDEBTEDNESS ......

SECTION VI: LEGAL AND OTHER INFORMATION...

 

 

 

 

 

OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS...
GOVERNMENT AND OTHER APPROVALS
OTHER REGULATORY AND STATUTORY DISCLOSURES

SECTION VII: OFFER INFORMATION...

 
 
 
 
 
 
 

TERMS OF THE OFFER.......
RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES.
OFFER STRUCTURE.
OFFER PROCEDURE

SECTION VIII: DESCRIPTION OF EQUITY SHARES AND TERMS OF THE ARTICLES
OF ASSOCIATION... a+ 397

 

 

SECTION IX: OTHER INFORMATION...

 

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION
DECLARATION ......

 
SECTION I: GENERAL

DEFINITIONS AND ABBREVIATIONS

Unless the context otherwise implies or requires, the terms and abbreviations stated hereunder shall have the
meaning as assigned below. References to statutes, rules, regulations, guidelines and policies will, unless the
context otherwise requires, be deemed to include all amendments, modifications and replacements notified
thereto, as of the date of this Prospectus.

Company and Selling Shareholders related terms

 

 

Company”, “ARWL”
or “Issuer”

Term Description
“Company”, “our | Anand Rathi Wealth Limited (formerly known as “Anand Rathi Wealth Services
Company”, “the | Limited”), a public limited company incorporated under the Companies Act, 1956,

AMEFI registered Mutual Fund Distributor, and having its registered office at Express
Zone, A Wing, 10th Floor, Western Express Highway, Goregaon (E), Mumbai 400
063, Maharashtra, India

 

‘we”, “us”, or “our”
or “Anand — Rathi
Wealth Group” or
“ARWG”

Unless the context otherwise requires, implies, indicates or refers to Anand Rathi
Wealth Limited and its Subsidiaries, on a consolidated basis

 

“Anand Rathi Group”

Anand Rathi Financial Services Limited and its subsidiaries

 

“Articles” or “Articles
of Association”

The articles of association of our Company, as amended

 

 

 

 

 

 

 

 

 

 

“ARAL” Anand Rathi Advisors Limited*
“In compliance with the proviso to Regulation 21A(1) of the Securities and Exchange Board of India
(Merchant Bankers) Regulations, 1992, as amended, read with proviso to Regulation 23(3) of the SEBI
ICDR Regulations, Anand Rathi Advisors Limited was involved only in marketing of the Offer.

“ARCL” Anand Rathi Commodities Limited

“ARFSL” Anand Rathi Financial Services Limited

“ARGFL” Anand Rathi Global Finance Limited

“ARHFL” Anandrathi Housing Finance Limited

“ARIBL” Anand Rathi Insurance Brokers Limited

“ARIVPL” Anand Rathi International Ventures (IFSC) Private Limited

“ARITPL” Anand Rathi IT Private Limited

“ARSSBL” Anand Rathi Share and Stock Brokers Limited

“ARDWPL” AR Digital Wealth Private Limited (Formerly “AR Wealth Management Private

Limited”)

 

“AuM” or “Assets
under Management ”

Our AuM is a sum of (i) all third-party assets that generate commissions or incomes,
which could be upfront and/or on a trail basis and (ii) custody assets of our Clients
(we do not include clients that merely have a custody account i.e. a demat account
with us, but have no wealth assets such as mutual funds). Our AuM does not include
the value of the promoter holdings in companies in our AuM even though they may
be in the Anand Rathi Group’s custody.

 

“Audit Committee”

The audit committee of our Board constituted in accordance with the Companies
Act, 2013 and the Listing Regulations, and as described in “Our Management” on
page 199.

 

“Board” or “Board of
Directors”

The board of directors of our Company, as constituted from time to time, including a
duly constituted committee thereof

 

“Chief Executive
Officer” or “CEO”

The chief executive officer of our Company, being Mr. Rakesh Rawal, see “Our
Management” on page 195.

 

“Chief Financial
Officer” OR “CFO”

The chief financial officer of our Company, being Mr. Rajesh Kumar Bhutara, see
“Our Management” on page 209.

 

“Company Secretary
and Compliance
Officer”

Company Secretary and Compliance Officer of our Company, being Mr. Ashish
Chauhan. For details, see “Our Management” on page 209.

 

“Corporate Office”

The corporate office of our Company situated at 11" Floor, Times Tower, Kamala
City, Senapati Bapat Marg, Lower Parel, Mumbai 400 013, Maharashtra, India

 

 

“Corporate Social

 

The corporate social responsibility committee of our Board constituted in accordance

 

 
 

 

 

Term Description
Responsibility with the Companies Act, 2013 and as described in “Our Management” on page 202.
Committee”
“Director(s)” Director(s) on the Board of our Company, as appointed from time to time

 

“Equity Shares”

Unless the context otherwise requires, equity shares of our Company of face value of
= 5 each

 

“Executive Director”

An executive Director of our Company

 

 

 

 

“ESOP 2017” Employee Stock Option Scheme 2017

“ESOP 2018” Employee Stock Option Scheme 2018

“FIINFRA” Ffreedom Intermediary Infrastructure Private Limited
“FWSPL” Freedom Wealth Solutions Private Limited

 

“Group Companies”

In terms of the SEBI ICDR Regulations, the term “group companies”, includes (i)
such companies (other than promoters and subsidiaries) with which there were
related party transactions during the period for which financial information is
disclosed in relation to the offer document, as covered under applicable accounting
standards, and (ii) any other companies considered material by the board of directors
of the relevant issuer company.

Accordingly, pursuant to a resolution of our Board dated July 16, 2021, our Board
has determined that other than the entities with which there were related party
transactions during the period for which financial information is disclosed in relation
to the offer document determined in accordance with applicable accounting
standards, there are no other entities which are material to our Company and ought to
be classified as group companies of our Company

 

“Independent
Director”

A non-executive, independent Director appointed as per the Companies Act, 2013
and the Listing Regulations and as described in “Our Management” on page 191.

 

“TPO Committee”

The committee of our Board constituted pursuant to a Board resolution dated
November 15, 2019 as described in “Our Management” on page 204.

 

“KMP” or = “Key
Management
Personnel”

Key management personnel of our Company in terms of Regulation 2(1)(bb) of the
SEBI ICDR Regulations, which includes key managerial personnel in terms of the
Companies Act, 2013, as disclosed in “Our Management” on page 209 of this
Prospectus.

 

“Materiality Policies”

The policies adopted by our Board on November 15, 2019, for identification of
material: (a) litigation involving the Company, Subsidiaries and Directors; (b) Group
Companies; and (c) material creditors, pursuant to SEBI ICDR Regulations and for
the purposes of disclosure in the Draft Red Herring Prospectus, Red Herring
Prospectus and this Prospectus.

Additionally, pursuant to a resolution of our Board dated July 16, 2021, our Board
has determined that other than the entities with which there were related party
transactions during the period for which financial information is disclosed in relation
to the offer document determined in accordance with applicable accounting
standards, there are no other entities which are material to our Company and ought to
be classified as group companies of our Company.

 

“Material Subsidiary”

AR Digital Wealth Private Limited

 

 

“Memorandum” or | The memorandum of association of our Company, as amended

“Memorandum of

Association” or

“MoA”

“Nomination and | The nomination and remuneration committee of our Board constituted in accordance

Remuneration
Committee”

with the Companies Act, 2013 and the Listing Regulations

 

“Non-Executive

A Director, not being an Executive Director

 

Director”
“Other Selling | Mr. Amit Rathi, Ms. Priti Gupta, Ms. Supriya Rathi, Rawal Family Trust, acting
Shareholders” through Mr. Rakesh Rawal, Mr. Jugal Mantri and Mr. Feroze Azeez

 

 

“Promoter Group”

 

Such persons and entities which constitute the promoter group of our Company
pursuant to Regulation 2(1)(pp) of the SEBI ICDR Regulations. For details, please
see “Our Promoters and Promoter Group” on page 211 of this Prospectus

 

 
 

 

 

Term Description
“Promoter Selling | Mr. Anand Rathi, Mr. Pradeep Gupta and Anand Rathi Financial Services Limited
Shareholders”
“Promoters” The promoters of our Company, namely, Mr. Anand Rathi, Mr. Pradeep Gupta and

Anand Rathi Financial Services Limited. For details, please see “Our Promoters and
Promoter Group” on page 211 of this Prospectus

 

“Registered Office”

The registered office of our Company situated at Express Zone, A Wing, 10" Floor,
Western Express Highway, Goregaon (E), Mumbai, Mumbai City 400 063,
Maharashtra, India.

 

“Registrar of
Companies” or “RoC”

Registrar of Companies, Maharashtra at Mumbai

 

“Restated
Consolidated
Financial
Information” or
“Restated
Consolidated
Financial Statements”

Restated Ind AS Consolidated Financial Information of the Company and its
subsidiaries, comprising the Restated Ind AS Consolidated Statement of Assets and
Liabilities as at August 31, 2021, March 31, 2021 , March 31, 2020 and March 31,
2019, the Restated Ind AS Consolidated Statement of Profit and Loss (including
other comprehensive income), the Restated Ind AS Consolidated Statement of
Changes in Equity and the Restated Ind AS Consolidated Cash Flow Statement for
the five month period ended August 31, 2021 and for the years ended March 31,
2021, March 31, 2020 and March 31, 2019, the Summary Statement of Significant
Accounting Policies, and other explanatory information and the examination report.

 

 

 

“Risk | Management | Risk management committee of our Company, as described in “Our Management”
Committee” on page 203.

“RM” or | The relationship managers of our Company

“Relationship

Managers”

“Selling Collectively, the Promoter Selling Shareholders and the Other Selling Shareholders
Shareholders”

 

“Shareholder(s)”

The equity shareholders of our Company whose names are entered into (i) the
register of members of our Company; or (ii) the records of a depository as a
beneficial owner of Equity Shares

 

“Stakeholders”
Relationship
Committee”

The stakeholders’ relationship committee of our Board, as described in ‘Our
Management’ on page 202 of this Prospectus

 

“Statutory Auditor”

The statutory auditor of our Company, being Khimji Kunverji & Co. LLP, Chartered
Accountants

 

“Subsidiary”
“Subsidiaries”

 

 

Subsidiaries of our Company, namely AR Digital Wealth Private Limited, Freedom
Wealth Solutions Private Limited and Ffreedom Intermediary Infrastructure Private
Limited, as of the date of this Prospectus, in accordance with the Companies Act,
2013, and as set out in “Our Subsidiaries” on page 188 of this Prospectus

 

Offer related terms

 

Term

Description

 

“Acknowledgement
Slip”

The slip or document issued by Designated Intermediaries to a Bidder as proof of
registration of the Bid cum Application Form

 

“Allotment”, “Allot”
or “Allotted”

Transfer of the Equity Shares offered by the Selling Shareholders to successful
Bidders pursuant to the Offer for Sale

 

“Allotment Advice”

A note or advice or intimation of Allotment, sent to each Bidder who have bid in the
Offer after approval of the Basis of Allotment by the Designated Stock Exchange

 

“Allottee”

A successful Bidder to whom the Equity Shares are Allotted

 

“Anchor Investor”

A Qualified Institutional Buyer, who applied under the Anchor Investor Portion in
accordance with the SEBI ICDR Regulations. For further details, see “Offer
Procedure” on page 378.

 

“Anchor Investor
Allocation Price”

The price of = 550 at which the Equity Shares were allocated to the Anchor Investors
in terms of the Red Herring Prospectus and this Prospectus, which was decided by our
Company in consultation with the BRLMs

 

“Anchor Investor
Bidding Date”

 

 

The day, one Working Day prior to the Bid/Offer Opening Date, on which Bids by
Anchor Investors were submitted, prior to and after which the BRLMs did not accept
any Bids in the Anchor Investor Portion, and allocation to Anchor Investors were

 

 

 
 

 

 

 

Term Description
completed
“Anchor Investor | Form used by an Anchor Investor to Bid in the Anchor Investor Portion and which
Form” was considered as an application for Allotment in terms of the Red Herring Prospectus
and this Prospectus
“Anchor Investor | Final price at which the Equity Shares were issued and Allotted to Anchor Investors in
Offer Price” terms of the Red Herring Prospectus and this Prospectus, which price was equal to or

higher than the Offer Price but not higher than the Cap Price. The Anchor Investor
Offer Price was decided by our Company, in consultation with the BRLMs

 

“Anchor Investor Pay
- in Date”

With respect to Anchor Investor(s), the Anchor Investor Bidding Date, and, in the
event the Anchor Investor Allocation Price is lower than the Offer Price a date being,
not later than two Working Days after the Bid/Offer Closing Date

 

60% of the QIB Portion, which was allocated by our Company, in consultation with
the BRLMs, to Anchor Investors on a discretionary basis in accordance with the SEBI
ICDR Regulations, out of which one third was reserved for domestic Mutual Funds,
subject to valid Bids having been received from domestic Mutual Funds at or above
the Anchor Investor Allocation Price

 

“Anchor Investor
Portion”
“Applications
Supported by

Blocked Amount” or
“ASBA”

An application, whether physical or electronic, used by ASBA Bidders to make a Bid
authorising an SCSB to block the Bid Amount in the specified bank account
maintained with such SCSB or to block the Bid Amount using the UPI Mechanism

 

“ASBA Account”

A bank account maintained with an SCSB which may be blocked by such SCSB or
the account of the RIBs blocked upon acceptance of UPI Mandate Request by the
RIBs using the UPI Mechanism, to the extent of the Bid Amount of the ASBA Bidder

 

 

 

“ASBA Bid” A Bid made by an ASBA Bidder
“ASBA Bidder” All Bidders except Anchor Investors
“ASBA Form” An application form, whether physical or electronic, used by ASBA Bidders which

was considered as the application for Allotment in terms of the Red Herring
Prospectus and this Prospectus

 

Banker(s) to the
Offer

Collectively, the Escrow Collection Bank(s), Refund Bank(s), Public Offer Account
Bank(s) and the Sponsor Bank.

 

“Basis of Allotment”

The basis on which the Equity Shares will be Allotted under the Offer, as described in
“Offer Procedure” on page 378 of this Prospectus

 

“Bid

An indication to make an offer during the Bid/Offer Period by an ASBA Bidder, or on
the Anchor Investor Bidding Date by an Anchor Investor, pursuant to the submission
of a Bid cum Application Form, to subscribe, the Equity Shares at a price within the
Price Band, including all revisions and modifications thereto as permitted under the
SEBI ICDR Regulations and in terms of the Red Herring Prospectus and the Bid cum
Application Form, and the term “Bidding” shall be construed accordingly

 

“Bidder”

Any investor who made a Bid pursuant to the terms of the Red Herring Prospectus and
the Bid cum Application Form and, unless otherwise stated or implied, includes an
Anchor Investor

 

 

“Bid Amount”

 

The highest value of optional Bids indicated in the Bid cum Application Form (less
Employee Discount as applicable) and, in the case of Retail Individual Bidders
Bidding at the Cut off Price, the Cap Price multiplied by the number of Equity Shares
Bid for by such Retail Individual Bidder and mentioned in the Bid cum Application
Form and payable by the Bidder or blocked in the ASBA Account of the Bidder, as
the case may be, upon submission of the Bid.

Eligible Employees applying in the Employee Reservation Portion applied at the Cut
off Price and the Bid Amount was the Cap Price net of Employee Discount, multiplied
by the number of Equity Shares Bid for by such Eligible Employee and mentioned in
the Bid cum Application Form. The maximum Bid Amount under the Employee
Reservation Portion by an Eligible Employee did not exceed %500,000 (net of
Employee Discount). However, the initial Allotment to an Eligible Employee in the
Employee Reservation Portion did not exceed 200,000 (net of Employee Discount)
in value. Only in the event of an under-subscription in the Employee Reservation
Portion post the initial allotment, such unsubscribed portion was Allotted on a
proportionate basis to Eligible Employees Bidding in the Employee Reservation

 

 
 

Term

Description

 

Portion, for a value in excess of 2200,000 (net of Employee Discount), subject to the
total Allotment to an Eligible Employee not exceeding %500,000 (net of Employee
Discount) in value

 

“Bidding Centres”

Centres at which the Designated Intermediaries accepted the ASBA Forms, ice.,
Designated Branches for SCSBs, Specified Locations for the Syndicate, Broker
Centres for Registered Brokers, Designated RTA Locations for RTAs and Designated
CDP Locations for CDPs

 

“Bid cum
Application Form”

Anchor Investor Form or the ASBA Form, as the context requires

 

“Bid Lot”

27 Equity Shares and in multiples of 27 Equity Shares thereafter.

 

“Bid/Offer Closing
Date”

Except in relation to any Bids received from the Anchor Investors, Monday,
December 6, 2021.

 

“Bid/Offer Opening
Date”

Except in relation to Bids received from the Anchor Investors, Thursday, December 2,
2021.

 

“Bid/Offer Period”

Except in relation to Bids received from the Anchor Investors, the period between
Thursday, December 2, 2021 and Monday, December 6, 2021.

 

 

 

“BNP” BNP Paribas

“Book Building | The book building process as described in Part A, Schedule XIII of the SEBI ICDR
Process” Regulations, in terms of which the Offer is being made

“Book Running Lead | The book running lead managers to the Offer, namely Equirus Capital Private
Managers” or | Limited, Anand Rathi Advisors Limited*, BNP Paribas and IIFL Securities Limited
“BRLMs”

*In compliance with the proviso to Regulation 21A(1) of the Securities and Exchange
Board of India (Merchant Bankers) Regulations, 1992, as amended, read with proviso
to Regulation 23(3) of the SEBI ICDR Regulations, Anand Rathi Advisors Limited was
involved only in marketing of the Offer

 

“Broker Centre”

Broker centres notified by the Stock Exchanges where ASBA Bidders have submitted
the ASBA Forms to a Registered Broker and details of which are available on the
websites of the respective Stock Exchanges as below:
https://www.bseindia.com/Markets/PublicIssues/brokercentres_new.aspx?expandable
=3 and
http://www.nseindia.com/products/content/equities/ipos/ipo_mem_terminal.htm

 

 

 

 

 

 

“CAN” or | The note or advice or intimation of allocation sent to Anchor Investors who have been
“Confirmation of | allocated Equity Shares after the Anchor Investor Bidding Date

Allocation Note”

“Cap Price” % 550 each Equity Share

“CARE Advisory” CARE Advisory Research and Training Limited

 

“CARE Advisory
Research”

A report titled “Research Report on Wealth Management Industry”, October 2021,
prepared by CARE Advisory. The CARE Advisory Research is available on website
of our company at https://rathi.com/Wealth/Investorrelations.php

 

“Escrow and Sponsor
Bank Agreement”

The agreement dated November 15, 2021 entered into amongst our Company, the
Selling Shareholders, the Registrar to the Offer, the BRLMs, the Escrow Collection
Bank, the Public Offer Account Bank, and the Refund Bank including the Sponsor
Bank in accordance with the UPI Circular and for the collection of the Bid Amounts
from Anchor Investors, transfer of funds to the Public Offer Account and where
applicable, refunds of the amounts collected from Bidders, on the terms and
conditions thereof

 

“Circular on
Streamlining of
Public Issues”/ “UPI
Circular”

Circular (SEBI/HO/CFD/DIL2/CIR/P/2018/138) dated November 1, 2018, circular
(SEBI/HO/CFD/DIL2/CIR/P/2019/50) dated April 3, 2019, circular
(SEBI/HO/CFD/DIL2/CIR/P/2019/76) dated June 28, 2019, circular
(SEBI/HO/CFD/DIL2/CIR/P/2019/85) dated July 26, 2019, circular no.
(SEBI/HO/CFD/DCR2/CIR/P/2019/133) dated November 8, 2019, circular no.
(SEBI/HO/CFD/DIL2/CIR/P/2020/50) dated March 30, 2020, circular no.
(SEBI/HO/CFD/DIL2/CIR/P/2021./2480/1/M) dated March 16, 2021, SEBI circular
no. SEBI/HO/CED/DIL1/CIR/P/2021/47 dated March 31, 2021, SEBI circular number
no. (SEBI/HO/CFD/DIL2/P/CIR/2021/570) dated June 2, 2021, and any subsequent
circulars or notifications issued by SEBI in this regard.

 

 

“Client ID”

 

Client identification number maintained with one of the Depositories in relation to the

 

 
 

Term

Description

 

demat account

 

“Collecting
Depository
Participant” or
“CDP”

A depository participant as defined under the Depositories Act, registered with SEBI
and who was eligible to procure Bids at the Designated CDP Locations in terms of
circular no. CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015 issued by
SEBI, as per the list available on the websites of BSE and NSE, as updated from time
to time

 

“Cut-off Price”

The Offer Price, as finalised by our Company, in consultation with the BRLMs. Only
Retail Individual Bidders Bidding in the Retail Portion and Eligible Employees
bidding under the Employee Reservation Portion were entitled to Bid at the Cut-off
Price. QIBs and Non-Institutional Bidders were not entitled to Bid at the Cut-off Price

 

 

“Demographic Details of the Bidders including the Bidder’s address, name of the Bidder’s father/

Details” husband, investor status, occupation and bank account details

“Designated Such branches of the SCSBs which collected ASBA Forms, a list of which is available

Branches” on the website of the SEBI at
(https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognised=yes) and

updated from time to time, and at such other websites as may be prescribed by SEBI
from time to time

 

“Designated CDP
Locations”

Such locations of the CDPs where ASBA Bidders submitted the ASBA Forms, a list
of which, along with names and contact details of the Collecting Depository
Participants eligible to accept ASBA Forms are available on the websites of the
respective Stock Exchanges (www.bseindia.com and www.nseindia.com)

 

“Designated Date”

The date on which funds are transferred from the Escrow Account to the Public Offer
Account or the Refund Account, as appropriate, or the funds blocked by the SCSBs
are transferred from the ASBA Accounts to the Public Offer Account, as the case may
be, after this Prospectus is filed with the RoC

 

“Designated
Intermediaries”

Collectively, the Syndicate, sub-syndicate/agents, SCSBs, Registered Brokers, CDPs
and RTAs, who were authorized to collect ASBA Forms from the ASBA Bidders, in
relation to the Offer.

 

“Designated RTA
Locations”

Such locations of the RTAs where ASBA Bidders submitted the Bid cum Application
Forms to RTAs, a list of which, along with names and contact details of the RTAs
eligible to accept ASBA Forms are available on the respective websites of the Stock
Exchanges (www.bseindia.com and www.nseindia.com)

 

“Designated — Stock
Exchange”

BSE Limited

 

“Draft Red Herring
Prospectus” or
“DRHP”

The draft red herring prospectus dated July 19, 2021, filed with SEBI and issued in
accordance with the SEBI ICDR Regulations, which did not contain complete
particulars of the Offer, including the price at which the Equity Shares will be Allotted
and the size of the Offer

 

“Eligible
Employee(s)”

All or any of the following: (a) a permanent employee of our Company (excluding
such employees who are not eligible to invest in the Offer under applicable laws) as of
the date of filing of the Red Herring Prospectus with the RoC and who continues to be
a permanent employee of our Company, until the submission of the Bid cum
Application Form; and (b) a Director of our Company, whether whole time or not,
who is eligible to apply under the Employee Reservation Portion under applicable law
as on the date of filing of the Red Herring Prospectus with the RoC and who continues
to be a Director of our Company, until the submission of the Bid cum Application
Form, but not including Directors who either themselves or through their relatives or
through any body corporate, directly or indirectly, hold more than 10% of the
outstanding Equity Shares of our Company.

The maximum Bid Amount under the Employee Reservation Portion by an Eligible
Employee could not exceed = 500,000. However, the initial Allotment to an Eligible
Employee in the Employee Reservation Portion shall not exceed % 200,000. Only in
the event of under-subscription in the Employee Reservation Portion, the
unsubscribed portion will be available for allocation and Allotment, proportionately to
all Eligible Employees who have Bid in excess of 2 200,000, subject to the maximum
value of Allotment made to such Eligible Employee not exceeding = 500,000.

 

 

“Eligible FPIs”

 

FPIs from such jurisdictions outside India where it is not unlawful to make an offer/
invitation under the Offer and in relation to whom the Red Herring Prospectus

 

 
 

Term

Description

 

constituted an invitation to purchase the Equity Shares offered thereby

 

“Eligible NRIs”

NRIs from jurisdictions outside India where it is not unlawful to make an offer or
invitation under the Offer and in relation to whom the Red Herring Prospectus
constituted an invitation to purchase the Equity Shares offered thereby

 

“Employee Discount”

% 25 per Equity Share to Eligible Employees

 

“Employee
Reservation Portion”

The portion of the Offer up to 250,000 Equity Shares, aggregating to = 131.25"
million available for allocation to Eligible Employees, on a proportionate basis.

*Our Company in consultation with the Book Running Lead Managers, offered a discount of % 25 per
Equity Share to Eligible Employees bidding in the Employee Reservation Portion.
Subject to finalization of Basis of Allotment

 

“Equirus”

Equirus Capital Private Limited

 

“Escrow Account(s)”

Accounts opened with the Escrow Collection Bank(s) in whose favour Anchor
Investors transferred money through direct credit/ NEFT/ RTGS/NACH in respect of
Bid Amounts when submitting a Bid

 

“Escrow Collection
Bank(s)”

The banks which are clearing members and registered with SEBI under the BTI
Regulations, with whom the Escrow Account(s) was opened, being HDFC Bank
Limited

 

 

“ESOP” Employees Stock Option Plan
“First Bidder” or | The Bidder whose name appeared first in the Bid cum Application Form or the
“Sole Bidder” Revision Form and in case of joint Bids, whose name also appeared as the first holder

of the beneficiary account held in joint names

 

“Floor Price”

The lower end of the Price Band, i.e. = 530,

 

“General Information
Document” or “GID”

The General Information Document for investing in public offers, prepared and issued
in accordance with the SEBI circular no. with the SEBI circular no.
SEBI/HO/CFD/DIL1/CIR/P/2020/37 dated March 17, 2020 and the UPI Circulars, as
amended from time to time. The General Information Document shall be available on
the websites of the Stock Exchanges and the BRLMs

 

“Mutual Fund”

Mutual funds registered with SEBI under the Securities and Exchange Board of India
(Mutual Funds) Regulations, 1996

 

“Mutual Fund
Portion”

Up to 5% of the Net QIB Portion available for allocation to Mutual Funds only, on a
proportionate basis, subject to valid Bids being received at or above the Offer Price

 

“Net Offer”

The Offer less the Employee Reservation Portion.

 

“Net QIB Portion”

QIB Portion, less the number of Equity Shares Allotted to the Anchor Investors

 

“Non-Institutional
Investors” or “NII(s)”

All Bidders, that are not QIBs or Retail Individual Bidders who have Bid for Equity
Shares for an amount of more than 2 200,000 (but not including NRIs other than
Eligible NRIs)

 

“Non-Institutional
Portion”

The portion of the Offer being not more than 15% of the Offer available for allocation
to Non-Institutional Investors on a proportionate basis, subject to valid Bids received
at or above the Offer Price

 

“Non-Resident” — or
“NR”

A person resident outside India, as defined under FEMA and includes Eligible NRIs,
FPIs and FVCIs registered with SEBI

 

“Offer”

Initial public offering of up to 12,000,000 Equity Shares for cash at a price of = 550
per Equity Share (including a share premium of 2 545 per Equity Share) aggregating
up to % 6,593.75*/ million, through an Offer for Sale by the Selling Shareholders.

*Our Company in consultation with the Book Running Lead Managers, offered a discount of ® 25 per
Equity Share to Eligible Employees bidding in the Employee Reservation Portion.
Subject to finalization of Basis of Allotment

 

“Offer Agreement”

The agreement dated July 19, 2021 amongst our Company, the Selling Shareholders
and the BRLMs, pursuant to the SEBI ICDR Regulations, based on which certain
arrangements are agreed to in relation to the Offer

 

“Offer for Sale”

The offer for sale of 12,000,000 Equity Shares aggregating up to = 6,593.75*/ million
by the Selling Shareholders

*Our Company in consultation with the Book Running Lead Managers, offered a discount of ® 25 per
Equity Share to Eligible Employees bidding in the Employee Reservation Portion.
Subject to finalization of Basis of Allotment

 

 

“Offer Price”

 

%.550 per Equity Share was the final price at which the Equity Shares were Allotted to

 

 
 

Term

Description

 

successful Bidders other than Anchor Investors. Equity Shares were Allotted to
Anchor Investors at the Anchor Investor Offer Price in terms of this Prospectus.

A discount of 2 25 per Equity Share was offered to Eligible Employees. The Offer
Price and Employee Discount decided by our Company in consultation with the
BRLMs.

 

“Offer Proceeds”

The proceeds of the Offer based on the total number of Equity Shares Allotted

 

“Offered Shares”

Up to 12,000,000 Equity Shares aggregating up to % 6,593.75” million, comprising up
to 9,285,000 Equity Shares, aggregating up to % 5,101.91 million by Anand Rathi
Financial Services Limited, up to 375,000 Equity Shares aggregating up to = 206.05"
million by Mr. Anand Rathi, up to 375,000 Equity Shares aggregating up to = 206.05
million by Mr. Pradeep Gupta, up to 375,000 Equity Shares aggregating up to =
206.05" million by Mr. Amit Rathi, up to 375,000 Equity Shares aggregating up to 2
206.05" million by Ms. Priti Gupta, up to 375,000 Equity Shares aggregating up to 2
206.05" million by Ms. Supriya Rathi, up to 375,000 Equity Shares aggregating up to
% 206.05" million by Rawal Family Trust, acting through Mr. Rakesh Rawal, up to
90,000 Equity Shares aggregating up to = 49.45” million by Mr. Jugal Mantri and up
to 375,000 Equity Shares aggregating up to = 206.05” million by Mr. Feroze Azeez

*Our Company in consultation with the Book Running Lead Managers, offered a discount of % 25 per
Equity Share to Eligible Employees bidding in the Employee Reservation Portion.
Subject to finalization of Basis of Allotment

 

“Price Band”

Price band of a minimum price of % 530 per Equity Share (Floor Price) and the
maximum price of = 550 per Equity Share (Cap Price) including any revisions thereof.
The Price Band and the minimum Bid Lot for the Offer was decided by our Company,
in consultation with the BRLMs, and was advertised in all editions of an English
national daily newspaper Business Standard, all editions of a Hindi national daily
newspaper Business Standard and Mumbai editions of a Marathi newspaper Navshakti
(each of which are widely circulated English, Hindi and Marathi newspapers,
respectively, Marathi being the regional language of Maharashtra, where our
Registered Office is located), at least two Working Days prior to the Bid/Offer
Opening Date

 

“Pricing Date”

The date on which our Company, in consultation with the BRLMs, finalized the Offer
Price

 

“Prospectus”

This prospectus dated December 7, 2021 filed with the RoC, in accordance with the
Companies Act, 2013 and the SEBI ICDR Regulations containing, amongst other
things, the Offer Price that is determined at the end of the Book Building Process, the
size of the Offer and certain other information, including any addenda or corrigenda
hereto.

 

“Public Offer
Account Bank(s)”

The banks which are clearing members and registered with SEBI under the BTI
Regulations, with whom the Public Offer Account(s) was opened in this case being
HDEC Bank Limited

 

“Public Offer
Account(s)”

An account opened in accordance with the provisions of the Companies Act, 2013,
with the Public Offer Account Bank(s) to receive money from the Escrow Accounts
and from the ASBA Accounts on the Designated Date

 

“QIB Portion”

The portion of the Offer (including the Anchor Investor Portion) being not less than
50% of the Offer, which was allocated to QIBs, including the Anchor Investors
(which allocation was on a discretionary basis, as determined by our Company, in
consultation with the BRLMs up to a limit of 60% of the QIB Portion) subject to valid
Bids having been received at or above the Offer Price

 

“Qualified
Institutional Buyers”
or “QIBs” or “QIB
Bidders”

A qualified institutional buyer, as defined under Regulation 2(1)(ss) of the SEBI
ICDR Regulations

 

 

“Red Herring
Prospectus” or
“RHP”

 

The red herring prospectus dated November 26, 2021, issued in accordance with
section 32 of the Companies Act, 2013 and the provisions of SEBI ICDR Regulations,
which did not have complete particulars of the price at which the Equity Shares were
offered and the size of the Offer.

 

 
 

Term

Description

 

“Refund Account(s)”

No lien and non-interest bearing account to be opened with the Refund Bank(s), from
which refunds to unsuccessful Anchor Investors, if any, of the whole or part of the Bid
Amount shall be made

 

“Refund Bank(s)”

The banks which are clearing members and registered with SEBI under the BTI
Regulations with whom the Refund Account(s) was opened, in this case being HDFC
Bank Limited

 

“Registered Broker”

Stock brokers registered with the stock exchanges having nationwide terminals other
than the Members of the Syndicate, and eligible to procure Bids from ASBA Bidders
in terms of the circular No. CIR/CFD/14/2012 dated October 4, 2012 issued by SEBI

 

“Registrar
Agreement”

The agreement dated July 17, 2021, entered into amongst our Company, the Selling
Shareholders and the Registrar to the Offer

 

“Registrar and Share
Transfer Agents” or
“RTAs”

Registrar and share transfer agents registered with SEBI and eligible to procure Bids
from ASBA Bidders at the Designated RTA Locations in terms of circular no.
CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015 issued by SEBI

 

“Registrar” or
“Registrar to the
Offer”

Link Intime India Private Limited

 

“Resident Indian”

A person resident in India, as defined under FEMA

 

“Retail Individual
Bidders” or “RIB(s)”
or “Retail Individual
Investors” or “RII(s)”

Individual Bidders (including HUFs applying through their karta and Eligible NRIs)
who had not submitted a Bid for Equity Shares for a Bid Amount of more than =
200,000 in any of the Bidding options in the Offer

 

“Retail Portion”

The portion of the Offer being not more than 35% of the Offer consisting of 4,112,500
Equity Shares which was made available for allocation to Retail Individual Bidders in
accordance with the SEBI ICDR Regulations, subject to valid Bids having been
received at or above the Offer Price.

 

“Revision Form”

Form used by the Bidders to modify the quantity of the Equity Shares or the Bid
Amount in any of their ASBA Form(s) or any previous Revision Form(s).

QIB Bidders and Non-Institutional Bidders were not allowed to withdraw or lower
their Bids (in terms of quantity of Equity Shares or the Bid Amount) at any stage.
Retail Individual Bidders and Eligible Employee Bidders could revise their Bids
during the Bid/Offer Period and withdraw their Bids until Bid/Offer Closing Date.

 

“Self Certified
Syndicate Bank(s)”
or “SCSB(s)”

The banks registered with SEBI, offering services: (a) in relation to ASBA (other
than using the UPI Mechanism), a list of which is available on the website of SEBI at
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intm1
d=34 and
https://www.sebi.gov.in/sebiweb/other/OtherA ction.do?doRecognisedFpi=yes&intml
d=35, as applicable or such other website as may be prescribed by SEBI from time to
time; and (b) in relation to RIBs (using the UPI Mechanism), a list of which is
available on the website of SEBI at
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intm!
d=40, or such other website as may be prescribed by SEBI from time to time.

Applications through UPI in the Offer can be made only through the SCSBs mobile
applications (apps) whose name appears on the SEBI website. A list of SCSBs and
mobile application, which, are live for applying in public issues using UPI mechanism
is appearing in the “list of mobile applications for using UPI in public issues”
displayed on the SEBI website. The said list shall be updated on the SEBI website

 

“Specified

Bidding centers where the Syndicate accepted the ASBA Forms for Bidders

 

 

Locations”

“Share Escrow | Escrow agent appointed pursuant to the Share Escrow Agreement, namely Link
Agent” Intime India Private Limited

“Share Escrow | The agreement dated November 15, 2021, entered into amongst our Company, the
Agreement” Selling Shareholders, and the Share Escrow Agent for deposit of the Equity Shares

offered by the Selling Shareholders in escrow.

 

 

“Sponsor Bank”

 

The Banker to the Offer registered with SEBI who was appointed by the Company to
act as a conduit between the Stock Exchanges and the National Payments Corporation

 

 
 

Term

Description

 

of India in order to push the mandate collect requests and / or payment instructions of
the RIBs into the UPI, the Sponsor Bank in this case being HDFC Bank Limited

 

“Stock Exchange(s)”

BSE Limited and National Stock Exchange of India Limited

 

“Sub Syndicate”

The sub-syndicate members, if any, appointed by the BRLMs and the Syndicate
Members, to collect Bid cum Application Forms

 

 

 

 

“Syndicate Agreement dated November 15, 2021, entered into among the Company, the Registrar

Agreement” to the Offer, the Selling Shareholders, the BRLMs and the Syndicate Members in
relation to collection of Bid cum Application Forms by Syndicate.

“Syndicate Intermediaries registered with SEBI who are permitted to accept bids, application and

Members” place orders with respect to the Offer to be appointed pursuant to the Syndicate
Agreement in this case being Equirus Securities Private Limited, Sharekhan Limited
and Anand Rathi Share and Stock Brokers Limited

“Syndicate” or | The BRLMs and the Syndicate Members

“members of the

Syndicate”

“Systemically Systemically important non-banking financial company as defined under Regulation

Important Non- | 2(1)(iii) of the SEBI ICDR Regulations.

Banking Financial
Company or NBFC-
sI”

 

“Underwriters”

The BRLMs and the Syndicate Members

 

 

 

 

“Underwriting The agreement dated December 7, 2021 entered into amongst the Underwriters, the

Agreement” Selling Shareholders and our Company

“UPI” Unified Payments Interface, which is an instant payment mechanism developed by
NPCI

“UPI ID” ID created on Unified Payment Interface (UPI) for single-window mobile payment
system developed by the NPCI

“UPI Mandate | A request (intimating the RIB by way of a notification on the UPI application and by

Request” way of a SMS directing the RIB to such UPI application) to the RIB initiated by the

Sponsor Bank to authorize blocking of funds in the relevant ASBA Account through
the UPI application equivalent to Bid Amount and subsequent debit of funds in case
of Allotment

In accordance with the SEBI Circular No. SEBI/HO/CFD/DIL2/CIR/P/2019/76 dated
June 28, 2019 and SEBI Circular No. SEBI/HO/CFD/DIL2/CIR/P/2019/85 dated July
26, 2019, RIBs Bidding using the UPI Mechanism may apply through the SCSBs and
mobile applications whose names appears on the website of the SEBI
(https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intml
d=40) and
(https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intm!
d=43) respectively, as updated from time to time.

 

“UPI Mechanism”

The mechanism that was used by an RIB to make a Bid in the Offer in accordance
with the Circular on Streamlining of Public Issues

 

“UPI PIN”

Password to authenticate UPI transaction

 

“Wilful Defaulter”

A wilful defaulter, as defined under the SEBI ICDR Regulations

 

“Working Day”

All days other than second and fourth Saturdays of the month, Sundays or public
holidays, on which commercial banks in Mumbai are open for business; provided
however, with reference to (a) announcement of Price Band; and (b) Bid/Offer Period,
Working Day shall mean all days except Saturday, Sunday and public holidays on
which commercial banks in Mumbai are open for business and (c) the time period
between the Bid/Offer Closing Date and the listing of the Equity Shares on the Stock
Exchanges, shall mean all trading days of Stock Exchanges, excluding Sundays and
bank holidays, as per the circular issued by SEBI.

 

Conventional or general terms and abbreviations

 

Term

Description

 

 

“AGM”

 

Annual general meeting

 

10

 
 

Term

Description

 

“AIFS”

Alternative investment funds as defined in and registered under the AIF Regulations

 

“AIF Regulations”

Securities and Exchange Board of India (Alternative Investment Funds) Regulations,
2012

 

 

 

 

“AMC” Asset management company

“AMFI” Association of Mutual Funds in India

“AML” Anti-money laundering

“AS” Accounting standards issued by the Institute of Chartered Accountants of India, as

notified from time to time

 

“AUM” or “Assets
under management”

With respect to a mutual fund, the total market value of all the financial assets which
such mutual fund manages on behalf of its customers

 

“BSE”

BSE Limited

 

“BTI Regulations”

Securities and Exchange Board of India (Bankers to an Issue) Regulations, 1994

 

 

 

 

 

 

“CAGR” Compounded Annual Growth Rate

“Calendar Year” or | Unless the context otherwise requires, shall refer to the twelve month period ending
“year” December 31

*«CCr* Competition Commission of India

“CDSL” Central Depository Services (India) Limited

“CEP” Client Engagement Partner

“CFO” Chief Financial Officer

 

Clients / active client
family(ies)

Clients or active client families are defined as client families / groups with at least
INR 5 million in cumulative AuM. Each “client family” or “Client” may have one or
more sub accounts or family members accounts, through which they invest

 

 

“Companies Act, | Erstwhile Companies Act, 1956 along with the relevant rules made thereunder
1956”,
Companies Act/ | Companies Act, 2013, along with the relevant rules, regulations, clarifications,

Companies Act, 2013

circulars and notifications issued thereunder.

 

“Cr.P.C.”

Code of Criminal Procedure, 1973

 

 

 

 

 

 

 

 

 

 

 

 

 

“CSR” Corporate social responsibility

“Depositories Act” Depositories Act, 1996

“Depository” or | NSDL and CDSL

“Depositories”

“DIN” Director Identification Number

“DP” or “Depository | A depository participant as defined under the Depositories Act

Participant”

“DP ID” Depository Participant’s Identification Number

“EBITDA” Earnings before interest, tax, depreciation and amortisation

“EGM” Extraordinary general meeting

“EPS” Earnings per share (as calculated in accordance with IND AS-33)

“EDI” Foreign direct investment

“FDI Policy” Consolidated Foreign Direct Investment Policy notified by the DPIIT through
notification dated October 28, 2020 effective from October 15, 2020, issued by the
DPUT

“FEMA” Foreign Exchange Management Act, 1999, including the rules and regulations
thereunder

“FEMA Rules” Foreign Exchange Management (Non-debt Instruments) Rules, 2019.

 

“Financial Year”,
“Fiscal”, “FY” or
“HY,”

Period of twelve months ending on March 31 of that particular year, unless stated
otherwise

 

“FIIs”

Foreign institutional investors

 

“FIT Regulations”

Erstwhile Securities and Exchange Board of India (Foreign Institutional Investors)
Regulations, 1995

 

“FIR”

First information report

 

“EPI”

Foreign Portfolio Investors, as defined under the FPI Regulations

 

“FPI Regulations”

Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations,
2019

 

=FIPB™

The erstwhile Foreign Investment Promotion Board.

 

 

“EVCE

 

Foreign venture capital investors, as defined and registered with SEBI under the FVCI

 

11

 
 

Term

Description

 

Regulations

 

“Fugitive Economic
Offender”

A fugitive economic offender as defined under the Fugitive Economic Offenders Act,
2018

 

“FVCI Regulations”

Securities and Exchange Board of India (Foreign Venture Capital Investor)
Regulations, 2000

 

 

 

 

 

 

 

 

 

“GDP” Gross domestic product

“GIR Number” General index registration number

“Gol” or Government of India

“Government” or

“Central

Government”

“GST” Goods and services tax

“HUF” Hindu undivided family

“ICAI” The Institute of Chartered Accountants of India
“TFRS” International Financial Reporting Standards
“India” Republic of India

“Ind AS” Indian Accounting Standards

 

“Indian GAAP”

Accounting principles generally accepted in India

 

“Insider Trading
Regulations”

Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations,
2015

 

 

 

 

 

 

“TPC” The Indian Penal Code, 1860
“TPR” Intellectual property rights
“TPO” Initial public offer

“IST” Indian standard time

“IT Act” The Income Tax Act, 1961
ST? Information technology

 

“Listing Agreement”

The equity listing agreement to be entered into by our Company with each of the
Stock Exchanges

 

“Listing Regulations”

Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015

 

 

 

 

“MCA” Ministry of Corporate Affairs, Government of India

“MICR” Magnetic ink character recognition

“Mn” or “mn” Million

“MPID” Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act,

1999

 

“Mutual Funds”

A mutual fund registered with SEBI under the Securities and Exchange Board of India
(Mutual Funds) Regulations, 1996

 

 

 

 

 

 

“NAL” Not applicable

“NAV” Net asset value

“NBFC” Non-Banking Financial Company
“NECS” National electronic clearing service
“NEFT” National electronic fund transfer

“NL Act” The Negotiable Instruments Act, 1881

 

“NRE Account”

Non-resident external account established in accordance with the Foreign Exchange
Management (Deposit) Regulations, 2016

 

“NRI” or “Non-
Resident Indian”

A person resident outside India who is a citizen of India as defined under the Foreign
Exchange Management (Deposit) Regulations, 2016 or is an ‘Overseas Citizen of
India’ cardholder within the meaning of section 7(A) of the Citizenship Act, 1955

 

“NRO Account”

Non-resident ordinary account established in accordance with the Foreign Exchange
Management (Deposit) Regulations, 2016

 

 

 

“NSDL” National Securities Depository Limited
“NSE” National Stock Exchange of India Limited
“NSEL” National Spot Exchange Limited

 

 

“OCB” or “Overseas
Corporate Body”

 

A company, partnership, society or other corporate body owned directly or indirectly
to the extent of at least 60% by NRIs including overseas trusts in which not less than
60% of the beneficial interest is irrevocably held by NRIs directly or indirectly and
which was in existence on October 3, 2003 and immediately before such date was

 

12

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Term Description
eligible to undertake transactions pursuant to the general permission granted to OCBs
under the FEMA. OCBs are not allowed to invest in the Offer
“P/E Ratio” Price/earnings ratio
“PAN” Permanent account number allotted under the I.T. Act
“RBI” Reserve Bank of India
“Regulation S” Regulation S under the Securities Act
“RONW” Return on net worth
“Rs.” or “Rupees” or | Indian Rupees
“2” or “INR”
“RTGS” Real time gross settlement
“SCRA” Securities Contracts (Regulation) Act, 1956
“SCRR” Securities Contracts (Regulation) Rules, 1957
“SEBI” Securities and Exchange Board of India constituted under the SEBI Act
“SEBI Act” Securities and Exchange Board of India Act, 1992
“SEBI ICDR | Securities and Exchange Board of India (Issue of Capital and Disclosure
Regulations” Requirements) Regulations, 2018
“SEBI SBEB | Securities and Exchange Board of India (Share Based Employee Benefits and Sweat
Regulations” Equity) Regulations, 2021.
“Securities Act” USS. Securities Act of 1933
“SICA” The erstwhile Sick Industrial Companies (Special Provisions) Act, 1985
“STT” Securities Transaction Tax
“State Government” _| Government of a State of India
“Takeover Securities and Exchange Board of India (Substantial Acquisition of Shares and
Regulations” Takeovers) Regulations, 2011
“U.S.A”/ “U.S."/ | The United States of America

 

“United State:

 

“USD” or “US$” or
“ge

 

 

United States Dollars, the official currency of the United States

 

Industry related terms

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Term Description
Bn. Billion
cso Central Statistics Organization
ETFs Exchange Traded Funds
FY Financial Year
IFAs Independent financial advisors
SRO Self-regulatory organization
UHNH Ultra-High Networth Households
UHNI Ultra-High Net-Worth Individual
UTI Unit Trust of India
WMS, Wealth management services
YoY Year on Year

 

Unless the content otherwise requires, the words and expressions used but not defined in this Prospectus will
have the same meaning as assigned to such terms under the Companies Act, SEBI ICDR Regulations, the SEBI
Act, the SCRA, the Depositories Act and the rules and regulations made thereunder.

Capitalised terms in “Description of Equity Shares and Terms of the Articles of Association”, “Statement of Tax
Benefits”, “Industry Overview”, “Key Regulations and Policies in India”, “Financial Information” and
“Outstanding Litigation and Material Development”, on pages 397, 110, 113, 177, 225 and 331, will have the
meaning given to such terms in these respective sections.

Notwithstanding the foregoing, terms specifically defined in this Prospectus, shall have the meanings given to
such terms in the sections where specifically defined.

13

 

 
14
CERTAIN CONVENTIONS, PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA

All references to “India” contained in this Prospectus are to the Republic of India and all references to “U.S.”,
“US”, “USA” or “United States” are to the United States of America. All references to the “Government”,
“Indian Government”, “GOI”, “Central Government” or the “State Government” are to the Government of
India, central or state, as applicable.

Unless otherwise specified, any time mentioned in this Prospectus is in Indian Standard Time (“IST”). Unless
stated otherwise, all references to page numbers in this Prospectus are to the page numbers of this Prospectus.

Financial Data

Unless the context requires otherwise, the financial data in this Prospectus is derived from our Restated
Consolidated Financial Information. The Restated Consolidated Financial Information has been prepared in
accordance with the requirements of the Companies Act, 2013, Ind -AS, and restated in accordance with the
SEBI ICDR Regulations.

Our Company’s Financial Year commences on April 1 and ends on March 31 of the following year and
accordingly, all references to a particular financial year, unless stated otherwise, are to the 12 month period
ended on March 31 of that year.

Certain figures contained in this Prospectus, including financial information, have been subject to rounding
adjustments. Unless set out otherwise, all figures in decimals, including percentage figures, have been rounded
off to two decimal points. In certain instances, (i) the sum or percentage change of such numbers may not
conform exactly to the total figure given; and (ii) the sum of the numbers in a column or row in certain tables
may not conform exactly to the total figure given for that column or row.

We prepare our audited financial statements in accordance with Ind-AS and guidelines issued by the RBI, which
differs in some respects from IFRS and U.S. GAAP. Accordingly, the degree to which the Ind-AS financial
statements included in this Prospectus will provide meaningful information is entirely dependent on the reader’s
level of familiarity with the Companies Act, 2013, Ind AS, RBI guidelines and the SEBI ICDR Regulations.
Any reliance by persons not familiar with Indian accounting practices on the financial disclosures presented in
this Prospectus should accordingly be limited. We have not attempted to quantify the impact of IFRS or U.S.
GAAP on the financial data included in this Prospectus and we urge you to consult your own advisors regarding
such differences and their impact on our financial data. Please see “Risk Factor — Differences exist between Ind-
AS and other accounting principles, such as US GAAP and IFRS, which may be material to investors’
assessments of our financial condition. Additionally, the financial measures and statistical information in the
Restated Financial Information may vary from any standard methodology that is applicable across the financial
services industry, and therefore may not be comparable with financial or statistical information of similar
nomenclature computed and presented by other financial services companies” on page 52 of this Prospectus.

Any percentage amounts, as set forth in “Risk Factors”, “Our Business” and “Management's Discussion and
Analysis of Financial Condition and Results of Operations” on pages 26, 160 and 297 of this Prospectus,
respectively, and elsewhere in this Prospectus, unless otherwise indicated, have been calculated on the basis of
our Restated Consolidated Financial Information.

Non-GAAP Financial Measures

Certain non-GAAP financial measures and certain other statistical information relating to our operations and
financial performance like EBITDA, net worth, return on net worth, Net Asset Value per Equity Share and
capital gearing ratio have been included in this Prospectus. These non-GAAP Measures are not a measurement
of our financial performance or liquidity under Ind AS, Indian GAAP, or IFRS and should not be considered in
isolation or construed as an alternative to cash flows, profit/ (loss) for the year/period or any other measure of
financial performance or as an indicator of our operating performance, liquidity, profitability or cash flows
generated by operating, investing or financing activities derived in accordance with Ind AS, Indian GAAP, or
IFRS. These non-GAAP financial measures and other statistical and other information relating to our operations
and financial performance may not be computed on the basis of any standard methodology that is applicable
across the industry and therefore may not be comparable to financial measures and statistical information of
similar nomenclature that may be computed and presented by other companies and are not measures of

15
operating performance or liquidity defined by Ind AS and may not be comparable to similarly titled measures
presented by other companies.

Currency and units of presentation
All references to:

1. “Rupees” or “Rs.” or “INR” or “2” are to Indian Rupees, the official currency of the Republic of India.
2. “US Dollars” or “US$” or “USD” are to United States Dollars, the official currency of the United States of
America.

In this Prospectus, our Company has presented certain numerical information in “million” and “billion” units.
One million represents °10 lakhs’ or ‘1,000,000’ and one billion represents ‘1,000 million’ or ‘1,000,000,000°.

Figures sourced from third-party industry sources may be expressed in denominations other than millions or
may be rounded off to other than two decimal points in the respective sources, and such figures have been
expressed in this Prospectus in such denominations or rounded-off to such number of decimal points as provided
in such respective sources.

Industry and Market Data

Unless stated otherwise, industry and market data used throughout this Prospectus has been obtained or derived
from publicly available information as well as industry publications and sources. The copy of the CARE
Advisory Research is available on website of our company at https://rathi.com/Wealth/Investorrelations.php_

Industry publications generally state that the information contained in those publications has been obtained from
publicly available documents from various sources believed to be reliable but their accuracy and completeness
are not guaranteed and their reliability cannot be assured. Accordingly, no investment decision should be made
on the basis of such information. Although we believe that the industry and market data used in this Prospectus
is reliable, it has not been independently verified by us, our Directors, our Promoters, the Selling Shareholders,
the BRLMs or any of their respective affiliates or advisors. The data used in these sources may have been
reclassified by us for the purposes of presentation. Data from these sources may also not be comparable.

Further, the extent to which the industry and market data presented in this Prospectus is meaningful depends on
the reader’s familiarity with and understanding of the methodologies used in compiling such data. There are no
standard data gathering methodologies in the industry in which we conduct our business, and methodologies and
assumptions may vary widely among different industry sources.

Such data involves risks, uncertainties and numerous assumptions and is subject to change based on various
factors, including those disclosed in “Risk Factors” on page 26 of this Prospectus. Accordingly, investment
decisions should not be based solely on such information.

The sections “Summary of the Offer Document” and “Industry Overview” on pages 20 and 113, respectively, of
this Prospectus, respectively and other information in this Prospectus have been derived or extracted from the
industry report, which contains the following disclaimer:

“This report is prepared by CARE Advisory, division of CARE Advisory Research and Training Limited
(CART). CARE Advisory has taken utmost care to ensure accuracy and objectivity while developing this report
based on information available in public domain. However, neither the accuracy nor completeness of
information contained in this report is guaranteed. CARE Advisory operates independently of CARE ratings
Limited and this report does not contain any confidential information obtained by ratings division, which they
may have obtained in the regular course of operations. The opinion expressed in this report cannot be
compared to the rating assigned to the company within this industry by the ratings division. The opinion
expressed is also not a recommendation to buy, sell or hold an instrument.

CARE Advisory is not responsible for any errors or omissions in analysis/inferences/views or for results
obtained from the use of information contained in this report and especially states that CARE (including all
divisions) has no financial liability whatsoever to the user of this product. This report is for the information of
the intended recipients only and no part of this report may be published or reproduced in any form or manner
without prior written permission of CARE Advisory.”

16
 

Exchange Rates

This Prospectus contains conversions of US$ currency amounts into Indian Rupees that have been presented
solely to comply with the requirements of the SEBI ICDR Regulations. These conversions should not be
construed as a representation that such currency amounts could have been, or can be converted into Indian
Rupees, at any particular rate, or at all.

The following table provides, for the periods indicated, information with respect to the exchange rates between
the Rupee and the US §$ (in 2 per US $):

 

 

(in)
Currency As on August As on March 31, |As on March 31, 2020) As on March 29,
31,2021 2021 2019
USD 73.15 73.50 75.39 69.17

 

 

 

 

 

Source: www.fbil.org.in

(1) Not available from March 30, 2019 to March 31, 2019 on account of these being non-trading days; Exchange rate as on March

29, 2019 considered

17

 
FORWARD-LOOKING STATEMENTS

This Prospectus contains certain “forward-looking statements”. These forward-looking statements include
statements with respect to our business strategy, objectives, our plans, prospects, goals and our projects. Bidders
can generally identify forward-looking statements by words or phrases such as “aim”, “anticipate”, “believe”,
“expect”, “estimate”, “intend”, “objective”, “plan”, “project”, “shall”, “will”, “will continue”, “will pursue” or
other words or phrases of similar import. Similarly, statements that describe our Company’s strategies,
objectives, plans, prospects or goals are also forward-looking statements. All forward-looking statements
(whether made by us or any third party) are predictions and are subject to risks, uncertainties and assumptions or
other facts and circumstances about us that could cause actual results to differ materially from those
contemplated by the relevant forward-looking statement.

Forward-looking statements reflect our current views with respect to future events as of the date of this
Prospectus and are not a guarantee of future performance. These statements, including forward looking
statements made by third parties, included in this Prospectus, are based on our management’s beliefs and
assumptions, which in turn are based on currently available information. Although we believe the assumptions
upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to
be inaccurate, and the forward-looking statements based on these assumptions could be incorrect.

Further, the actual results may differ materially from those suggested by the forward-looking statements due to
risks or uncertainties associated with our expectations with respect to, but not limited to, regulatory changes
pertaining to the industries in India in which we have our businesses and our ability to respond to them, our
ability to successfully implement our strategy, our growth and expansion, technological changes, our exposure
to market risks, general economic and political conditions in India, which have an impact on our business
activities or investments, the monetary and fiscal policies of India, inflation, deflation, unanticipated turbulence
in interest rates, foreign exchange, equity prices or other rates or prices, the performance of the financial
markets in India and globally, changes in domestic laws, regulations and taxes, changes in competition in our
industry and incidence of any natural calamities and/or acts of violence. Important factors that could cause
actual results to differ materially from our expectations include, but are not limited to, the following:

» The continuing effect of the COVID-19 pandemic on our business and operations is highly uncertain and
cannot be predicted.

> Our revenues from distribution and sale of financial products are dependent on our sustained ability to
increase our AuM as well as on the performance of the funds that we distribute. Any changes in the total
expense ratio due to regulatory changes may reduce our distribution commission income which may have a
material adverse effect on our business, financial condition or results of operation.

» Anand Rathi Commodities Limited (“ARCL”), one of our promoter group entity and its Directors, on
account of being a commodity broker with NSEL, are involved in a proceedings involved with SEBI and
Economic Offence Wing of Mumbai Police (“EOW”). Also, proceedings under relevant section of IPC and
MPID Act are pending against ARCL and one of its ex-Director who is also a Director in our Company.
Any adverse outcome in the aforesaid proceedings would have an adverse effect on the brand and
reputation of the Anand Rathi Group, which could have an adverse impact on our business, financial
condition and results of operations.

>» Non-compliance with regulatory guidelines and directions/ observations during inspection by regulatory
organisations may have a material adverse effect on our business, financial condition or results of operation.

> Our distribution arrangement with AMCs can be terminated without notice, or due to failure on our part to

comply/ perform.

For further discussion on factors that could cause our actual results to differ, see “Risk Factors”, “Our Business”
and “Management's Discussion and Analysis of Financial Condition and Results of Operations” on pages 26,
160 and 297, respectively, of this Prospectus, respectively. By their nature, certain market risk related
disclosures are only estimates and could be materially different from what actually occurs in the future. As a
result, actual gains or losses could materially differ from those that have been estimated.

We cannot assure Bidders that the expectation reflected in these forward-looking statements will prove to be
correct. Given these uncertainties, Bidders are cautioned not to place undue reliance on such forward-looking
statements and not to regard such statements as a guarantee of future performance.

Forward-looking statements reflect current views as of the date of this Prospectus and are not a guarantee of
future performance. These statements are based on our management's beliefs and assumptions, which in turn are

18
based on currently available information. Although we believe the assumptions upon which these forward-
looking statements are based are reasonable, any of these assumptions could prove to be inaccurate, and the
forward-looking statements based on these assumptions could be incorrect. Neither our Company, our Directors,
the Promoter Selling Shareholders, the BRLMs nor any of their respective affiliates have any obligation to
update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the
occurrence of underlying events, even if the underlying assumptions do not come to fruition. In accordance with
the SEBI ICDR Regulations, our Company and the BRLMs will ensure that the investors in India are informed
of material developments pertaining to our Company and the Offered Shares from the date of this Prospectus
until the time of the grant of listing and trading permission by the Stock Exchanges. The Promoter Selling
Shareholders shall, ensure that investors are informed of material developments in relation to statements and
undertakings specifically made or confirmed by such Promoter Selling Shareholders from the date of the Red
Herring Prospectus and this Prospectus until the grant of listing and trading approval by the Stock Exchanges.

19
SUMMARY OF THE OFFER DOCUMENT

This section is a general summary of certain disclosures included in this Prospectus and is not exhaustive, nor
does it purport to contain a summary of all the disclosures in this Prospectus or all details relevant to prospective
investors. This summary should be read in conjunction with, and is qualified in its entirety by, the more detailed
information appearing elsewhere in this Prospectus, including the sections titled “Risk Factors”, “Our
Business”, “Industry Overview”, “Capital Structure”, “Our Promoters and Promoter Group”, “The Offer”
“Offer Structure "and “Outstanding Litigation and Material Developments” beginning on pages 26, 160, 113,
79, 211, 67, 372 and 331, respectively, of this Prospectus.

Primary business of our Company
We are one of the leading non-bank wealth solutions firms in India and have been ranked amongst one of the
three largest non-bank mutual fund distributors in India by gross commission earned in Fiscal 2019, 2020 and

2021 (Source — CARE Advisory Research, Page 46 and 47. The CARE Advisory Research is available on the
website of our Company at https://rathi.com/Wealth/Investorrelations.php).

Industry in which our Company operates

We operate in the financial services industry with a focus on mutual fund distribution and sale of financial
products.

Names of the Promoters

Our Promoters are Mr. Anand Rathi, Mr. Pradeep Gupta and Anand Rathi Financial Services Limited. For
details, see “Our Promoters and Promoter Group” on page 211 of this Prospectus.

 

 

 

Offer Size

Offer Up to 12,000,000" Equity Shares for cash at price of %550* per Equity Share (including a
premium of 545 per Equity Share), aggregating up to % 6,593.75* million
*Our Company in consultation with the Book Running Lead Managers, offered a discount of % 25 per Equity Share to
Eligible Employees bidding in the Employee Reservation Portion.
Subject to finalisation of Basis of Allotment

of which

Offer for Sale Up to 12,000,000 Equity Shares aggregating up to % 6,593.75" million (comprising up to

9,285,000 Equity Shares, aggregating up to 2 5,101.91” million by Anand Rathi Financial
Services Limited, up to 375,000 Equity Shares aggregating up to 2206.05" million by Mr.
Anand Rathi and up to 375,000 Equity Shares aggregating up to 206.05" million by Mr.
Pradeep Gupta, up to 375,000 Equity Shares aggregating up to % 206.05" million by Mr. Amit
Rathi, up to 375,000 Equity Shares aggregating up to 2 206.05" million by Ms. Priti Gupta, up
to 375,000 Equity Shares aggregating up to % 206.05” million by Ms. Supriya Rathi, up to
375,000 Equity Shares aggregating up to %206.05” million by Rawal Family Trust, acting
through Mr. Rakesh Rawal, 90,000 Equity Shares aggregating up to % 49.45” million by Mr.
Jugal Mantri and up to 375,000 Equity Shares aggregating up to % 206.05" million by Mr.
Feroze Azeez)

*Our Company in consultation with the Book Running Lead Managers, offered a discount of & 25 per Equity Share to

Eligible Employees bidding in the Employee Reservation Portion.

‘Subject to finalization of Basis of Allotment

Employee Reservation | Up to 250,000 Equity Shares aggregating up to 2 131.25” million
Portion®)
Net Offer Up to 11,750,000 Equity Shares aggregating up to % 6,462.50" million

(D) The Offer has been authorized by our Board pursuant to its resolution dated July 16, 2021.

(2) Each Selling Shareholder severally and not jointly confirmed that the Offered Shares have been held by such Selling Shareholder for a
period of at least one year prior to the filing of the Draft Red Herring Prospectus in accordance with Regulation 8 of the SEBI ICDR
Regulations and accordingly, were eligible for the Offer in accordance with the provisions of the SEBI ICDR Regulations. For details
on the authorization of each of the Selling Shareholders in relation to their respective Offered Shares, see ‘The Offer” on page 67.

(3) In the event of under-subscription in the Employee Reservation Portion, the unsubscribed portion shall be available for allocation and
Allotment, proportionately to all Eligible Employees who had Bid in excess of @ 200,000, subject to the maximum value of Allotment

 

 

 

 

 

 

20
made to such Eligible Employee not exceeding ® 500,000. The unsubscribed portion, if any, in the Employee Reservation Portion, shall
be added to the Net Offer. For further details, see “Offer Structure” beginning on page 372.
*Our Company in consultation with the Book Running Lead Managers, offered a discount of 25 per Equity Share to Eligible Employees
bidding in the Employee Reservation Portion.
‘Subject to finalization of Basis of Allotment

For details of the offer structure, please see “Offer Structure” on page 372 of this Prospectus.

Objects of the Offer

The objects of the Offer are to (i) to carry out the Offer for Sale of up to 12,000,000 Equity Shares, aggregating
up to % 6,593.75 million by the Selling Shareholders; and (ii) to achieve the benefits of listing the Equity Shares
on the Stock Exchanges. For further details, see “Objects of the Offer” on page 104.

Aggregate pre-Offer Shareholding of Promoter, Promoter Group and Selling Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

S No. Name of shareholder Pre-Offer
Number of Equity Shares Percentage of total pre-Offer
paid up Equity Share capital
(%)
Promoters
Ai Mr. Anand Rathi 5,346,390, 12.85%
2 Mr. Pradeep Gupta 2,277,012 5.47%
3. Anand Rathi Financial Services 17,946,123 43.12%
Limited
Total 25,569,525 61.44%
Promoter Group (other than Promoters)
dy Mr. Amit Rathi 1,800,000 4.33%
z Ms. Phool Kaur Mundra 10,500 0.03%
3. Ms. Priti Pradeep Gupta 1,537,500 3.69%
4. Ms. Tara Mantri 12,000 0.03%
5. Ms. Pooja Maru 60,000 0.14%
6. Jaipur Securities Pvt. Ltd. 630,000 1.51%
qs Navratan Mal Gupta (HUF) 720,000 1.73%
8. Pradeep Kumar Gupta (HUF) 750,000 1.80%
9. Mr. Suresh Rathi 3,000 0.01%
10. Mr. Krishnav Pradeep Gupta 7,500 0.02%
11._| Ms. Asha Biyani 2,000 Negligible
Total 5,532,500 13.29%
Other Selling Shareholders
1. Ms. Supriya Rathi 1,500,000 3.60%
z Rawal Family Trust, acting through
Mr. Rakesh Rawal 887,100 2.13%
3. Mr. Jugal Mantri 195,000 0.47%
4. Mr. Feroze Azeez 1,104,210 2.65%
Total 36,863,10 8.85%

 

 

Summary of Financial Statements

(In million other than earnings per share (both basic and diluted) and net asset value per equity share)

 

 

 

 

 

 

 

 

 

 

 

 

 

‘As on/for the | Ason/forthe] As on/for
five-month | year ended the year As on / for the
[Particulars period ended [March 31,2021] ended year ended
August 31, March 31, Sea
2021 2020
Authorized equity share capital 250.00) 200.00) 200.00 200.00
Issued and paid up equity share capital 208.08) 137.57] 135.14 134.54
Net worth (excluding non-controlling interest) 2,867.93 2,412.84) 1,855.23 1,239.37
Revenue (including Other Income) 1,689.03] 2,792.48 3,364.14 2,841.87
Total comprehensive income attributable to the 512.15) 453.57| 603.18. 589.80.
owners of the Company
Earnings per share

 

 

21
 

 

 

 

 

‘As on/for the | Ason/for the] as on/for
five-month | year ended the year As on / for the

Particulars period ended |March 31, 2021; ended year ended
August 31, March 31, Meee

2021 2020 "

- Basic 12.30} *10.98) 1515: *14.67

- Diluted 12.25) *10.85) *14.95, *14.40

Net asset value per equity share 68.9] 58.46 45.76 30.71

Total borrowings 312.26 333.60} 417.30 5.96

 

 

 

 

 

 

 

* Earnings Per Share has been adjusted to give effect of bonus issue.
For further details please see “Financial Information” on page 225.

 

Qualifications of the Auditors

There were no auditor qualifications which require corrective adjustments and which have not been given effect
to in the Restated Consolidated Financial Information.

Summary of Outstanding Litigation and Material Developments

A summary of outstanding litigation proceedings as on the date of this Prospectus as disclosed in the section
titled “Outstanding Litigation and Material Developments” in terms of the SEBI ICDR Regulations and the
Materiality Policy is provided below:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

‘Type of Proceedings Ninnberot cases aan)

Cases against our Company

Criminal proceedings Nil NA.

Actions taken by statutory or regulatory authorities 2 0.84

Claims related to direct and indirect taxes Nil NA.

Other pending material litigation 1 NA.

Total 3 0.84

Cases by our Company

Criminal proceedings Nil NA.

Other pending material litigation Nil NA.

Total Nil NA.
‘Cases against our Promoters

Criminal proceedings 6 107.87

Actions taken by statutory or regulatory authorities Nile ® N.A.@®

Claims related to direct and indirect taxes 1 3.63

Other pending material litigation 5 107.50
Total 12@ 219.002
Gases by our Promoters

Criminal proceedings Nil NA.

Other pending material litigation Nil NA.

Total Nil N.A.
Cases against the Directors

Criminal proceedings 7

Actions taken by statutory or regulatory authorities Nil@

Direct and indirect taxes 1

Other pending material litigation 3

Total 11@
Cases by the Directors

Criminal proceedings Nil NA.

Other pending material litigation Nil NA.

Total Nil N.A.
Cases against the Subsidiaries

Criminal proceedings Nil NA.

Actions taken by statutory or regulatory authorities Nil NA.

Direct and indirect taxes 1 4.62

Other pending material litigation 1 NA.

 

 

 

22

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

‘Type of Proceedings Number of cases ee

Total z 4.62
Cases by the Subsidiaries

Criminal proceedings Nil NA.

Other pending material litigation Nil NA.

Total Nil NA.
Cases against the Group Companies which have a material impact on our Company

Pending litigation which has a material impact on our Company z 225.14

Total x 225.14"
Cases by the Group Companies which have a material impact on our Company

Pending litigation which has a material impact on our Compan Nil NA.

Total Nil NA.

 

“To the extent quantifiable.

® This does not include the matter initiated by SEBI in 2001 against, inter alia, Mr. Anand Rathi, one of our Promoters and Directors. For
details, see “Outstanding Litigation and Material Developments — Orders passed by SEBI against the Group Companies ~ Mr. Anand Rathi,
Anand Rathi Share and Stock Brokers Limited" on page 340 of this Prospectus

(1) This does not include 4 matters involving imposition of penalty of % 0.60 million on ARFSL. (formerly Anand Rathi Securities Private
Limited whose name got changed to Anand Rathi Securities Limited and thereafter Anand Rathi Financial Services Limited. The BSE
Broking Business of ARFSL stands transferred to and vested in ARSSBL as per the Scheme of Arrangement sanctioned by the Bombay High
Court in Company Petition No. 420/2009, 421/209 and 42/2009). For details, see “Outstanding Litigation and Material Developments
Orders passed by SEBI against the Group Companies - ARSSBL and ARFSL ~ Paragraph (ix) on page 343 of this Prospectus"

This does not include the 12 orders passed by SEBI involving imposition of penalties of approximately ® 2.4 million on ARAL and ARSSBL
(including 4 matters having penalty of 20.60 million imposed on ARFSL and whose BSE Broking Business stands transferred to and vested
in ARSSBL as per the Scheme of Arrangement sanctioned by the Bombay High Court in Company Petition No. 420/2009, 421/2009 and
42/2009), our Group Companies.

 

For further details of the outstanding litigation proceedings, see “Risk factors- There are outstanding legal
proceedings against our Company, our Subsidiaries, our Promoters, our Directors and our Group Companies,
which if determined adversely, could affect our business and results of operations on page 34 and “Outstanding
Litigation and Material Developments” beginning on page 331.

Risk Factors

Investors should see “Risk Factors” on page 26 to have an informed view before making an investment
decision.

Summary of Contingent Liabilities of our Company

Details of the contingent liabilities of our Company as on August 31, 2021, March 31, 2021, March 31, 2020
and March 31, 2019 to the extent provided for in the Restated Consolidated Summary Financial Information are
set forth below:

(@ in million)

 

 

 

 

 

 

 

Particulars As of | As of March | As of March | As of March
August 31, | 31, 2021 31, 2020 31, 2019
2021
Liabilities disputed — appeals filed with
respect to:
Income Tax demand for Assessment Year - 417 4.17 4.17
2013-14*
Income Tax demand for Assessment Year 4.62 4.62 0.00 0.00
2013-14 (Penalty order under sec 271(1)I)
Income Tax demand for Assessment Year 11.44 11.44 11.44
2015-16*
Total 4.62 20.23 15.61 15.61

 

 

 

 

 

* Addition on account of difference in consideration which is received more in comparison to fair market value of shares issued u/s
56(2)(vii)(b)

For further details, see “Financial Information — Restated Consolidated Summary Statement of Contingent
Liability” on page 278.

23

 

 
Summary of Related Party Transactions

(@ in million)

 

Nature of the Related party] For the five-| For the year |For the year |For the year

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

transaction month _ period | ended March 31, | ended March | ended March
ended August 31, | 2021 31, 2020 31, 2019
2021
Loan Given 383.40 14,355.66 2,562.90 3,122.16
Loan Repayment Received 115.50 1,916.40 3,272.16
Loan Taken 4,274.70 24,909.00 24,554.72
Loan Repaid 4,274.70 24,909.00 24,554.72
Purchase of Debentures 10,224.90 26,211.78 17,326.73
Purchase of Fresh Equity < 1,012.5 -
Support Service Given 9.71 8.38
Support Service Taken 132.62 129.09
Brokerage Expense < 1.56 0.10
Interest Income 10.81 41.23 0.19
Interest Expense 3.75 7.93 2.85
Rent Expenses 0.73 1.74 1.68
Brand Charges 8.00 12.69 16.21
Rent Income 0.03 0.06 0.06
Commission Income = = -
Referral Fees - = 29.14
Demat Charges - 2.12 - -
Remuneration paid to KMP 26.77 73.45 74.52 55.49

 

 

 

 

 

The Company (on a consolidated basis) has surplus funds for short term which are utilized for extending inter-
corporate deposits to the related parties on an arms-length basis.

Details of tenure wise issuance of market linked non-convertible debentures, having returns linked to market
and further sold to clients are given below:

(in million)

 

 

 

 

 

 

 

 

Number of Years For the five-month Fiscal 2021 Fiscal 2020 Fiscal 2019
period ended August
31, 2021

1-2 - 3,345.88 985.75, -

2-3 - 33.00 - -

3-4 1,476.25 18,101.38 28,427.68 17,895.63

45 - 55.00 - 194.00

5-6 10,095.13 7,177.59 315.13 574.50

Total 11,571.38 28,712.85 29,728.56 18,664.13

 

 

 

 

 

For details of the related party transactions, as per the requirements under Ind-AS see ‘Related Party
Disclosures’ issued by the Institute of Chartered Accountants of India and as reported in the Restated
Consolidated Financial Statements, see “Financial Information — Restated Summary Statement Of Related Party
Disclosure” beginning on page 268.

Financing Arrangements

There have been no financing arrangements whereby our Promoters, members of the Promoter Group, the
directors of Anand Rathi Financial Services Limited, Directors and their relatives have financed the purchase of
any securities of our Company by any other person of securities during a period of six months immediately

preceding the date of the Draft Red Herring Prospectus, the Red Herring Prospectus and this Prospectus.

Weighted average price at which the equity shares of our Company were acquired by our Promoter and
Selling Shareholders in the one year preceding the date of this Prospectus

24

 

 
The weighted average price at which the Equity Shares of our Company were acquired by each of our Promoters
and Selling Shareholders in the one year preceding the date of this Prospectus is as follows:

 

Name of the Promoter / Selling
Shareholder

Number of Equity Shares acquired

Weighted average price per Equity
Share (®)

 

 

 

 

 

 

 

 

 

 

 

 

Mr. Anand Rathi 1,782,130 Nil
Mr. Pradeep Gupta 770,254 0.06
Anand Rathi Financial Services 5,982,041 Nil
Limited

Mr. Amit Rathi 600,000 Nil
Ms. Priti Gupta 537,500 0.23
Ms. Supriya Rathi 520,000 0.19
Rawal Family Trust 295,700 Nil
Mr. Feroze Azeez 498,090 108.51
Mr. Jugal Mantri 65,000 Nil

 

Average Cost of Acquisition

The average cost of acquisition per Equity Share by our Selling Shareholders, as at the date of this Prospectus, is

 

 

 

 

 

 

 

 

 

 

 

 

as follows:
Name of the Promoter / Selling | Number of Equity Shares held ‘Average cost of acquisition per
Shareholder Equity Share (in 2)
‘Mr, Anand Rathi 5,346,390 3.33
Mr. Pradeep Gupta 2,277,012 3.33
Anand Rathi Financial Services Nil
Limited 17,946,123
‘Mr. Amit Rathi 1,800,000 3.33
Ms. Priti Gupta 1,537,500 3.33
Ms. Supriya Rathi 1,500,000 3.33
Rawal Family Trust 887,100
Mr. Jugal Mantri 195,000 .
Mr. Feroze Azeez 1,104,210 233.14

 

 

 

 

(@_ The average cost of acquisition of shares held by Anand Rathi Financial Services Limited is NIL as the shares held are bonus

shares.

Issue of Equity Shares for consideration other than cash in the last one year

Our Company has not issued any equity shares or preference shares for consideration other than cash in the last
one year. Please see “Capital Structure” on page 79 for further details.

Split / Consolidation of Equity Shares in the last one year

There has been no split or consolidation of the Equity Shares of our Company in the last one year.

25

 

 
SECTION II: RISK FACTORS

An investment in Equity Shares involves a high degree of risk. You should carefully consider all the information
in this Prospectus, including the risks and uncertainties described below, before making an investment in our
Equity Shares.

To obtain a more detailed understanding of our business and operations, prospective investors should read this
section in conjunction with “Our Business”, “Financial Information”, “Management's Discussion and Analysis
of Financial Condition and Results of Operations”, “Key Regulations and Policies in India” and “Outstanding
Litigation and Material Developments” on pages 160, 225, 297, 177 and 331, respectively, of this Prospectus,

respectively, as well as the other financial and statistical information contained in this Prospectus.

We have described the risks and uncertainties that we believe are material, but these risks and uncertainties
may not be the only risks relevant to us, the Equity Shares, or the industry in which we currently operate. In
addition, the risks provided in this section may not be exhaustive and additional risks and uncertainties, not
presently known to us or that we currently deem immaterial may also impair our businesses, financial condition,
results of operations and prospects. If any of the following risks (or a combination of them), or other risks that
are not currently known or are now deemed immaterial, actually occur, our businesses, financial condition,
results of operations, and prospects could suffer, the trading price of our Equity Shares could decline, and you
may lose all or part of your investment. In making an investment decision, prospective investors must rely on
their own examination of us and the terms of the Offer, including the merits and risks involved. You should
consult your tax, financial and legal advisors about particular consequences of investing in the Offer.

Our Company had filed a draft red herring prospectus dated September 24, 2018 with SEBI and Stock
Exchanges (“Erstwhile Offer Document”). However, the same was subsequently withdrawn pursuant to the
resolution passed by the IPO Committee dated December 26, 2018 owing to prevailing capital market
conditions. Bidders were advised not to place any reliance on the Erstwhile Offer Document and refer to the
Red Herring Prospectus

Prospective investors should pay particular attention to the fact that we are incorporated under the laws of
India and are subject to a legal and regulatory environment, which may differ in certain respects from that of
other countries. This Prospectus also contains forward-looking statements that involve risks, assumptions,
estimates and uncertainties. Our actual results could differ from those anticipated in these forward-looking
statements as a result of certain factors, including the considerations described below and elsewhere in this
Prospectus. For details, see “Forward-Looking Statements” on page 18 of this Prospectus.

Our Company's Fiscal commences on April I and ends on March 31 of the immediately subsequent year, and
references to a particular Fiscal are to the 12 months ended March 31 of that year. Unless otherwise stated or
the context otherwise requires, references in this section to “we”, “our” or “us” are to the Anand Rathi Wealth

Management Group.

Unless otherwise indicated, industry and market data used in this section has been derived from the report titled
“Industry Research Report on Wealth Management” prepared and issued by the CARE Advisory Research,
commissioned by and paid for by us. The CARE Advisory Research is available on the website of our Company
at https://rathi.com/Wealth/Investorrelations.php. Also see, “Certain Conventions, Presentation of Financial,
Industry and Market Data — Industry and Market Data” on page 16.

Unless specified in the relevant risk factor below, we are not in a position to quantify the financial implication
of any of the risks mentioned below. The financial information in this section is derived from our Restated
Financial Information unless otherwise stated.

Internal Risk Factors
de The continuing effect of the COVID-19 pandemic on our business and operations is highly uncertain
and cannot be predicted.

The COVID-19 pandemic and the preventative or protective actions that governments around the world
have taken to counter the effects of the pandemic have resulted in an extended period of business
disruption and a decrease in economic activity in several countries, including in India. In order to contain

26
the spread of the COVID-19 pandemic, the Government of India along with State Governments declared
a lockdown of the country in March 2020, including severe travel and transport restriction and a directive
to all citizens to shelter in place. The lockdown has since been extended several times with gradual
relaxations of the restrictions conducted through phases. As a result, the current COVID-19 pandemic has
adversely affected workforces, consumer sentiment, economies and financial markets around the world
and has led to uncertainty in the global economy and significant volatility in global financial markets.

There remains significant uncertainty regarding the duration and long-term impact of the COVID-19
pandemic, as well as possible future responses by the Government, which makes it impossible for us to
predict with certainty the impact that COVID-19 will have on our business, results of operations,
financial condition and cash flows in the future. Further, one or more states have imposed or may impose
additional regional or local lockdowns.

Following the outbreak of the COVID-19 pandemic, our revenue from operations decreased from &
3,318.27 million for Fiscal 2020 to = 2,653.30 million for Fiscal 2021, representing a 20.04% decrease,
and our profit before tax for the year decreased from % 869.61 million to = 635.84 million and our profit
after tax decreased from 2 616.14 million to = 450.95 million during the same period, representing
decrease of 26.88% and 26.81% in our profit before tax and profit after tax respectively. Such decline in
our revenue from operations and profits was primarily due to the adverse effect of the COVID-19
pandemic, extended period of business disruptions, stock market volatility and decrease in investor’s
sentiments for new investment in the initial phase of the COVID-19 pandemic. The nature of our business
requires personal meetings and face-to-face discussions with clients, which could not take place
effectively during the initial phase of the pandemic. However, our robust and readily available
technological solutions enabled our customers and employees to continue to function and interact
seamlessly despite the unprecedented complex environment created by the COVID-19 pandemic, which
we believe, has given us a competitive advantage during this period. For five-months period ended
August 31, 2021; our overall revenue from operations was = 1,669.26 million, profit before tax was =
683.41 million and profit after tax was = 510.88 million.

The full extent to which the COVID-19 pandemic, or any future pandemic or widespread public health
emergency impacts our business, operations and financial results will depend on numerous evolving
factors that we may not be able to accurately predict, including the scope, severity, and duration of the
pandemic; actions taken by governments, businesses and individuals in response to the pandemic; the
effect on willingness of investors to make investments in asset classes; disruptions or restrictions on our
employees’ ability to work and travel; volatility in financial markets and any extended period of remote
work arrangements.

Any intensification of the COVID-19 pandemic or any future outbreak of another highly infectious or
contagious disease may materially and adversely impact our business, financial condition, cash flows and
results of operations. Further, as much as COVID-19 adversely affects our business and results of
operations, it may also have the effect of exacerbating many of the other risks described in this “Risk
Factors” section. For the purpose of the current impact of COVID-19 pandemic, see also “Management's
Discussions and Analysis of Financial Condition and Results of Operations - Developments in relation to
the COVID-19 pandemic” on page 300.

 

Our revenues from distribution and sale of financial products are dependent on our sustained ability to
increase our AuM as well as on the performance of the funds that we distribute. Any changes in the
total expense ratio due to regulatory changes may reduce our distribution commission income which
may have a material adverse effect on our business, financial condition or results of operation.

We earn distribution commission income from asset management companies for our mutual fund
distribution business. We also generate a part of our operating income through purchase and sale of
financial products to our clients. The mutual fund products distributed, and financial products sold, to our
clients constitute a significant part of our AuM and revenue. Our AuM comprises mutual fund schemes
and other financial products such as bonds, market linked debentures other securities held by clients in
their own demat accounts. Further, we do not include demat holdings of the clients in the AUM unless the
client has also used the distribution service of our Company or have bought market linked debentures
through us. The details of break-up of our AuM are given in section “Our Business” on page 161. If the
asset management companies reduce the total expense ratio due to regulatory changes, then they may
reduce our distribution commission income which would impact our revenues and results of operations.

27
In September 18, 2018, SEBI announced changes in the total expense ratio (TER) of mutual funds to
bring in transparency in appropriation of expenses, and reducing mis-selling and churning, whereby all
commission and expenses, etc. shall necessarily be paid from the scheme only and not from the
AMC/Associate/Sponsor/Trustee, or any other route. Further, SEBI said that the mutual fund industry
must adopt the full trail model of commission in all schemes without payment of any upfront commission
or upfronting of any trail commission. As mentioned in section “Our Business” on page 172, from FY
2018 to FY 2020, the mutual fund distribution income has decreased in the industry due to the aforesaid
changes in the TER. While the consolidated AUM of our Company has increased from 2183.93 billion as
at March 31, 2019 to 2266.70 billion as at March 31, 2021 and to 2302.09 billion as at August 31, 2021,
as a consequence of change in TER, there has been a decline in our revenue from mutual fund
distribution income from 21,040.00 million in FY 2019 to % 902.34 million in FY 2021. For further
details, please see “Our Business” on page 172.

The willingness of investors to make investments in asset classes is contingent on its ability to generate
returns, in line with or in excess of client expectations. Market conditions, economic volatility or
changing financial environment may render the asset classes or products we offer less attractive to
investors. Any inability on our part to distribute or offer appropriate financial products to clients or if
such products underperform either according to their relevant benchmarks, or similar investment products
provided by our competitors, for various reasons including general market conditions, investment
decisions taken by the fund manager, inability to identify appropriate investment opportunities and the
performance of the companies in which the funds are invested in, may lead to a failure to meet the clients
return expectations on their investments. Underperformance by the financial products distributed or sold
by us may result in a withdrawal of clients and restrict our ability to attract new clientele, further leading
to potential reduction in AuM. While the performance of the funds distributed by us is outside our control,
it is an important factor for us to sustain the growth of our AuM. The performance of these funds depends,
primarily, on the general market conditions, investment performance made by the respective fund
managers and existing competition in the market. If we are unable to sustain the increase in our AuM or
the funds that we distribute underperform, clients may seek distributors or directly invest in financial
products themselves, which in turn could result in reduced revenue from distribution and sale of financial
products and, thus, could adversely impact our revenues and results of operations.

Anand Rathi Commodities Limited (“ARCL”), one of our promoter group entity and its Directors, on
account of being a commodity broker with NSEL, are involved in a proceedings involved with SEBI
and Economic Offence Wing of Mumbai Police (‘EOW”). Also, proceedings under relevant section of
IPC and MPID Act are pending against ARCL and one of its ex-Director who is also a Director in our
Company. Any adverse outcome in the aforesaid proceedings would have an adverse effect on the
brand and reputation of the Anand Rathi Group, which could have an adverse impact on our business,
financial condition and results of operations.

By way of a notification dated June 5, 2007 (“Exemption Notification”), the Central Government
exempted NSEL from complying with certain requirements of the FCRA in relation to all one day
forward contracts, subject to certain conditions, including, amongst other things, no short selling by the
members of the exchange and that all outstanding positions of the trade at the end of the day shall result
in delivery. On April 27, 2012, the Ministry of Consumer Affairs, Food and Public Distribution
(Department of Consumer Affairs) (“MCA”) issued a show cause to NSEL to explain as to why action
should not be initiated against it for violation of the conditions of the Exemption Notification. After
considering NSEL’s response and other communications, MCA vide its letter dated July 12, 2013
directed NSEL to submit undertaking to the fact that (i) no further/fresh contracts shall be launched by
NSEL until further instructions from the concerned authority; and (ii) all the existing contracts will be
settled on the due dates. NSEL on July 31, 2013 issued a circular stating that there had been “loss of
trading interest in the market due to underlying uncertainties, which led to trade in-equilibrium”. Further,
NSEL vide the aforesaid circular suspended trading in all one day forward contracts (except e-series
contracts) until further notice and merged the delivery and settlement of all such contracts and deferred
settlement by 15 days. On August 14, 2013, NSEL issued a circular setting out details in respect of the
revised schedule for settlement of outstanding dues payable to the members (including ARCL) however,
failed to honour the revised settlement schedule resulting in default amounting to 5600 crores.

On complaint made by an investor regarding the aforesaid payment default, the Economic Offence Wing

of Mumbai Police (“EOW”) registered a FIR bearing no. 89/2013 dated September 30, 2013 against
NSEL, its officials, certain defaulting counter parties/defaulting borrowers and brokers. Pursuant to

28
investigation, EOW filed charge sheet/s against NSEL, its officials, defaulting borrowers and brokers
including ARCL and Mr. Amit Rathi (erstwhile director of ARCL) before the Sessions Judge, Special
Court under ‘The Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act,
1999” (“MPID Act”) for offence under Section 120-B read with Sections 409, 420, 465, 467, 468, 471,
474, 477-A of the IPC and section 3 of MPID Act. By way of an order dated March 4, 2019, the Sessions
Judge, Special Court under MPID Act issued process/summons to Mr. Amit Rathi and ARCL for
attendance and to answer to a charge of commission of offense mentioned in the charge sheet. Mr. Amit
Rathi and ARCL have challenged the aforesaid order dated March 4, 2019 in criminal writ petition
bearing no. 555/2020 dated January 27, 2020, before the Bombay High Court. The aforesaid criminal
writ petition is pending.

EOW pending investigation in the aforesaid matter, forwarded its interim report dated April 4, 2015 to
the FMC, particularly with respect to the role played by commodity brokers, in terms of which, while the
EOW was taking cognisance of the criminal aspects of the matter, intervention of FMC was sought in
relation to potential violations of codes of conduct or licensing terms. Subsequently, on October 28, 2016,
in purported exercise of powers under Regulation 24 of the Intermediaries Regulations read with Section
19 of the SEBI Act, SEBI issued a Notice dated 28"" October 2016 (“Notice”) to ARCL calling upon to
show cause as to why appropriate recommendation should not be made against ARCL in terms of
Regulation 27 of the SEBI Intermediaries Regulations, 2008, read with Section 12(3) of the SEBI Act,
1992, in relation to the application of the ARCL for registration as commodities derivatives broker.
ARCL responded to the allegations set out in the Notice on January 6, 2017. Subsequently, on April 24,
2017, a show cause notice was issued by SEBI under Regulation 28(1) read with Regulation 7(2) of the
SEBI (Intermediaries) Regulation (“2017 SCN”), based on an enquiry report dated April 11, 2017
submitted by a bench of designated authorities, which recommended rejection of an application
submitted by ARCL for registration as a commodity derivative broker, and initiation of prosecution
proceedings under the FCRA. Pursuant to personal hearings and submission of detailed written
submissions, SEBI on December 27, 2018 issued another show cause notice (“2018 SCN”) informing
that “reference to regulation 7(2) of SEBI (Intermediaries) Regulations, 2008 in the body of said notice
shall be read as regulation 5I read with Regulation 7(1) of Brokers Regulations” and called upon ARCL
to show cause as to why the information brought on record by the report filed by SFIO should not be
considered while deciding the application for registration. Pursuant to personal hearings, the Hon’ble
whole time member, SEBI, vide order dated February 25, 2019 (“2019 Order”), declared that ARCL is
not a fit and proper person to hold, directly or indirectly, the certificate of registration as commodity
derivatives broker, and accordingly, rejected the application dated December 16, 2015, filed by ARCL
for registration as commodity derivatives broker. The 2019 Order does not hold that any of the
allegations and/or the recommendations contained in the recommendation report of the Designated
Authority as proved and simply concluded that ARCL is guilty, by association, only on account of them
being members of the said NSEL. ARCL has challenged 2019 Order before Securities Appellate Tribunal,
Mumbai (“SAT”). NSEL has also filed an Appeal no. 566 of 2019 to challenge the said order of SEBI.

Also, a Gurgaon based company having traded at NSEL platform through ARCL has initiated
proceedings under section 9 of IBC, 2019 before National Company Law Tribunal, Mumbai against
ARCL for alleged non-payment of the operational debt amounting to = 28.81 million pertaining to its
unsettled trades at NSEL platform. The aforesaid petition has not been admitted till date.

An adverse outcome in relation to the criminal proceedings against ARCL and one of its ex-director Mr.
Amit Rathi, who is also the Director of our Company, could result in, amongst other things, conviction of
our Director and the imposition of monetary penalty on ARCL, who is also a part of our Promoter Group.
Further any adverse finding in the aforesaid criminal proceeding and appeal pending before SAT and
against 2019 Order and the NCLT proceedings, could have an adverse effect on the brand and reputation
of the Anand Rathi Group, which could have an impact on the ability to conduct our business, financial
condition and results of operations. For further details, please refer to “Outstanding Litigation and
Material Developments” on page 331 of this Prospectus.

Non-compliance with regulatory guidelines and directions/ observations during inspection by
regulatory organisations may have a material adverse effect on our business, financial condition or
results of operation.

We are subject to regular scrutiny and supervision by various regulators, statutory bodies and self-
regulatory organisations such as SEBI and AMFI. The requirements imposed by these regulators are

29
designed to ensure the integrity of the financial markets and to protect investors’ interests. Any non-
compliance with regulatory guidelines and directions in future may result in regulatory actions, which
includes issuance of administrative/warnings/deficiency letters, fines or sanctions imposed by these
regulators and, in certain circumstances, could lead to revocation of certain of our licenses. While we
attempt to comply with all regulatory provisions applicable to us, in the event we are not able to comply
with the observations made by these regulators, we could be subject to supervisory actions, which may
have a material adverse effect on our reputation, financial condition and results of operations. For details
relating to litigations, please see “Outstanding Litigation and Material Developments” on page 331 of
this Prospectus.

We will not receive any proceeds from the Offer.

This Offer includes an Offer for Sale of up to 12,000,000 Equity Shares aggregating up to 6,593.75
million by the Selling Shareholders. The entire proceeds, net of the Offer expenses borne by the Selling
Shareholders, from the Offer for Sale will be paid to the Selling Shareholders and our Company will not
receive any such proceeds. For details, see, “Objects of the Offer” on page 104 of this Prospectus.

Our distribution arrangement with AMCs can be terminated without notice, or due to failure on our
part to comply/ perform.

A significant portion i.e. 33.29% and 34.01% of our revenue from operations for the five-month period
ended August 31, 2021 and the Financial Year ended March 31, 2021 came as mutual fund distribution
from asset management companies on the basis of mutual funds distributed by us. We are empanelled
with several asset management companies for whom we act as a mutual fund distributor for their mutual
fund schemes. In the Fiscals 2021, 2020 and 2019 and as on the date of this Prospectus, there have been
no instances where the distribution arrangement with the asset management companies have been
terminated without notice or otherwise. However, we cannot assure you that our empanelment with these
companies will continue, or that we will be able to renew the same upon expiry at favourable terms or at
all, which may result in reduced trail income and an adverse effect on our revenues and results of
operations.

Furthermore, the increase in depth of the Indian financial markets and increasing investor preference for
equity investment or equity-linked products may prompt more asset management companies to
commence business operations and offer mutual fund products. We cannot assure you that we will be
able to obtain empanelment with these asset management companies, which may affect our business
prospects and our results of operations.

Our results are also dependent on the strength and reputation of the brand ‘ANANDRATHI,, as well
as the reputation of other entities forming part of the Anand Rathi Group.

We operate our business under the aegis of ‘ANANDRATHI’, a brand which is owned by, and is
registered in the name of ARFSL and is used by multiple entities in the Anand Rathi Group. This
trademark is licensed to us through a license agreement dated April 1, 2018, which was subsequently
replaced by the new brand policy approved by the board of ARFSL on March 11, 2019, which will
continue to have effect unless mutually terminated by ARFSL and our Company. Our business prospects
and ability to attract clientele are, to a certain extent, dependent on the strength and reputation of the
brand ‘ANANDRATHI as well as the reputation of other entities forming part of the Anand Rathi Group.
Our reputation could be affected by the conduct or performance of other entities forming part of the
Anand Rathi Group, over which we have no control and have rights to use the same brand as us. While
we believe that our brand is well recognised, we may be vulnerable to adverse market and client
perception, particularly in an industry where integrity, trust and client confidence are paramount. We are
exposed to the risk of litigation, misconduct, operational failure, negative publicity (including through
social media channels) or press speculation which could harm our brand and reputation.

Further, negative publicity may result in greater regulatory scrutiny of our operations and of the industry

generally. As the ‘ANANDRATHI’ brand is intrinsically linked to our Company, any reputational harm
to entities in the Anand Rathi Group, can materially and adversely impact our business and operations.

30
We operate in a highly regulated environment, which is subject to change, and existing and new laws,
regulations and government policies affecting the sectors in which we operate could adversely affect
our business, financial condition and results of operations.

We are subject to a variety of financial services regulation in the jurisdictions where we operate,
including, the SEBI Act, the SEBI (Intermediaries) Regulations, 2008, the SEBI (Investment Advisers)
Regulations, 2013 or directions issued by AMFI. The laws and regulations governing advisory and
distribution services relating to financial products have become increasingly complex and cover a wide
variety of issues, including registration, disclosures, conflicts and insider trading. We believe that
significant regulatory changes in our industry are likely to continue on a scale that exceeds the historical
pace of regulatory change, which is likely to subject industry participants to additional and generally
more stringent regulations. The requirements imposed by our regulators are designed to ensure the
integrity of the financial markets and to protect investors and other third parties who deal with us, and are
not typically designed to protect our shareholders. Consequently, these regulations often serve to limit our
activities and/or increase our costs, including through investor protection and market conduct
requirements. We may also be adversely affected by changes in the interpretation or enforcement of
existing laws and rules by various governmental authorities and self-regulatory organisations.

SEBI has recently amended the SEBI (Investment Advisers) Regulations, 2013, which inter alia provides
that a non-individual investment adviser shall have client level segregation at group level for investment
advisory and distribution services and the same client cannot be offered both advisory and distribution
services within the group of the non-individual entity. Further, the amendment provides for maintaining
an arm’s length relationship between activities as investment adviser and distributor by providing advisor
services through a separately identifiable department or division, with a condition that advisory clients
shall not be charged for distribution services and vice versa. Though, they can provide both services
under different division/separately identifiable department on arm’s length basis but shall ensure that they
do not have common clients for both services. Such changes have come into force from October 1, 2020
and from even date we have discontinued our operations under the SEBI (Investment Advisers)
Regulations, 2013. One of our Subsidiaries, Freedom Wealth Solutions Private Limited (“FWSPL”) had
earned Rs. 14.91 million as distribution and advisory fees for the period April 1, 2020 to September 30,
2020. Post discontinuation of operations under the Securities and Exchange Board of India (Investment
Advisers) Regulations, 2013, FWSPL has not earned any distribution and advisory fees till the filing of
this Prospectus.

 

For further details, please see “Key Regulations and Policies in India” on page 177 of this Prospectus.

We are highly dependent on our management team and Relationship Managers. Any loss of such team
members or the inability to attract or retain management personnel may have material adverse effect
on our business performance.

Our business and the implementation of our strategy are dependent upon our management team, who
oversee our day-to-day operations, strategy and growth of our business and also on our Relationship
Managers, who are integral for our Company to manage existing client relationships as well as establish
new Client relationships. If one or more members of our management team are unable or unwilling to
continue in their present positions, such persons would be difficult to replace and our business, prospects
and results of operations could have a material adverse effect.

Competition in our industry for skilled management and efficient employees is high, and we cannot
assure that members of our management team or high performing Relationship Managers will not leave
our Company and join our competitors, and that we will be able to find suitable replacements for them, in
a timely manner or at all. This could result in an increase in our expenses, a decline in performance of
our business, or damage to our reputation. In addition, we may need to increase employee compensation
levels in order to retain our existing team and attract any additional personnel we may require.

Our success in expanding our business will also depend, in part, on our ability to attract, retain and
motivate mid-to-senior management personnel and trained and skilled employees, to maintain a high
standard of client service. The attrition rates for the employees other than the key managerial personnel
have been 19.95%, 12.39% and 10.55% for the Fiscals 2021, 2020 and 2019, respectively. We may be
unable to successfully manage our personnel needs which could adversely affect our business prospects
and results of operations. These risks could be heightened to the extent we invest in businesses or

31
10.

geographical regions in which we have limited experience. If we are not able to address these risks, our
business, results of operations and financial condition could be materially adversely affected.

Our Company may have been operating as a NBFC without authorization from RBI as observed by the
Statutory Auditors in the Fiscal 2021 and 2020 reports. As part of the consequences for operating as
an unregistered entity, our Company may be subject to penalty as determined by RBI. Further, we may
be required to be registered as a NBFC in the future, but RBI may decide not to grant registration to
our Company as a NBFC. This may impact the business of the Company and its subsidiaries.

As the principal business of our Company is wealth management, we earn profit on the sale of securities
of ARGFL to clients as a part of our wealth management strategy. However, as per Press Note dated
April 8, 1999 issued by RBI, a company will be treated as an NBFC if its financial assets are more than
50% of its total assets (netted off by intangible assets) and income from financial assets should be more
than 50% of the gross income. Both these tests are required to be satisfied as the determinant factor for
principal business of a company. This classification has led to a situation where our principal activity
may be deemed to be one of financial business solely.

Further, the value investment in equity shares of Subsidiaries at cost for the five-month period ended
August 31, 2021 and Fiscals 2021, 2020 and 2019 is % 898.32 million, = 898.32 million, = 898.32 million
and % 538.42 million, respectively. The amount deployed by the Subsidiaries in non-financial assets for
the five-month period ended August 31, 2021 and Fiscals 2021, 2020 and 2019 is % 410.13 million, =
429.94 million, = 559.53 million and % 488.18 million, respectively...

We believe that our investments in our Subsidiaries are neither purchase and sale of securities nor the
acquisition of marketable securities which falls within the purview of business of financial institution as
defined in Section 451 I of the RBI Act. We further believe that our investments in business done through
Subsidiaries should be excluded for this purpose as it primarily comprises of deployment in non-financial
assets such as infrastructure, software development, technology upgradation etc., which in turn provides
the physical and software platform for our Company to run our business operations smoothly.

On account of the above requirements, we have sent a clarification letter dated June 10, 2021 to RBI
requesting for guidance as to whether we may be excluded from making application to register as NBFC
as we are purely and actively engaged in wealth management business and the investments in our
subsidiaries are primarily for infrastructure and software which enables our wealth management business.
As of the date of this Prospectus, our Company has received communication from RBI vide its letter
dated October 22, 2021, seeking a copy of the aforesaid letter dated June 10, 2021. Our Company on
November 1, 2021, has shared the copy of the aforesaid letter dated June 10, 2021 with the RBI.

Our Company has received further communication on November 26, 2021, from the RBI seeking a copy
of the audited financial statements of the Company for Fiscal 2021 and a certificate from the Statutory
Auditors in respect of the Company’s claim of winding up its NBFI activities during Fiscal 2022. Our
Company has provided the requisite documents vide its letter dated December 7, 2021. We cannot assure
you that we will be not receive such communication in the future.

Further, in the CARO Report of Fiscal 2021, our Statutory Auditors have included the following
observation:

“In our opinion, the Company is required to be registered under Section 451A of the Reserve Bank of
India Act, 1934 considering that the Company’s Financial Assets and Financial income constitute more
than 50 percent of the total assets and gross income. However, the Management is of the view that the
Company is actively engaged in Wealth Management business and the investments in the subsidiaries,
which are considered in the nature of financial assets are primarily for the purpose of infrastructure and
software and should not be considered as Financial Assets. In the opinion of the management, the said
investments in subsidiaries should not be considered as financial assets for computation of 50 percent
test and thus the Company may not require to register as NBFC. The Company has also submitted
request to RBI explaining this position and seeking guidance on captioned matter.”

The above observation was also highlighted by the Statutory Auditors in the CARO Report of Fiscal 2020.

In the event that the RBI does not agree with our interpretation or opines that we are required to seek
registration as an NBFC, we will be required to apply for registration as NBFC, which may have a

32
11.

12.

material impact on account of increased compliances and consequent costs. For instance, if classified as
an NBFC, we will also be required to comply with additional requirements, including for maintenance of
regulatorily mandated capital limits, restrictions of access to funds, periodic inspections and reporting
requirements, which in turn may adversely impact our ability to access capital or to raise funds in a
timely manner, or at all. There can be no assurance that we will be able to comply with any requirements
of being classified as an NBFC and failure to comply with registration requirements or additional
compliance requirements may subject us to penalties, loss of licenses or reputational risks. We may also
be required to spend substantial management time in order to comply with such requirements, which
would adversely impact our current business plans and operations.

Our Company is dependent on Anand Rathi Global Finance Limited (‘ARGFL”), one of our Group
Companies, for the business relating to the structured products. Any change in the regulatory
environment of non-banking financial services may have an adverse impact on the business and
operations of the Company.

ARGFL is in the business of non-banking financial services. As a part of its business activities, it issues
financial products (non-convertible debentures / structured products) for our ultimate clients. As of
August 31, 2021, we bought all these products from ARGFL which are then sold to certain of our clients.
The percentage of revenue contributed by sale of structured products (market linked debentures) to the
overall revenue of the Company for the five-month period ended August 31, 2021, Fiscal 2021, 2020 and
2019 are 63.21%, 59.23%, 66.10% and 52.35%, respectively. As a result, any adverse impact on the
business of ARGFL due to any regulatory restrictions, may constrain our revenue stream from this
business line. While we believe that such transactions are executed on an arm’s length basis, we cannot
assure you that the respective regulatory authorities will concur with our views or will not seek
adjustments to our income from taxation purposes.

Certain minority shareholders of ARDWPL, one of our Subsidiaries, have filed a petition under the
Companies Act, 2013, alleging, amongst other things, oppression and mismanagement against our
Company, Subsidiaries and some of our Directors. Any adverse outcome in these proceedings could
have an adverse impact on the Offer and our reputation.

Certain minority shareholders of ARDWPL (collectively, the “Petitioners”), one of the Company’s
Subsidiaries, collectively holding, 428,490 equity shares of face value of = 10 each of ARDWPL (7.97%
of the shareholding) filed a petition (“Petition”) before the National Company Law Tribunal, Mumbai
Bench (“NCLT Mumbai”), under Sections 241(1)(a) and (b), and Section 242, read with Section 244 of
the Companies Act, 2013, against the Company, its Subsidiaries (i.e. ARDWPL, FWSPL and FIINFRA),
Mr. Anand Rathi, Mr. Amit Rathi, Mr. Rakesh Rawal and others (collectively, the “Respondents”),
alleging, amongst other things, (a) oppression and mismanagement; (b) that the Respondents have acted
against the interest of ARDWPL by transferring the investments held by ARDWPL in favour of our
Company, wherein the Petitioners are not shareholders; (c) that the Petitioners have been kept away from
the affairs of ARDWPL and (d) that the affairs of ARDWPL are being conducted as a sole proprietorship
instead of a company.

The Petitioners have sought various reliefs from the NCLT in the Petition, including, amongst other
things, an exit on mutually agreeable terms, that the Respondents be directed to maintain status quo in the
board and shareholding of ARDWPL, that the Respondents be restrained from transferring the
investments / assets of ARDWPL, FWSPL, FIINFRA and the Company, that an ad interim ex parte order
be passed directing SEBI to not consider the offer documents of our Company with respect to its initial
public offering and to stay such offering and that a receiver be appointed to regulate the affairs of
ARDWPL. Mr. Amit Rathi has filed a Miscellaneous Application under the National Company Law
Tribunal Rules, 2016 challenging the maintainability of the Petition (“Application”), which has been
responded to by the Petitioners, seeking dismissal of the Application. Further, Mr. Amit Rathi has also
filed an affidavit dated February 6, 2021 (the “Reply”) on behalf of our Company and ARDWPL, before
the NCLT Mumbai, denying the allegations in the Petition. Supriya Rathi, one of the Respondents, has
also filed a miscellaneous application dated March 3, 2021, praying for dismissal of the Petition and that
the NCLT refer the disputes arising from the Petition to arbitration.

Further, SEBI filed its affidavit-in-reply dated July 20, 2021 praying that no interim relief be granted
against and that it does not regulate on merits or approve an offer document such as DRHP but only

33
13.

14,

mandates true, fair and adequate disclosures by issuing a letter of observation(s) specifying changes about
disclosures and accordingly, the offer document is required to be modified.

NCLT vide order dated October 18, 2021 (“October 2021 Order”), while rejecting Petitioners’ prayer
for grant of interim relief observed that “The rights of the shareholders qua the company in the Petition
alleging the oppression and mismanagement are squarely covered under the SHA/SPA dated August 8,
2016 and hence are bound by the terms and conditions thereof. The Anand Rathi Group being the
majority shareholders and in control of the management of the company have acted in the best interest of
the Company due to the notification of MCA and the Petitioners have waived their rights to object to the
transfers being made by acquiescence. Further, the action has been brought about with reference to the
holding of meeting of EGM at a belated stage and hence there is no balance of convenience and
irreparable loss cause to the Petitioner.” Also, vide October 2021 Order, NCLT while allowing the
miscellaneous application dated March 3, 2021 directed the parties to refer the dispute to arbitration. The
Petitioners have challenged the October 2021 Order in appeal before the National Company Law
Appellate Tribunal, New Delhi.

Any adverse outcome in this regard, could potentially have an adverse impact on our Offer and our
reputation. For further details, please refer to “Outstanding Litigation and Material Developments” on
page 332 of this Prospectus.

We require certain approvals and licenses in the ordinary course of business, and the failure to obtain
or retain them in a timely manner may have a material adverse effect on our operations.

We require certain approvals, licenses, registrations and permissions for operating our business, some of
which may have expired and for which we may have either made, or are in the process of making, an
application for obtaining the approval for its renewal. We have filed necessary applications with various
authorities such as Trademark Registry, Assistant Commissioner of Profession Tax, Employee State
Insurance Corporation and Regional PF Commissioner in relation to change in name on the certificates
pursuant to change in name of our Company and the same are pending for approval and our Company is
yet to receive the copies of new certificate in the new name. While we have procured all material
approvals for our operations, we are in the process of renewing/procuring certain approvals and licenses.
If we are unable to obtain or retain any of these approvals or licenses, or renewals thereof, in a timely
manner, our business may be adversely affected. Furthermore, our government approvals and licenses are
subject to numerous conditions, some of which may be onerous and require us to make substantial
compliance-related expenditure. If we are unable to comply or a regulator claims that we have not
complied with these conditions, our business, prospects, financial condition and results of operations may
be adversely affected. For details see “Government and Other Approvals” on page 345 of this Prospectus.

There are outstanding legal proceedings against our Company, our Subsidiaries, our Promoters, our
Directors and our Group Companies, which if determined adversely, could affect our business and
results of operations.

In the ordinary course of our business, our Company, our Subsidiaries, our Promoters, our Directors and
our Group Companies are involved in certain legal proceedings, pending at varying levels of adjudication
before various courts, tribunals and appellate authorities. Any such action may include claims for
substantial or unspecified compensatory and punitive damages, as well as civil, regulatory or criminal
proceedings against our Directors, officers or employees, and the probability and amount of liability, if
any, may be significant or remain unknown for significant periods of time. In this Prospectus, pending
litigation involving our Company other than criminal proceedings, statutory or regulatory actions and
taxation matters (pending actions or any actions taken in the past five years), are considered material if
the monetary amount of claim by or against the entity or person in any such pending matter is in excess
of % 22.56 million.

A summary of such legal proceedings, including material legal proceedings, is set out below:

Litigation against our Company
(in 2 million except where otherwise stated, to the extent ascertainable)

 

Nature of litigation Number of outstanding cases Amount involved

 

i

Criminal proceedings Nil N.A.

 

a

Regulatory/ statutory proceedings 2 0.84

 

 

 

.

 

 

Taxation proceedings Nil NA.

 

34

 
 

 

 

thresholds

Nature of litigation Number of outstanding cases Amount involved
Direct
Indirect
4] Other matters exceeding the materiality 1 N.A.

 

Litigation against our Directors

(in 2 million except where otherwise stated, to the extent ascertainable)

 

 

 

 

 

 

 

thresholds

 

 

Nature of litigation Number of outstanding cases Amount involved
1] Criminal proceedings 7 107.87
2] Regulatory/ statutory proceedings Nil@ N.A.@
3] Taxation proceedings 1 3.63
Direct
Indirect
4] Other matters exceeding the materiality 2 73.15

 

© This does not include the matter initiated by SEBI in 2001 against, inter alia, Mr. Anand Rathi, one of our Promoters and Directors.

For details, see “Outstanding Litigation and Material Developments
Anand Rathi, Anand Rathi Share and Stock Brokers Limited " on page 340 of this Prospectus".

Litigation against our Subsidiaries

Orders passed by SEBI against the Group Companies — Mr.

(in million except where otherwise stated, to the extent ascertainable)

 

 

 

 

 

thresholds

Nature of litigation Number of outstanding cases Amount involved
1] Criminal proceedings Nil NA.
2] Regulatory/ statutory proceedings Nil N.A.
3! Taxation proceedings 1 4.62
Direct
Indirect
4] Other matters exceeding the materiality 1 N.A.

 

Litigation against our Promoters

(in 2 million except where otherwise stated, to the extent ascertainable)

 

 

 

 

 

 

 

thresholds

 

 

Nature of litigation Number of outstanding cases Amount involved
1] Criminal proceedings 6 107.87
2! Regulatory/ statutory proceedings NiIe® NACo
3] Taxation proceedings
Direct a 3.63
Indirect
4] Other matters exceeding the materiality 5 107.50

 

© This does not include the matter initiated by SEBI in 2001 against, inter alia, Mr. Anand Rathi, one of our Promoters and Directors.

For details, see “Outstanding Litigation and Material Developments
Anand Rathi, Anand Rathi Share and Stock Brokers Limited " on page 340 of this Prospectus”.

Orders passed by SEBI against the Group Companies — Mr.

(1) This does not include 4 matters involving imposition of penalty of 20.60 million on ARFSL. (formerly Anand Rathi Securities
Private Limited whose name got changed to Anand Rathi Securities Limited and thereafter Anand Rathi Financial Services
Limited. The BSE Broking Business of ARFSL stands transferred to and vested in ARSSBL as per the Scheme of Arrangement
sanctioned by the Bombay High Court in Company Petition No. 420/2009, 421/2009 and 42/2009). For details, see

“Outstanding Litigation and Material Developments

ARFSL ~ Paragraph (ix) on page 343 of this Prospectus

Litigation against our Group Companies which has a material impact on our Company

Orders passed by SEBI against the Group Companies ~ ARSSBL and

(in million except where otherwise stated, to the extent ascertainable)

 

 

 

 

 

 

 

thresholds

 

 

Nature of litigation Number of outstanding cases Amount involved
1] Criminal proceedings 5 107.87
2! Regulatory/ statutory proceedings 1A 82.924
3! Taxation proceedings Nil NA.
Direct
Indirect
4] Other matters exceeding the materiality 1 34.35

 

 

A This does not include the 12 orders passed by

:EBI involving imposition of penalties of approximately 22.4 million on ARAL and

ARSSBL (including 4 matters having penalty of 20.60 million imposed on ARFSL and whose BSE Broking Business stands transferred

35

 

 

 
15.

16.

to and vested in ARSSBL as per the Scheme of Arrangement sanctioned by the Bombay High Court in Company Petition No. 420/2009,
421/2009 and 42/2009), our Group Companies.

Given the uncertainties and complexity of many of these regulatory or legal proceedings, their outcome
generally cannot be predicted with any reasonable degree of certainty.

We cannot assure you that any of the outstanding legal proceedings will be settled in our favour, or that
no additional liability will arise out of these proceedings. We may incur significant expenses and
management time in such legal proceedings and may have to make provisions in our financial statements,
which could increase our expenses and liabilities. An adverse outcome in any of these proceedings could
have an adverse effect on our business, financial condition, results of operations, and prospects.

Moreover, even claims are withdrawn, or if we ultimately prevail in a relevant litigation, regulatory
action or investigation, we could suffer significant harm to our reputation, which could materially affect
our prospects and future growth, including our ability to attract new contracts, retain current contracts
and recruit and retain employees and agents.

For details, see “Outstanding Litigation and Material Developments” on page 331 of this Prospectus.

Given the uncertainties and complexity of many of these regulatory or legal proceedings, their outcome
generally cannot be predicted with any reasonable degree of certainty.

We cannot assure you that any of the outstanding legal proceedings will be settled in our favour, or that
no additional liability will arise out of these proceedings. We may incur significant expenses and
management time in such legal proceedings and may have to make provisions in our financial statements,
which could increase our expenses and liabilities. An adverse outcome in any of these proceedings could
have an adverse effect on our business, financial condition, results of operations, and prospects.

Moreover, even claims are withdrawn, or if we ultimately prevail in a relevant litigation, regulatory
action or investigation, we could suffer significant harm to our reputation, which could materially affect
our prospects and future growth, including our ability to attract new contracts, retain current contracts
and recruit and retain employees and agents.

For details, see “Outstanding Litigation and Material Developments” on page 331 of this Prospectus.

NSE has imposed a penalty on Anand Rathi Share and Stock Brokers Limited (‘ARSSBL”), one of
our Group Companies. Any adverse finding in this proceeding may have an adverse effect on the
brand and reputation of ARSSBL

NSE, by way of its order dated April 9, 2021 (“April 9 Order”), imposed a penalty amounting to Rs.
82.92 million on Anand Rathi Share and Stock Brokers Limited (“ARSSBL”), one of our Group
Companies, in terms of NSE Circular No. NSE/INVG/39647 dated December 13, 2018, Circular No.
NSE/INVG/2019/40175 dated February 7, 2019 and Circular No. NSE/INVG/2020/43435 dated
February 4, 2020. NSE purportedly observed certain non-genuine trades in the F&O segment, declaring
that ARSSBL is the trading member common on both sides of the reversal trades executed in a
synchronized manner, and that the transactions involved were executed with the same companies
(namely, Anand Rathi Global Finance Limited, one of our Group Companies, and our Company) under
common management. ARSSBL has appealed the April 9 Order before the Securities Appellate Tribunal,
Mumbai (“SAT”). The matter is currently pending. However, in compliance with the interim order dated
May 20, 2021, passed by the SAT, ARSSBL deposited the penalty amount of % 82.92 million with NSE
on May 27, 2021, subject to the result of the appeal.

Any adverse finding in this proceeding may have an adverse effect on the brand and reputation of
ARSSBL. For further details, please refer to “Outstanding Litigation and Material Developments — Any
pending litigation involving the Group Companies which has a material impact on our Company” on
page 339 of this Prospectus.

We have entered into related party transactions. We will continue to enter into such transactions and

there can be no assurance that we could not have achieved more favourable terms had such
transactions not been entered into with related parties.

36
17.

18.

We have entered into transactions with several related parties which were conducted in compliance with
applicable laws. As on August 31, 2021, and for Fiscals 2021, 2020 and 2019, the aggregate revenue
from related parties was 2 14.46 million, = 51.00 million, = 37.76 million and 2 192.71 million,
respectively, which was 0.86%, 1.83%, 1.12% and 6.78% of the total revenue of our Company for the
respective period. Further, loans given to related parties are repayable on demand and have no tenure.
The Company (on a consolidated basis) has surplus funds for short term which are utilized for extending
inter-corporate deposits to the related parties on an arms-length basis in accordance with applicable law.
It is likely that we will enter into related party transactions in the future and there can be no assurance
that such transactions, individually or in the aggregate, will not have an adverse effect on our financial
condition and results of operations. Furthermore, if any relevant regulatory authority disagrees with our
views of such related party transactions, we may be required to expend senior management time to
defend our positions on such matters and may have to face additional pay-outs and penalties. For more
information regarding our related party transactions and for litigation involving relevant entities, see
“Other Financial Information — Related Party Transactions” and “Outstanding Litigation and Material
Developments” on pages 295 and 331, respectively, of this Prospectus.

For the corporate structure, please see “Our Business” on page 162.

Competition from existing and new market participants in our industry may affect our market share,
or results of operations.

We face competition from the wealth management arms of several market participants, including
established Indian and foreign banks, as well as private banks and dedicated wealth management
companies. We also compete with a large number of independent financial advisors as a consequence of
the fragmented wealth management market in India. As a result, we may face difficulty in attracting and
retaining clients and their funds. Further, our competition consists of large, integrated banks with wide
geographical reach which offer a variety of financial services and enables them to leverage their existing
platforms and services to cross-sell their wealth management services. Further, with the rise in the use of
technology, we may face competition from new entrants in the industry who may leverage technology to
provide products and services similar to us or which our clients prefer over services provided by us. This
increased competition may result in our inability to grow or maintain our market share. It may also result
in reduced AuM, which may adversely affect our results of operations.

Security breaches of clients’ confidential information that we store may harm our reputation and
expose us to liability.

We store clients’ bank information, credit information and other sensitive data. While we have measures
and systems in place to protect clients’ confidential data, any accidental or wilful security breach or other
unauthorised access could cause the theft and criminal use of this data. Security breach or unauthorised
access to confidential information could also expose us to liability related to the loss of the information,
time-consuming and expensive litigation and negative publicity. In the past three Fiscals and as on the
date of this Prospectus, we have not had any instances of security breaches. If security measures are
breached because of third party action, employee error, malfeasance or otherwise, or if design flaws in
our software are exposed and exploited, and, as a result, a third party obtains unauthorised access to
client data, our relationships with clients will be severely damaged, and we could incur significant
liability and reputational damage. Further, we engage with certain third party service providers, and
although our contracts with them restrict the usage of client data and impose protective precautions, there
can be no assurance that they will abide by such contractual terms or that the contracts will be found to
be in compliance with data protection laws.

Because techniques used to obtain unauthorised access or to sabotage systems change frequently and
generally are not recognised until they are launched against a target, we and our third party hosting
facilities may be unable to anticipate these techniques or to implement adequate preventative measures.
In addition, we may be required under applicable regulations to notify individuals of data security
breaches involving their personal data. These mandatory disclosures regarding a security breach are
costly to implement and often lead to widespread negative publicity, which may cause clients to lose
confidence in the effectiveness of our data security measures.

Information Technology Act, 2000 (“IT Act’), as amended, read with rules and regulations thereunder
requires us to maintain confidentiality of sensitive personal data or information. The IT Act also imposes

37
19.

20.

stringent punishment, including imprisonment in case a person (including an intermediary), while
providing services as per a contract, accesses, reveals or discloses personal information about another
individual in violation of the contract or without consent of such other individual, knowing that the same
will cause wrongful loss or wrongful gain. India has also implemented privacy laws, including the
Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or
Information) Rules, 2011, which impose limitations and restrictions on the collection, use and disclosure
of personal information. It also mandates body corporates to adopt a privacy policy, to obtain consent
from data subjects for collecting or transferring their sensitive personal data or information and intimate
them about recipients of such collected data, as a mechanism of establishing a robust security standard.
Further, the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules,
2021 require body corporates and intermediaries (respectively) to implement appropriate security control
measures that are commensurate with the information assets being protected.

In September 2019, the Ministry of Electronics and Information Technology of the GOI formed a
committee of experts (“NPD Committee”) to recommend a regulatory regime to govern non-personal
data (“NPD”). The NPD Committee has released two reports which recommend, among other items, a
framework to govern NPD (defined as any data other than personal data), access and sharing of NPD
with the Gol and corporations alike who will undertake a ‘duty of care’ to the community to which the
NPD pertains and a registration regime for “data businesses”, meaning businesses that collect, process or
store data, both personal and non-personal. In December 2019, the Personal Data Protection Bill 2019
(“PDP Bill”) was tabled in the Indian Parliament by the Government of India and has currently been
referred to a joint parliamentary committee. The PDP Bill proposes a legal framework governing the
processing of personal data, where such data has been collected, disclosed, shared or otherwise processed
within India, as well as any processing of personal data by the Gol, Indian companies, Indian citizens or
any person or body of persons incorporated or created under Indian law. The PDP Bill defines personal
data and sensitive personal data, prescribes rules for collecting, storing and processing of such data and
creates rights and obligations of data-subjects and processors. The Indian Government has also been
mooting a legislation governing non-personal data. If these or similar legislation are enacted, we may
incur additional compliance costs, it may affect us in ways that we are currently unable to predict and our
business, results of operation and financial condition may be adversely affected.

Any security breach, whether actual or perceived, would harm our reputation, and result in loss of clients,
which could in turn have a material adverse effect on our business, prospects, results of operations,
financial condition or cash flows.

We may not be able to fully comply with anti-money-laundering, insider trading and anti-terrorism
rules and regulations, which could result in criminal and regulatory fines and severe reputational
damage.

Although we have implemented comprehensive anti-money laundering (“AML”), ‘“‘know your
customer”’ (*““KYC’’) and insider trading policies and procedures and seek to adhere to all requirements
under Indian law, there can be no assurances that these policies and procedures will be completely
effective. If, in the future, we are unable to comply with reporting requirements or other AML, KYC or
insider trading regulations, or are associated with money laundering or terrorist financing, our reputation,
ability to continue our business, financial condition, results of operations or prospects could be adversely
affected. In addition, involvement in such activities may carry criminal or regulatory fines and sanctions.

There have been instances of discrepancies in relation to certain of our corporate records and
statutory filings with the RoC under applicable laws. Any proceedings that may be initiated in this
regard, or any adverse outcome of such proceedings, could adversely impact our reputation, business
and our results of operations.

There have been certain discrepancies in relation to statutory filings required to be made by us with the
RoC under applicable laws, as well as certain other non-compliances incurred by us under the Companies
Act, 1956 and the Companies Act, 2013. We have filed applications for compounding with the RoC, with
respect to (a) delay in appointment of Independent Directors, (b) delay in constituting the Audit
Committee; and (c) delay in constituting the Nomination and Remuneration Committee. For further
details in relation to these compounding applications, please refer to “Outstanding Litigation and
Material Developments” on page 332 of this Prospectus.

38
21.

22.

In addition to the above, there were certain other past instances of non-compliance relating to disclosure
requirements under the Companies Act, pertaining to (i) disclosure in the Board report with respect to the
composition of the Audit Committee and (ii) in name of the one of the initial subscribers as Mr. Sidharth
Jadhav in our Memorandum of Association and our Register of Shareholders | the minutes of the meeting
of our Board which stated that it was Mr. Santosh Jadhav.

During Fiscal 2016-17, our Company had undertaken two allotments on a rights basis (collectively,
“Rights Issues”), consisting of 4,371,000 Equity Shares on September 19, 2016, and 2,169,834 Equity
Shares on October 25, 2016, which were erroneously recorded as private placements in the records of the
Company. Subsequently, on discovery of these errors, our Company suo motu resolved to rectify its
records and consequently filed the revised forms on November 1, 2019, with due references to the
original erroneous documentation and correctly recording these allotments as rights issues.

Further, our Company undertook two private placements of 34,000 Equity Shares and 50,000 Equity
Shares on January 9, 2017 and January 19, 2017, respectively, wherein the Company failed to open
separate bank accounts for receipt of funds, as prescribed under the Companies Act. On February 7, 2020,
we applied for adjudication of penalties with the RoC (“Adjudication Application”), with respect to all
the above matters. The RoC passed two orders with respect to the Adjudication Application, both dated
March 30, 2021, and imposed penalties of 20.34 million and 20.50 million with respect to the two private
placements and noted the facts with respect to the Rights Issues. Our Company has paid the above-
mentioned penalties, aggregating to = 0.84 million, on April 21, 2021. For further details in relation to the
Adjudication Application and the orders passed by the RoC, please refer to “Capital Structure” and
“Outstanding Litigation and Material Developments” on page 79 and 332, respectively, of this
Prospectus.

With respect to the above non-compliances and any non-compliances that may occur going forward, there
can be no assurance that the RoC, or any other applicable statutory/regulatory authority, will not take an
adverse view and, consequently, initiate proceedings against our Company or any of our Directors. Any
such proceedings, or any adverse outcome of such proceedings could adversely impact our reputation,
business and our results of operations.

If we are unable to maintain an effective system of internal controls, we may not be able to
successfully manage, or accurately report, our financial risks.

Effective internal controls are necessary for us to manage our operations, prepare reliable financial
reports and effectively avoid fraud. Moreover, any internal controls that we may implement, or our level
of compliance with such controls, may deteriorate over time, due to evolving business conditions. In the
CARO Report of Financial Year 2019-20 and 2020-21, while considering the internal control over the
financial reporting criteria established by the Company, the Statutory Auditors have observed that in light
of the essential component of internal control stated in the Guidance Note, appropriate documentation
needs to be strengthened to make the same commensurate with the size of the Company and nature of its
business. There can be no assurance that deficiencies in our internal controls will not arise in the future,
or that we will be able to implement, and continue to maintain, adequate measures to rectify or mitigate
any such deficiencies in our internal controls. Any inability on our part to adequately detect, rectify or
mitigate any such deficiencies in our internal controls may adversely impact our ability to accurately
report, or successfully manage, our financial risks, and to avoid fraud.

Failure or disruption of our IT systems may adversely affect our business, financial condition, results
of operations and prospects.

We have implemented various information technology (“IT”) solutions to cover key areas of our
operations and accounting.

These systems are potentially vulnerable to damage or interruption from a variety of sources, which could
result in a material adverse effect on our operations. An IT malfunction could disrupt our business or lead
to disclosure of sensitive company information. Our ability to maintain our business operations depends
on the proper and efficient operation and functioning of various IT systems, which are susceptible to
malfunctions and interruptions (including those due to equipment damage, power outages, computer
viruses and a range of other hardware, software and network problems).

39
23.

24,

25.

Our DWM business, uses technology to interact with clients via online/mobile based services delivered
by our employees and client engagement partners. A significant or large-scale malfunction or interruption
of one or more of our IT systems could adversely affect our ability to keep our operations running
efficiently. In addition, it is possible that a malfunction of our data system security measures could enable
unauthorised persons to access sensitive business data, including information relating to our intellectual
property or business strategy or those of our clients. Such malfunction or disruptions could cause
economic losses for which we could be held liable. A failure of our information technology systems
could also cause damage to our reputation which could harm our business. Any of these developments,
alone or in combination, could have a material adverse effect on our business, financial condition and
results of operations.

Further, unavailability of, or failure to retain, well trained employees capable of constantly servicing our
IT systems may lead to inefficiency or disruption of IT system thereby adversely affecting our ability to
operate efficiently.

During the last three Fiscals and as on the date of this Prospectus, there have been no instances of failure
or disruption of our IT systems. Any failure or disruption in the operation of these systems or the loss of
data due to such failure or disruption (including due to human error or sabotage) may affect our ability to
plan, track, record and analyse work in progress and sales, process financial information, meet business
objectives based on IT initiatives, or otherwise conduct our normal business operations, which may
increase our costs and otherwise adversely affect our business, financial condition, results of operations
and prospects.

We are dependent on third party public cloud provider and any disruption in the cloud provider end
will have an impact on our business.

Our services are hosted on third party public cloud provider and such cloud services are key to our
business continuity. In the event, the third party public cloud provider fail to perform their contractual or
other obligations satisfactorily, we may be unable to successfully carry out our operations or our clients
and partners may face difficulties in their operations or we may be required to make additional
investments, which could result in reduced profits or, in some cases, losses. Any of the foregoing could
have an adverse effect on our business, results of operations, financial condition and reputation.

We may introduce new products for our customers and we cannot assure you that such products will
be profitable in the future

We introduce new products and services in our existing lines of business. We may incur costs to expand
our range of products and cannot guarantee that such new products will be successful once offered. Such
failure may be due to factors outside of our control, such as general economic conditions, competition,
changing customer demands, or our own errors in judgment of customer demands and product features. If
we fail to develop and launch these products successfully, we may lose a part or all of the costs incurred
in development and promotion or discontinue these products entirely, which could in turn increase our
expenses without a corresponding increase in revenue.

Our insurance coverage may not be adequate to protect us against all potential losses, which may have
a material adverse effect on our business, financial condition and results of operations.

Our operations are subject to various risks inherent in the financial sector, as well as fire, theft, data crash,
hacking, robbery, earthquake, flood, acts of terrorism and other force majeure events. We maintain
insurance for a small portion of our assets including with respect to our private four wheeler vehicles, fire
and special perils in India through third-party insurers. We do not have any keyman insurance policy in
place, and are not insured against business interruption, consequential damages, environmental damages,
terrorist acts and war-related events. None of our insurance policies are assigned in favour of any third-
party. We may not have identified every risk and further may not be insured against every risk, including
operational risk that may occur and the occurrence of an event that causes losses in excess of the limits
specified in our policies, or losses arising from events or risks not covered by insurance policies or due to
the same being inadequate, could materially harm our results of operations, financial condition and cash
flows. There can be no assurance that the insurance availed by us or risks covered under such insurance
policies are adequate or any claims filed will be honoured fully or timely under our insurance policies.
Also, our financial condition may be affected to the extent we suffer any loss or damage that is not
26.

27.

28.

covered by insurance or which exceeds our insurance coverage. In addition, we may not be able to renew
certain of our insurance policies upon their expiration, either on commercially acceptable terms or at all.

Further, there have been no claims in the past three Fiscals. The Company also maintains insurance
policies with respect to certain four wheelers, fire and special perils. The Company has taken insurance
coverage of 2 107.37 million for the assets shown under the head of ‘capital work in progress (office
premises)’ of % 690.39 million as of March 31, 2021 and % 653.86 million as of March 31, 2020. Over
and above this, the Company also has insurance coverage for other fixed assets of the Company through
the Anand Rathi Group level insurance policy. The coverage amount under the same is = 935.60 million.

Our Company has experienced negative cash flows in some prior periods and may do so in the future,
which could have a material adverse effect on our business, prospects, financial condition, cash flows
and results of operations.

Our Company has experienced negative cash flows in Fiscal 2021, the details of which are provided
below:

 

 

 

 

 

(Zin million)
Particulars FY 2020-2021
Operating Profit Before Working Capital Changes 832.11
Working Capital Changes (803.21)
Direct Taxes Paid (Net) (239.03)
Net cash flow from operating activities (210.13)

 

 

 

 

For details on the cash flows for the last three Fiscals, please refer the section titled “Management's
Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital
Resources” “ and “Financial Information — Restated IND AS Consolidated Summary Statement of Cash
Flow” on pages 323 and 233, respectively of this Prospectus. We may incur negative cash flows in the
future which may have a material adverse effect on our business, prospects, results of operations and
financial condition.

Our Subsidiary has incurred losses in some prior periods and may do so in the future, which could
have a material adverse effect on our business, prospects, financial condition, cash flows and results of
operations.

One of our Subsidiary has incurred losses in the Fiscal 2020 and Fiscal 2019, based on its audited
financial statements. We cannot assure you that our Subsidiaries will not incur such losses in the future.

Set forth are the details of our Subsidiary which has incurred losses in Fiscals 2020 and 2019, based on its
audited financial statements:
(in million)

 

 

 

 

‘Name of the entity Profit / (loss) for the Fiscal
2021 2020 2019
Ffreedom Intermediary Infrastructure Private Limited 2.69 (21.77) (20.97)

 

 

 

 

 

For further details, see “Our Subsidiaries” on page 188 of this Prospectus.

Our ability to pay dividends in the future will depend on our future cash flows, working capital
requirements, capital expenditures and financial condition.

The amount of our future dividend payments, if any, will be at the sole discretion of our Board of
Directors and will depend on our future earnings, cash flows, financial condition, working capital
requirements, capital expenditures, applicable Indian legal restrictions and other factors. There can be no
assurance that we will pay dividends. We may decide to retain all of our earnings to finance the
development and expansion of our business and, therefore, may not declare dividends on our Equity
Shares. Additionally, in the future, we may be restricted by the terms of our financing agreements in
making dividend payments unless otherwise agreed with our lenders. Our historical payment of
dividends is not indicative of any payments of dividends in the future. We may be unable to pay
dividends in the near or medium term and our future dividend policy will depend on our capital
requirements, financial condition and results of operations. For details, see “Dividend Policy” on page
224 of this Prospectus.

41
29.

30.

We have undertaken and may continue to undertake strategic investments and alliances, acquisitions
and mergers in the future, which may be difficult to integrate and manage. These may expose us to
uncertainties and risks, any of which could adversely affect our business, financial conditions and
result of operations.

We have pursued and may continue to pursue strategic investments and alliances in India as a mode of
expanding our operations. Going forward, we may undertake acquisitions, mergers, investments and
expansions to enhance our operations and technological capabilities. There can be no assurance that we
will be able to raise sufficient funds to finance such strategies for growth. Further, expansion and
acquisitions may require us to incur or assume new debt, expose us to future funding obligations, legal
claims, past liabilities, regulatory probes or integration risks and we cannot assure you that such
expansion or acquisitions will contribute to our profitability.

 

 

Furthermore, the return on capital deployed in such acquisitions will depend on the price of the
acquisitions and efficiency of integration of acquired business employees and assets. We may also face
numerous risks and uncertainties combining, transferring, separating or integrating the relevant
businesses and systems, including the need to align accounting and data-processing systems and
management controls and to integrate relationships with clients, trading counterparties and business
partners. We may not be able to realise the benefits we might anticipate from any such acquisitions,
which may adversely affect our growth prospects and results of operations. Moreover, we may expend
significant management attention trying to do so, but may not see results. In addition, there can be no
assurance that we will be able to consummate our expansions, acquisitions, mergers or alliances in the
future on terms acceptable to us, or at all.

Additionally, factors such as competition, culture, regulatory regimes, business practices and customs and
client requirements in the markets that we may target differ from those in our current markets and our
experience in our current markets may not be applicable to these new markets. In addition, as we enter
new markets and geographical regions, we are likely to compete with other banks and financial
institutions that already have a presence in those jurisdictions and markets. As these banks and financial
institutions are more familiar with local regulations, business practices and customs, they may have
developed stronger relationships with clients. Our business expansion may be exposed to various
additional challenges, including obtaining the necessary governmental approvals, identifying and
collaborating with local business and partners with whom we may have no previous working relationship,
successfully gauging market conditions in the local markets in which we have no previous familiarity,
attracting potential clients in a market in which we do not have significant experience or visibility, being
susceptible to local laws, including taxation in additional geographical areas in India and overseas, and
adapting our marketing strategy and operations to the different regions. Due to the aforementioned
challenges, if we are unable to expand our current operations on favourable terms or at all it may
adversely affect our business prospects, financial condition and results of operations.

In the past our Company had made acquisitions of FWSPL and FIINFRA pursuant to ARDWPL
Shareholders Agreement and purchase of certain assets from Religare Wealth Management Limited
pursuant to the Asset Purchase Agreement. For details see “History and Certain Corporate Matters” on
page 182 of this Prospectus.

Industry information included in this Prospectus has been derived from an industry report
commissioned for this Offer, from CARE Advisory Research and Training Limited and paid by us for
such purpose. There can be no assurance that such third-party statistical, financial and other industry
information is either complete or accurate.

Certain information in the sections entitled “Our Business” “Industry Overview” and “Management's
Discussion and Analysis of Financial Condition and Results of Operations” on pages 160, 113 and 297
of this Prospectus includes information that is derived from a report dated October, 2021, titled “Industry
Research Report on Wealth Management” prepared by CARE Advisory Research and Training Limited
(“CARE Advisory”), being appointed by the Company on April 15, 2021. We have commissioned and
paid for this report for the purpose of confirming our understanding of the industry in connection with the
Offer. CARE Advisory has advised that while it has taken due care and caution in preparing the report
based on information obtained from sources which it considers reliable, it does not guarantee the
accuracy, adequacy or completeness of the CARE Advisory or the data therein and is not responsible for
any errors or omissions or for the results obtained from the use of CARE Advisory or the data therein.

42
31.

32.

33.

The CARE Advisory highlights certain industry and market data relating to our Company and our
competitors. Such data is subject to many assumptions. There are no standard data gathering
methodologies in the industry in which we conduct our business, and methodologies and assumptions
may vary widely among different industry sources. Further, such assumptions may change based on
various factors. We cannot assure you that CARE Advisory’s assumptions are correct or will not change
and accordingly our position in the market may differ from that presented in this Prospectus. Further, the
CARE Advisory is not a recommendation to invest or disinvest in our Company or any company covered
in the CARE Advisory. CARE Advisory has stated that it is not responsible for any loss or damage
arising from the use of the CARE Advisory. Prospective investors are advised not to unduly rely on the
CARE Advisory when making their investment decision.

Such data may also be produced on different bases from those used in the industry publications we have
referenced. Therefore, discussions of matters relating to India, its economy and the industries in which
we currently operate are subject to the caveat that the third-party and statistical data upon which such
discussions are based may be incomplete or unreliable. For details, see “Industry Overview” on page 113
of this Prospectus.

We have certain contingent liabilities, which, if they materialize, may adversely affect our results of
operations, financial condition and cash flows.

The following table sets forth certain information relating to our contingent liabilities as per Ind-AS 37,
as of August 31, 2021:
(@ in million)

 

 

 

Particulars As of August 31, 2021
Liabilities disputed — appeals filed with respect to Income Tax demand for 4.62
Assessment Year 2013-14 (Penalty order under sec 271(1)I)

Total 4.62

 

 

 

 

If a significant portion of these liabilities materialize, it could have an adverse effect on our results of
operations, cash flows and financial condition. For details of our contingent liabilities as of August 31,
2021, as per Ind-AS 37, see “Financial Information — Restated Ind AS Consolidated Summary Statement
of Contingent Liability” on page 278.

Certain of our Promoters, Directors and Key Management Personnel may be interested in our
Company other than remuneration and reimbursement of expenses.

Certain of our Directors and Key Management Personnel are interested in our Company, in addition to
regular remuneration or benefits and reimbursement of expenses, to the extent of their shareholding,
direct and indirect, and stock options in our Company and benefits arising therefrom. Our Promoters are
also interested in our Company to the extent of their shareholding in our Company. Our Promoters and
certain of our Key Management Personnel may also be deemed to be interested to the extent of their
shareholding in our Group Companies on account of related party transactions entered into by our
Company with such Group Companies. There can be no assurance that our Promoters and our Key
Management Personnel will exercise their rights as shareholders to the benefit and best interest of our
Company. Our Directors may also be interested to the extent of any transaction entered into by our
Company with any other company/firm/entity in which they are director/promoter/partner. For details,
see “Our Promoters and Promoter Group”, “Our Management”, “Our Group Companies” and “Other
Financial Information — Related Party Transactions” on pages 211, 191, 218 and 295, respectively, of
this Prospectus

Some of our offices, are held by us on lease or leave and license or tenancy agreements which subject
us to certain risks.

Some of our offices are on premises that have been leased by us from third parties through lease or leave
and license or tenancy arrangements for fixed terms, typically for 36-60 months. Upon expiration of the
term of the relevant agreement for each such premise, we will be required to negotiate the terms and
conditions on which the lease agreement may be renewed. We cannot assure you that we will be able to
renew these agreements on commercially reasonable terms in a timely manner, or at all. Further, some of
our Subsidiaries and Group Companies use our Registered Office or Corporate Office as their respective
registered offices. In the event that these existing leases are terminated, or they are not renewed on

43
34,

35.

commercially acceptable terms or at all, it may have a limited impact on our operational activities for the
time being. For further details of all the lease and license agreements entered by the Company along with
relevant details, please see “Our Business” on page 175.

Direct investment in mutual funds by our existing as well as potential clients will have an adverse
impact on our revenue from mutual fund distribution.

While we initially commenced our mutual fund distribution business with a business model based on
upfront commission, given the larger proportion of equity mutual funds historically distributed by us, we
moved to a trail commission model, which has provided us with a recurring commission based on the
performance of such funds in the market. Currently, we derive our revenue from operations, from the
commission and trail income i.e. in the nature of a recurring periodic payment as long as the AuM is
reflected in our ARN code that we earn by distribution of mutual funds through our business verticals and
from fees received from funds that we distribute to our clients. With growing technology and increase in
the ease of investments in such funds, our existing, as well as potential clients may not see significance in
choosing to make their investments through us, and may choose to invest in such funds directly, thereby
reducing or eliminating our involvement in the process of investments. Our AuM comprises mutual fund
schemes and other financial products such as bonds, market linked debentures other securities held by
clients in their own demat accounts. Further, we do not include demat holdings of the clients in the AUM
unless the client has also used the distribution service of our Company or have bought market linked
debentures through us. Our consolidated AuM has increased from %. 183.93 billion as on March 31, 2019
and 2 183.55 billion as on March 31, 2020 to = 266.70 billion as on March 31, 2021. During five months
period ended August 31, 2021 our total AuM increased by 13.27% to % 302.09 billion as compared to 2
266.70 billion as on March 31, 2021. Our number of Clients in PWM vertical have increased from 4,258
as on March 31, 2019 and 5,121 as on March 31, 2020 to 6,109 as on March 31, 2021 and 6,564 as on
August 31, 2021. For details of break-up of our AuM, see “Our Business” on page 161.

In the event that such existing or potential clients choose to invest in such funds directly, our AuM or
growth in AuM may reduce which would have an adverse impact on our business and results of
operations.

We cannot ensure that our intellectual property is protected from being copied or used by others,
including our competitors, and intellectual property infringement actions may be brought against us,
which could have a material adverse effect on our business.

We use, among others, the name, brand and trademark ‘ANANDRATHI’ and associated logos in the
ordinary course of our business and in our corporate name. The trademark and tagline of “Private Wealth.
Uncomplicated” are not registered, nor have they been applied for. The trademark ‘ANANDRATHI’ is
owned by, and is currently registered in the name of ARFSL. This trademark is licensed to us through a
license agreement dated April 1, 2018, which was subsequently replaced by the new brand policy
approved by the board of ARFSL on March 11, 2019, which will continue to have effect unless mutually
terminated by ARFSL and our Company. The said brand policy became effective from January 1, 2019,
and the brand charges were paid as follows: From April 1, 2018 to December 31, 2018: = 0.37 million
(proportionately for nine months), = 3.19 million from January 1, 2019 to March 31, 2019. The total
amount of brand usage charges paid in Fiscal 2019 was 2 3.56 million. Further, the amount of = 16.21
million was paid in Fiscal 2020, subject to levy of GST in accordance with the terms and conditions
mentioned in the brand policy, i.e.: 0.5% of the gross revenue; or 5% of profit before tax (before brand
charges); or 1% of net interest margin (only in case of NBFC), whichever is lower.

As per the terms of the brand policy, the calculation for brand charges was done considering Profit before
tax and Gross Revenue as the base. Profit before tax was as per the financial statements. Gross revenue
includes all fee, commission, brokerage, interest etc. However, no charges will be levied on revenue not
incidental to use of brand like following:

+ Gain on sale of investments

+ Interest on fixed deposits and investments

+ Dividend on investments

+ Gain on sale of property / fixed assets

+ Interest on inter-corporate deposits to group companies
36.

In the event of termination of this brand policy, we would be required to change our name and brand,
which could require us to expend significant resources to establish new branding and name recognition in
the market, which could materially and adversely affect our reputation, business, operations, financial
condition and results of operations. The brand usage charges for the five-month period ended August 31,
2021 was 8 million and for Fiscal 2021 was 2 12.69 million.

As of the date of this Prospectus, except for seven trademarks, being, OFA, FIINFRA logos,
UNCAPPED ACCELERATOR, DECAY MULTIPLE, PROTECTED ACCELERATOR, PROTECTED
CALL, PROTECTED CALL PLUS, ARWEALTH and REVERSE CHI SQUARE and three copyright
Core Concept Note, Financial Strategy- V1 and Financial Strategy- V34; we do not have any other
registered intellectual property rights, which may impact our ability to protect our intellectual property.
We may be unable to detect the unauthorised use of, or take appropriate steps to enforce, our intellectual
property rights. Failure to protect our intellectual property and trademarks adequately could harm our
reputation and affect our ability to compete effectively. Further, defending our intellectual property rights
may require significant financial and managerial resources, the expenditure of which may materially
adversely affect its business, financial condition and results of operations. Further, we cannot assure you
that such attempt to establish our brand will be successful or that ARFSL will not leverage the brand
recognition created by us for ‘ANANDRATHI’ brand to itself enter into the wealth management
business.

We may also be subject to claims that we have breached our licensed use of software or otherwise
infringed on the intellectual property of third parties, including infringement by service providers who
use such licences to provide services to us. Any of the above matters could have a material adverse effect
on our business, results of operations, financial performance and the trading price of our Equity Shares.

There were certain deficiencies observed in the mutual fund distribution activities of AR Venture
Funds Management Private Limited and corrective actions were required to rectify the same. We
cannot assure you that such deficiencies will not take place in the future and that we will not be
subject to any corrective actions imposed by the competent regulatory authority in this regard.

 

There were certain deficiencies observed in the mutual fund distribution activities of AR Venture Funds
Management Private Limited (previous name of our Company) (ARN-111569) in a due diligence report
submitted by a firm of chartered accountants as part of the unified due diligence of mutual fund
distributors facilitated by AMFI. The relevant details of the said deficiencies and the corrective actions
taken to rectify the same are disclosed below:

 

S.No

Deficiencies

Corrective actions

 

Company is involved in offering execution
services only but the practice of obtaining
written communication from the investor is not
followed.

The mutual fund transactions are executed through both demat
and non-demat route.

Demat transactions are executed online through the BSE StAR
Exchange Platform (“BSE Platform”).

Online non-demat transactions are executed through BSE
Platform or through MFU after obtaining approval from the
Clients electronically.

Physical non-demat transactions are executed through respective
AMC / RTA common application/transaction forms duly signed
by the Clients and submitted at the official points of acceptance.

 

Company does not follow the practice of
retaining application forms submitted to AMC

Employee Unique Identification Number (“EUIN”) of the
interacting employee is quoted on the Transactions executed
through “Other than online mode”. The photocopies of such
applications / transaction slips are photocopied and retained by
the respective branch under their custody for three months post
which they are stored in the central warehouse location.

 

Documentation evidencing the process of
selection, deselection including ongoing review
of mutual fund products was not available for
review.

‘A documented selection process is in place for both equity and
debt mutual funds. The detail process documents was attached.

 

 

 

No written communication from investor was
available / provided to indicate implementation

 

All transactions were executed on behalf of the Clients only after
obtaining necessary approvals from the Clients either

 

45,

 
 

S.No

Deficiencies

Corrective actions

 

of such said practice.

electronically through the in-house order generation system or
email.

 

No formal process exists to track / assess
customer feedback.

Until 2014 the Company participated in the Asia Money survey
which would measure customer satisfaction and post that till
today the Company holds client review meetings every month
with sales personnel where portfolio performance is discussed
and client feedback is taken. An annual review is held between
the client and senior management.

 

No documented hiring policy was made
available.

On verification it was observed that 93 out of
165 sales personnel were operating without
NISM certificate.

‘A documented hiring policy is in place for the sales department.
The policy document was attached and provided.

The list of RMs along with their EUIN and its validity is
monitored regularly.

‘Three months ahead of the expiry of the EUIN, follow-up is done
with the respective RMs to renew their EUIN and the EUIN is
renewed by the RMs.

NISM Certification and EUIN are pre-requisites as part of the
RM hiring exercise.

 

The Company explained that there is internal
audit process is in place.

Client accounts are opened both for demat & non-demat mode of
Investments.

Trading & demat accounts opened through application forms and
any subsequent modifications sought by Clients through signed
requests are audited through a concurrent audit process and any
observations are immediately sorted.

Non-demat accounts are opened through BSE Platform where the
Client approves the data captured in the account.

Transactions through demat and non-demat route are carried out
online through BSE Platform where clients approve the
transaction initiated on their behalf.

 

 

 

The Company explained that it recommended
goal based and long term investment plan to the
client, hence portfolio turnover ratio and % of
UM redeemed within the exit load is below
the industry level. But no redemption details
were provided to corroborate the same.

 

Processed transaction data is received through the mailback
services of RTAs and these transactions are stored in in-house
system for AUM_ monitoritoring, Client reporting and
performance measurement purposes.

The average age of equity assets has been 2.52 years for FY 15-
16 and 2.51 years for FY 16-17.

‘The average age of debt assets has been 1.62 years for FY 15-16
and 2.13 years for FY 16-17.

The average age of liquid assets has been 0.85 years for FY 15-16
and 0.98 years for FY 16-17.

The average holding period above shows that we have a low
turnover ratio and assets are generally not redeemed during the
exit load period.

 

37.

We cannot assure you that such deficiencies will not take place in the future and that we will not be
subject to any corrective actions imposed by the competent regulatory authority in this regard.

 

Our success depends in large part upon our Promoters and certain members of our Promoter Group.
If such individuals are unable or unwilling to continue in their present position, they would be difficult
to replace and our business, prospects and results of operations could have a material adverse effect.

Our individual Promoters, Mr. Anand Rathi and Mr. Pradeep Gupta, and our Director, Mr. Amit Rathi,
who is also a part of our Promoter Group, have extensive experience in the financial services industry.
We also operate our business under the aegis of brand ‘ANANDRATHI’, a brand used by multiple
entities in the Anand Rathi Group, which is owned by, and is registered in the name of ARFSL. This
trademark is licensed to us through a license agreement dated April 1, 2018, which was subsequently
replaced by the new brand policy approved by the board of ARFSL on March 11, 2019, which will

46
38.

39.

40.

continue to have effect unless mutually terminated by ARFSL and our Company. They have been crucial
to the growth of our business and we are highly dependent on them to manage our current operations and
to meet future business challenges. In particular, the active involvement of certain of our Promoters and
members of our Promoter Group in our operations, including through strategy, direction and client
relationships have been integral to our development and business. If such individuals are unable or
unwilling to continue in their present position, it would have a material adverse effect on our operations.
We cannot assure you that their services will continue to be available to us, or that we will be able to find
a suitable replacement if required. For further details on the risks in relation to usage of the
“ANANDRATHI’ logo, refer to ‘-Our results are also dependent on the strength and reputation of the
brand ‘ANANDRATHI’, as well as the reputation of other entities forming part of the Anand Rathi
Group.’ on page 30 of this Prospectus.

Some of our Promoter Group entities are involved in similar line of business that may lead to real or
potential conflicts of interest with our business.

Some of our Promoter Group entities are involved in a similar line of business which may have a
potential conflict of interest with our business. The interests of some of our Promoter Group entities may
conflict with the interests of our other Shareholders and for business considerations or otherwise, cause
our Company to take actions, or refrain from taking actions, in order to benefit themselves instead of our
Company’s interests or the interests of its other Shareholders and which may be harmful to our
Company’s interests or the interests of our other Shareholders, which may impact our business, financial
condition and results of operations.

Our Company has issued Equity Shares during the preceding one year at a price that may be below the
Offer Price and grants of stock options under our employee stock option plan may result in a charge to
our profit and loss account and, to that extent, reduce our profitability and financial condition.

We have in the preceding one year prior to filing this Prospectus, issued Equity Shares pursuant to the
ESOP 2017 and ESOP 2018 at par value of 35 per Equity Share, which may be less than the Offer Price.
The price at which the Equity Shares have been issued by our Company in the preceding one year is not
indicative of the price at which they will be issued or traded. Further, going forward, our Company may
continue to issue Equity Shares, including under the ESOP Scheme(s), at prices that may be lower than
the Offer Price. Grants of stock options result in a charge to our statement of profit and loss and reduce,
to that extent, our reported profits in future periods. Any issuance of the equity shares by us, including
through exercise of employee stock options pursuant to the ESOP Scheme we may implement in the
future, may dilute your shareholding in the Company, adversely affecting the trading price of the Equity
Shares and our ability to raise capital through an issuance of new securities. For details, please see
“Capital Structure” on page 79 of this Prospectus.

Some of our old corporate or secretarial records may not be traceable and some of our corporate
records contain discrepancies. We cannot assure you that regulatory proceedings or actions will not be
initiated against us in the future and we will not be subject to any penalty imposed by the competent
regulatory authority in this regard.

We manage our internal compliance by monitoring and evaluating internal controls and ensuring all
applicable statutory and regulatory compliances from time to time. However, there can be no assurance
that deficiencies in our internal controls will not arise in future, or that we will be able to implement, and
continue to maintain, take adequate measures to rectify or mitigate any such deficiencies in our internal
controls, in a timely manner or at all.

For instance, our Company is currently not in possession of certain secretarial records and filings for and
including in relation to certain earlier transfer of equity shares of face value of = 10 each and appointment
of our directors such as share transfer forms, annual return, confirmation from directors and also records
and filings such as, application for availability of name, certain records of the Company prior to 2005,
etc. Accordingly, some of the information included in the section “Capital Structure” and “Our
Management” on pages 79 and 191, respectively, of this Prospectus is based on other documentation
available with our Company, including annual returns and alternate secretarial records and filings. While
we believe that these secretarial records and filings were prepared and submitted to the relevant
authorities by our Company, in due course; we cannot assure you that we will be able to locate these
secretarial records and filings in the future. Accordingly, while we have obtained a practicing company

47
41.

42.

43.

secretary certificate for certain of these secretarial records and filings, we cannot assure you that our
Company will not be subject to any action, including monetary penalties by the relevant regulatory
authority on account of any inadvertent discrepancies in, or non-availability of, some of its secretarial
records and filings. Any such outcome may adversely impact our reputation, business and our results of
operations.

We may be unable to detect and deter misconduct of our employees or other third-party service
providers which could harm our brand and our reputation, or lead to regulatory fines or litigation
against us.

We operate in an industry in which we use hold and trade client monies, and in which personal
relationships, integrity and the confidence of our clients are of critical importance. As a result, we are
subject to the risk that our employees and other third parties whom we deal with could engage in
misconduct that may adversely affect our business. For example, if an employee were to engage in illegal
or suspicious activities, we could be subject to regulatory fines and suffer serious harm to our reputation
(because of the negative perception resulting in such activities), financial position, client relationships
and ability to attract new clients. While we have internal processes to detect, prevent and monitor our
employees, agents, distributors and other third parties and have not faced such a situation so far, we may
not be successful in our endeavours. Such misconduct could include, engaging in mis-selling,
misrepresentation or fraudulent, deceptive or otherwise improper activities when marketing or selling
products, binding us to transactions, hiding unauthorised or unsuccessful activities, such as insider trading,
improperly using or disclosing confidential information, making illegal or improper payments, falsifying
documents or data, recommending products, services or transactions that are not suitable for our clients;
misappropriation of funds, engaging in unauthorised or excessive transactions detriment to our clients or
not complying with applicable laws or our internal policies and procedures.

Our business often requires that we deal with confidential information. If our employees were to
improperly use or disclose this information, even if inadvertently, we could be subject to legal action and
suffer serious harm to our reputation, financial position and current and future business relationships. It is
not always possible to deter employee misconduct, and the precautions we take to detect and prevent such
activities may not always be effective. Misconduct by our employees, or even unsubstantiated allegations
of misconduct, could result in an adverse effect on our reputation and our business. While we have
implemented specific initiatives to reduce the likelihood of such situations occurring in future, including
enhanced due diligence measures for high-risk cases and additional verification measures during the
client on-boarding process, there can be no assurance that we will not be subjected to fraudulent claims in
the future. We may be also subjected to fraudulent behaviour and disclosures by client and third parties in
respect of other areas of operations, including money laundering and forgery, which may negatively
impact our ability to comply with applicable regulations, which could result in us being subjected to
regulatory action, and have an adverse impact on our results of operations, profitability and reputation.

Our Promoters and Promoter Group will continue to have significant shareholding in us after the
Offer, which will allow them to exercise significant influence over us.

After the completion of the Offer, our Promoters and Promoter Group will have significant shareholding
in our Company. Accordingly, our Promoters and Promoter Group will continue to exercise significant
influence over our business and all matters requiring shareholders’ approval, including the composition of
our Board of Directors, the approval of mergers, strategic acquisitions or the sales of substantially all of
our assets, and the policies for dividends, lending, investments and capital expenditures. This
concentration of ownership may also delay, defer or even prevent a change in control of our Company
and may make some transactions more difficult or impossible without the support of our Promoters and
Promoter Group. Further, the Takeover Regulations may limit the ability of a third party to acquire
control of our Company. The interests of our Promoters, as our Company’s controlling shareholder, could
conflict with our Company’s interests, your interests or the interests of our other shareholders.

Our operations are dependent on the performance of the Indian economy and securities market.

The growth in our business has been directly related to the growth in the Indian economy, specifically the
growing GDP and growing household savings. There have been periods of slowdown in the economic
growth of India or periods where inflation was high. Such economic growth is affected by various factors
including domestic consumption and savings, balance of trade movements, namely export demand and
45.

movements in key imports (oil and oil products), global economic uncertainty and liquidity crisis,
volatility in exchange currency rates, and annual rainfall, which affects agricultural production. Any
slowdown or reversal in the growth of the Indian economy could result in a reduction in wealth in the
Indian economy that can be diverted to savings and investment, a reduced interest in investment in the
securities market and reduced foreign investment. Any such reductions could result in a reduction in our
AuM and /or the commissions we can charge for our services.

Additionally, an increase in India’s trade deficit, a downgrading in India’s sovereign debt rating or a
decline in India’s foreign exchange reserves could negatively impact interest rates and liquidity, which
could adversely impact the Indian economy and our business. Any adverse revisions to India’s sovereign
debt ratings may also adversely affect our ability to raise additional financing and the interest rates and
other commercial terms at which such additional financing is available. This could adversely affect our
business, prospects, financial condition and results of operations and our ability to obtain refinancing, as
well as the trading price of the Equity Shares.

The Restated Consolidated Financial Statements included in this Prospectus may not be comparable
with the audited financial statements for the corresponding periods.

The Restated Consolidated Financial Statements included in this Prospectus have taken into consideration
all the adjustments, as applicable, which have been reflected in the corresponding period and accordingly
the Restated Consolidated Financial Statements may vary from the audited financials for the respective
years or periods, as available on the website of the Company. Further we cannot assure you that the
comparative descriptions of Restated Consolidated Financial Statements included in this Prospectus,
including in the section “Management's Discussion and Analysis of Financial Condition and Results of
Operations” beginning on page 297 provide any meaningful analysis for audited financials for the same
periods.

On account of such differences, our, investors will not have the benefit of considering comparable
performance over prior periods and any reliance on our Restated Consolidated Financial Statements or
the audited financial statements for any of our prior periods should be accordingly limited.

Certain non-GAAP financial measures and certain other statistical information relating to our
operations and financial performance like EBITDA have been included in this Prospectus. These non-
GAAP financial measures are not measures of operating performance or liquidity defined by Ind AS
and may not be comparable.

Certain non-GAAP financial measures and certain other statistical information relating to our operations
and financial performance like EBITDA, EBITDA margin, net worth, return on net worth, Net Asset
Value per Equity Share and capital gearing ratio have been included in this Prospectus. These non-GAAP
Measures are not a measurement of our financial performance or liquidity under Ind AS, Indian GAAP,
or IFRS and should not be considered in isolation or construed as an alternative to cash flows, profit/
(loss) for the year/ period or any other measure of financial performance or as an indicator of our
operating performance, liquidity, profitability or cash flows generated by operating, investing or
financing activities derived in accordance with Ind AS, Indian GAAP, or IFRS. These non-GAAP
financial measures and other statistical and other information relating to our operations and financial
performance may not be computed on the basis of any standard methodology that is applicable across the
industry and therefore may not be comparable to financial measures and statistical information of similar
nomenclature that may be computed and presented by other companies and are not measures of operating
performance or liquidity defined by Ind AS and may not be comparable to similarly titled measures
presented by other companies

External Risk Factors

46.

Political, economic and social developments in India could adversely affect our business.
Our current operations are conducted primarily in India and are subject to special considerations and

significant risks typical for India. These include risks associated with, among others, the political,
economic and legal environments and foreign currency exchange rate fluctuations.

49
47.

48.

Our results may be adversely affected by changes in the political and social conditions in India, and by
changes in governmental policies with respect to laws and regulations, anti-inflationary measures,
currency conversion and remittance abroad, and rates and methods of taxation, among other things.
Volatility in social and political conditions in India may interrupt, limit or otherwise affect our operations.
We continue to experience sporadic disruptions and disturbances at our branches located in certain states
in India which tend to be more prone to protests or union activity involving persons other than our
employees. Additionally, we cannot ensure that our employees may not join such unions in future. This
could have an adverse effect on our business and results of operations in those states.

The central and state governments serve multiple roles in the Indian economy, including as producers,
consumers and regulators, which have significant influence on the financial services sector and us.
Economic liberalisation policies have encouraged foreign investment in the financial sector, and changes
in these governmental policies could have a significant impact on the business and economic conditions
in India in general and the financial sector in particular, which in turn could adversely affect our business,
future financial condition and results of operations. In addition, any military activity, terrorist attacks or
other adverse social, economic and political events could adversely impact our business prospects. The
occurrence of any of these events may result in a loss of investor confidence, which could potentially lead
to economic recession and generally have an adverse effect on our business, results of operations and
financial condition. Our insurance policies do not cover loss of business from terrorist attacks, war or
civil unrest. Any political instability in India may adversely affect the Indian securities markets in general,
which could also adversely affect the trading price of our Equity Shares.

If inflation were to rise significantly in India the trend towards increased saving rates in the Indian
economy may decline or reverse.

India has experienced some of the highest levels of inflation measured by consumer price index of any of
the 34 member states of the Organisation for Economic Cooperation and Development (“OECD”).

Although the Government has initiated several economic measures to curb the rise in inflation rates, it is
unclear at this stage whether these measures will have the desired effect. Annual inflation rate in India
increased to 6.30 percent in May 2021, the lowest reading in three months from 5.03 percent in March
2021 (Source: Ministry of Statistics and Programme Implementation (MOSP). Any further rise in
inflation rates may adversely affect saving or investment patterns of clients, potentially affecting growth
in the Indian economy and our results of operations.

Changing laws, rules and regulations and legal uncertainties, including adverse application of tax
laws and regulations, may adversely affect our business and financial performance.

Our business and financial performance could be adversely affected by unfavourable changes in or
interpretations of existing, or the promulgation of new laws, rules and regulations applicable to us and our
business. Please refer to “Key Regulations and Policies in India” on page 177 of this Prospectus for
details of the laws currently applicable to us.

There can be no assurance that the Government of India will not implement new regulations and policies
which will require us to obtain approvals and licenses from the Government of India and other regulatory
bodies or impose onerous requirements and conditions on our operations. For example, SEBI has recently
amended the SEBI (Investment Advisers) Regulations, 2013, wherein it has introduced client level
segregation of advisory and distribution activities which prescribes that an individual investment adviser
shall not provide distribution services and a non-individual investment adviser shall maintain an arm’s
length relationship between its activities as investment adviser and distributor by providing advisor
services through a separately identifiable department or division. Furthermore, the same client cannot be
offered both advisory and distribution services within the group of the non-individual entity and a client
can either be an advisory client where no distributor consideration is received at the group level or
distribution services client where no advisory fee is collected from the client at the group level. Any such
changes and the related uncertainties with respect to the applicability, interpretation and implementation
of any amendment to, or change to governing laws, regulation or policy in the jurisdictions in which we
operate may have a material adverse effect on our business, financial condition and results of operations.
In addition, we may have to incur expenditures to comply with the requirements of any new regulations,
which may also materially harm our results of operations. Any unfavourable changes to the laws and
regulations applicable to us could also subject us to additional liabilities.

50
49.

The application of various Indian tax laws, rules and regulations to our business, currently or in the future,
is subject to interpretation by the applicable taxation authorities. If such tax laws, rules and regulations
are amended, new adverse laws, rules or regulations are adopted or current laws are interpreted adversely
to our interests, the results could increase our tax payments (prospectively or retrospectively) and/or
subject us to penalties. For example, the GAAR have come into effect from April 1, 2017. The tax
consequences of the GAAR provisions being applied to an arrangement could result in denial of tax
benefits, amongst other consequences. Further, changes in capital gains tax or tax on capital market
transactions or sale of securities could affect investor returns. As a result, any such changes or
interpretations could have an adverse effect on our business and financial performance.

Further, the Government of India has implemented a comprehensive national goods and services tax
(“GST”) regime that combines taxes and levies by the central and state governments into a largely
unified rate structure. Any such future increases or amendments may affect the overall tax efficiency of
companies operating in India and may result in significant additional taxes becoming payable. Further,
the Government of India has notified the Finance Act, 2021 (“Finance Act”) which has introduced
various amendments to taxation laws in India. There is no certainty on the impact that the Finance Act
may have on our business and operations or on the industry in which we operate. In addition,
unfavourable changes in or interpretations of existing, or the promulgation of new laws, rules and
regulations including foreign investment laws governing our business, operations and group structure
could result in us being deemed to be in contravention of such laws or may require us to apply for
additional approvals. We may incur increased costs relating to compliance with such new requirements,
which may also require management time and other resources, and any failure to comply may adversely
affect our business, results of operations and prospects. Uncertainty in the applicability, interpretation or
implementation of any amendment to, or change in, governing law, regulation or policy, including by
reason of an absence, or a limited body, of administrative or judicial precedent may be time consuming as
well as costly for us to resolve and may affect the viability of our current business or restrict our ability to
grow our business in the future.

It may not be possible for you to enforce a judgment obtained outside India against our Company or
any of our Directors and executive officers that are resident in India, except by way of a law suit in
India on such judgment.

We are incorporated under the laws of India and our Directors and executive officers reside in India.
Furthermore, substantially all of our assets are located in India. As a result, you may be unable to effect
service of process in jurisdictions outside India upon our Company or such persons, or enforce in Indian
courts judgments obtained in courts of jurisdictions outside India against our Company, including
judgments predicated upon the civil liability provisions of securities laws of jurisdictions outside India.

India has reciprocal recognition and enforcement of judgments in civil and commercial matters with a
limited number of jurisdictions. A judgment from certain specified courts located in a jurisdiction with
reciprocity must meet certain requirements of the Code of Civil Procedure, 1908, as amended, (the “Civil
Code”).

The United Kingdom, Singapore, Hong Kong and United Arab Emirates have been declared by the
Government of India to be reciprocating territories for purposes of Section 44A of the Civil Code. A
judgment of a court of a country which is not a reciprocating territory may be enforced in India only by a
suit on the judgment under Section 13 of the Civil Code, and not by proceedings in execution. Section 13
of the Civil Code provides that foreign judgments shall be conclusive regarding any matter directly
adjudicated on except (i) where the judgment has not been pronounced by a court of competent
jurisdiction, (ii) where the judgment has not been given on the merits of the case, (iii) where it appears on
the face of the proceedings that the judgment is founded on an incorrect view of international law or
refusal to recognise the law of India in cases to which such law is applicable, (iv) where the proceedings
in which the judgment was obtained were opposed to natural justice, (v) where the judgment has been
obtained by fraud or (vi) where the judgment sustains a claim founded on a breach of any law then in
force in India.

The party in whose favour such final judgment is rendered may bring a new suit in a competent court in

India based on a final judgment that has been obtained in such jurisdiction within three years of obtaining
such final judgment. It is unlikely that an Indian court would award damages on the same basis as a

51
50.

51.

52.

foreign court if an action is brought in India. Moreover, it is unlikely that an Indian court would award
damages to the extent awarded in a final judgment rendered outside India if it believes that the amount of
damages awarded were excessive or inconsistent with Indian practice and public policy. It is uncertain
whether an Indian Court would enforce foreign judgement that would contravene or violate Indian law. In
addition, any person seeking to enforce a foreign judgment in India is required to obtain the prior
approval of the RBI to repatriate any amount recovered and may be subject to tax in accordance with
applicable tax laws in India.

Foreign investors are subject to foreign investment restrictions under Indian law, which may adversely
affect the market price of the Equity Shares.

Under the foreign exchange regulations currently in force in India, transfers of shares between non-
residents and residents are freely permitted (subject to certain restrictions) if they comply with the pricing
guidelines and reporting requirements specified by the RBI. If the transfer of shares, which are sought to
be transferred, is not in compliance with such pricing guidelines or reporting requirements or falls under
any of the exceptions referred to above, then the prior approval of the RBI will be required. Additionally,
shareholders who seek to convert the Indian Rupee proceeds from a sale of shares in India into foreign
currency and repatriate that foreign currency from India will require a no objection/tax clearance
certificate from the income tax authority. Further, in accordance with press note 3 of 2020, dated April 17,
2020, issued by the Department for Promotion of Industry and Internal Trade, Government of India, all
foreign direct investments by entities incorporated in a country which shares land border with India or
where the beneficial owner of an investment into India is situated in or is a citizen of any such country
will require prior approval of the Government of India and shall have to be in conformity with the
applicable provisions of the FEMA Rules. We cannot assure investors that any required approval from
the RBI or any other Indian government agency can be obtained on any particular terms, or at all.

Differences exist between Ind-AS and other accounting principles, such as US GAAP and IFRS,
which may be material to investors’ assessments of our financial condition. Additionally, the financial
measures and statistical information in the Restated Financial Information may vary from any
standard methodology that is applicable across the financial services industry, and therefore may not
be comparable with financial or statistical information of similar nomenclature computed and
presented by other financial services companies.

Our Restated Financial Information included in this Prospectus are prepared under Ind-AS and presented
in conformity with compliance to the Companies Act and restated under the SEBI ICDR Regulations,
consistently applied during the periods stated, except as provided therein, and no attempt has been made
to reconcile any of the information given in this Prospectus to U.S. GAAP or IFRS or any other principles
or to base it on any other standards. Ind-AS differs from accounting principles and auditing standards
with which prospective investors may be familiar in other countries, including U.S. GAAP or IFRS.
Additionally, the financial measures and statistical information in the Restated Financial Information may
vary from any standard methodology that is applicable across the financial services industry, and
therefore may not be comparable with financial or statistical information of similar nomenclature
computed and presented by other financial services companies.

Accordingly, the degree to which the financial information included in this Prospectus will provide
meaningful information is dependent on your familiarity with Ind-AS, the Companies Act, and the SEBI
ICDR Regulations. Any reliance by persons not familiar with Ind-AS, or these laws and regulations, on
the financial disclosures presented in this Prospectus should accordingly be limited. All consideration of
financial, and other, information with regard to an investor’s decision whether or not to invest in this
Offer should be made on the basis of the Restated Financial Information.

Any downgrading of India’s debt rating by an independent agency may harm our ability to raise
financing.

Any adverse revisions to India’s credit ratings for domestic and international debt by domestic or
international rating agencies may adversely affect our ability to raise additional financing and the interest
rates and other commercial terms at which such additional financing is available. This could have an
adverse effect on our capital expenditure plans, business and financial performance and the price of our
Equity Shares.

52
53.

54,

Rights of shareholders under Indian laws may be more limited than under the laws of other
jurisdictions.

Indian legal principles related to corporate procedures, directors’ fiduciary duties and liabilities, and
shareholders’ rights may differ from those that would apply to a company in another jurisdiction.
Shareholders’ rights including in relation to class actions, under Indian law may not be as extensive as
shareholders’ rights under the laws of other countries or jurisdictions. Investors may have more difficulty
in asserting their rights as shareholder in an Indian company than as shareholder of a corporation in
another jurisdiction.

Difficult conditions in the global capital markets and the economy generally have affected and may
continue to affect our business, prospects, financial condition and results of operations.

The Indian economy may be affected by changes in Government policies, economic conditions,
demographic trends, employment and income levels and interest rates, among other factors. In the past,
economic developments outside India have adversely affected the markets in which we operate and our
overall business. For instance, on June 23, 2016, the United Kingdom held a referendum on its
membership in the European Union and voted to leave (“Brexit”). In October 2019, a withdrawal
agreement (the “Withdrawal Agreement’) setting out the terms of the United Kingdom’s exit from the
European Union, and a political declaration on the framework for the future relationship between the
United Kingdom and European Union was agreed between the UK and EU governments. The
Withdrawal Agreement, which became effective on January 31, 2020 includes the terms of a transition or
“standstill” period until December 31, 2020. Following the Brexit, there remains significant uncertainty
around the terms of their future relationship with the European Union and, more generally, as to the
impact of Brexit on the general economic conditions in the United Kingdom and the European Union and
any consequential impact on global financial markets. For example, Brexit could give rise to increased
volatility in foreign exchange rate movements and the value of equity and debt investments. In addition,
trade tensions between the U.S. and major trading partners, most notably China, continue to escalate
following the introduction of a series of tariff measures in both countries. Although China is the primary
target of U.S. trade measures, value chain linkages mean that other emerging markets, primarily in Asia,
may also be impacted. China’s policy response to these trade measures also presents a degree of
uncertainty. There is some evidence of China’s monetary policy easing and the potential for greater fiscal
spending, which could worsen existing imbalances in its economy. This could undermine efforts to
address already high debt levels and increase medium-term risks.

These and other related factors such as concerns over recession, inflation or deflation, energy costs,
geopolitical issues, slowdown in economic growth in China and Renminbi devaluation, commodity prices
and the availability and cost of credit have had a significant impact on the global credit and financial
markets as a whole, including reduced liquidity, greater volatility, widening of credit spreads and a lack
of price transparency in the United States, Europe and the global credit and financial markets. A lack of
clarity over the process for managing the exit and uncertainties surrounding the economic impact could
lead to a further slowdown and instability in financial markets. This and any prolonged financial crisis
may have an adverse impact on the Indian economy, and in turn on our business, financial condition and
results of operations.

A loss of investor confidence in the financial systems of other emerging markets may cause increased
volatility in the Indian financial markets and indirectly in the Indian economy in general. Any worldwide
financial instability could influence the Indian economy. In response to such developments, legislators
and financial regulators in the United States, Europe and other jurisdictions, including India, have
implemented several policy measures designed to add stability to the financial markets. In addition, any
increase in interest rates by the United States Federal Reserve will lead to an increase in the borrowing
costs in the United States which may in turn impact global borrowing as well. Furthermore, in several
parts of the world, there are signs of increasing retreat from globalization of goods, services and people,
as pressure for the introduction of a protectionist regime is building and such developments could
adversely affect Indian exports. However, the overall impact of these and other legislative and regulatory
efforts on the global financial markets is uncertain, and they may not have the intended stabilizing effects.

If there is a tightening of credit in financial markets globally, this could also affect the Indian market and

debt could become significantly more expensive for us. We may not be able to arrange for debt financing
for our capital requirements at all or debt financing which is available to us may not be on commercially

a3
55.

acceptable terms; as a result, we may have to restrict our business operations. Any economic downturn
could affect the overall sentiment of the market and our business. We are unable to predict the likely
duration and severity of any future disruption in financial markets and adverse economic conditions in
India, the United States and other countries, which may cause material adverse impact to our business and
operating results.

Natural disasters, fires, epidemics, pandemics, acts of war, terrorist attacks, civil unrest and other
events could materially and adversely affect our business.

Natural disasters (such as typhoons, flooding and earthquakes), epidemics, pandemics such as COVID-
19, acts of war, terrorist attacks and other events, many of which are beyond our control, may lead to
economic instability, including in India or globally, which may in turn materially and adversely affect our
business, financial condition, cash flows and results of operations.

Our operations may be adversely affected by fires, natural disasters and/or severe weather, which can
result in damage to our property and generally reduce our productivity and may require us to evacuate
personnel and suspend operations. Any terrorist attacks or civil unrest as well as other adverse social,
economic and political events in India could have a negative effect on us. Such incidents could also create
a greater perception that investment in Indian companies involves a higher degree of risk and could have
an adverse effect on our business and the price of the Equity Shares.

A number of countries in Asia, including India, as well as countries in other parts of the world, are
susceptible to contagious diseases and, for example, have had confirmed cases of diseases such as the
highly pathogenic H7N9, H5N1 and H1N1 strains of influenza in birds and swine and more recently, the
COVID-19 virus. Certain countries in Southeast Asia have reported cases of bird-to-human transmission
of avian and swine influenza, resulting in numerous human deaths. A worsening of the current outbreak
of COVID-19 virus or future outbreaks of COVID-19 virus, avian or swine influenza or a similar
contagious disease could adversely affect the Indian economy and economic activity in the region and in
turn have a material adverse effect on our business and the trading price of the Equity Shares.

  

Risk Relating to the Offer

56.

57.

The Offer Price of the Equity Shares may not be indicative of the market price of the Equity Shares
after the Offer

The Offer Price of the Equity Shares has been determined by our Company and the Selling Shareholders
in consultation with the Book Running Lead Managers, and through the Book Building Process. This
price is based on numerous factors, as described under “Basis for Offer Price” beginning on page 107 and
may not be indicative of the market price for the Equity Shares after the Offer. The market price of the
Equity Shares could be subject to significant fluctuations after the Offer, and may decline below the Offer
Price. We cannot assure you that the investor will be able to resell their Equity Shares at or above the
Offer Price.

There is no guarantee that our Equity Shares will be listed on the Stock Exchanges in a timely manner
or at all and if they are listed you may not be able to immediately sell the Equity Shares you purchased
in the Offer.

In accordance with Indian law and practice, permission for listing and trading of our Equity Shares will
not be granted until after certain actions have been completed in relation to this Offer and until Allotment
of Equity Shares pursuant to this Offer. There can be no guarantee that these actions will be completed in
a timely manner or at all and as a result our Equity Shares may not be listed on the Stock Exchanges in a
timely manner or at all.

In accordance with the current regulations and circulars issued by SEBI, our Equity Shares are required to
be listed on the Stock Exchanges within such time as mandated under UPI Circulars, subject to any
change in the prescribed timeline in this regard. However, we cannot assure you that the trading in our
Equity Shares will commence in a timely manner, in accordance with timelines prescribed under the UPI
Circulars, or at all. Any failure or delay in obtaining final listing and trading approvals may restrict your
ability to dispose of your Equity Shares.

54
58.

59.

60.

You can begin trading in the Equity Shares only after they have been credited to your demat account and
after final listing and trading permissions have been received from the Stock Exchanges, which will be
within six working days of closing of the public issue. Final trading permissions may not be received
from the Stock Exchanges, the Equity Shares allocated to you may not be credited to your demat account
and trading in the Equity Shares may not commence within the time periods specified above.

The Equity Shares have never been publicly traded, and, after the Offer, the Equity Shares may
experience price and volume fluctuations, and an active trading market for the Equity Shares may not
develop. Further, the price of the Equity Shares may be volatile, and you may be unable to resell the
Equity Shares at or above the Offer Price, or at all.

Prior to the Offer, there has been no public market for the Equity Shares, and an active trading market on
the Stock Exchanges may not develop or be sustained after the Offer. Listing and quotation does not
guarantee that a market for the Equity Shares will develop, or if developed, the liquidity of such market
for the Equity Shares. The Offer Price of the Equity Shares is proposed to be determined through a book-
building process and may not be indicative of the market price of the Equity Shares at the time of
commencement of trading of the Equity Shares or at any time thereafter. The market price of the Equity
Shares may be subject to significant fluctuations in response to, among other factors, variations in our
operating results of our Company, market conditions specific to the industry we operate in, developments
relating to India, volatility in securities markets in jurisdictions other than India, variations in the growth
rate of financial indicators, variations in revenue or earnings estimates by research publications, and
changes in economic, legal and other regulatory factors. We cannot assure you that a liquid market for
our Equity Shares will develop or that you will be able to sell your Equity Shares at or above the Offer
Price or sell your Equity Shares at all.

The requirements of being a publicly listed company may strain our resources.

We are not a publicly listed company and have not, historically, been subjected to the increased scrutiny
of our affairs by shareholders, regulators and the public at large that is associated with being a listed
company. As a listed company, we will incur significant legal, accounting, corporate governance and
other expenses that we did not incur as an unlisted company. We will be subject to the SEBI Listing
Regulations which will require us to file audited annual and unaudited quarterly reports with respect to
our business and financial condition. If we experience any delays, we may fail to satisfy our reporting
obligations and/or we may not be able to readily determine and accordingly report any changes in our
results of operations as promptly as other listed companies. Further, as a publicly listed company, we will
need to maintain and improve the effectiveness of our disclosure controls and procedures and internal
control over financial reporting, including keeping adequate records of daily transactions. In order to
maintain and improve the effectiveness of our disclosure controls and procedures and internal control
over financial reporting, significant resources and management attention will be required. As a result, our
management's attention may be diverted from our business concerns, which may adversely affect our
business, prospects, results of operations and financial condition. In addition, we may need to hire
additional legal and accounting staff with appropriate experience and technical accounting knowledge,
but we cannot assure you that we will be able to do so in a timely and efficient manner.

The trading volume and market price of the Equity Shares may be volatile following the Offer.

The market price of the Equity Shares may fluctuate as a result of, among other things, the following
factors, some of which are beyond our control:

quarterly variations in our results of operations;

results of operations that vary from the expectations of securities analysts and investors;

results of operations that vary from those of our competitors;

changes in expectations as to our future financial performance, including financial estimates

by research analysts and investors;

a change in research analysts’ recommendations;

* announcements by us or our competitors of significant acquisitions, strategic alliances, joint
operations or capital commitments;

announcements by third parties of significant claims or proceedings against us;

55,
61.

62.

63.

new laws and government regulations applicable to the industries we operate in;
additions or departures of key management personnel;

changes in interest rates; fluctuations in stock market trading volume; and
general economic and stock market conditions.

Changes in relation to any of the factors listed above could adversely affect the price of the Equity Shares.

Our Equity Shares are denominated, and once listed will be traded, in Indian Rupees. Erosion in the
value of the Indian Rupee may have an adverse effect on the value of our Equity Shares, independent
of our operating results and could result in a loss of your investment.

Our Equity Shares are denominated, and once listed will be traded, in Indian Rupees. Fluctuation in the
exchange rate between the Indian Rupee and foreign currencies or erosion in the value of the Indian
Rupee may have an adverse effect on the value of our Equity Shares, independent of our operating results
and could result in a loss of your investment. Further, any dividends on our Equity Shares will also be
paid in Indian Rupees and subsequently converted into the relevant foreign currency for repatriation, if
required. Any adverse movement in currency exchange rates during the time that it takes to undertake
such conversion may reduce the net dividend to foreign investors.

Investors may be subject to Indian taxes arising out of capital gains on the transfer of the Equity
Shares.

Investors may be subject to Indian taxes arising out of capital gains on the transfer of the Equity Shares.
Any gain realised on the transfer of listed equity shares on a stock exchange held for more than 12
months will be subject to capital gains tax in India even if Securities Transaction tax (“STT”) has been
paid on the transaction. STT is levied on and collected by a domestic stock exchange on which equity
shares are transferred. STT is payable on acquisition or transfer of Equity Shares. Any gain realised on
the transfer of equity shares held for more than 12 months to an Indian resident, which are sold other than
on a recognised stock exchange and on which no STT has been paid, is subject to long-term capital gains
tax in India. Further, any gain realised on the transfer of listed equity shares held for a period of 12
months or less will be subject to short-term capital gains tax in India.

Subject to any relief available under an applicable tax treaty or under the laws of their own jurisdictions,
residents of other countries may be liable for tax in India as well as in their own jurisdictions on gains
arising from a transfer of our Equity Shares as Indian tax treaties do not limit India’s ability to impose
capital gains tax on transfer of Equity Shares.

Any future issuance of Equity Shares may dilute your shareholding and earnings per share for future
periods and sales of our Equity Shares by our Promoter or other major shareholders may adversely
affect the trading price of the Equity Shares.

Our Company has framed and implemented two employee stock option schemes, ESOP 2017 and ESOP
2018 (together, the “ESOP Schemes”). As on the date of this Prospectus, we have 176,060 outstanding
stock options under the ESOP Schemes. Any future equity issuances by us, including a primary offering
and under the ESOP Schemes, may lead to the dilution of investors’ shareholdings in our Company. It
may also lead to dilution in earnings per share for future periods. Any future equity issuances by us or
sales of our Equity Shares by our Promoter may adversely affect the trading price of the Equity Shares,
which may lead to other adverse consequences for us including difficulty in raising debt-financing. In
addition, any perception by investors that such issuances or sales might occur may also affect the trading
price of our Equity Shares.

Holders of Equity Shares may be restricted in their ability to exercise pre-emptive rights under Indian
law and thereby suffer future dilution of their ownership position.

Under the Companies Act, a company incorporated in India must offer its equity shareholders pre-
emptive rights to subscribe and pay for a proportionate number of equity shares to maintain their existing

56
65.

66.

67.

68.

ownership percentages prior to issuance of any new equity shares, unless the pre-emptive rights have
been waived by the adoption of a special resolution by holders of three-fourths of the equity shares voting
rights on such resolution.

However, if the law of the jurisdiction that you are in does not permit the exercise of such pre-emptive
rights without our filing an offering document or registration statement with the applicable authority in
such jurisdiction, you will be unable to exercise such pre-emptive rights, unless we make such a filing. To
the extent that you are unable to exercise pre-emptive rights granted in respect of our Equity Shares, your
proportional interests in our Company may be reduced.

QIBs and Non-Institutional Investors are not permitted to withdraw or lower their Bids (in terms of
quantity of Equity Shares or the Bid Amount) at any stage after submitting a Bid.

Pursuant to the SEBI ICDR Regulations, QIBs and Non-Institutional Investors are not permitted to
withdraw or lower their Bids (in terms of quantity of Equity Shares or the Bid Amount) at any stage after
submitting a Bid. Retail Individual Investors can revise their Bids during the Bid/Offer Period and
withdraw their Bids until the Offer Closing Date. While our Company is required to complete Allotment
pursuant to the Offer within six Working Days from the Offer Closing Date, events affecting the Bidders’
decision to invest in the Equity Shares, including material adverse changes in international or national
monetary policy, financial, political or economic conditions, our business, results of operation or
financial condition may arise between the date of submission of the Bid and Allotment. Our Company
may complete the Allotment of the Equity Shares even if such events occur, and such events limit the
Bidders’ ability to sell the Equity Shares.

Our ability to raise foreign capital may be constrained by Indian law.

As a company registered in India, we are subject to foreign exchange control law that regulate borrowing
in foreign currencies. Such regulatory restrictions limit our financing sources and could constrain our
ability to obtain financings on competitive terms and refinance existing indebtedness. In addition, we
cannot assure you that any required regulatory approvals for borrowing in foreign currencies will be
granted to us without onerous conditions, or at all. Limitations on foreign debt may have an adverse
effect on our business growth, financial condition and results of operations.

The determination of the Price Band is subject to various factors and assumptions and the Offer Price
may not be indicative of the trading price of the Equity Shares, upon listing on the Stock Exchanges
subsequent to the Offer. Further, the current trading price of equity shares listed pursuant to certain
past issues handled by the BRLMs is below their respective issue price.

The determination of the Price Band is based on various factors and assumptions, and was determined by
our Company in consultation with the BRLMs. Further, the Offer Price of the Equity Shares will be
determined by our Company and the Selling Shareholders in consultation with the BRLMs through the
Book Building Process. This price is based on certain factors, as described under “Basis for Offer Price”
on page 107 of this Prospectus and may not be indicative of the trading price of the Equity Shares, upon
listing on the Stock Exchanges subsequent to the Offer. The trading price of the Equity Shares could be
subject to significant fluctuations after the Offer, and may decline below the Offer Price. We cannot
assure that you will be able to resell the Equity Shares at or above the Offer Price. In addition to the
above, the current trading price of equity shares listed pursuant to certain past issues handled by the
BRLMs is below their respective issue price. For further details regarding the track record of the public
issues handled by the BRLMs, as specified in circular reference CIR/MIRSD/1/2012 dated January 10,
2012 issued by SEBI, please see section “Other Regulatory and Statutory Disclosures” on page 353 of
this Prospectus.

The average cost of acquisition of the Equity Shares for the Selling Shareholders may be lesser than
the lower end of the Price Band.

af
The Price Band for the Equity Shares was 7530 to 7550 per Equity Share. For more information on the
determination of the Price Band, please see “Basis for Offer Price” on page 107. If the average cost of
acquisition of the Equity Shares for the Selling Shareholders is lesser than the lower end of the Price
Band, investors who purchase the Equity Shares in the Offer would do so at a cost that is higher than the

average cost of acquisition of the Equity Shares for the Selling Shareholders even if the Equity Shares are
acquired at the lower end of the Price Band.

58
SECTION III: INTRODUCTION
SUMMARY OF FINANCIAL INFORMATION
The summary financial information presented below should be read in conjunction with “Financial
Information” and “Management's Discussion and Analysis of Financial Condition and Results of Operations”

beginning on pages 225 and 297, respectively.

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

59
RESTATED CONSOLIDATED SUMMARY OF ASSETS AND LIABILITIES

(2 in million)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PARTICULARS AS AT ae 31, AS a aoe AS at pee AS at ope
I | ASSETS
Non-Current Assets
Property, Plant and Equipment 66.76 71.59 88.62 74.78
Right-of-use Asset 87.07 122.55 251.43 312.83
Capital work in progress 702.19 690.39 653.86 =
Goodwill 29.01 29.01 29.01 29.01
Other Intangible assets 300.57, 321.83, 373.29 78.95
Intangible assets under development - - - 316.63
Financial Assets
- Investments 1,018.15 1,018.15 1,013.18 S
- Other Financial assets 81.95 42.80 51.67 40.22
Deferred Tax Assets 43.78 45.02 51,15 46.48
Other Non Current Assets 217.68 111.18 72.33 285.52
2,547.16 2,452.52 2,584.54 1,184.42
Current Assets
Financial Assets
- Investments 28.04 26.79 18.32 750.85
- Trade Receivables 129.23 108.65 91.14 110.14
- Cash and cash equivalents 573.24 653.18 282.54 114.12
- Bank balances other than above 0.48 0.47 0.43 0.41
- Loans 267.90, : 648.64 1.97
- Other Financial Assets 463.64 137,12 333.41 122.49
Other Current Assets 13.55, 15.28 131.62 23.88
1,476.08 941.49 1,506.10 1,123.85
TOTAL ASSETS 4,023.24 3,394.01 4,090.64 2,308.27
Il | EQUITY AND LIABILITIES
Equity

 

 

 

 

 

 

60

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PARTICULARS AS AT aveust 31, AS Bit enn AS Ae eeRcH AS an anc
Equity Share Capital 208.08 137.57 135.14 134.54
Other Equity 2,659.85, 2,275.27 1,720.09 1,104.82
Non Controlling Interest 116.39 116.21 115.85 125.38
2,984.32 2,529.05 1,971.08 1,364.74
Liabilities
Non-Current Liabilities
Financial Liabilities
- Borrowings 228.51 249.64 333.60, 3.68
- Lease Liabilities 47.44 63.24 165.06 226.92
Provisions 5.80 11.64 21.62 10.97
281.75 324.52 520.28 241.57
Current Liabilities
Financial liabilities
- Borrowings 83.75 83.96 83.70 2.28
- Lease Liabilities 55.69 78.10 100.74, 93.52
- Trade Payables
Total Outstanding dues of micro
enterprises and small enterprises : 0.81 3.43 2
Total Outstanding dues of
creditors other than micro enterprises
and small enterprises 0.12 TZ 13.17 1,62
~ Other Financial Liabilities 306.76 56.34 909.72 207.53
Other Current Liabilities 79.24 122.33 91.41 65.59
Provisions 231.61 197.68 397.11 331.42
757.17 540.44 1,599.28 701.96
TOTAL EQUITY AND
LIABILITIES 4,023.24 3,394.01 4,090.64 2,308.27

 

 

 

 

 

 

 

 

61

 
RESTATED CONSOLIDATED SUMMARY OF PROFIT & LOSS

(in million , unless stated otherwise)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the | Forthe | For the | For the
Period | Year | Year Year
PARTICULARS Ended | Ended | Ended | Ended
August | March | March | March
31, 2021 | 31, 2021 | 31, 2020 | 31, 2019
L_| Revenue From Operation 1,669.26 | 2,653.30 | 3,318.27 | 2,765.87
U_| Other Income 19.77 | 139.18 | 45.87 | __76.00
Total Revenue 1,689.03 | 2,792.48 | 3,364.14 | 2,841.87
I | Expenses:
Employee Benefit Expenses 743.65 | 1,507.56 | 1,665.73 | 1,321.73
Finance Costs 859] 29.06] 32.96| 61.10
Depreciation and Amortisation Expenses 65.11 | 172.92 | 210.48 | 162.69
Other Expenses 188.27 | 447.10 | 585.36 | 465.36
Total Expenses 1,005.62 | 2,156.64 | 2,494.53 | 2,010.88
Iv_| Profit Before Tax 683.41 | 635.84 | 869.61 | 830.99
V_| Tax Expenses:
1. Current Tax 171.29 | 178.75 | 258.13 | 343.70
2. Deferred Tax 1.24 6.14 | __ (4.66) |_ (97.04)
Total Tax Expenses 172.53 | 184.89 | 253.47 | 246.66
V1_| Profit for the Period/Year 510.88 | 450.95 | 616.14 | 584.33
Vil_| Other Comprehensive Income/(Loss)
(A)__ (i) Items that will not be reclassified to profit or loss 1.44 2.98 | (10.67) |__(2.23)

 

(ii) Less : Income tax relating to items that will not be reclassified
to profit or loss

 

 

(B) _@ Items that will be reclassified to profit or loss

 

 

 

(ii) Income tax relating to items that will be reclassified to profit or
loss

 

 

 

 

 

62

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Other comprehensive income/(loss) 1.44 2.98 | (10.67) | _(2.23)
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD/YEAR | 512.32 | 453.93 | 605.47 | _582.10
Profit for the period/year attributable to :
Owners of the Company 510.67 | 450.74 | 613.83 | _592.05
Non- Controlling Interest 0.22 0.21 231 | (7.73)
Other Comprehensive income for the period/year attributable to :
Owners of the Company 1.48 2.83 | (10.65) |__(2.26)
Non- Controlling Interest (0.04) 0.15 | (0.02) 0.03
Total Comprehensive income for the period/year attributable to :
Owners of the Company 512.15 | 453.57 | 603.18 | _589.80
Non- Controlling Interest 0.17 0.36 2.29 |__ (7.70)
vill | Earning Per Equity Share of Face Value of Rs. 5 each *
Basic 12.30| 1098 | 15.15 | 14.67
Diluted 12.25| 1085|  1495| 14.40

 

 

 

* not annualised for period ended August 31, 2021

 

 

 

 

 

63

 
RESTATED CONSOLIDATED SUMMARY OF CASH FLOW

(Zin million)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FOR THE FOR THE THE FOR THE
PERIOD YEAR Veen en YEAR
PARTICULARS ENDED ENDED MARCH 31. ENDED
AUGUST 31, MARCH 2020 * MARCH
2021 31, 2021 31, 2019
CASH FLOW FROM OPERATING
ACTIVITIES
NET PROFIT BEFORE TAX AND
EXTRAORDINARY ITEMS 683.41 635.84 869.61 830.99
Add / (Less) :
Depreciation 65.11 172.92 210.48 162.69
Interest Income (14.35) (51.20) (14.16) (12.77)
Interest Expenses 8.59 29.06 32.96 61.10
Dividend (0.04) (0.06) (0.07) 2
Gain on Sale of Investments (1.59) (26.50) (23.03) (24.66)
Fair Value of Financial Instruments (21.31) (14.77) 6.28 (10.67)
(Gain)/Loss on sale of Property, Plant
and Equipment 0.20 (0.02) 0.14 -
Employee Stock Option Plan 11.15 64.79 0.27 0.21
Gratuity 5.20 11.51 8.84 7.09
Leave 9.69 4.51 13.26 3.94
Bad Debts written off : 6.03 1.01 -
Balance Written Off 0.20 : : -
(Gain)/Loss on Investment in PMS - - (0.02) -
62.85 196.27 235.96 186.93
OPERATING PROFIT BEFORE
WORKING CAPITAL CHANGES 746.26 832.11 1,105.57 1,017.92
Adjustment for :
Decrease/(Increase) in Other Financial
Assets (308.55) 193.83 (200.32) 123.40
Decrease/(Increase) in Trade
Receivables (20.57) (23.55) 17.99 12.59
Decrease/(Increase) in Other Current
Assets 1.74 116.33 (107.74) 18.60
(Decrease)/Increase in Trade Payables (1.91) (14.56) 14.98 0.59
(Decrease)/Increase in Other Financial
Liabilities 250.42 (883.69) 702.20 (227.92)
(Decrease)/Increase in Provisions 14.48 (222.49) 43.56 74.57
(Decrease)/Increase Other Current
Liabilities (43.09) 30.92 25.82 (0.97)
(107.48) (803.21) 496.50 0.86

 

 

 

 

 

64

 
 

 

CASH GENERATED FROM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATIONS 638.78 28.90 1,602.06 1,018.78
Add / (Less):

Direct Taxes Paid (Net) (291.08) (239.03) (199.01) | __(347.86)
NET CASH FROM OPERATING

ACTIVITIES 347.70 (210.13) 1,403.05 670.92
CASH FLOW FROM INVESTING

ACTIVITIES :

Sale/(Purchase) of Property, Plant and

Equipment (15.52) (12.96) (498.09) (39.13)
Dilution of NCI 0.00 0.00 : (20.48)
Acquisition of Intangible Assets - - (7.93) (2.18)
Intangible Assets Under Development - - (52.37) (82.03)
Dividend received 0.04 0.06 0.07 7
Interest Income 13.97 47.38 9.83 10.00
Advance paid for Purchase of property 13.50 21.43 (34.93) (189.00)
Security Deposit (Given)/Received (38.30) 17.99 (12.50) (21.47)
Sale/(Purchase) of Other Investment 2.63 21,27 (259.10) (224.54)
Loans Given (267.90) 652.70 (646.65) 148.03
Investment in Fixed Deposit 0.29 (0.33) (14.92) (2.52)
NET CASH FROM INVESTING

ACTIVITIES (291.29) 7A7.54 (1,516.59) | __ (423.32)
CASH FLOW FROM FINANCING

ACTIVITIES :

Loan Taken/(Repayment) (21.34) (83.70) 411.33 (0.88)
Interest Paid (3.84) (10,06) (6.38) (33.43)
Issue of Shares 1.15 108.03 0.59 0.11
Dividend paid (69.36) (68.78) - -
Lease Payments (42.96) (112.26) (123.58) | _ (104.95)
NET CASH USED IN FINANCING

ACTIVITIES (136.35) (166.77) 281.96 | __ (139.14)
NET INCREASE / (DECREASE)

IN CASH AND CASH

EQUIVALENTS (79.94) 370.64 168.42 108.44
CASH AND CASH

EQUIVALENTS - Opening Balance 653.18 282.54 114.12 5.68
CASH AND CASH

EQUIVALENTS - Closing Balance 573.24 653.18 282.54 114,12

 

 

 

Details of Cash and Cash
equivalents at the end of the
period/year

 

 

65

 
 

 

 

 

 

 

- Cash in Hand 0.47 0.19 0.91 1.56
- Balance in Current Account 569.67 118.99 281.13 2.56
- Balance in Deposit Account 3.10 534.00 0.50 110.00
Total 573.24 653.18 282.54 114.12

 

 

 

 

 

66

 
THE OFFER

The following table summarizes the Offer details:

 

Offer

Up to 12,000,000’ Equity Shares aggregating up to 2
6,593.75*/ million

 

of which

 

Offer for Sale?

Up to 12,000,000’ Equity Shares aggregating up to =
6,593.75*/ million

 

of which

 

Employee Reservation Portion

Up to 250,000 Equity Shares aggregating up to =
131.25*4 million

 

 

The Net offer comprises:

Up to 11,750,000“ Equity Shares aggregating up to =
6,462.50*/ million

 

A)QIB Portion

Not more than 5,875,000 Equity Shares

 

of which

 

Anchor Investor Portion

3,525,0004 Equity Shares

 

of which:

 

Available for allocation to Mutual Funds onl:

At least 1,175,000 Equity Shares

 

Balance for all QIBs including Mutual Funds

At least 2,350,000 Equity Shares

 

Balance available for allocation to QIBs other than
Anchor Investors (assuming Anchor Investor Portion
is fully subscribed)

2,350,000“ Equity Shares

 

of which

 

Available for allocation to Mutual Funds only (5% of
the QIB Portion (excluding Anchor Investor Portion))

At least 117,500’ Equity Shares

 

Balance of QIB Portion (excluding Anchor Investor
Portion) for all QIBs including Mutual Funds

2,232,500 Equity Shares

 

 

B) Non-Institutional Portion

Not less than 1,762,500‘ Equity Shares available for
allocation on proportionate basis

 

 

C) Retail Portion®

Not less than 4,112,500‘ Equity Shares available for
allocation

 

 

Equity Share capital — pre and post Offer

 

 

Equity Shares outstanding prior to the Offer

41,616,227 Equity Shares

 

 

Equity Shares outstanding after the Offer

41,616,227 Equity Shares

 

 

 

Use of Net Proceeds by our Company

 

Our Company will not directly receive any proceeds
from the Offer since it involves only the Offer for
Sale. See “Objects of the Offer” on page 104.

 

@

The Offer has been authorized by our Board pursuant to its resolution dated July 16, 2021.

 

(2) The Equity Shares being offered by the Selling Shareholders are eligible for being offered for sale pursuant to the Offer in terms of the

SEBI ICDR Regulations. The Selling Shareholders have severally and not jointly, confirmed and approved their participation in the
Offer for Sale as set out below:

*Our Company in consultation with the Book Running Lead Managers, offered a discount of & 25 per Equity Share to Eligible Employees bidding
in the Employee Reservation Portion.

Subject to finalization of Basis of Allotment

67
 

 

 

 

 

 

 

 

 

 

 

 

Selling Shareholder ‘Number of Equity Shares offered in the Date of board resolution / Authorisation
Offer for Sale (up to)

Mr. Anand Rathi 375,000 July 18, 2021

Mr. Pradeep Gupta 375,000 July 18, 2021

Anand Rathi Financial Services Limited 9,285,000 February 24, 2021, July 18, 2021
Mr. Amit Rathi 375,000 July 18, 2021

Ms. Priti Gupta 375,000 July 18, 2021

Ms. Supriya Rathi 375,000 July 18, 2021

Rawal Family Trust 375,000 July 18, 2021

Mr. Jugal Mantri 90,000 July 18, 2021

Mr. Feroze Azeez 375,000 July 18, 2021

 

 

 

3) In the event of under-subscription in the Employee Reservation Portion (if any), the unsubscribed portion was made available for
allocation and Allotment, proportionately to all Eligible Employees who had Bid in excess of 2200,000, subject to the maximum value of
Allotment made to such Eligible Employee not exceeding %500,000. The unsubscribed portion, if any, in the Employee Reservation
Portion (after allocation up to 2500,000), was required to be added to the Net Offer.

(4) Our Company and the Selling Shareholders, in consultation with the BRLMs, allocated up to 60% of the QIB Portion to Anchor
Investors on a discretionary basis in accordance with the SEBI ICDR Regulations. One-third of the Anchor Investor Portion was
available for allocation to domestic Mutual Funds only, subject to valid Bids having been received from domestic Mutual Funds at or
above the Anchor Investor Allocation Price. In the event of under-subscription in the Anchor Investor Portion, the remaining Equity
Shares in the Anchor Investor Portion were required to be added back to the Net QIB Portion. 5% of the Net QIB Portion (excluding the
Anchor Investor Portion) was available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the Net QIB
Portion (excluding the Anchor Investor Portion) was available for allocation on a proportionate basis to all QIB Bidders (other than
Anchor Investors), including Mutual Funds, subject to valid Bids having been received at or above the Offer Price. In the event the
aggregate demand from Mutual Funds was less than as specified above, the balance Equity Shares available for Allotment in the Mutual
Fund Portion was added to the QIB Portion and allocated proportionately to the Net QIB Bidders (other than Anchor Investors) in
proportion to their Bids. For details, see “Offer Procedure” on page 378.

(5) Subject to valid Bids having been received at or above the Offer Price, under-subscription, if any, in any category, except the QIB
Portion, was allowed to be met with spill-over from any other category or a combination of categories of Bidders at the discretion of our
Company and the Selling Shareholders in consultation with the BRLMs and the Designated Stock Exchange, subject to applicable law.

See “Terms of the Offer" on page 359.

Notes:

* Allocation to all categories, other than Anchor Investor Portion and the Retail Portion, if any, shall be made on a
proportionate basis, subject to valid Bids received at or above the Offer Price. The allocation to each Retail Individual
Investors shall was not less than the minimum Bid Lot, subject to availability of Equity Shares in the Retail Portion and
the remaining available Equity Shares, if any, was allocated on a proportionate bas

 

. For details

 

Procedure” on page 378. Allocation to Anchor Investors was made on a discretionary basis.

For further details, please see “Terms of the Offer” and “Offer Procedure” on pages 359 and 378, respectively, of

this Prospectus, respectively.

68

 

, see “Offer
GENERAL INFORMATION

Our Company was originally incorporated as a private limited company under the Companies Act, 1956 in the
name of ‘Hitkari Finvest Private Limited’ on March 22, 1995. It was thereafter renamed as ‘AR Venture Funds
Management Private Limited’, and a fresh certificate of incorporation consequent upon a change of name was
issued by the RoC on April 6, 2005, which was later converted from a private limited company to a public limited
company under the Companies Act, 1956, with the name ‘AR Venture Funds Management Limited’, and a fresh
certificate of incorporation consequent upon a change of name was issued by the RoC on March 8, 2007.
Subsequently, ‘AR Venture Funds Management Limited’ was converted to a private limited company with the
name ‘AR Venture Funds Management Private Limited’, and a fresh certificate of incorporation consequent upon
a change of name was issued by the RoC on July 7, 2015. Thereafter, ‘AR Venture Funds Management Private
Limited’ was again converted to a public limited company with name ‘AR Venture Funds Management Limited’,
and a fresh certificate of incorporation consequent upon a change of name was issued by the RoC on April 3,
2017. Subsequently ‘AR Venture Funds Management Limited’ was renamed as ‘Anand Rathi Wealth Services
Limited’ and received a fresh certificate of incorporation from the RoC on July 6, 2017. Thereafter, our Company
received a fresh certificate of incorporation dated January 07, 2021 consequent upon change of name as Anand
Rathi Wealth Limited. For further details, in relation to change in name and Registered Office of our Company,
see “History and Certain Corporate Matters” on page 182 of this Prospectus.

For details of the business of our Company, please see “Our Business” on page 160 of this Prospectus.
Registered Office

10" floor, A Wing, Express Zone

Western Express Highway

Goregaon (East), Mumbai 400063

Maharashtra

Telephone: +91 (22) 6281 7000

Corporate Office

11" Floor, Times Tower

Kamala City, Senapati Bapat Marg

Lower Parel, Mumbai 400013.

Maharashtra

Telephone: +91 (22) 4047 7000

Company registration number and corporate identity number

The registration number and corporate identity number of our Company are as follows:

CIN: U67120MH1995PLC086696
Registration Number: 086696

Address of the Registrar of Companies

Our Company is registered with the Registrar of Companies, Maharashtra at Mumbai, which is situated at 100,
Everest, Marine Drive, Mumbai 400 002, Maharashtra, India.

Board of Directors

The following table sets out the details regarding our Board as on the date of filing of this Prospectus:

 

 

 

 

 

 

Name Designation DIN Address

 

69
 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name Designation DIN Address
Mr. Anand Rathi Chairman and 00112853 274-A, Kalpataru Horizon Co. Op. Hsg
Non-Executive Society, S. K. Ahire Marg, Worli,
Director Mumbai 400018
Mr. Pradeep Gupta Non-Executive 00040117 301-C, Beaumonde Tower, Appasaheb
Director Marathe Marg, Prabhadevi, Mumbai 400
025
Mr. Amit Rathi Non-Executive (00029791 274-A, Kalpataru Horizon Co. Op. Hsg
Director Society, S. K. Ahire Marg, Worli,
Mumbai 400018
Mr. Rakesh Rawal Executive 02839168 No. 1002, Embassy Oasis, 46-1,
Director and Promenade Road, Near Ulsoor, Bangalore
Chief Executive North, Bengaluru 560005,
Officer
Mr. Mohan Tanksale Independent 02971181 C-3105, Oberoi Exquisite, Oberoi Garden|
Director City, Off Western Express Highway,
Goregaon East, Mumbai — 400063
Mr. Ramesh Chandak Independent (00026581 Tower No-5, Flat No-2901, Crescent Bay,
Director Jerbai Wadia Road, Parel, Mumbai City,
Mumbai 400 012
Mr. Kishan Gopal Somani Independent 00014648 163, Tagore Park, Dr. Mukherjee Nagar,
Director Model Town, Delhi 110 009
Ms. Sudha Navandar Independent 02804964 Flat No.603,604/209, Anita Kutir CHS,
Director HIG Colony, 90 feet road, Opposite State
Bank of India, Near Ganpati Mandir,
Ghatkopar (East) Mumbai 400 075

 

For further details in relation to our Directors, please see “Our Management” on page 191 of this Prospectus.
Company Secretary and Compliance Officer
Mr. Ashish Chauhan

10" floor, A Wing, Express Zone
Western Express Highway
Goregaon (East), Mumbai 400063
Maharashtra

Telephone: +91 (22) 6281 7000
Email: csarwsl@rathi.com

Investor Grievances

Bidders can contact the Company Secretary and Compliance Officer, the BRLMs and/or the Registrar to
the Offer in case of any pre-Offer or post-Offer related problems such as non-receipt of letters of
Allotment, non-credit of Allotted Equity Shares in the respective beneficiary account, non-receipt of refund
orders or non-receipt of funds by electronic mode, etc. For all Offer related queries and for redressal of
complaints, Bidders can also write to the BRLMs or the Registrar to the Offer, in the manner provided
below.

All Offer related grievances, other than by Anchor Investors, are required to be addressed to the Registrar to the
Offer, with a copy to the relevant Designated Intermediary with whom the Bid cum Application Form was
submitted, quoting the full details such as the name and address of the sole or First Bidder, date and number of the
Bid cum Application Form, Bidders’ DP ID, Client ID, PAN, number of Equity Shares applied for, name and
address of the relevant Designated Intermediary where the Bid cum Application Form was submitted by the
Bidder and ASBA Account number (for Bidders other than RIBs using the UPI Mechanism) in which the amount
equivalent to the Bid Amount was blocked or the UPI ID in case of RIBs using the UPI Mechanism. Further, the
Bidder shall enclose the Acknowledgement Slip or provide the acknowledgement number received from the
Designated Intermediaries in addition to the documents/information mentioned hereinabove.

70
In terms of SEBI circular no. SEBI/HO/CFD/DIL2/CIR/P/2018/22, dated February 15, 2018, any ASBA Bidder
whose Bid has not been considered for Allotment, due to failure on the part of any SCSB, shall have the option to
seek redressal of the same by the concerned SCSB within three months of the date of listing of the Equity Shares.
SCSBs are required to resolve these complaints within 15 days, failing which the concerned SCSB would have to
pay interest at the rate of 15% per annum for any delay beyond this period of 15 days.

All grievances relating to Bids submitted with Registered Brokers, shall be addressed to the Stock Exchanges,
with a copy to the Registrar to the Offer. Further, the Bidders shall also enclose a copy of the Acknowledgement
Slip duly received from the Designated Intermediaries in addition to the documents/information mentioned
hereinabove.

All grievances of the Anchor Investors shall be addressed to the Registrar to the Offer, giving full details such as
the name of the sole or first Bidder, Bid cum Application Form number, Bidders’ DP ID, Client ID, PAN, date of
the Bid cum Application Form, address of the Bidder, number of the Equity Shares applied for, Bid Amount paid
on submission of the Bid cum Application Form and the name and address of the BRLMs where the Bid cum
Application Form was submitted by the Anchor Investor.

 

 

 

Book Running Lead Managers
Equirus Capital Private Limited BNP Paribas

12" Floor, C Wing, Marathon Futurex, BNP Paribas House, 1-North Avenue

NM. Joshi Marg, Lower Parel Maker Maxity, Bandra Kurla Complex

Mumbai 400 013 Bandra I, Mumbai 400 051

Maharashtra, India Maharashtra, India

‘Telephone: +91 (22) 4332 0700 Telephone: +91 (22) 3370 4000

Email: arwl.ipo@equirus.com E-mail: dl.ipo.arwi@asia bnpparibas.com

Investor Grievance Investor Grievance E-mail: indiainvestors.care@asia bnpparibas.com
E-mail: investorsgrievance@equirus.com Website: www.bnpparibas.co.in

Website: www.equirus.com Contact Person: Mr. Mehul Golwala

Contact Person: Ms. Mrinmayee Dethe SEBI Registration No.: INM000011534

SEBI Registration Number: INM000011286

TIFL Securities Limited ‘Anand Rathi Advisors Limited

10" Floor, IIFL Centre, Kamala City, 10" Floor, Trade Tower D, Kamala City

Senapati Bapat Marg, Senapati Bapat Marg, Lower Parel

Lower Parel (West), Mumbai - 400013, Maharashtra, India

Mumbai 400 013 ‘Telephone: +91 22 6626 6666

Maharashtra, India Fax number: +91 22 6626 6544

‘Telephone: +91 (22) 4646 4600 E-mail: alpha.ipo@rathi.com

E-mail: arwL.ipo@iiflcap.com Investor Grievance E-mail: grievance.ecm@rathi.com
Investor grievance E-mail: ig.ib@iiflcap.com Contact Person: Ms, Astha Daga / Mr. V Prashant Rao
Website: www.iifleap.com Website: www.rathi,com

Contact Person: Mr. Pinak Bhattacharyya / SEBI Registration Number: INM000010478,

Mr. Harshvardhan Jain

SEBI Registration No.: INM000010940

 

 

* Tn compliance with the proviso to Regulation 21A(1) of the Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992, as amended, read
with proviso to Regulation 23(3) of the SEBI ICDR Regulations, Anand Rathi Advisors Limited was involved only in marketing of the Offer.

 

 

 

 

 

Syndicate members
‘Equirus Securities Private Limited Sharekhan Limited

Address: A-2102 B, 21* Floor, A wing, Marathon Futurex, NM. | Address: 10" Floor, Beta Building, Lodha iThink Techno Campus, Opp. Kanjurmarg Railway
Joshi Marg, Lower Parel Mumbai 400 013 Station, Kanjurmarg East, Mumbai 400 042, Maharashtra, India

‘Telephone: +91 7874000623 ‘Telephone: +91 22 6115 0000

E-mail: mahek, gandhi E-mail: pravin@sharekhan.com / ipo@sharekhan.com,

admin_equirus@equirus.com Website: www.sharekhan.com,

Website: www.equirus.com Contact Person: Pravin Darji

Contact Person: Mehak Gandhi SEBI Registration Number: INB231073330

SEBI Registration Number: INZ000251536

 

 

‘Anand Rathi Share and Stock Brokers Limited
Address: Express Zone, A Wing, 10" Floor, Western Express
Highway, Goregaon East, Mumbai — 400063

‘Telephone: +91 22 6281 7000

E-mail: roopbhootra@rathi.com

‘Website: www.rathi.com

Contact Person: Roop Kishor Bhootra

SEBI Registration Number: INZ000170832

 

 

aL

 
 

Legal Counsel to our Company as to Indian
law

Legal Counsel to the BRLMs as to Indian

International Legal Counsel to the Book Running
Lead Managers

 

‘AZB & Partners

AZB House
Peninsula Corporate Park
Ganpatrao Kadam Marg

Lower Parel, Mumbai 400 013
Maharashtra, India

‘Telephone: +91 (22) 6639 6880

 

 

Vakils House
18 Sprott Road

Ballard Estate

Mumbai 400 001

Maharashtra, India

‘Telephone: +91 (22) 4341 8600

 

Linklaters Singapore Pte. Ltd.

One George Street #17-01
Singapore 049145
Tel: +65 6692 5700

 

 

Registrar to the Offer

 

 
 

Intime India Private Limited
101, 1* Floor, 247 Park, Lal Bahadur Shastri Marg,
Vikhroli (West), Mumbai 400 083,

Maharashtra , India

‘Telephone: +91 22 49186000

E-mail: anandrathi.ipo@linkintime.co.in

Website: www.linkintime.co.in

Investor grievance e-mail: anandrathi.ipo@linkintime.co.in
Contact person: Ms. Shanti Gopalkrishnan

SEBI Registration No.: INRO00004058

 

 

Public Offer Account Bank, Escrow Collection Bank, Refund Bank and Sponsor Bank

 

HDFC Bank Limited
HDFC Bank Limited, FIG- OPS Department- Lodha, I Think Techno Campus 0-3

Level, Next to Kanjurmarg, Railway Station, Kanjurmarg (East), Mumbai - 400042, Maharashtra, India
‘Telephone:+91 22 30752927 , +91 22 30752928 , +91 22 30752914

Fax No: +91 22 25799801

Email ID: Tushar. Gavankar@hdfcbank.com, Siddharth.Jadhav@hdfcbank.com,

Prasanna, Uchil@hdfcbank.com, Neerav.Desai@hdfcbank.com

‘Website : www.hdfcbank.com

Contact Person: Tushar Gavankar, Siddharth Jadhav, Prasanna Uchil, Neerav Desai

 

SEBI Registration No. : INBI00000063
CIN No : L65920MH1994PLC080618

 

 

Statutory Auditor of our Company

 

Khimji Kunverji & Co., LLP
Sunshine Tower, Level 19

Senapati Bapat Marg

Elphinstone Road, Mumbai 400 013
Maharashtra, India

‘Telephone: +91 (22) 6143 7333
Email: info@kke.in

ICAI Firm Registration Number: 105146W/W100621

Peer Review Number: 011216

 

 

Bankers to our Company

 

ICICI Bank Limited
Capital Markets Division,

1" floor, 122, Mistry Bhavan,
Dinshaw Wachha Road,

Backbay Reclamation, Churchgate,
Mumbai 400 020

Maharashtra, India

‘Telephone: +91 (22) 6681 8990
Email: cmd-fort@icicibank.com

Website: www.icicibank.com
Contact person: Branch Manager

HDFC Bank Limited

HDFC Bank Limited,

FIG-OPS Department — Lodha, I Think Techno Campus,

0-3 Level, Next to Kanjurmarg Railway Station

Kanjurmarg (East), Mumbai 400 042

Maharashtra, India

‘Telephone: +91 (22) 3075 2927, +91 (22) 3075 2928 and +91 (22) 3075
2927, +91 (22) 3075 2914

Email: Tushar. Gavankar@hdfcbank.com,

Siddharth Jadhav@hdfcbank.com,

Neerav.Desai@hdfcbank.com

Website: www.hdfcbank.com

Contact person: Tushar Gavankar / Siddharth Jadhay / Prasanna Uchil /
Neerav Desai

Prasanna.uchil@hdfcbank.com,

 

 

 

‘YES Bank Limited
YES Bank House,

6" floor — South, Off Western Express Highway,
Santacruz East,

Mumbai 400 055

Maharashtra, India

‘Telephone: +91 86963 61234

Email: naveen.surana@yesbank. in

Website: www. yesbank.in

Contact person: Naveen Surana

Bank of India, Stock Exchange Branch
Ground floor,

PJ Tower, BSE,

Fort,

Mumbai 400 001

Maharashtra, India

‘Telephone: +91 (22) 22722394

Email: stockexchange. mumbaisouth@bankofindia.co.in
Website: www.bankofindia.co,in

Contact person: Nitin Nigam

 

 

Designated Intermediaries

72

 
Self-Certified Syndicate Banks

The list of SCSBs notified by SEBI for the ASBA process is available on the SEBI website at
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognised=yes, or at such other website as may be
prescribed by SEBI from time to time.

A list of the Designated SCSB Branches with which an ASBA Bidder (other than an RIB using the UPI
Mechanism), not Bidding through Syndicate/Sub Syndicate or through a Registered Broker, may submit the
ASBA Forms, is available at
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmld=34, and at such other
websites as may be prescribed by SEBI from time to time.

Further, the branches of the SCSBs where the Designated Intermediaries could submit the ASBA Form(s) of
Bidders (other than RIBs) is provided on the website of SEBI at
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedF pi=yes&intmld=35 which may be updated
from time to time or at such other website as may be prescribed by SEBI from time to time.

Self-Certified Syndicate Banks eligible as Issuer Banks for UPI

The list of SCSBs through which Bids can be submitted by RIBs using the UPI Mechanism, including details such
as the eligible Mobile Apps and UPI handle which can be used for such Bids, is available on the website of the
SEBI at https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=40, which may be
updated from time to time or at such other website as may be prescribed by SEBI from time to time.

Syndicate SCSB Branches

In relation to Bids (other than Bids by Anchor Investors and RIBs) submitted under the ASBA process to a
member of the Syndicate, the list of branches of the SCSBs at the Specified Locations named by the respective
SCSBs to receive deposits of Bid cum Application Forms from the members of the Syndicate is available on the
website of the SEBI at https://www.sebi.gov.in/sebiweb/other/OtherA ction.do?doRecognisedFpi=yes&intmld=35,
which may be updated from time to time or any such other website as may be prescribed by SEBI from time to
time. For more information on such branches collecting Bid cum Application Forms from the Syndicate at
Specified Locations, see the website of the SEBI
thttps://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmld=35 or any such other
website as may be prescribed by SEBI from time to time.

Registered Brokers

The list of the Registered Brokers eligible to accept ASBA Forms from Bidders (other than RIBs), including
details such as postal address, telephone number and e-mail address, is provided on the websites of the BSE and
the NSE at http://www. bseindia.com/Markets/PublicIssues/brokercentres_new.aspx? and
https://www.nseindia.com/products/content/equities/ipos/ipo_mem_terminal.htm, respectively, as updated from
time to time.

Registrar and Share Transfer Agents

The list of the RTAs eligible to accept ASBA Forms from Bidders (other than RIBs) at the Designated RTA
Locations, including details such as address, telephone number and e-mail address, is provided on the websites of
Stock Exchanges at http://www. bseindia.com/Static/Markets/Publiclssues/RtaDp.aspx? and
http://www.nseindia.com/products/content/equities/ipos/asba_procedures.htm, respectively, as updated from time
to time.

Collecting Depository Participants

The list of the CDPs eligible to accept ASBA Forms from Bidders (other than RIBs) at the Designated CDP
Locations, including details such as name and contact details, is provided on the websites of BSE at

73
http://www. bseindia.com/Static/Markets/PublicIssues/RtaDp.aspx? and on the website of NSE at
http://www.nseindia.com/products/content/equities/ipos/asba_procedures.htm, as updated from time to time.

For further details, please see “Offer Procedure” on page 378 of this Prospectus.
Inter-se allocation of responsibilities:

The responsibilities and co-ordination by the BRLMs for various activities in the Offer are as follows:

 

Responsibili Co-ordinator
= Activity aaa

 

Capital structuring, positioning strategy and due diligence of the Company including its
operations/management/business plans/legal etc. Drafting and design of the Draft Red Herring
Prospectus and of statutory advertisements including a memorandum containing salient features of

 

 

1. | this Prospectus. The BRLMSs shall ensure compliance with stipulated requirements and completion of | Eauitus, BNP, TIFL Equirus
prescribed formalities with the Stock Exchanges, RoC and SEBI including finalization of Prospectus
and RoC filing.
2 Drafting and approval of all statutory advertisement Equirus, BNP, [FL Equirus
3. Drafting and approval of all publicity material other than statutory advertisement as mentioned above | Equirus, BNP, IIFL_ Equirus

including corporate advertising, brochure, etc. and filing of media compliance report.

 

‘Appointment of intermediaries viz., Registrar to the Offer, printers, advertising agency, Syndicate, | Equirus, BNP, IIFL
4, | Sponsor Bank, Bankers to the Offer and other intermediaries, including coordination of all Equirus
agreements to be entered into with such intermediaries

  

 

Equirus, BNP, IIFL,

 

 

Preparation of road show presentation and frequently asked questions Rae mn
Equirus, BNP, IIFL,
ARAL* BNP

International institutional marketing of the Offer, which will cover, inter alia:
6. | + Finalizing the list and division of international investors for one-to- one meetings
Finalizing international road show and investor meeting schedules

 

Equirus, BNP, IIFL,

ARAL* HEL,
Domestic institutional marketing of the Offer, which will cover, inter alia:

Institutional marketing strategy

 

 

 

 

7 Finalizing the list and division of domestic investors for one-to-one meetings
Finalizing domestic road show and investor meeting schedules
Equirus, BNP, FL,
ARAL"
Retail marketing of the Offer, which will cover, inter alia:
+ Formulating marketing strategies, preparation of publicity budget, BNP
Finalising media, marketing and public relations strategy;
8 + Arranging for selection of underwriters and underwriting agreement;
Finalising collection centers;
Finalising centres for holding conferences for brokers etc.
+ Follow-up on distribution of publicity and Offer material including form, RHP/Prospectus
and deciding on the quantum of the Offer material
| Equirus, BNP, TIFL,
Non-Institutional marketing ofthe Offer, which will cover, inter alia RRare Equirus
9. | + Finalising media, marketing and-—public_—relations-~— strategy; and
Finalising centres for holding conferences for brokers, etc
Equirus, BNP, 1IFL
Managing anchor book related activities and submission of letters to regulators post completion of Equirus
10. | anchor allocation, book building software, bidding terminals and mock wading, payment of 1%
security deposit to the designated stock exchange.
Equirus, BNP, TFL TFL

11. | Managing the book and finalization of pricing in consultation with the Company.

 

 

 

 

 

 

74
 

Equiras, BNP, FL

Post bidding activities including management of escrow accounts, coordinate non-institutional im
allocation, coordination with Registrar, SCSBs and Banks, intimation of allocation and dispatch of
refund to Bidders, etc,
Post-Offer activities, which shall involve essential follow-up steps including allocation to Anchor
Investors, follow-up with Bankers to the Offer and SCSBs to get quick estimates of collection and
advising the Issuer about the closure of the Offer, based on correct figures, finalization of the basis of
allotment or weeding out of multiple applications, listing of instruments, dispatch of certificates or
demat credit and refunds and coordination with various agencies connected with the post-Offer
activity such as registrar to the Offer, Bankers to the Offer, SCSBs including responsibility for

12.

underwriting arrangements, as applicable.
Payment of the applicable securities transactions tax on sale of unlisted equity shares by the Selling
Shareholders,

Co-ordination with SEBI and Stock Exchanges for refund of 1% security deposit and submission of
final post Offer report to SEBI

 

 

 

 

 

 

* In compliance with the proviso to Regulation 21A of the SEBI Merchant Banker Regulations and Regulation 23(3) of the SEBI ICDR Regulations, ARAL was
involved only in marketing of the Offer. ARAL has signed the due diligence certificate and has been disclosed as a BRLM for the Offer.

Experts

Except as stated below, our Company has not obtained any expert opinions:

Our Company has received written consent dated November 25, 2021 from the Statutory Auditor, namely, Khimji
Kunverji & Co LLP, Chartered Accountants, to include its name, as required under Section 26 of the Companies
Act, 2013, in the Red Herring Prospectus and this Prospectus and to be named as an “Expert”, (as described under
the provisions of Section 2(38) and Section 26 of the Companies Act, 2013, as amended), in respect of their (i)
examination report dated November 17, 2021 on our Restated Consolidated Financial Information; and (ii) report
dated November 25, 2021 on the Statement of Special Tax Benefits, included in the Red Herring Prospectus and
this Prospectus and such consent has not been withdrawn as on the date of this Prospectus.

However, the term “expert” shall not be construed to mean an “expert” as defined under the Securities Act.

Monitoring Agency

As the Offer is an offer for sale of Equity Shares, our Company is not required to appoint a monitoring agency for
the Offer.

IPO Grading

As the Offer is an offer for sale of Equity Shares, no credit agency registered with SEBI has been appointed in
respect of obtaining grading for the Offer.

Appraising Entity

As the Offer is an offer for sale of Equity Shares, our Company will not receive any proceeds from the Offer.
Accordingly, no appraising entity has been appointed for the Offer.

Credit Rating
As this is an Offer of equity shares, credit rating is not required.
Trustees

As this is an Offer of equity shares, the appointment of trustees is not required.

75
Filing of the Offer Documents

A copy of the Draft Red Herring Prospectus has been filed with SEBI at Corporation Finance Department,
Division of Issues and Listing, SEBI Bhavan, Plot No. C4 A, ‘G’ Block, Bandra Kurla Complex, Bandra (East),
Mumbai 400 051 and simultaneously through the SEBI Intermediary Portal at https://siportal.sebi.gov.in, in
accordance with SEBI circular bearing reference SEBI/HO/CFD/DIL1/CIR/P/2018/011 dated January 19, 2018
and has been emailed to SEBI at cfddil@sebi.gov.in, in accordance with the instructions issued by SEBI on March
27, 2020, in relation to “Easing of Operational Procedure — Division of Issues and Listing - CFD”.

A copy of the Red Herring Prospectus, along with the material contracts and documents required to be filed, has
been filed with the RoC in accordance with Section 32 of the Companies Act, 2013, and a copy of the Prospectus
required to be filed under Section 26 of the Companies Act, 2013 will be delivered for filing to the RoC situated at
the address mentioned below and through the electronic portal at
http://www.mca.gov.in/mcafoportal/loginvalidateuser.do:

Registrar of Companies, Maharashtra at Mumbai
100, Everest, Marine Drive
Mumbai 400 002.

Book Building Process

Book building, in the context of the Offer, refers to the process of collection of Bids from investors on the basis of
the Red Herring Prospectus and the Bid cum Application Forms within the Price Band. The Price Band and the
minimum Bid Lot was decided by our Company, in consultation with the BRLMs, and advertised in all editions of
an English national daily newspaper Business Standard, all editions of a Hindi national daily newspaper Business
Standard and Mumbai editions of a Marathi newspaper Navshakti (each of which are widely circulated English,
Hindi and Marathi newspapers, respectively, Marathi being the regional language of Maharashtra, where our
Registered Office is located) at least two Working Days prior to the Bid/Offer Opening Date and was made
available to the Stock Exchanges for the purpose of uploading on their respective websites. The Offer Price has
been determined by our Company and the Selling Shareholders in consultation with the BRLMs, after the
Bid/Offer Closing Date.

All investors, other than Retail Individual Bidders and Anchor Investors, were only required to participate
through the ASBA process by providing the details of their respective ASBA Account in which the
corresponding Bid Amount was blocked by the SCSBs. Retail Individual Bidders participated through the
ASBA process by either; (a) providing the details of their respective ASBA Account in which the
corresponding Bid Amount was blocked by the SCSBs or; (b) through the UPI Mechanism. Anchor
Investors were not permitted to participate in the Offer through the ASBA process.

In accordance with the SEBI ICDR Regulations, QIBs Bidding in the Net QIB Portion and Non-
Institutional Investors bidding in the Non-Institutional Portion were not allowed to withdraw or lower the
size of their Bid(s) (in terms of the quantity of the Equity Shares or the Bid Amount) at any stage. Retail
Individual Bidders could revise their Bids during the Offer Period and withdraw their Bids until the
Bid/Offer Closing Date. Further, Anchor Investors could not withdraw their Bids after the Anchor Investor
Bidding Date. Allocation to QIBs in the Net QIB Portion was on proportionate basis and allocation to the
Anchor Investors was on a discretionary basis.

For further details, please see “Offer Procedure” on page 378 of this Prospectus.

Our Company and the Selling Shareholders will comply with the SEBI ICDR Regulations and any other ancillary
directions issued by SEBI for the Offer. Our Company and the Selling Shareholders have appointed the BRLMs to
manage the Offer and procure Bids for the Offer.

The Book Building Process and the Bidding process under the SEBI ICDR Regulations are subject to

change from time to time. Investors were advised to make their own judgment through this process prior to
submitting a Bid.

76
Bidders should note that the Offer is also subject to obtaining (i) final approval of the RoC after this Prospectus is
filed with the RoC; and (ii) final listing and trading approval from each of the Stock Exchanges, which our
Company shall apply for after Allotment.

Each Bidder, by submitting a Bid in the Offer, will be deemed to have acknowledged the above restrictions and
the terms of the Offer.

For further details, please see “Offer Structure” and “Offer Procedure” on pages 372 and 378, respectively, of this
Prospectus, respectively.

Underwriting Agreement
Our Company and the Selling Shareholders have entered into the Underwriting Agreement with the Underwriters
for the Equity Shares proposed to be offered through the Offer. Pursuant to the terms of the Underwriting

Agreement, the obligations of the Underwriters are several and are subject to certain conditions specified therein.

The Underwriting Agreement is dated December 7, 2021. The Underwriters have indicated their intention to
underwrite the following number of Equity Shares:

 

‘Name, address, telephone numiber and e-mail address of the Underwriters Indicated Number of | Amount Underwritten (up
Equity Shares to be | to)
Underwritten (up to)

 

Equirus Capital Private Limited 2,999,900 1,648, 382,500
12" Floor, C Wing, Marathon Futurex,
N.M. Joshi Marg, Lower Parel
Mumbai 400 013,

Maharashtra, India

‘Telephone: +91 (22) 4332 0700

Email: arwl.ipo@equitus.com

 

 

Equirus Securities Private Limited 100 55,000
A-2102 B, 21° Floor, A wing, Marathon Futurex, N.M. Joshi Marg, Lower Parel
Mumbai 400 013

‘Telephone: +91 7874000623

E-mail: mahek.gandhi@equirus.com/ admin_equirus@equirus.com

 

BNP Paribas 2,999,900 1,648,382,500
BNP Paribas House, 1-North Avenue
Maker Maxity, Bandra Kurla Complex
Bandra I, Mumbai 400 051

Maharashtra, India

‘Telephone: +91 (22) 3370 4000

E-mail: dl.ipo.arwl@asia.bnpparibas.com

 

‘Sharekhan Limited 100 55,000
10th Floor, Beta Building, Lodha iThink Techno Campus, Opp. Kanjurmarg Railway
Station, Kanjurmarg East, Mumbai 400 042, Maharashtra, India

‘Telephone: +91 22 6115 0000

E-mail: pravin@sharekhan.com

 

TIFL Securities Limited 3,000,000 1,648,437,500
10" Floor, IIFL Centre, Kamala City,
Senapati Bapat Marg,

Lower Parel (West),

Mumbai 400 013

Maharashtra, India

‘Telephone: +91 (22) 4646 4600
E-mail: arwl.ipo@iiflcap.com

 

 

‘Anand Rathi Advisors Limited 2,999,900 1,648,382,500
10" Floor, Trade Tower D, Kamala City
Senapati Bapat Marg, Lower Parel
Mumbai — 400013, Maharashtra, India
‘Telephone: +91 22 6626 6666

E-mail: alpha.ipo@rathi.com

 

‘Anand Rathi Share and Stock Brokers Limited 100 55,000
Express Zone, A Wing, 10th Floor, Westen Express Highway, Goregaon East,
Mumbai — 400063

‘Telephone: +91 22 6281 7000

E-mail: roopbhootra@rathi.com

 

 

 

 

Total 12,000,000 6,593,750,000

 

 

* Th compliance with the proviso to Regulation 21A(1) of the Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992, as amended, read
with proviso to Regulation 23(3) of the SEBI ICDR Regulations, Anand Rathi Advisors Limited was involved only in marketing of the Offer.

a
The above-mentioned amount is indicative and will be finalised after finalisation of the ‘Basis of Allotment’ and
subject to the provisions of the SEBI ICDR Regulations.

Based on the representations and undertakings provided by the Underwriters, in the opinion of our Board, the
resources of the Underwriters are sufficient to enable them to discharge their respective underwriting obligations
in full. The above-mentioned Underwriters are registered with SEBI under the SEBI Act or registered as brokers
with the Stock Exchanges. Our Board, at its meeting held on December 7, 2021, has accepted and entered into the
Underwriting Agreement mentioned above on behalf of our Company.

Allocation among the Underwriters may not necessarily be in proportion to their underwriting commitments set
forth in the table above.

Notwithstanding the above, the Underwriters shall be severally responsible for ensuring payment with respect to
the Equity Shares allocated to Bidders respectively procured by them in accordance with the Underwriting
Agreement. In the event of any default in payment, the respective Underwriter, in addition to other obligations
defined in the Underwriting Agreement, will also be required to procure purchases for or purchase the Equity
Shares to the extent of the defaulted amount in accordance with the Underwriting Agreement.

78
CAPITAL STRUCTURE

The share capital of our Company, as of the date of this Prospectus is set forth below:

(In %, except share data)

 

Aggregate. nominal [Value at Offer
value Price §=(@ in
million)

 

A) |AUTHORISED SHARE CAPITAL

 

50,000,000 Equity Shares

250,000,000 N.A.

 

B) |ISSUED, SUBSCRIBED AND PAID UP SHARE CAPITAL BEFORE AND AFTER THE OFFER

 

 

 

 

 

 

 

 

 

 

 

 

 

[41,616,227 Equity Shares 208,081,135 N.A.
C) [PRESENT OFFER ©

Offer for Sale of up to 12,000,000 Equity Shares by the Selling] 60,000,000 6,593.75"

Shareholders ®

Which includes :

Employee Reservation Portion of up to 250,000 Equity Shares* 1,250,000 131,25%A

Net Offer of up to 11,750,000 Equity Shares 58,750,000 6,462.50*A
D) [SECURITIES PREMIUM ACCOUNT

Before the Offer 400,147,495

After the Offer 400,147,495

 

# Our Company in consultation with the Lead Managers, offered an Employee Discount of ® 25 per Equity Share
(1) The Offer has been authorized by our Board pursuant to its resolution dated July 16, 2021.
(2) Each Selling Shareholder severally and not jointly confirmed that its Offered Shares had been held by it for a period of at least one
year prior to the filing of the Draft Red Herring Prospectus in accordance with Regulation 8 of the SEBI ICDR Regulations and
accordingly ,were eligible for the Offer in accordance with the provisions of the SEBI ICDR Regulations. For details on the

authorization of each of the Selling Shareholders in relation to their respective Offered Share:
“Our Company in consultation with the Book Running Lead Managers, offered a discount of & 25

see “The Offer” on page 67.
rer Equity Share to Eligible Employees

 
  

bidding in the Employee Reservation Portion.
‘Subject to finalization of Basis of Allotment

Details of changes to our Company’s authorized share capital in the last 10 years:

 

Sr.No. | Date of AGM/
EGM

Change in authorized share capital

 

1. June 6, 2016

The authorized share capital of % 2,600,000 comprising 260,000 equity shares of face value of
2 10 each was increased to 102,600,000 comprising 10,260,000 equity shares of face value of
2 10 each,

 

ae September 2,
2016

The authorized share capital of % 102,600,000 comprising 10,260,000 equity shares of face
value of & 10 each was increased to % 150,000,000 comprising 15,000,000 equity shares of face
value of 10 each.

 

3. March 3, 2018

The authorized share capital of € 150,000,000 comprising 15,000,000 equity shares of face
value of € 10 each was increased to % 200,000,000 comprising 20,000,000 equity shares of face
value of 10 each.

 

4. August 14, 2018

20,000,000 equity shares of face value of & 10 each was sub-divided into 40,000,000 Equity
Shares of face value of 5 each,

 

5. July 15, 2021

 

 

 

The authorized share capital of 200,000,000 comprising 40,000,000 equity shares of face
value of 85 each was increased to 250,000,000 comprising 50,000,000 equity shares of face
value of &5 each.

 

Notes to Capital Structure

1. Share capital history

(a) History of equity share capital of our Company

The following table sets forth the history of the equity share capital of our Company:

79

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Date of Number of | Face Issue Nature of Reasons for Cumulative Cumulative
allotment Equity | value | price | consideration allotment number of paid up
Shares ®@ per Equity Shares | Equity Share
Equity capital (2)
Share
@
February 28, 2 10 10 Cash Subscription to 2 20
1995@ MoA”)
February 25, 1,000 10 10 ‘Cash Further allotment 1,002 10,020
1997
March 30, 1999 155,700. 10 50 Cash Further allotment 156,702 1,567,020
August 26, 30,000 10 50 Cash Further allotment 186,702 1,867,020
2000
March 14, 2003 8,000 10 50 ‘Cash Further allotment 194,702 1,947,020
‘August 8, 2016 6,230,464 10 NA. NA. Bonus issue of 6,425,166 64,251,660
equity shares in the
ratio of 32:1 equity
shares for each
equity share held
by a Shareholder
as on August 8,
2016
September 19, 4,371,000 10 10 ‘Cash Rights Issue * 10,796,166 107,961,660
2016
October 25, 2,169,834 10 10 ‘Cash Rights Issue®* 12,966,000 129,660,000
2016
January 9, 2017 34,000 10 10 ‘Cash Private 13,000,000 130,000,000
Placement?) **
January 19, 50,000 10 10 ‘Cash Private 13,050,000 130,500,000
2017 Placement() **
May 3, 2017 ‘40,000 10 750 ‘Cash Private 13,090,000 130,900,000
Placement(!)
May 3, 2017 300,300 10 750 ‘Cash Private 13,390,300 133,903,000
Placement'!)
March 15, 2018 52,740 10 10 ‘Cash Allotment pursuant 13,443,040 134,430,400
to ESOP 201713)
‘August 10, 11,260 10 10 ‘Cash Allotment pursuant 13,454,300 134,543,000
2018 to ESOP 2017")
‘August 14, NA. 5 NA. NA. Sub-division of 26,908,600 134,543,000
2018 equity shares(*®)
July 6, 2019 118,840 5 5 ‘Cash Allotment pursuant 27,027,440 135,137,200
to ESOP 201709)
‘August 5, 2020 174,000 5 5 ‘Cash Allotment pursuant 27,201,440 136,007,200
to ESOP 2017 (7)
52,020 5 5 ‘Cash Allotment pursuant 27,253,460 136,267,300
to ESOP 20180)
October 23, 2,60,100 5 411 Cash Preferential 27,513,560 137,567,800
2020 Allotment (
June 14, 2021 178,560 5 5 ‘Cash Allotment pursuant 27,692,120 138,460,600
to ESOP 20172)
52,020 5 5 Cash Allotment pursuant 27,744,140 138,720,700
to ESOP 2018?)
July 16, 2021 13,872,087 5 7 a Bonus Issue of 41,616,227 208,081,135

 

 

 

 

 

equity shares in the
ratio of 1:2 equity
shares for each
Equity Share held
by a Shareholder
as on July 15,
20210)

 

 

 

80

 
@
OM
2)

@)

@

@)
”

(8)

a

(10)
ay
(12)

Date of subscription to the MoA.
Initial subscription to the MoA by Mr. Om Prakash Soni for 1 equity share of face value of = 10 each and Mr.
Siddharth Jadhav for 1 equity share of face value of & 10 each.

Allotment of 400 equity shares of face value of & 10 each to Mr. Vishal Laddha, allotment of 100 equity shares of face
value of @ 10 each to Mr. M. L. Agrawal and allotment of 500 equity shares of face value of @ 10 each to Mr. Roop
Bhootra.

Allotment of 20,000 equity shares of face value of = 10 each to Gerard Viegas Finvest Private Limited, allotment of
75,700 Equity Shares to Preetraj Finvest Private Limited, allotment of 9,000 Equity Shares to Metro Woven Sacks
Private Limited, allotment of 24,000 equity shares of face value of % 10 each to Rukmani Mercantile Private Limited,
allotment of 17,000 equity shares of face value of & 10 each to Rukmani Agencies Private Limited, allotment of 10,000
Equity Shares to Yash Securities Private Limited.

Allotment of 10,000 equity shares of face value of & 10 each to Amalgamated Comm. Traders Private Limited,
allotment of 10,000 equity shares of face value of € 10 each to Mr. P. K. Goyal, allotment of 7,000 equity shares of face
value of & 10 each to Ms. Navrati Gupta and allotment of 3,000 equity shares of face value of % 10 each to Ms, Pratiba
Goyal.

Allotment of 8,000 equity shares of face value of @ 10 each to Ms. Vimlaben Jayantilal Shah

Allotment of 6,230,464 equity shares of face value of & 10 each to Anand Rathi Financial Services Limited.

Allotment of 1,810,000 equity shares of face value of @ 10 each to Mr. Anand Rathi, allotment of 540,000 equity shares
of face value of % 10 each to Mrs. Supriya Rathi, allotment of 240,000 equity shares of face value of % 10 each to
Navratan Mal Gupta HUF, allotment of 250,000 equity shares of face value of % 10 each to Pradeep Kumar Gupta
HUF, allotment of 500,000 equity shares of face value of % 10 each to Mr. Pradeep Gupta, allotment of 360,000 equity
shares of face value of & 10 each to Ms. Priti Gupta, allotment of 484,000 equity shares of face value of & 10 each to
Mr. Rakesh Rawal, allotment of 110,000 equity shares of face value of @ 10 each to Mr. Feroze Azeez, allotment of
22,000 equity shares of face value of @ 10 each to Mr. Sumeet Vaid, allotment of 55,000 equity shares of face value of 2
10 each to Mr. Jugal Mantri.

Allotment of 1,117,880 equity shares of face value of & 10 each to Mr. Anand Rathi, allotment of 40,000 equity shares
of face value of @ 10 each to Navratan Mal Gupta HUF, allotment of 60,000 equity shares of face value of & 10 each to
Pradeep Kumar Gupta HUF, allotment of 255,254 equity shares of face value of % 10 each to Mr. Pradeep Gupta,
allotment of 140,000 equity shares of face value of @ 10 each to Ms. Priti Gupta, allotment of 470,000 equity shares of
face value of % 10 each to Jaipur Securities Private Limited, allotment of 86,700 equity shares of face value of & 10
each to Mr. Rakesh Rawal.

Allotment of 20,000 equity shares of face value of % 10 each to Mr. Feroze Azeez, allotment of 10,000 equity shares of
face value of & 10 each to Mr. Jugal Mantri and allotment of 4,000 equity shares of face value of @ 10 each to Anand
Rathi Capital Advisors Private Limited.

Allotment of 50,000 equity shares of face value of 10 each to Mr. Feroze Azer.

Allotment of 40,000 equity shares of face value of & 10 each to Amit Capital and Securities Private Limited.

Allotment of 300,300 equity shares of face value of % 10 each to 83 allottees, comprising 700 equity shares of face
value of % 10 each to Ms. Aarti Desikan, 700 equity shares of face value of = 10 each to Mr. Abhishek Kumar, 700
equity shares of face value of & 10 each to Mr. Abhishek Rastogi, 700 equity shares of face value of = 10 each to Mr.
Akhil Mathur, 3,350 equity shares of face value of @ 10 each to Mr. Amitabh Shankarlal Lara, 700 equity shares of face
value of = 10 each to Mr. Amol Vijay Mane, 8,000 equity shares of face value of @ 10 each to Mr. Anil Ramesh, 700
equity shares of face value of € 10 each to Mr. Animesh Kashinath, 700 equity shares of face value of % 10 each to Ms.
Ankit Kalra, 3,300 equity shares of face value of = 10 each to Ms. Anupama Ashok Shenoy, 2,000 equity shares of face
value of & 10 each to Mr. Arijit Gautam Mukherjee, 1,350 equity shares of face value of % 10 each to Mr. Arjun
Guhathakurta, 700 equity shares of face value of @ 10 each to Ms. Arti Wadhwa Bhalla, 14,000 equity shares of face
value of @ 10 each to Mr. Chandramouli J, 700 equity shares of face value of @ 10 each to Mr. Chirag Ramesh Muni,
7,000 equity shares of face value of @ 10 each to Ms. Daksha Amlani, 700 equity shares of face value of ® 10 each to
Mr. Debarshi Dutta, 950 equity shares of face value of @ 10 each to Mr. Devashish Arora,14,000 equity shares of face
value of & 10 each to Mr. Devesh Nayel, 14,000 equity shares of face value of = 10 each to Ms. Divya Sreenivasan,
6,700 equity shares of face value of @ 10 each to Mr. Feroze Azeez, 1,400 equity shares of face value of @ 10 each to
Mr. Firdous Sharieff, 1,000 equity shares of face value of % 10 each to Mr. Gaurav Khosla, 700 equity shares of face
value of % 10 each to Ms. Gayathri Gangadharan, 1,400 equity shares of face value of = 10 each to Mr. George
Verghese, 700 equity shares of face value of 2 10 each to Mr. Goutham Somayaji, 1,000 equity shares of face value of 2
10 each to Mr. Hardev Singh Saini, 700 equity shares of face value of @ 10 each to Mr. Harshad Dongre, 950 equity
shares of face value of = 10 each to Mr. Hrishikesh Palve, 1,350 equity shares of face value of % 10 each to Mr.
Jasmeet Singh Kumar, 700 equity shares of face value of % 10 each to Ms. Jyoti Jalhotra, 700 equity shares of face
value of % 10 each to Mr. Kalpesh Girish Koradia, 14,000 equity shares of face value of € 10 each to Mr. Karan
Mangla, 700 equity shares of face value of € 10 each to Mr. Karl Tata, 700 equity shares of face value of @ 10 each to
Mr. Karna Prabhakar Patil, 700 equity shares of face value of 2 10 each to Mr. Kedar Bhatt,14,000 equity shares of
face value of 2 10 each to Mr. Krishnakumar Natrajan, 700 equity shares of face value of % 10 each to Mr. Kunaal
George Philip, 28,000 equity shares of face value of % 10 each to Mr. Kurugod Shettar Ravi, 1,000 equity shares of
face value of & 10 each to Mr. Manish Srivastava, 700 equity shares of face value of & 10 each to Ms. Meenu Bagree,

 

  

 

 

81
(13)

a4

ds)
(16)

700 equity shares of face value of @ 10 each to Mr. Mohit Mehta, 700 equity shares of face value of @ 10 each to Ms.
Nidhi Parakh, 2,000 equity shares of face value of @ 10 each to Mr. Niraj Kumar, 700 equity shares of face value of %
10 each to Ms. Padmini BS, 1,350 equity shares of face value of @ 10 each to Mr. Parama Ghosh, 700 equity shares of
face value of % 10 each to Mr. Piyush Dungarpuria, 2,700 equity shares of face value of % 10 each to Ms. Ponam
Verma Raghuvanshi, 700 equity shares of face value of @ 10 each to Ms. Prati Rajgopal, 700 equity shares of face
value of = 10 each to Ms. Protima Ravindra, 14,000 equity shares of face value of % 10 each to Mr. R. Vaikunta
Ramasubramaniam, 14,000 equity shares of face value of 10 each to Mr. Ramesh Sundaresan, 14,000 equity shares
of face value of @ 10 each to Mr. Ravishankar Balraman, 700 equity shares of face value of & 10 each to Mr. Rayasam
Kuldeep, 700 equity shares of face value of @ 10 each to Ms. Sabita Krishnakumar, 700 equity shares of face value of %
10 each to Ms, Sangishetty Uma Maheshwar, 700 equity shares of face value of @ 10 each to Mr. Sanjay Rao, 700
equity shares of face value of & 10 each to Mr. Saswat Mishra, 700 equity shares of face value of = 10 each to Mr.
Saumil Pabari, 1,400 equity shares of face value of = 10 each to Mr. Shiv Kumar Damani, 700 equity shares of face
value of % 10 each to Mr. Shivraj Ghorpade, 2,000 equity shares of face value of @ 10 each to Ms. Shubbida Jagtiani
Randhawa, 700 equity shares of face value of & 10 each to Mr. Shyam Sunder Kakani, 1,400 equity shares of face value
of & 10 each to Mr. Siddhartha Bhaduri, 2,000 equity shares of face value of @ 10 each to Ms. Sonali Rawal, 1,000
equity shares of face value of @ 10 each to Ms. Sonam Samir Bhagat, 700 equity shares of face value of % 10 each to
Ms. Sriram Iyer, 1,350 equity shares of face value of @ 10 each to Mr. Subhendu Bhushan Harichandan, 700 equity
shares of face value of @ 10 each to Mr. Sudha Thilak Nath, 14,000 equity shares of face value of € 10 each to Sunshine
Trust, 700 equity shares of face value of @ 10 each to Mr. Suraj Sinha, 1,400 equity shares of face value of @ 10 each to
Mr. Swapan Chakraborty, 700 equity shares of face value of 10 each to Mr. Swapnil Gokul Amritkar, 5,600 equity
shares of face value of % 10 each to Ms. Swetha Manot, 1,350 equity shares of face value of % 10 each to Mr. Tushar
Singh, 1,000 equity shares of face value of @ 10 each to Ms. Urvashi Maheshwari, 700 equity shares of face value of %
10 each to Mr. Uttam Kumar, 7,000 equity shares of face value of = 10 each to Mr. Vadanikal Mathada Harsha
Vardhana, 700 equity shares of face value of @ 10 each to Mr. Vijay Kumar Singh, 4,000 equity shares of face value of
% 10 each to Mr. Vimalathithan Natarajan Duraiswamy, 28,000 equity shares of face value of 10 each to Mr. Vinayak
Kurugod Shettar, 700 equity shares of face value of @ 10 each to Mr. Vishal Deshpande and 13,300 equity shares of
face value of & 10 each to Mr. Yash Agrawal.

Allotment of 52,740 equity shares of face value of & 10 each to 29 allottees, comprising 700 equity shares of face value
of 10 each to Ms. Aarti Desikan, 320 equity shares of face value of @ 10 each to Mr. Akhil Mathur, 940 equity shares
of face value of = 10 each to Mr. Anil Ramesh, 640 equity shares of face value of % 10 each to Mr. Arijit Mukherjee,
1,860 equity shares of face value of @ 10 each to Mr. Arjun Guha, 800 equity shares of face value of @ 10 each to Mr.
Chethan Shenoy, 420 equity shares of face value of @ 10 each to Mr. Chirag Muni, 800 equity shares of face value of @
10 each to Mr. Dilip Balakrishnan, 4,080 equity shares of face value of @ 10 each to Ms. Divya Sreenivasan, 26,000
equity shares of face value of @ 10 each to Mr. Feroze Azeez, 1,220 equity shares of face value of @ 10 each to Mr.
Firdous Sharieff, 700 equity shares of face value of @ 10 each to Mr. Gaurav Khosla, 580 equity shares of face value of
% 10 each to Mr. Karna Patil, 920 equity shares of face value of @ 10 each to Mr. Kedar G Bhatt, 940 equity shares of
face value of @ 10 each to Mr. Manish Srivastava, 420 equity shares of face value of @ 10 each to Mr. Mohamed Ishaq
‘Amjad, 640 equity shares of face value of @ 10 each to Mr. Niraj Kumar, 880 equity shares of face value of @ 10 each to
Ms. Nitika Gulati, 1,200 equity shares of face value of @ 10 each to Mr. Piyush Dungarpuria, 700 equity shares of face
value of & 10 each to Ms. Poonam Raghuvanshi, 580 equity shares of face value of @ 10 each to Ms. Protima Dhawan,
1,240 equity shares of face value of @ 10 each to Mr. Shailendra Khinda, 500 equity shares of face value of @ 10 each
to Mr. Shiv Kumar Damani, 1,380 equity shares of face value of % 10 each to Ms. Shubbida Jagtiani Randhawa, 340
equity shares of face value of @ 10 each to Mr. Shyam Sunder Kakani, 620 equity shares of face value of & 10 each to
Ms. Sonam Samir Bhagat, 640 equity shares of face value of 2 10 each to Mr. Subhendu Harichandan, 400 equity
shares of face value of @ 10 each to Mr. Suraj Sinha and 2,280 equity shares of face value of & 10 each to Ms. Swetha
Manot.

Allotment of 11,260 equity shares of face value of @ 10 each to seven allottees, comprising 4,000 equity shares of face
value of % 10 each to Mr. Roop Bhootra, 4,000 equity shares of face value of % 10 each to Mr. Vishal Laddha, 1,200
equity shares of face value of @ 10 each to Mr. Rajkumar Jain, 600 equity shares of face value of @ 10 each to Mr. Shiv
Kumar Damani, 600 equity shares of face value of @ 10 each to Mr. Girish Kumar Pungalia, 600 equity shares of face
value of & 10 each to Mr. Rajesh Kumar Bhutara, and 260 equity shares of face value of @ 10 each to Mr. Narendra
Jain.

Pursuant to a circular resolution the Board has approved the sub-division of equity shares from face value of 210 per
equity share to @ 5 per Equity Share on August 10, 2018 and shareholders’ approval dated August 14, 2018.

Allotment of 118,840 Equity Shares of face value of % 5 each to 33 allotees, comprising 52,000 Equity Shares of face
value of @ 5 each to Mr. Feroze Azeez, 8,160 Equity Shares of face value of 5 each to Ms. Divya Sreenivasan, 8,000
Equity Shares of face value of @ 5 each to Mr. Roop Bhootra, 4,560 Equity Shares of face value of @ 5 each to Ms.
Swetha Manot, 3,720 Equity Shares of face value of ? 5 each to Mr. Arjun Guha, 2,760 Equity Shares of face value of @
5 each to Ms. Shubbida Jagtiani Randhawa, 2,480 Equity Shares of face value of ® 5 each to Mr. Shailendra Khinda,
2,440 Equity Shares of face value of @ 5 each to Mr. Firdous Sharieff, 2,400 Equity Shares of face value of @ 5 each to
Mr. Piyush Dungarpuria, 2,400 Equity Shares of face value of @ 5 each to Mr. Rajkumar Jain, 2,200 Equity Shares of
face value of ® 5 each to Mr. Shiv Kumar Damani, 1,880 Equity Shares of face value of & 5 each to Mr. Anil Ramesh,

 

 

82
a7)

(18)
(19)
(20)

@))
(22)

1,880 Equity Shares of face value of @ 5 each to Mr. Manish Srivastava, 1,840 Equity Shares of face value of & 5 each
to Mr. Kedar G Bhatt, 1,760 Equity Shares of face value of @ 5 each to Ms. Nitika Gulati, 1,600 Equity Shares of face
value of = 5 each to Mr. Chethan Shenoy, 1,600 Equity Shares of face value of @ 5 each to Mr. Dilip Balakrishnan,
1,400 Equity Shares of face value of % 5 each to Ms. Aarti Desikan, 1,400 Equity Shares of face value of @ 5 each to
Mr. Gaurav Khosla, 1,400 Equity Shares of face value of % 5 each to Ms. Poonam Raghuvanshi, 1,280 Equity Shares of
face value of & 5 each to Arijit Mukherjee, 1,280 Equity Shares of face value of @ 5 each to Niraj Kumar, 1,280 Equity
Shares of face value of @ 5 each to Mr. Subhendu B Harichandan, 1,240 Equity Shares of face value of ® 5 each to Ms.
Sonam Samir Bhagat, 1,200 Equity Shares of face value of @ 5 each to Mr. Girish Kumar Pungalia, 1,200 Equity
Shares of face value of % 5 each to Mr. Rajesh Kumar Bhutara, 1,160 Equity Shares of face value of % 5 each to Ms.
Protima Dhawan, 840 Equity Shares of face value of @ 5 each to Mr. Chirag Muni, 840 Equity Shares of face value of %
5 each to Mr. Mohamed Ishaq Amjad, 800 Equity Shares of face value of = 5 each to Mr. Suraj Sinha, 680 Equity
Shares of face value of @ 5 each to Mr. Shyam Sunder Kakani, 640 Equity Shares of face value of @ 5 each to Mr. Akhil
Mathur, and 520 Equity Shares of face value of ? 5 each to Mr. Narendra Jain.

Allotment of 174,000 Equity Shares of face value of 5 each to 31 allotees, comprising 2,100 Equity Shares of face
value of 5 each to Ms. Aarti Desikan, 960 Equity Shares of face value of 5 each to Mr. Akhil Mathur, 2,820 Equity
Shares of face value of @ 5 each to Mr. Anil Ramesh, 1,920 Equity Shares of face value of = 5 each to Mr. Arijit
Mukherjee, 5,580 Equity Shares of face value of @ 5 each to Mr. Arjun Guha, 2,400 Equity Shares of face value of ? 5
each to Mr. Chethan Shenoy, 1,260 Equity Shares of face value of @ 5 each to Mr. Chirag Muni, 12,240 Equity Shares
of face value of @ 5 each to Ms. Divya Sreenivasan, 78,000 Equity Shares of face value of @ 5 each to Mr. Feroze Azeez,
3,660 Equity Shares of face value of @ 5 each to Mr. Firdous Sharieff, 2,100 Equity Shares of face value of @ 5 each to
Mr. Gaurav Khosla, 2,760 Equity Shares of face value of @ 5 each to Mr. Kedar G Bhatt, 2,820 Equity Shares of face
value of @ 5 each to Mr. Manish Srivastava, 1,260 Equity Shares of face value of % 5 each to Mr. Mohamed Ishaq
Amjad, 1,920 Equity Shares of face value of ® 5 each to Mr. Niraj Kumar, 2,640 Equity Shares of face value of ® 5 each
to Ms. Nitika Gulati, 3,600 Equity Shares of face value of @ 5 each to Mr. Piyush Dungarpuria, 2,100 Equity Shares of
face value of = 5 each to Ms. Poonam Raghuvanshi, 1,740 Equity Shares of face value of @ 5 each to Ms. Protima
Dhawan, 3,720 Equity Shares of face value of @ 5 each to Mr. Shailendra Khinda, 3,300 Equity Shares of face value of
% 5 each to Mr. Shiv Kumar Damani, 4,140 Equity Shares of face value of % 5 each to Mr. Shubbida Jagtiani
Randhawa, 1,020 Equity Shares of face value of @ 5 each to Mr. Shyam Sunder Kakani, 1,920 Equity Shares of face
value of @ 5 each to Mr, Subhendu B Harichandan, 1,200 Equity Shares of face value of @ 5 each to Mr. Suraj Sinha,
6,840 equity shares of face value of @ 5 each to Ms. Swetha Manot, 12,000 Equity Shares of face value of @ 5 each to
Ms. Roop Bhootra, 3,600 Equity Shares of face value of % 5 each to Mr. Rajkumar Jain, 1,800 Equity Shares of face
value of % 5 each to Mr. Girish Kumar Pungalia, 1,800 Equity Shares of face value of @ 5 each to Mr. Rajesh Kumar
Bhutara, and 780 Equity Shares of face value of ? 5 each to Mr. Narendra Jain.

Allotment of 52,020 Equity Shares of face value of ® 5 each to Mr. Feroze Azeez.

Allotment of 2,60,100 Equity Shares of face value of @ 5 each to Mr. Feroze Azeez.

Allotment of 178,560 Equity Shares of face value of % 5 each to 30 allotees, comprising Allotment of 2,100 Equity
Shares of face value of ? 5 each to Ms, Aarti Desikan, 960 Equity Shares of face value of 5 each to Mr. Akhil Mathur,
2,820 Equity Shares of face value of ® 5 each to Mr. Anil Ramesh, 1,920 Equity Shares of face value of & 5 each to Mr.
Arijit Mukherjee, 5,580 Equity Shares of face value of @ 5 each to Mr. Arjun Guha, 2,400 Equity Shares of face value of
% 5 each to Mr. Chetan Shenoy, 1,260 Equity Shares of face value of = 5 each to Mr. Chirag Muni, 12,240 Equity
Shares of face value of @ 5 each to Ms. Divya Sreenivasan, 78,000 Equity Shares of face value of = 5 each to Mr.
Feroze Azeez, 3,660 Equity Shares of face value of ® 5 each to Ms. Firdous Sharieff, 2,100 Equity Shares of face value
of @ 5 each to Mr. Gaurav Khosla, 2,760 Equity Shares of face value of ® 5 each to Mr. Kedar G Bhatt, 2,820 Equity
Shares of face value of = 5 each to Mr. Manish Srivastava, 1,260 Equity Shares of face value of @ 5 each to Mr.
Mohamed Ishaq Amjad, 1,920 Equity Shares of face value of @ 5 each to Mr. Niraj Kumar, 2,640 Equity Shares of face
value of @ 5 each to Ms. Nikta Gulati, 3,600 Equity Shares of face value of @ 5 each to Mr. Piyush Dungarpuria, 2,100
Equity Shares of face value of @ 5 each to Ms. Poonam Raghuvanshi, 1,740 Equity Shares of face value of @ 5 each to
Ms. Protima Dhawan, 3,720 Equity Shares of face value of @ 5 each to Mr, Shailendra Khinda, 1,020 Equity Shares of
‘face value of @ 5 each to Mr. Shyam Sunder Kakani, 1,920 Equity Shares of face value of @ 5 each to Mr. Subhendu B
Harichandan, 1,200 Equity Shares of face value of ® 5 each to Mr. Suraj Sinha, 6,840 Equity Shares of face value of %
5 each to Ms. Swetha Manot, 12,000 Equity Shares of face value of = 5 each to Mr. Roop Bhootra, 12,000 Equity
Shares of face value of ® 5 each to Mr.Vishal Laddha, 3,600 Equity Shares of face value of @ 5 each to Mr. Rajkumar
Jain, 1,800 Equity Shares of face value of @ 5 each to Mr.Girish Kumar Pungalia, 1,800 Equity Shares of face value of
5 each to Mr. Rajesh Kumar Bhutara, 780 Equity Shares of face value of @ 5 each to Mr. Narendra Jain.

Allotment of 52,020 Equity Shares of face value of ® 5 each to Mr. Feroze Azeez.

Bonus issue of 13,872,087 Equity Shares to the Shareholders of face value of @ 5 each in the ratio of 1 bonus share for
every 2 Equity Shares held, as at record date i.e. July 15, 2021.

 

The allotments dated September 19, 2016 and October 25, 2016, were erroneously recorded as private placements.
Our Company has subsequently filed the revised forms ie. Form PAS 3 on November 1, 2019, along with an
explanatory note giving reference of the original erroneous return and recording the transactions as Rights Issues. For
further details, please refer to “Risk Factor — There have been instances of discrepancies in relation to certain of our

83,
##

(b)

©

@

©

o

corporate records and statutory filings with the RoC under applicable laws. Any proceedings that may be initiated in
this regard, or any adverse outcome of such proceedings, could adversely impact our reputation, business and our
results of operations.” On page 38 of this Prospectus.

Our Company filed an application for adjudication of penalties with the RoC (“Adjudication Application”), with
respect to, inter alia, the two allotments on January 9, 2017 and January 19, 2017, respectively, for failure to comply
with the requirements of opening and maintaining a separate bank account for receipt of application monies. The RoC
passed two orders with respect to the Adjudication Application, both dated March 30, 2021, and imposed penalties of ¢
0.34 million and & 0.50 million with respect to the two private placements of 34,000 Equity Shares and 50,000 Equity
Shares, respectively. We have paid the penalties aggregating to @ 0.84 million imposed by way of the above-mentioned
orders on April 21, 2021. For further details in relation to these adjudication applications, please refer to
“Outstanding Litigation and Material Developments” on page 332 of this Prospectus. For further details, please refer
to “Risk Factor — There have been instances of discrepancies in relation to certain of our corporate records and
statutory filings with the RoC under applicable laws. Any proceedings that may be initiated in this regard, or any
adverse outcome of such proceedings, could adversely impact our reputation, business and our results of operations.”
On page 38 of this Prospectus.

History of preference share capital of our Company
Our Company has not issued any preference shares since incorporation.
Shares issued for consideration other than cash or out of revaluation reserves

Our Company has not issued any equity shares or preference shares for consideration other than cash or out of
revaluation reserves at any time since incorporation.

Equity Shares allotted in terms of any scheme of arrangement approved under Sections 391-394 of the
erstwhile Companies Act, 1956 or under Sections 230-234 of Companies Act, 2013

The Company has not issued or allotted any Equity Shares pursuant to schemes of amalgamation approved
under Sections 391-394 of the erstwhile Companies Act, 1956 or Sections 230-234 of the Companies Act, 2013.

Issuance of Equity Shares at a price lower than the Offer Price during the preceding one year

As of the date of this Prospectus, except as set out in “Notes to Capital Structure — Share Capital History —
History of Equity Share capital of our Company” on page 79 of this Prospectus, there have been no Equity
Shares issued by our Company at a price that may be lower than the Offer Price during a period of one year
preceding the date of this Prospectus.

Shareholding of our Promoters, members of the Promoter Group and directors of our Promoter in our
Company

The build-up of the equity shareholding of our Promoters since incorporation of our Company is set forth in the
table below:

 

 

 

 

Name of the Promoters | Date of allotment/| Number of | Face | Issue/ |%  0ff%  offNatur [Nature
transfer and when the | Equity Shares | value | Acqui |pre- [post- fe  offof
Equity Shares were | allotted/ ®@ sition/ Offer [Offer |consid|Transact|
made fully paid up transferred Sale _|capital [capital leratio lion
Price In
per
Equit
y
Share
@
Mr. Anand Rathi [September 26, 2006 1*| 10) N.A| 0.00] 0.00\Cash__|Transfer
[September 19, 2016 1,810,000 10) 10) 4.35} 4.35|\Cash_ |Rights
Issue

 

 

 

 

 

 

 

 

 

 

84
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name of the Promoters | Date of allotment/ | Number of | Face Issue/ |%  of/% _ ofiNatur |Nature
transfer and when the | Equity Shares | value | Acqui |pre-  |post- le — offof
Equity Shares were | allotted/ ®@ sition/ |Offer [Offer |consid {Transact
made fully paid up transferred Sale _ [capital |capital eratio |ion

Price In
per
Equit
y
Share
®@
[October 25, 2016 1,117,880 10) 10} 2.69] 2.69|Cash [Rights
Issue
January 16, 2017 (65,000) 10| 10) 0.16) 0.16|Cash_ [Transfer
January 16, 2017 (325,000)| 10) 10| 0.78| 0.78|Cash__ [Transfer
[November 23, 2017 (100,000)| 10) 800 0.24] 0.24|Cash [Transfer
January 23, 2018 (300,000)| 10) NA] 0.72 0.72\N.A. [Transfer
by  way|
lof a gift
[March 16, 2018 (1,250)| 10) NA] 0.00) 0.00IN.A. [Transfer
by way|
jof a gift
[March 16, 2018 (1,250)| 10) NA] 0.00} 0.00IN.A. [Transfer
by way|
jof a gift
[March 16, 2018 (1,250)| 10} NA] 0.00) 0.00IN.A. [Transfer
by way|
lof a gift
June 25, 2018 (300,000) 10) NA] 0.72 0.72|N.A. [Transfer
by way|
jof a gift
June 25, 2018 (1,250)| 10} NA] 0.00) 0.00N.A. [Transfer
by — way|
jof a gift
June 25, 2018 (1,250)| 10) NA] 0.00) 0.00N.A. [Transfer
by  way|
lof a gift
June 25, 2018 (1,250)| 10) NA] 0.00} 0.00|N.A. [Transfer
by way|
jof a gift
[july 9, 2018 (a ol N.AJ 0.00] _0.00|N.A_ [Transfer
July 12, 2018 (2,250) 10| 800[ 0.00 _0.00|N.A__ [Transfer
Sub-Total 1,829,130] 10| | | - | -
[August 14, 2018 3,658,2602| 5s) NAY | 5 ISub-
division
[July 13, 2021 (89,000)| S| NA 0.21/ 0.21|N.A. [Transfer
by way|
jof a gift
July 14, 2021 (5,000)| 5] NA] 0.01 0.01/N.A. [Transfer
by  way|
lof a gift
July 16, 2021 1,782,130 5] NA] 4.28} 4.28IN.A_ |Bonus
issue
Sub-total (A) 5,346,390 5| 12.85] 12.85]
IMr. Pradeep Gupta September 19, 2016 500,000 10 tof 1.20] 1.20/Cash_ Rights
Issue
[October 25, 2016 255,254 10} 10} 0.61) 0.61/Cash Rights
Issue
[Sub-Total 755,254! 10) 1.81 E E

 

 

 

 

 

 

 

 

85.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name ofthe Promoters | Date of allotment) | Number of | Face | Issue’ |% off% _ of{Natur [Nature
transfer and when the | Equity Shares | value | Acqui |pre-  |post- |e _offof
Equity Shares were | allotted/ ®@ sition/ [Offer Offer |consid|Transact
made fully paid up transferred Sale _|capital |capital leratio jion

Price In
per
Equit
y
Share
®
[August 14, 2018 1,510,508¢ S| ONAL q a ISub-
ldivision
[July 13, 2021 10,000] 5) NA] 0.02] 0.02\N.A [Acquired
by way|
lof a gift
[July 16, 2021 760,254 5) NA] 183] 1.83|N.A [Bonus
issue
lOctober 7, 2021 (3,750) 5) NAJ 0.00] 0.00\N.A [Transfer
by way|
lof a gift

[Sub-total (B) 2,277,012 3 5.47|__ 5.47

[Anand Rathi Financial[March 14, 2003 14,000 10 60, 0.03|_0.03|Cash_ [Transfer

lServices Limited March 14, 2003, 75,700 10 60, 0.18|_0.18|Cash_[Transfer
[April 11, 2005 (89,700) id 50|__ 0.22] 0.22\Cash_ [Transfer
[February 27, 2006 154,702| 10 50|_0.37[ _0.37\Cash_ [Transfer
[September 26, 2006 ("| 10, NAY 0.00[ _0.00|Cash_ [Transfer
September 26, 2006 (1) 10, NAY 0.00[ _0.00|Cash_ [Transfer
[September 26, 2006 (1) 10, NAY 0.00[ _0.00|Cash_ [Transfer
[September 26, 2006 ("| 10, N.AJ 0.00| _0.00|Cash_ [Transfer
[December 28, 2015 20,000] 1 50|__0.05| _0.05|Cash_ [Transfer
May 11, 2016 20,000] io, 125 0.05| _0.05|Cash_ [Transfer
[August 8, 2016 6,230,464 10) =NAJ 14.97) 14.97|N.A. [Bonus

issue
[March 30, 2017 (325,000) 10, 750|__0.78| __0.78|Cash_|Transfer
June 30, 2017 (14,000) io, 750|__0.03|__0.03|Cash_ [Transfer
[July 4, 2017 (4,000) io, 750|__ 0.01 _0.01|\Cash_ [Transfer
[uly 7, 2017 (4,000) 10, 750| 0.01 _0.01|Cash_ [Transfer
[August 28, 2017 (6,700) 10, 750|_0.02[_0.02|Cash_ [Transfer
[March 12, 2018 (4,375) 10, 800| 0.01 0.01\Cash_ [Transfer
[March 12, 2018 (3,125) 10, 800| 0.01 0.01\Cash_ [Transfer
[March 12, 2018 (3,125) 10, 800) 0.01) 0.01|Cash_ [Transfer
[March 12, 2018 (6,250) 10, 800|_0.02|_0.02|Cash_ [Transfer
[April 4, 2018 (6,875) 10, 800|_0.02|_0.02|Cash_ [Transfer
[April 4, 2018 (3,125) 10, 800| 0.01 0.01\Cash_ [Transfer
[June 12, 2018 (6,300) 10, 800|_0.02[_0.02|Cash_ [Transfer
[une 14,2018 14 10, NA 0.00| _0.00\N.A._ [Transfer
[July 9,2018 1 10, NA 0.00| _0.00\N.A._ [Transfer
[July 10,2018 1 io, NA] 0.00| __0.00\N.A._ [Transfer
[July 13,2018 1 10, NA] 0.00| _0.00\N.A._ [Transfer
[uly 11,2018 (2,500) 10, 800| 0.01 0.01|\Cash_ [Transfer
[uly 27,2018 (1,250) 10, 800|_0.00| _0.00\Cash_ [Transfer
Sub-Total 6,034,541 10 : z :
August 14, 2018 12,069,082 S| NAL : A ISub-

division
[March 28, 2019 (15,000) S| 407|_ 0.04] 0.04lCash_ [Transfer
[March 31, 2020 (70,000) S| 425[0.17|_0.17|Cash_ [Transfer
[March 31, 2020 (20,000) S| 425[_0.05| _0.05|Cash_ [Transfer

 

86
 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name of the Promoters | Date of allotment/| Number of | Face | Issue/ ]%  off%  offNatur [Nature
transfer and when the | Equity Shares | value | Acqui [pre- [post- je  offof
Equity Shares were | allotted/ ®@ sition/ Offer [Offer |consid|Transact|
made fully paid up transferred Sale _|capital [capital leratio lion
Price In
per
Equit
y
Share
®
July 16, 2021 5,982,041] 5} N.AJ|  14.37| 14.37|N.A_ |Bonus
lissue
[Sub-total © 17,946,123} 5} + 43.12) 43.12)
[Total (A+B+C) 25,569,525] 5| -|_ 61.44) 61.44).

 

“Transfer of beneficial interest by Anand Rathi Financial Services Limited.
"Transfer of beneficial interest back to Anand Rathi Financial Services Limited.

Each equity shar
to a shareholders’

 

  
 

esolution dated August 14, 2018.

th a face value of @ 10 each was sub-divided into two equity shares with a face value of @ 5 each, pursuant

As on the date of this Prospectus, our Promoters hold 25,569,525 Equity Shares, equivalent to 61.44% of the issued,
subscribed and paid-up equity share capital of our Company, as set forth in the table below:

 

 

 

 

 

ca ao the Nara Equity | Percentage of pre-Offer capital | pas centage of post-Offer capital
1. Mr. Anand Rathi 5,346,390 12.85% 12.85%
2. Mr. Pradeep Gupta 2,277,012 5.47% 5.47%
3. Anand Rathi Financial 17,946,123 43.12% 43.12%
Services Limited
Total 25,569,525 61.44% 61.44%

 

 

 

 

 

The details of the shareholding of the members of the Promoter Group (other than our Promoters) and the directors
of Anand Rathi Financial Services Limited as on the date of filing of this Prospectus are set forth in the table below:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sr.No. [Name of the Shareholder Percentage of pre-Offer capital _| Percentage of post-Offer capital
Promoter Group (other than Promoters)
L Mr. Amit Rathi 433%
2. Ms. Priti Gupta 3.69%
3. Navratan Mal Gupta (HUF) 1.73%
4. Jaipur Securities Private Limited 1.51%
5. Pradeep Kumar Gupta HUF 1.80%
6. Ms. Pooja Maru 0.14% 0.14%
Te Ms. Phool Kaur Mundra 0.03% 0.03%
8. Ms. Tara Mantii 0.03% 0.03%
9. Mr. Krishnav Pradeep Gupta 0.02% 0.02%
10. Mr. Suresh Rathi 0.01% 0.01%
uu. Ms. Asha Biyani Negligible Negligible
Total 13.29% 13.29%
Directors of Anand Rathi Financial Services Limited
1. Mr. Anand Rathi 12.85% 12.85%
2. Mr. Amit Rathi 4.33% 4.33%
3. Mr. Pradeep Gupta 5.47% 5.47%
4. Ms. Sudha Navandar Negligible Negligible
Total 22.65% 22.65%

 

 

 

 

None of the Equity Shares held by our Promoters are pledged.

The entire shareholding of our Promoters is in dematerialised form as of the date of this Prospectus.

(a) Details of Promoters’ contribution and lock-in

87

 
Pursuant to Regulations 14 and 16 of the SEBI ICDR Regulations, an aggregate of 20% of the fully diluted
post-Offer paid up capital of our Company held by our Promoters, shall be considered as the minimum
Promoters’ contribution and locked-in for a period of three years from the date of Allotment (“Promoters’
Contribution”) and our Promoters’ shareholding in excess of 20% shall be locked in for a period of one year
from the date of Allotment.

Based on the above, the details of the Equity Shares to be locked-in for three years from the date of Allotment
as Promoters’ Contribution are set forth in the table below:

 

 

 

 

 

 

 

 

 

 

Date on
which the Offer/
Equity acquisition Percentage
Dateof | Shares priceper | No.of | of the pre-
allotment | were Equity | Equity Offer Date up to which
Name of | ofthe made Equity | Face | Share Shares | paid-up | the Equity Shares
the equity | fullypaid | Natureof | Shares | value locked- | capital | are subject to lock-
Promoter | _ shares up transaction | _ held @ ®@ in’ (%) in
Anand
Rathi Three years from
Financial the date of
Services | August8, | August 8, Bonus Allotment
Limited 2016 2016 Issue 6,230,464 104 NA 2,679,074 6.44%
‘Anand
Rathi Three years from
Financial the date of
Services July 16, July 16, Bonus Allotment
Limited 2021 2021 Issue 5,982,041 5 NA 3,563,401 8.56%
Three years from
Anand | September | September | _ Rights the date of
Rathi 19, 2016 19, 2016 Issue 1,810,000 104 10 953,500 2.29% Allotment
Three years from
Anand October | October Rights the date of
Rathi 25, 2016 25, 2016 Issue 1,117,880 104 10 294,995 0.71% Allotment
September | September Three years from
Pradeep 19, 2016 19, 2016 Rights the date of
Gupta Issue 500,000 104 10 621,250 1.49% Allotment
October | October Three years from
Pradeep 25, 2016 25, 2016 Rights the date of
Gupta Issue 255,254 104 10 211,080 0.51% Allotment
15,895,639 8,323,300 20.00%

 

 

 

 

 

 

 

 

 

 

 

\ Our Company sub-divided each equity share of a face value of & 100 a face value of & 5 each with effect from August 14, 2018.

 

88

 
(b)

o

@

(@

@

Our Promoters, have given consent to include such number of Equity Shares held by them as may constitute
20% of the fully diluted post-Offer equity share capital of our Company as Promoters’ Contribution. Our
Promoters, have agreed not to sell, transfer, charge, pledge or otherwise encumber in any manner, the
Promoters’ Contribution from the date of filing this Prospectus, until the expiry of the lock-in period specified
above, or for such other time as required under SEBI ICDR Regulations, except as may be permitted, in
accordance with the SEBI ICDR Regulations.

The Equity Shares that are to be locked-in are not ineligible for computation of Promoters’ Contribution under
Regulation 15 of the SEBI ICDR Regulations. In this regard, our Company confirms the following:

(i) the Equity Shares offered for Promoters’ Contribution do not include (i) Equity Shares acquired in the three
immediately preceding years for consideration other than cash and revaluation of assets or capitalization of
intangible assets was involved in such transaction ; (ii) resulting from a bonus issue of Equity Shares out of
revaluation reserves or unrealised profits of our Company or from a bonus issue against equity shares,
which are otherwise ineligible for computation of Promoters’ Contribution;

(ii) none of the Equity Shares were acquired during the one year preceding the date of this Prospectus, at a

price lower than the price at which the Equity Shares are being offered to the public in the Offer;

(iii) our Company has not been formed by the conversion of a partnership firm or a limited liability partnership
firm into a company and hence, no Equity Shares have been issued in the one year immediately preceding
the date of this Prospectus pursuant to conversion from a partnership firm; and

(iv) the Equity Shares forming part of the Promoters’ Contribution are not subject to any pledge.

Details of Equity Share Capital locked-in for one year

Unless provided otherwise under applicable law, pursuant to Regulation 17 of the SEBI ICDR Regulations, the
entire pre-Offer capital of the Company shall be locked-in for a period of one year from the date of Allotment,
except for the categories of shareholders exempted under Regulation 17 of the SEBI ICDR Regulations.

The aforesaid lock-in arrangement shall be subject to any subsequent amendments to the lock-in requirements
under applicable provisions of the SEBI ICDR Regulations. Any unsubscribed portion of the Offered Shares
would also be locked in as required under the SEBI ICDR Regulations.

Lock-in of Equity Shares Allotted to Anchor Investors

Any Equity Shares Allotted to Anchor Investors in the Anchor Investor Portion shall be locked in for a period
of 30 days from the date of Allotment.

Recording on non-transferability of Equity Shares locked-in

As required under Regulation 20 of the SEBI ICDR Regulations, our Company shall ensure that the details of
the Equity Shares locked-in are recorded by the relevant Depository.

Other requirements in respect of lock-in

Pursuant to Regulation 21 of the SEBI ICDR Regulations, Equity Shares held by our Promoters and locked-in,
as mentioned above, may be pledged as collateral security for a loan granted by a scheduled commercial bank, a
public financial institution, NBFC-SI or a housing finance company, subject to the following:

with respect to the Equity Shares locked-in for one year from the date of Allotment, such pledge of the Equity
Shares must be one of the terms of the sanction of the loan; and

89
(ii) with respect to the Equity Shares locked-in as Promoter’s Contribution for three years from the date of
Allotment, the loan must have been granted to our Company for the purpose of financing one or more of the
objects of the Offer, which is not applicable in the context of this Offer.

However, the relevant lock-in period shall continue post the invocation of the pledge referenced above, and the
relevant transferee shall not be eligible to transfer the Equity Shares till the relevant lock-in period has expired
in terms of the SEBI ICDR Regulations.

In terms of Regulation 22 of the SEBI ICDR Regulations, Equity Shares held by our Promoters and locked-in,
may be transferred to any member of our Promoter Group or a new promoter, subject to continuation of lock-in,
in the hands of such transferee, for the remaining period and compliance with provisions of the Takeover
Regulations.

Further, in terms of Regulation 22 of the SEBI ICDR Regulations, Equity Shares held by persons prior to the
Offer and locked-in for a period of one year, may be transferred to any other person holding Equity Shares
which are locked-in along with the Equity Shares proposed to be transferred, subject to the continuation of the
lock-in in the hands of such transferee and compliance with the applicable provisions of the Takeover
Regulations.

90
Shareholding Pattern of our Company as on the date of the Prospectus

 

 

 

 

 

 

 

 

 

 

 

 

Categor] Category | No.of | No.of |No.] No.of | Total |Shareholdin| No. of Voting Rights | No.of |Shareholdin] No.of | No.of  |No. of Equity
y of Shareholde| fully | of | shares | No.of | gasa% of| heldineach class of | Equity | g,asa% |lockedin| Equity | Shares held
(1) |Shareholde| rs (II) | paid up |Par|underlyin| shares | total No.of | securities (IX) Shares | assuming | Equity | Shares in
r() Equity | tly g held Equity underlyin full Shares _| pledged or |dematerialize
Shares | pai|depositor| (VII)= | Shares g conversion | (XII) | otherwise | d form
held | d- ly receipts (IV)+(V) |(calculate as outstandin of encumbere| (XIV)
av) |up| (vp | +(vd | per SCRR) g convertible d
Equ| (VID Asa convertibl |securities (as (xa)
ity % of | _No. of Voting Rights e a percentage|No| Asa | No. | Asa
Sha (A+B+C2) | Class |Tot| Total as] securities | of diluted | . | % of| (a) | % of
res (Equity)| al | a % of | (including | equity share | (a)| total total
hel (A+B+C] warrants) | capital) share share
d ) (x) (x)= s held s held
(vy) (VI)+(X) (b) (b)
Asa % of
(A+B+C2)
(A) [Promoter and 3 E J a
Promoter 14 31,102,025 * * 31,102,025 7474 31,102,025 31,102,025 - 74.74 31,102,025
Group
(B) [Public * % a % % a
722 10,514,202 10,514,202 25.26 10,514,202 10,514,202 = 25.26 10,514,202
o) |Non Promoter- - - - - = - = = = z = SF = o
Non Public
(Ci) [Shares
junderlying - - - - - - - - - - -
depository
receipts
(C2) Shares held by . . . - - - - - - -
lemployee
trusts
Total = = ¥ = =
(A+B+C) 736 41,616,227 41,616,227 100 41,616,227) - | 41,616,227 - 100.00 41,616,227

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

91

 
2. Other details of Shareholding of the Company

(a) As on the date of the Prospectus, the Company has 736 Shareholders.

(b) Set forth below is a list of Shareholders holding 1% or more of the paid-up Equity Share capital
of the Company, on a fully diluted basis, as on the date of filing of this Prospectus:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ae Name of the Shareholder ae EE aul eau aie
Share capital (%)

1 | Anand Rathi Financial Services Limited 17,946,123 42.94

2 | Mr. Anand Rathi 5,346,390 12.79

3 | Mr. Pradeep Kumar Gupta 2,277,012 5.45

4 | Mr. Amit Rathi 1,800,000 4.31

5 | Ms. Priti Pradeep Gupta 1,537,500 3.68

6 | Ms. Supriya Rathi 1,500,000 3.59

7 | Mr. Feroze Azeez 1,104,210 2.64

8 naa Family Trust acting through Rakesh 887,100 aa

9 | Pradeep Kumar Gupta HUF 750,000 1.79

10 | Navratan Mal Gupta HUF 720,000 1.72

11 | M/S Jaipur Securities Pvt. Ltd. 630,000 1.51

12 | Azeez Family Trust 461,225 i

13 au Gupte Family Trust acting through 455,750 1.09

Total 35,415,310 84.74

() Set forth below is a list of Shareholders holding 1% or more of the paid-up Equity Share

capital of the Company, on a fully diluted basis, as of the date 10 days prior to the date of
filing of this Prospectus:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sr Name of the Shareholder Ae CEE aus Reon ati

Share capital (%)#

1 | Anand Rathi Financial Services Limited 17,946,123 42.94
2 | Mr. Anand Rathi 5,346,390 12.79
3 | Mr. Pradeep Kumar Gupta 2,277,012 5.45
4 | Mr. Amit Rathi 1,800,000 431
5 | Ms. Priti Pradeep Gupta 1,537,500 3.68
6 | Ms. Supriya Rathi 1,500,000 3.59
7 | Mr. Feroze Azeez 1,104,210 2.64
| Rated Raely Th ct vreogh Rae 8075100 a
9 | Pradeep Kumar Gupta HUF 750,000 1.79
10 | Navratan Mal Gupta HUF 720,000 Ln
11 | M/S Jaipur Securities Pvt. Ltd. 630,000 151
12 | Azeez Family Trust 461,225 1.10
13 aun oue Family Trust acting through 455,750 1.09
Total 35,415,310 84.74

 

 

 

 

 

92
(d) Set forth below is a list of Shareholders holding 1% or more of the paid-up share capital of the
Company, on a fully diluted basis, as of the date one year prior to the date of filing of this

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prospectus:
Percentage of the
S.No. Name of the Shareholder Number of pre-Offer Equity
Equity Shares | _ Share capital (%)
1, Anand Rathi Financial Services Limited 11,964,082 42.88
2. Mr. Anand Rathi 3,658,260 13.11
3. Mr, Pradeep Gupta 1,510,508 541
4. ‘Mr. Amit Rathi 1,200,000 4.30
5. Ms. Priti Pradeep Gupta 1,000,000 3.58
6. | Ms. Supriya Rathi 980,000 3.51
7. Mr. Feroze Azeez 8,66,120 3.10
8. Rawal Family Trust acting through Rakesh Rawal 601,400 2.16
9. P.K. Gupta & Sons 500,000 1.79
10. | N.M. Gupta & Sons 480,000 1.72
11. __| WS Jaipur Securities Pvt, Ltd. 420,000 151
12. Suhas Gupta Family Trust acting through Preeti 1.10
Rawal 308,000
Total 23,488,370 84.17
(e) Set forth below is a list of Shareholders holding 1% or more of the paid-up share capital of the
Company, on a fully diluted basis, as of the date two years prior to the date of filing of this
Prospectus:
Percentage of the
S.No. ‘Name of the Shareholder Number of pre-Offer Equity
Equity Shares Share capital (%)
1, Anand Rathi Financial Services Limited 12,054,082 43.57
a Mr. Anand Rathi 3,658,260 13.22
3._| Mr. Pradeep Gupta 1,510,508 5.46
4. Mr. Amit Rathi 1,200,000 4.34
5. Rawal Family Trust acting through Rakesh Rawal 1,141,400 413
6 Ms. Priti Pradeep Gupta 1,000,000 3.61
7 Ms. Supriya Rathi 980,000 3.54
8 P.K. Gupta & Sons 500,000 1.81
9 N.M. Gupta & Sons 480,000 1.74
10 Mr. Feroze Azeez 476,000 1.72
11 M/S Jaipur Securities Pvt. Ltd. 420,000 1.52
Total 23,420,250 84.66
(6) Shareholding of our Directors and/or Key Management Personnel

Except as set forth below, none of our Directors or Key Management Personnel hold any
Equity Shares or any other convertible securities as on the date of filing of this Prospectus:

 

 

 

 

 

 

 

 

 

Pre-Offer %
Sr.No. | Name of Director/Key Management Personnel Number of Percentage (%)
Equity Shares
1. Mr. Anand Rathi 5,346,390 12.85
2 Mr. Pradeep Gupta 2,277,012 5.47
a Mr. Amit Rathi 1,800,000 4.33

 

 

93

 

 
 

 

 

 

 

 

 

 

 

 

 

Pre-Offer %
Sr.No. | Name of Director/Key Management Personnel | umber of Percentage (%)
Equity Shares
4. Mr. Rakesh Rawal* 1,328,600 3.19
5. Mr. Rajesh Kumar Bhutara 9,000 0.02
6. Ms. Sudha Navandar 1500 0.00
7. Mr. Ramesh Chandak 1500 0.00
Total 10,764,002 25.86

 

* Includes 42,000 Equity Shares held by Rakesh Rawal jointly with Gajanana Narayana Hegde and 399,500 Equity
Shares jointly held with Mrs. Preeti Rawal as trustees to Varun Nambiar Family Trust. Further, 887,100 Equity
Shares held by Rakesh Rawal as a trustee to Rawal Family Trust.

3. Equity Shares acquired in the last three years, by the Promoters, Promoter Group and the Selling

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders
Category Name of Acquirer nein rule Shares ee
Acquired

Promoter Group Pradeep Kumar Gupta HUF July 16, 2021 250,000 NA.
Promoter Group Navratan Mal Gupta HUF July 16, 2021 240,000 NA.
Promoter Group Jaipur Securities Pvt Ltd July 16, 2021 210,000 N.A.
Promoter Group Pooja Maru July 12, 2021 40,000 600.00
Promoter Group Pooja Maru July 16, 2021 20,000 N.A.
Promoter Group Tara Mantri July 13, 2021 3,000 600.00
Promoter Group Tara Mantri July 16, 2021 4,000 NA.
Promoter Group Phoolkaur Mundra July 13, 2021 2,000 Nil
Promoter Group Phoolkaur Mundra July 16, 2021 3,500 N.A.
Promoter Group Krishnav Gupta July 13, 2021 5,000 Nil
Promoter Group Krishnav Gupta July 16, 2021 2,500 N.A.
Promoter Group Suresh Rathi July 13, 2021 2,000 Nil
Promoter Group Suresh Rathi July 16, 2021 1,000 NA.
Promoter Group Asha Biyani October 7, 2021 2,000 Nil
Promoter Group a ie ‘Wall Plast Private March 28, 2019 15,000 407.00
Promoter Group fon Boot Wall Plast Private 7 March 16, 2021 81,300 430.05
Promoter Group ra ‘Wall Plast Private April 22, 2021 14,000 515.00
PRG CRRA Aaa Pras Wall Plast Private July 16, 2021 31,150 Neds
Pres Salling Anand Rath Financial Services | July 16, 2021 BUH ie
zromoiey Selling Anand Rathi July 16,2021 1,782,130 NA.
omer celine Pradeep Kumar Gupta July 13, 2021 10,000 Nil
propia Selling Pradeep Kumar Gupta Joly 16, 2024 760,254 N.A.
Selling Shareholder Amit Rathi July 16, 2021 600,000 N.A.
Selling Shareholder Priti Gupta July 13, 2021 20,000 Nil
Selling Shareholder Priti Gupta 5,000 Nil
Selling Shareholder Priti Gupta 512,500 N.A.
Selling Shareholder Supriya Rathi 20,000 Nil
Selling Shareholder Supriya Rathi 500,000 NA.

 

 

 

 

 

 

94

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Date of umber ot Price of

Category Name of Acquirer Acquisition Equity Shares ‘Acquisition
cquired

Selling Shareholder Rawal Family Trust July 16, 2021 295,700 N.A.
Selling Shareholder Feroze Azeez July 6, 2019 52,000 407.00
Selling Shareholder Feroze Azeez August 5, 2020 78,000 425.00
Selling Shareholder Feroze Azeez August 5, 2020 52,020 425.00
Selling Shareholder Feroze Azeez October 23, 2020 260,100 411.00
Selling Shareholder Feroze Azeez June 14, 2021 78,000 415.70
Selling Shareholder Feroze Azeez June 14, 2021 52,020 415.70
Selling Shareholder Feroze Azeez July 16, 2021 368,070 N.A.
Selling Shareholder Jugal Mantri July 16, 2021 65,000 N.A.
4. Price at which Equity Shares were acquired by Promoters, members of the Promoter Group, the

Selling Shareholders and Shareholders having a right to nominate directors or having any other

right in the last three years

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ne Name of the acquirer/shareholder Se ot see eae een

Promoter & Selling Shareholders
1 _| Anand Rathi July 16, 2021 17,82,130 Nil
2 | Pradeep Kumar Gupta July 13, 2021 10,000 5
3 Pradeep Kumar Gupta July 16, 2021 7,60,254 Nil
4 Anand Rathi Financial Services Limited | July 16, 2021 59,82,041 Nil

Promoter Group
& Pradeep Kumar Gupta HUF July 16, 2021 2,50,000 Nil
6 Navratan Mal Gupta HUF July 16, 2021 2,40,000 Nil
7 _ | Jaipur Securities Pvt Lid Tuly 16, 2021 2,10,000 Nil
8 Pooja Maru July 12, 2021 40,000 600
9 Pooja Maru July 16, 2021 20,000. Nil
10 ‘Tara Mantri July 13, 2021 3,000 600
11 ‘Tara Mantri July 16, 2021 4,000 Nil
12 Phoolkaur Mundra July 13, 2021 2,000 S
13 Phoolkaur Mundra July 16, 2021 3,500 Nil
14 Krishnav Gupta July 13, 2021 5,000 5
15 Krishnav Gupta July 16, 2021 2,500 Nil
16 Suresh Rathi July 13, 2021 2,000 5
17 Suresh Rathi July 16, 2021 1,000 Nil

 

 

 

 

 

95

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ae Name of the acquirer/shareholder paras ot ey ee
18 Asha Biyani October 7, 2021 2,000 3.33,
19 Aqua Proof Wall Plast Private Limited March 28, 2019 15,000 407
20 Aqua Proof Wall Plast Private Limited March 16, 2021 81,300 430.05
21 Aqua Proof Wall Plast Private Limited April 22, 2021 14,000 515
22 Aqua Proof Wall Plast Private Limited July 16, 2021 31,150 Nil
Selling Shareholders
2 Amit Rathi July 16, 2021 6,00,000 Nil
24 Priti Gupta July 13, 2021 20,000. &
25 Priti Gupta July 14, 2021 5,000 5
26 Priti Gupta July 16, 2021 5,12,500 Nil
27 | Supriya Rathi July 13, 2021 20,000 5
28 | Supriya Rathi Tuly 16, 2021 5,00,000 Nil
29 Rawal Family Trust July 16, 2021 2,95,700 Nil
30 Feroze Azeez July 6, 2019 52,000 407
31 Feroze Azeez August 5, 2020 78,000 425
32 Feroze Azeez August 5, 2020 52,020 425
33 | Feroze Azeez October 23, 2020 2,60,100 411
34 Feroze Azeez June 14, 2021 78,000 415.7,
ae Feroze Azeez June 14, 2021 52,020 415.7,
36 | Feroze Azeez July 16, 2021 3,68,070 Nil
37 Jugal Mantri July 16, 2021 65,000 Nil

 

 

 

 

 

Shareholders with nominee director rights or other rights

 

 

NA

 

96

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5. Weighted average cost of acquisition of all Equity Shares transacted in the last three years
Weighted panes
Average my
acquisiti|
Cost of
Number ae Sat on
** | Acquisition | Acquisition} _ ©
S| Nome of ie acquirer Date ot OF ESOT) rice per |(in Softhe| Poe” Catego
No, ‘a acquisition shares | Price Ps ©! Lowest eeOry
nes _|share (in 2)| shares ’
acquired ares | Price —
acquired in| Frost
the last | Flghes
Price (in|
three years
v
1 |Pradeep Kumar Gupta HUF — [July 16, 2021 250,0001 Nil 25.10 | 0-600 [promoter Group
2 |Navratan Mal GuptaHUF [July 16, 2021 240,000 Nil Promoter Group
3 [Jaipur Securities Pvt Ltd uly 16, 2021 210,000 Ni Promoter Group
4 [Pooja Maru uly 12, 2021 40,0001 G00 Promoter Group
5 [Pooja Maru July 16, 2021 20,000 Nil Promoter Group
6 [Tara Mantri July 13, 2021 3,000] 00 Promoter Group
7 [Tara Mantri [July 16, 2021 4,000 Nil Promoter Group
8 |Phoolkaur Mundra [July 13, 2021 2,000] 5 Promoter Group
9 |Phoolkaur Mundra July 16, 2021 3,500; Nil Promoter Group
10 |Krishnav Gupta uly 13, 2021 5,000] 5 Promoter Group
11 |Krishnav Gupta [July 16, 2021 2,500] Nil Promoter Group
12 |Suresh Rathi [July 13, 2021 2,000] 5 Promoter Group
13 [Suresh Rathi [July 16, 2021 1,000] Nil Promoter Group
14 |Asha Biyani October 07, 2021 2,000, 3.33 Promoter Group
15 /Aqua Proof Wall Plast Private [March 28, 2019 15,000} 407 Promoter Group
Limited
16 |Aqua Proof Wall Plast Private [March 16, 2021 81,300} 430.05 Promoter Group
Limited
17 |Aqua Proof Wall Plast Private |April 22, 2021 14,000} 515 lPromoter Grout
Limited P
18 Aqua Proof Wall Plast Private \July 16, 2021 31,150} Nil Promoter Group
Limited
19 |Anand Rathi Financial July 16, 2021 5,982,041) Nil \Promoter/ Selling
Services Limited [Shareholder
20 [Anand Rathi [July 16, 2021 1,782,130] i [Promoter/ Selling
[Shareholder
21 [Pradeep Kumar Gupta uly 13, 2021 10,000 5 IPromoter/ Selling
[Shareholder
22 [Pradeep Kumar Gupta [July 16, 2021 760,254] [Promoter/ Selling
[Shareholder
23 [Amit Rathi [July 16, 2021 600,000] Ni ISelling Shareholder
24 |Priti Gupta July 13, 2021 20,000} 5 \Selling Shareholder
25 |Priti Gupta [July 14, 2021 5,000] 5 Selling Shareholder
26 |Priti Gupta uly 16, 2021 512,500] Nil ISelling Shareholder
27 |Supriya Rathi July 13, 2021 20,000] 5 Selling Shareholder
28 |Supriya Rathi July 16, 2021 500,000} Nil [Selling Shareholder
29 |Rawal Family Trust [July 16, 2021 295,700 Nil Selling Shareholder
30 |Feroze Azeez July 06, 2019 52,000 407 Selling Shareholder
31 |Feroze Azeez [August 05, 2020 78,000 425 Selling Shareholder

 

 

 

 

 

 

 

 

 

97

 
 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

S Range
Weighted | “208
Average on
acquisiti|
Cost of
Number Sat on
** | Acquisition | Acquisition] 9"
Ss. : Date of of equity |**°4' : price:
Name of the acquirer ne price per | (in 2) of the Category
No, acquisition shares P Lowest
acquired [Share (in®)| shares | price”
acquired in| -*
Highest
the last oy
Price (in|
three years
D
32 |Feroze Azeez [August 05, 2020 52,020] 425 Selling Shareholder
33 |Feroze Azeez October 23, 2020 | 260,100] 414 ISelling Shareholder
34 |Feroze Azeez June 14, 2021 78,000 415.7 [Selling Shareholder
35 |Feroze Azeez June 14, 2021 52,020 415.7 Selling Shareholder
36 |Feroze Azeez uly 16, 2021 368,070] Nil Selling Shareholder
37 Jugal Mantri uly 16, 2021 65,000] Nil lSelling Shareholder
lrotal 124,19,285|
6. Weighted average cost of acquisition of all Equity Shares transacted in the last one year
Weighted
‘Average | Range of
Acquisiio |, Cestot | “hice:
s, Date of oaber oe price | Acauisition | ovest
4 Name of the acquirer ao equity shares m (in 2) of the 2 Category
No. acquisition pis per share Sane: Price —
" Ain) acquired in | Highest
‘at Price (in
the last =
three years
1 | Pradeep Kumar Gupta HUF July 16, 2021 250,000 i 10.23 0=600 | promoter Group
2_| Navratan Mal Gupta HUF Tuly 16, 2021 000 i Promoter Group
3_| Jaipur Securities Pvt Lid Tuly 16, 2021 710,000 Nil Prataer Grou
4_| Pooja Mary Tuly 12, 2021 40,000 600 Prainatee Got
3 | Pooja Mary Tuly 16, 2021 20,000 Nil Prainatee Got
© | Tara Mantri July 13, 2021 3,000 600 Prainatee Got
7_| Tara Mantri Tuly 16, 2021 4,000 Nil Prater Gian
@ | Phoolkaur Mundra Tuly 13, 2021 2,000 5 praciotee Group
9__| Phoolkaur Mundra Tuly 16, 2021 3500 NA praciotee Group
10 | Krishnav Gupta Tuly 13, 2021 5,000 5 PME Rau
iT_| Krishnav Gupta Tuly 16, 2021 2,500 wi PRG GR
12 | Suresh Rathi Tuly 13, 2021 2,000 . PRG GR
13 | Suresh Rathi Tuly 16, 2021 1,000 wi PRG GR
14 | Asha Biyani October 07, 2021 2,000 a Paar
15 | Aqua Proof Wall Plast Private March 16, 2021 81,300 | 39.05 wena Gan
Limited ° ae
1S" | ana Proof Wall Pas Pits ‘April 22, 2021 14,000 ae Beomutes Gioup
17_| Aqua Proof Wall Plast Private Tuly 16, 2021 31,150 Nil Promoter Grou
Limited aeODe.
18 | Anand Rathi Financial Services July 16, 2021 5,982,041 ‘i Promoter Selling
Limited ‘ Shareholder
19 | Anand Rathi Tuly 16, 2021 1,782,130 fl Promoter! Selling
Shareholder

 

 

 

 

 

 

 

 

98

 
 

 

    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted
‘Average | Range of
Cost of ee
Number of Acquisition
S ‘Name of the acquirer ae equity shares a Pelee | (in ey ofthe |e Category
io. acquisition Solas per share | (ns) of Price -~
ce (in ‘ved in | Highest
acquiredin | pen
the last 5
three years
20, | Pradeep Kumar Gupta uly 13, 2021 10,000 Z Promoter’ Selling
Shareholder
2) Pradeep Kumar Gupta Tuly 16, 2021 760,254 Ni Promoter/ Selling
Shareholder
2 | Amit Rathi Tuly 16, 2021 600,000 Nil Selling Shareholder
23] Pritt Gupta Tuly 13, 2021 20,000 5 Selling Shareholder
24_| Pritt Gupta Tuly 14, 2021 5,000 5 Selling Shareholder
25 | Priti Gupta Tuly 16, 2021 512,500 ND Selling Shareholder
26 | Supriya Rathi Tuly 13, 2021 20,000 5 Selling Shareholder
27] Supriya Rathi Tuly 16, 2021 5,00,000 ND Selling Sharcholder
28) Rawal Family Trust Tuly 16, 2021 295,700 =" Selling Shareholder
28 Feroze Azeer Tune 14, 2021 78,000 | ais7 Selling Shareholder
30] Feroze Azeez Tune 14, 2021 52,020 | gas Selling Shareholder
BI) Feroze Azeez Tuly 16, 2021 368,070 ‘i Selling Shareholder
32_| Jugal Mani Tuly 16, 2021 65,000 ‘i Selling Shareholder
Tal 119,62,165,

 

 

 

 

 

 

 

 

7. Employee Stock Options Schemes

ESOP 2017:

Our Company has implemented a scheme called “Employees Stock Option Plan 2017” (“ESOP 2017”). ESOP
2017 was adopted pursuant to a resolution passed by the Board of Directors on November 28, 2016 and a
resolution passed by the Shareholders on December 26, 2016. ESOP 2017 came into effect from January 1,
2017.

As on the date of this Prospectus, our Company has granted 3,20,000 options under ESOP 2017.

Further details in relation to the ESOP 2017 are as follows:

 

Particulars Details

 

Options granted

 

Exercise price of options

 

 

Number of Options post sub-division of
shares from face value Rs. 10 to Rs. 5 each

 

 

 

 

Options vested 621,260
Options lapsed before vesting 18,740
Options lapsed after vesting 21,860
Options exercised 5,99,400

 

Total no. of Equity Shares arising as a result | 5,99,400
of exercise of options

 

Variation in terms of options Pursuant to the resolution passed by the Nomination and Remuneration Committee on September 1, 2018,

ESOP 2017 has been amended to reflect the sub-division of equity shares from face value of & 10 each to

Equity Shares of face value of 8 5 each. Accordingly, each option grantee, upon exercise of the options,

shall be entitled to receive 2 Equity Shares for every option:

‘* to suit the requirements of SEBI SBEB Regulations and the applicability of statutes/ regulations to the
extent so as to include those which are required for a listed company.

* to allow the transfer of options in case of demise to the nominee or to the successors to the will/legal
heits, as the case may be.

In case of resignation of an employee, both the ‘vested’ and ‘unvested” options shall lapse with immediate

effect thereupon.

 

Money realised by exercise of options %29,97,000

 

 

 

 

‘Total no. of options in force Nil

 

99

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Particulars Details
Employee wise details of options granted to
@ Key managerial personnel ‘Name of Key managerial personnel Total no, of options granted
Mr. Rajesh Kumar Bhutara 6,000
w ‘Any other employee who ‘Name of employee Total no, of options granted
received a grant in any one year | | "Mr. Feroze Azeez 7,60,000
of options amounting to 5% or | | "Ms. Divya Sreenivasan 70,800
more of the options granted | Mir. Roop Bhootra 70,000
during the year Mr. Vishal Laddha 40,000
i) Identified employees who are ‘Name of employee Total no, of options granted
granted options, during any one | | Mr. Feroze Azeez 7,60,000
year equal to or exceeding 1%
of the issued capital (excluding
outstanding warrants and
conversions) of our Company at
the time of grant
Fully dilated EPS on a pre-Offer basis on
exercise of options calculated in accordance . 31-Aug:
with the applicable accounting standard ee anise Sere | eeeee | |e
“Earning Per Share’ Profit after tax as 7 5
reported (& million) 503.79 aAko0. TAD TR 651.63
‘Add:- ESOP cost using >
the intrinsic value “ “ “
method
Lessi- ESOP cost using
the fair value method - - :
Difference between employee compensation - — —
cost calculated using the Inbinie value of | | Proforma profitafter tax 503.79 441.90 712.78 651.63
stock options and the employee | [ Earnings per share of the
compensation cost that shall have been | | considering bonus issue
recognized if our Company had used fair | | and sub division of . = =
value of options and impact ofthis difference | | shares
on profits and EPS of our Company for the | [yo = -
last three fiscals
‘As reported 12.14 10.77 17.60 16.15
Diluted = z 7
As reported ae, 10.64 17.36 15,85

 

 

 

 

 

 

 

 

Description of the pricing formula and the
method and significant assumptions used
during the year to estimate the fair values of

 

The fair valuation of options has been carried out using Black Scholes pricing valuation model. The
exercise price shall not exceed fair market value of equity shares of our Company on the date of grant.

 

 

 

 

 

 

 

 

 

options, including —_weighted-average | [Basis Particulars
information, namely, risk-free interest rate, | [Dividend yield (%) 0%
expected life, expected volatility, expected | [Expected volatility (in %) 52.44%
dividends and the price of the underlying | [pxpected dividends 0%
share in market at the time of grant of the | "Risk-free interest rate Gn %) E51%
opdon Weighted average share price (in 8) NA.
Exercise price (in) 5.00
Expected life of options granted (in years) Zi years

 

 

 

 

Impact on profits and EPS of the last three
years if our Company had followed the
accounting policies specified in Regulation
15 of the SEBI SBEB Regulations in respect
of options granted in the last three years

Not Applicable

 

Intention of the Key Managerial Persons and
whole time directors who are holders of
Equity Shares allotted on exercise of options
to sell their shares within three months after
the listing of Equity Shares pursuant to the
Offer

Not Applicable

 

 

Intention to sell Equity Shares arising out of
an ESOS Scheme within three months after
the listing of Equity Shares by directors,
senior managerial personnel and employees
having Equity Shares arising out of an ESOS
Scheme amounting to more than 1% of the
issued capital (excluding outstanding
warrants and conversions)

 

Not Applicable

 

ESOP 2018:

 

Our Company has implemented a scheme called “Employees Stock Option Plan 2018” (“ESOP 2018”). ESOP
2018 was adopted pursuant to a resolution passed by the Board of Directors on February 3, 2018 and a
resolution passed by the Shareholders on March 3, 2018. Our Company adopted ESOP 2018, which was
effected from January 1, 2018.

100
As on the date of this Prospectus, our Company has granted 2,80,100 options pursuant to ESOP 2018.

Further details in relation to the ESOP 2018 are as follows:

 

 

 

 

 

 

 

of full exercise of options granted [(net of cancelled
options)]

Particulars Details
Options granted 2,80,100

Exercise price of options:

Options vested 1,04,040

Options lapsed before vesting Nit

Options exercised 1,04,040

Total no. of Equity Shares that would arise as a result | 1,04,040

 

Variation in terms of options

Pursuant to the resolution passed by the Nomination and Remuneration Committee on September

1, 2018, ESOP 2018 has been amended to reflect the sub-division of equity shares from face

value of & 10 each to Equity Shares of face value of @ 5 each.

to suit the requirements of SEBI SBEB Regulations and the applicability of statutes!
regulations to the extent so as to include those which are required for a listed company

+ to allow the transfer of options in case of demise to the nominee or to the successors to the
will/legal heirs, as the case may be.

In case of resignation of an employee, both the ‘vested’ and ‘unvested’ options shall lapse with

immediate effect thereupon.

 

“Money realised by exercise of options

5,20,200

 

‘Total no. of options in force as on June 14, 2021

1,76,060

 

Employee wise details of options granted to

 

(@ Key managerial personnel

‘Name of key managerial personnel
NIL.

“Total no. of options granted

 

 

@ ‘Any other employee who received a grant
in any one year of options amounting to 5% or more of
the options granted during the year

‘Name of employee ‘Total no. of options granted

 

Mr. Feroze Azeez
Mr. Vishal Laddha

2,60,100
20,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ai Identified employees who are granted | [Name of employee Total no, of options granted
options, during any one year equal to or exceeding 1% | [ Mr. Feroze Azeez 2,60,100
of the issued capital (excluding outstanding warrants
and conversions) of our Company at the time of grant
Fully diluted EPS on a pre-Offer basis on exercise of . SABE
options calculated in accordance with the applicable | | Particulars 2021 ee a aaa aaa
accounting standard ‘Earning Per Share’ Profit after tax a | 593 29 rr waza Sie
Difference between employee compensation cost | | reported (& million)
calculated using the intrinsic value of stock options | ["Add:- ESOP cost using | ~
and the employee compensation cost that shall have | | the intrinsic value - - -
been recognized if our Company had used fair value of | | method
options and impact of this difference on profits and | [Less:- ESOP cost using zi
EPS of our Company for the last three fiscals the fair value method i z 5
Proforma profit after tax | 503.79 441,90 712.78 651.63
Earnings per share of the
considering bonus issue
and sub division of = - - -
shares
Basic - - : z
‘As reported 12.14 10.77 17.60 16.15
Diluted - : :
‘As reported 12,09 10.64 17.36 15.85
Description of the pricing formula and the method and | The fair valuation of options has been camied out using Black Scholes pricing valuation model
significant assumptions used during the year to | The exercise price shall not exceed fair market value of equity shares of our Company on the date
estimate the fair values of options, including weighted- | of grant.
average information, namely, risk-free interest rate,
expected life, expected volatility, expected dividends | [TBasis Particulars
and the price of the underlying share in market at the | | Dividend yield (%) 0%
time of grant of the option Expected volatility (in %) 51.15%
Expected dividends 0%,
Risk-free interest rate (in 9%) 7.35%
Weighted average share price (in NA,
Exervise price (in ®) 5.00
Expected life of options granted (in years) Byers

 

 

 

 

 

 

 

 

 

 

 

 

Impact on profits and EPS of the last three years if our
Company had followed the accounting policies
specified in Regulation 15 of the SEBI SBEB.
Regulations in respect of options granted in the last
three years

 

 

Not Applicable

 

101

 
 

Tntention of the Key Managerial Persons and whole
time directors who are holders of Equity Shares
allotted on exercise of options to sell their shares
within three months after the listing of Equity Shares
pursuant to the Offer

Not Applicable

 

Intention to sell Equity Shares arising out of an ESOS,
Scheme within three months after the listing of Equity
Shares by directors, senior managerial personnel and
employees having Equity Shares arising out of an
ESOS Scheme amounting to more than 1% of the
issued capital (excluding outstanding warrants and

Not Applicable

 

conversions)

 

 

 

8.

10.

11,

12.

13.

14.

15.

16.

17.

Our Company presently does not intend or propose and is not under negotiations or considerations to alter
its capital structure for a period of six months from the Bid/Offer Opening Date, by way of split or
consolidation of the denomination of Equity Shares, or by way of further issue of Equity Shares (including
issue of securities convertible into or exchangeable, directly or indirectly for Equity Shares), whether on a
preferential basis, or by way of issue of bonus Equity Shares, or on a rights basis, or by way of further
public issue of Equity Shares, or otherwise. However, the foregoing restriction does not apply to any
issuance of Equity Shares, pursuant to the exercise of employee stock options under ESOP 2017 and ESOP
2018.

Except for the equity shares pertaining to Mr. Anand Rathi and Mr. Pradeep Gupta, the details of which are
disclosed under “-History of Equity Share Capital of our Company — Shareholding of our Promoters,
members of Promoter Group and directors of our Promoter in our Company” on page 84, none of the
members of the Promoter Group, our Promoters, directors of our Promoter, and / or our Directors and their
relatives have purchased or sold any securities of our Company during the period of six months
immediately preceding the date of the Draft Red Herring Prospectus, the Red Herring Prospectus and this
Prospectus.

There have been no financing arrangements whereby our Promoters, members of the Promoter Group,
directors of our Promoter and / or our Directors and their relatives have financed the purchase by any other
person of securities of our Company during a period of six months immediately preceding the date of the
Draft Red Herring Prospectus, the Red Herring Prospectus and this Prospectus.

All Equity Shares issued pursuant to the Offer shall be fully paid-up at the time of Allotment and there are
no partly paid-up Equity Shares as on the date of this Prospectus.

As on the date of this Prospectus, the BRLMs and their respective associates, as defined under the SEBI
Merchant Bankers Regulations do not hold any Equity Shares. The BRLMs and their respective associates
may engage in the transactions with and perform services for our Company in the ordinary course of
business or may in the future engage in commercial banking and investment banking transactions with our
Company for which they may in the future receive customary compensation.

Our Company, Promoters, the Selling Shareholders, our Directors and the BRLMs have no existing
buyback arrangements and or any other similar arrangements for the purchase of Equity Shares being
offered through the Offer.

Except for options granted under ESOP 2017 and ESOP 2018, there are no warrants, options or rights to
convert debentures, loans or other instruments convertible into, or which would entitle any person any
option to receive Equity Shares as on the date of this Prospectus.

Our Company shall ensure that there shall be only one denomination of the Equity Shares, unless
otherwise permitted by law.

Our Promoters and members of our Promoter Group will not submit Bids or otherwise participate in this
Offer, except to the extent of offering the Offered Shares in the Offer for Sale.

No person connected with the Offer, including the Book Running Lead Managers, the members of the
Syndicate, our Company, the Directors, the Promoters and members of the Promoter Group, shall offer
any incentive, whether direct or indirect, in any manner, whether in cash or kind or otherwise, to any
Bidder for making a Bid.

102
18. Our Company has not undertaken any public issue of securities. Further, except as disclosed in this section
under “- Share Capital History — History of Equity Share capital of our Company” on page 79, our
Company has not made any rights issue of any kind or class of securities since its incorporation.

19. Our Company has ensured that any transaction in the Equity Shares by the Promoters and the Promoter

Group during the period between the date of filing the Draft Red Herring Prospectus and the date of
closure of the Issue were reported to the Stock Exchanges within 24 hours of such transaction.

103
OBJECTS OF THE OFFER

The objects of the Offer are to achieve the benefits of listing the Equity Shares on the Stock Exchanges and for
the sale of up to 12,000,000 Equity Shares aggregating up to % 6,593.75 million by the Selling Shareholders,
subject to finalization of the Basis of Allotment. Further, the listing of Equity Shares will enhance our
Company’s brand name and provide liquidity to the existing Shareholders. Our Company expects that the
proposed listing will also provide a public market for the Equity Shares in India.

The Offer comprises an offer for sale by the Selling Shareholders. The proceeds from the Offer for Sale (net of
any Offer related expenses to be borne by the Selling Shareholders) shall be received by the Selling
Shareholders, and our Company shall not receive any proceeds from the Offer for Sale.

Offer related expenses

The total expenses of the Offer are estimated to be approximately % 368.08 million. The Offer related expenses
include, among others, listing fees, fees payable to the BRLMs, Banker to the Offer and legal counsel,
underwriting commission, brokerage and selling commission, including processing fee to the SCSBs for
processing ASBA Forms submitted by ASBA Bidders procured by the Syndicate and submitted to SCSBs,
commission payable to Registered Brokers, RTAs and CDPs and Registrar’s fees, printing and stationery
expenses, advertising and marketing expenses and all other incidental and miscellaneous expenses for listing the
Equity Shares on the Stock Exchanges.

The listing fees shall be borne by our Company. Other Offer-related expenses shall be borne by the Selling
Shareholders in proportion of the Equity Shares to be offered by each of the Selling Shareholders.

Provided that all Offer-related expenses shall initially be borne by our Company. Upon successful completion of
the Offer, the Selling Shareholders shall reimburse our Company their proportionate share of the Offer-related
expenses. The Offer related expenses shall be deducted from the proceeds of the Offer for Sale and only the
balance amount shall be paid to the Selling Shareholders.

The estimated Offer related expenses are as under:

 

 

 

 

 

 

 

 

 

 

 

Asa % of
+ total
an Estimated estimated | Asa % of
S.No. | Activity Amount * :
an oes Offer Size
Related
Expenses*
L Fees and commission payable to the BRLMs (including brokerage, 31954 57.74% 3.20%
underwriting and selling commission)
Commission and processing fees for SCSBs and fees payable to the Sponsor
Banks for Bids made by RIBs using UPI, Selling commission and processing
2 fees to SCSBs for ASBA Applications procured by the Syndicate, Sub- 781 2.12% 0.12%
Syndicate, Registered Brokers, RTAs or CDPs and submitted with the SCSBs;
and bidding charges to members of the Syndicate, RTAs and CDPs @®)
Brokerage, selling commission and bidding charges for the Members of the 5 .
3. Syndicate, Registered Brokers, RTAs and CDPs 1.08 0.29% 0.02%
4. Fees payable to the Registrar to the Offer 0.06 0.02% 0.00%
5. Printing, stationery and other distribution expenses 14.30 3.88% 0.22%
6 Advertising and marketing for the Offer 49.62 13.48% 0.75%
Others:
2. i. Listing fees; 0.72 0.20% 0.01%
ii, SEBI filing fees, BSE and NSE processing fees; 13.71 3.72% 0.21%

 

 

 

 

 

104

 
 

 

 

 

 

 

 

 

 

 

 

 

Asa% of
+ total
S.No. Estimated estimated | Asa % of
- No. ee Offer Offer Size
€inmillion) | Related
Expenses*

iii. Book building software fees; 6.09 1.65% 0.09%

iv. Other regulatory expenses; 34.80 9.45% 0.53%

v. Fees payable to the legal counsels; and 23.60 6.41% 0.36%

vi. Miscellaneous B75 1.02% 0.06%

Total Estimated Offer Related Expenses 368.08 100.00% 5.58%

 

* Estimated amounts have been finalized and incorporated in this Prospectus on determination of the Offer Price.

 

(1) Selling commission payable to the SCSBs on the portion for Retail Individual Bidders, Non-Institutional Bidders and Eligible
Employees, which are directly procured by the SCSBs, would be as follows:

 

Portion for Retail Individual Investors (0.35% of the Amount Allotted* (plus applicable taxes)

 

Portion for Non-Institutional Investors 0.20% of the Amount Allotted* (plus applicable taxes)

 

 

 

Portion for Employee Reservation 0.20% of the Amount Allotted* (plus applicable taxes)

 

 

“Amount Allotted is the product of the number of Equity Shares Allotied and the Offer Price

No processing fees shall be payable by our Company and the Selling Shareholders to the SCSBs on the applications directly procured by
them.

Selling commission payable to the SCSBs will be determined on the basis of the bidding terminal ID as captured in the Bid book of BSE or
NSE.

(2) Processing fees payable to the SCSBs on the portion for Retail Individual Bidders, Non-Institutional Bidders and Eligible Employees
which are procured by the members of the Syndicate/sub-Syndicate/Registered Broker/RTAs/ CDPs and submitted to SCSB for
blocking, would be as follows:

 

Portion for Retail Individual Investors

210 per valid application (plus applicable taxes)

 

Portion for Non-Institutional Investors

210 per valid application (plus applicable taxes)

 

Portion for Eligible Employees

 

210 per valid application (plus applicable taxes)

 

(3) The Processing fees for applications made by Retail Individual Bidders using the UPI Mechanism would be as follows:

 

‘Members of the Syndicate / RTAs / CDPs

210 per valid application (plus applicable taxes)

 

 

‘Sponsor Bank

Nil per valid Bid cum Application Form

The Sponsor Bank shall be responsible for making payments to the third
parties such as remitter bank, NPCI and such other parties as required in
connection with the performance of its duties under the SEBI circulars, the
Syndicate Agreement and other applicable laws.

 

 

 

(4) Selling commission on the portion for Retail Individual Bidders, Non-Institutional Bidders and Eligible Employees which are
procured by members of the Syndicate (including their sub-Syndicate Members), Registered Brokers, RTAs and CDPs would be as

follows:

 

Portion for Retail Individual Investors

(0.35% of the Amount Allotted* (plus applicable taxes)

 

Portion for Non-Institutional Investors

0.20% of the Amount Allotted* (plus applicable taxes)

 

 

Portion for Employee Reservation

 

(0.20% of the Amount Allotted* (plus applicable taxes)

 

 

“Amount Allotted is the product of the number of Equity Shares Allotied and the Offer Price

(8) Bidding charges of @ 10 (plus applicable taxes) shall be paid per valid Bid cum Application Form collected by the Syndicate, RTA
and CDPs (excluding applications made by Retail Individual Investors using the UPI mechanism). The terminal from which the Bid
has been uploaded will be taken into account in order to determine the total bidding charges. No additional bidding charges shall be
payable to SCSBs on the Bid cum Application Forms directly procured and bid by them.

(6) Selling commission payable to the Registered Brokers on the portion for Retail Individual Investors, Non-Institutional Investors and
Eligible Employees which are directly procured by the Registered Brokers and submitted to SCSB for processing, shall be 210 per

valid Bid cum Application Form (plus applicable taxes).

The Selling Commission payable to the Syndicate / Sub-Syndicate Members will be determined on the basis of the application form number /
series, provided that the application is also bid by the respective Syndicate / Sub-Syndicate Member. For clarification, if a Syndicate ASBA

105

 
application on the application form number / series of a Syndicate / Sub-Syndicate Member, is bid by an SCSB, the Selling Commission will
be payable to the SCSB and not the Syndicate / Sub-Syndicate Member. The selling commission and bidding charges payable to Registered
Brokers the RTAs and CDPs will be determined on the basis of the bidding terminal ID as captured in the bid book of BSE or NSE.

The processing fees for applications made by Retail Individual Bidders using the UPI Mechanism may be released to the SCSBs only after
such SCSBs provide a written confirmation on compliance with SEBI circular no: SEBI/HO/CFD/DIL2/P/CIR/2021/570 dated June 2, 2021
read with SEBI circular no: SEBI/HO/CFD/DIL2/CIR/P/2021/2480/1/M dated March 16, 2021.

The commission and processing fees shall be payable within 30 Working Days post the date of the receipt of the
final invoices of the respective intermediaries by our Company. All of the above are exclusive of applicable
taxes.

The Offer expenses shall be payable within 30 Working Days post the date of receipt of the final invoice from
the respective intermediaries by our Company in accordance with the arrangements/ agreements with the
relevant intermediary.

Monitoring of Utilization of Funds

Since the Offer is only an Offer for Sale, our Company will not receive any proceeds from the Offer and
accordingly our Company is not required to appoint a monitoring agency.

Other Confirmations
Except to the extent of any proceeds received pursuant to the sale of Equity Shares proposed to be sold by the

Selling Shareholders, none of our Promoters, Directors, Key Managerial Personnel, Group Companies or
members of our Promoter Group will receive any proceeds from the Offer.

106
BASIS FOR OFFER PRICE

The Offer Price has been determined by our Company and the Selling Shareholders, in consultation with the
BRLMs, on the basis of assessment of market demand for the Equity Shares offered through the Book Building
Process and on the basis of quantitative and qualitative factors as described below. Investors should also refer to
“Our Business”, “Risk Factors”, “Financial Information” and “Management's Discussion and Analysis of
Financial Condition and Results of Operations” on pages 160, 26, 225 and 297, respectively, of this Prospectus,

respectively, to have an informed view before making an investment decision.

 

Qualitative factors

Some of the qualitative factors which form the basis for computing the Offer Price are:

ee

Focus on the underserved and less price sensitive HNI segment;

b. Uncomplicated, holistic and standardized solutions offered to clients based on an objective-driven
approach;

c. One of the leading non-bank mutual fund distributor in India coupled with presence in Non-Convertible

Market Linked Debentures;

Focus on value added services i.e., safety net and estate planning services;

Focused toward to attracting and retaining talent through an entrepreneurial work culture; and

f. Strategic approach to the marketing initiatives.

oo

For further details, please see “Our Business — Our Strengths” on page 164 of this Prospectus.
Quantitative factors

Some of the information presented below relating to our Company is based on the Restated Financial
Information. For further details, see “Financial Information” on page 225 of this Prospectus

Some of the quantitative factors which may form the basis for calculating the Offer Price are as follows:

I. Basic and diluted earnings per share (“EPS”), as adjusted for changes in capital

 

 

Basic EPS (@) | Diluted EPS (®) | Weight
1

 

 

 

 

 

 

 

 

 

March 31, 2019 14.67 14.40

March 31, 2020 15.15 14.95 2
March 31, 2021 10.98 10.85 3
Weighted Average 12.99 12.81

As on August 31,2021* 12.30 12.25 =
*Not annualised

Notes:

(1) Earnings per share calculations are done in accordance with Ind AS 33 notified under Section 133 of the Companies Act, 2013, read
together with the Companies (Indian Accounting Standard) Rules, 2015, as amended.

 

(2) The face value of each Equity Share is @ 5 each. The Company in its annual general meeting held on June 15, 2021, after the
Balance Sheet date of March 31, 2021, has approved bonus in the ratio of 1 bonus equity share for every 2 equity shares held as on
the record date being June 15, 2021. The computation given above is after taking into account the bonus allotment.

@) Basic EPS (2) = Basic earnings per share are calculated by dividing the Restated Ind AS Consolidated Net Profit After Tax
attributable to the owners of the Company by the weighted average number of Equity Shares outstanding during the year.

 

(4) Diluted EPS (2) = Diluted earnings per share are calculated by dividing the restated Ind AS consolidated net profit after tax
attributable to owners of the Company by the diluted weighted average number of Equity Shares outstanding during the year.

(8) Weighted average = Aggregate of year-wise weighted EPS divided by the aggregate of weights i.e. (EPS x Weight) for each year /
Total of weights.

107

 
IL. Price/Earning (“P/E”) ratio in relation to Price Band of = 530 to = 550 per Equity Share:

 

Particulars P/E at the lower end of the Price P/E at the higher end of the
Band (no. of times) Price Band (no. of times)

 

Based on basic EPS for the financial 48.27 50.09
year ended March 31, 2021 on the
basis of Restated Consolidated
Financial Information

 

 

Based on diluted EPS for the financial 48.85 50.69
year ended March 31, 2021 on the
basis of Restated Consolidated
Financial Information

 

 

 

 

Industry P/E Ratio

As on date, there is only one comparable listed company in India engaged in the same line of business. The PE
of IIFL Wealth Management Ltd is 35.77 times.

Notes:
P/E figures for the peer is computed based on closing market price as on November 25, 2021 on NSE, divided by Diluted EPS (on

consolidated basis) for the Financial Year ending March 31, 2021 based on financial results of the company submitted to the Stock
Exchanges.

III. Average Return on Net worth (“RONW”)

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal/Period Ended RONW (%) Weight
March 31, 2019 47.77 1
March 31, 2020 33.09 =
March 31, 2021 18.68 2
Weighted Average 28.33

As on August 31,2021* 17.81 -
“Not annualised

Notes:

(1) Weighted average = Aggregate of year-wise weighted RONW divided by the aggregate of weights i.e. (RONW x Weight) for each
year/Closing of weights

(2) Return on Net Worth (%) = Restated Ind AS Consolidated Net Profit after tax attributable to the owners of the Company / Restated Ind
AS Consolidated Net Worth at the end of the year

@

Net worth is Equity share capital + Other Equity

IV. Net asset value per Equity Share

 

 

 

 

 

 

 

NAV for Fiscal Ended (Rs)
As on March 31, 2021 58.46
As on August 31,2021* 68.91
After completion of offer At the Floor Price: 68.91

At the Cap Price: 68.91
Offer Price 68.91

 

 

*Not annualised
(1) Net Asset Value per Equity Share represents Restated Ind AS Consolidated Net Worth at the end of the year / Number of equity shares
as at the end of the year / period as adjusted for the bonus allotment on July 16, 2021.

(2). Net worth is Equity share capital + Other Equity

As the Offer consists only of an offer for sale by the Selling Shareholders, there will be no change in the NAV
post completion of the Offer.

108

 
V. Comparison of accounting ratios with listed industry peer

 

 

 

 

 

NAV
Total Face . per
Name obi Income | Value | P/E (times) | EPS @asiO | Eps (pitutea) @ | RoNW(%) | equity
company @
mn) ® ee
®
‘Anand Rathi ; .
Sa de 2,792.48 5 50.69 10.98 10.85 18.68] 58.46
Listed Peer
TFL ‘Wealth 16,590.20 2 35.77 42.24 41.76 13.06 | 321.77
Management Ltd

 

 

 

 

 

 

 

 

“Financial Information for Anand Rathi Wealth Limited is derived from the Restated Consolidated Financial Statements for the year
ended March 31, 2021 and the computation of ratios given above is after taking into account the bonus allotment.

Notes:

(1) All the financial information for listed industry peer mentioned above is on consolidated basis and is sourced from the financial results
of FY21 submitted to the Stock Exchanges.

(2) P/E ratio is calculated as closing share price (As on November 25, 2021- NSE) divided by / Diluted EPS for year ended March 31,
2021.

3) Basic and Diluted EPS as reported in the annual report of the company for the year ended March 31, 2021.

(4) Return on net worth (%) = Net profit after tax divided by net worth at the end of the year. Net worth represents the equity share capital
and other equity.

(5) Net asset value per share (in 2) = Total equity divided by total number of equity shares outstanding at the end of the year

(6) Total Equity has been computed as sum of paid-up share capital and other equity.

VI. The Offer Price is 110 times of the face value of the Equity Shares.

The Offer Price of = 550 has been determined by our Company and the Selling Shareholders in consultation with
the BRLMs, on the basis of demand from investors for Equity Shares through the Book Building Process and, is
justified in view of the above qualitative and quantitative parameters. The face value of the Equity Shares is 7 5
each and the Offer Price is 106 times the face value at the lower end of the Price Band and 110 times the face
value at the higher end of the Price Band.

Investors should read the above-mentioned information along with “Risk Factors”, “Our Business”,
Management's Discussion and Analysis of Financial Condition and Results of Operations” and “Financial
Information” on pages 26, 160, 297 and 225, respectively, of this Prospectus, respectively, to have a more
informed view. The trading price of the Equity Shares could decline due to the factors mentioned in the “Risk
Factors” on page 26 and you may lose all or part of your investments.

109

 
STATEMENT OF TAX BENEFITS

Date: November 25, 2021

To

The Board of Directors

Anand Rathi Wealth Limited (formerly known as Anand Rathi Wealth Services Limited)
Express Zone, A wing, 10" floor,

Western Express Highway,

Goregaon, Mumbai — 400 063,

Maharashtra, India.

Re: Proposed initial public offering of equity shares of Rs. 5 each (“Equity Shares”) by Anand Rathi
Wealth Limited (formerly known as Anand Rathi Wealth Services Limited) (the “Company”) (the
“Offer”)

Dear Sirs,

We, Khimji Kunverji & Co. LLP, Chartered Accountants, the statutory auditors of the Company, hereby report
the possible special tax benefits available to the Company, its shareholders and the material subsidiary of the
Company, AR Digital Wealth Private Limited (Formerly Known as AR Wealth Management Private Limited
(“Material Subsidiary”) of the Company, under the Income-tax Act, 1961, as amended (the “IT Act”), and
presently in force in India, in the enclosed statement at Annexure A.

Several of these stated tax benefits/consequences are dependent on the Company or its shareholders or the
Material Subsidiary fulfilling the conditions prescribed under the relevant tax laws. Therefore, the ability of the
Company or its shareholders or the Material Subsidiary to derive the tax benefits is dependent on fulfilling such
conditions.

The benefits discussed in the enclosed annexure are not exhaustive. The attached Annexure A is for your
information and for inclusion in the Red Herring Prospectus and the Prospectus (“Offer Documents), as
amended or supplemented thereto or any other written material in connection with the proposed Offer and is
neither designed nor intended to be a substitute for professional tax advice. In view of the individual nature of
the tax consequences and the changing tax laws, each investor is advised to consult his or her own tax consultant
with respect to the specific tax implications arising out of their participation in the Offer. Neither are we
suggesting nor advising the investor to invest money based on this statement.

We do not express any opinion or provide any assurance as to whether:

i) the Company or its shareholders or the Material Subsidiary will continue to obtain these benefits in
future; or

ii) the conditions prescribed for availing the benefits have been/would be met with.

iii) the revenue authorities/courts will concur with the views expressed herein.

The contents of the enclosed statement are based on information, explanations and representations obtained
from the Company and on the basis of our understanding of the business activities and operations of the
Company. Further, in relation to the statement on possible tax benefits available to the Material Subsidiary, we
have relied up on the certificate on the statement of tax benefit issued by the auditors of the Material Subsidiary
and have not conducted any independent verification.

Limitations:
Our views expressed in the statement enclosed are based on the facts and assumptions indicated above. No
assurance is given that the revenue authorities/courts will concur with the views expressed herein. Our views are

based on the existing provisions of law and its interpretation, which are subject to change from time to time. We
do not assume responsibility to update the views consequent to such changes.

110
All capitalized terms not defined hereinabove shall have the same meaning as defined in the Offer Documents.

Sincerely,

For Khimji Kunverji & Co LLP
Chartered Accountants

FRN: 105146W/ W100621

Gautam V Shah

Partner

Membership No — 117348
UDIN: 21117348AAAADH5298
Place: Mumbai

Date: November 25, 2021

Encl: Statement of Special Tax Benefits

lil
Annexure A

ANNEXURE TO THE STATEMENT OF POSSIBLE SPECIAL TAX BENEFIT AVAILABLE TO THE
COMPANY, ITS SHAREHOLDERS AND THE MATERIAL SUBSIDIARY

Outlined below are the possible special tax benefits available to the Company, its shareholders and the Material
Subsidiary under the current direct tax laws currently in force in India. These tax benefits are dependent on the
Company, its shareholders and the Material Subsidiary fulfilling the conditions prescribed under the relevant
provisions of the Act. Hence, the Company, its shareholders and the Material Subsidiary can derive the possible
tax benefits upon fulfilling such conditions laid down in the Act, which are based on business imperatives they
face in the future, they may or may not choose to fulfill.

SPECIAL TAX BENEFITS TO THE COMPANY UNDER THE INCOME-TAX ACT, 1961 (THE
“ACT”)

The Company is not entitled to any special tax benefits under the Act.

SPECIAL TAX BENEFITS TO THE SHAREHOLDERS UNDER THE INCOME-TAX ACT, 1961
(THE ACT”)

The Shareholders of the Company are not entitled to any special tax benefits under the Act.

SPECIAL TAX BENEFITS TO THE MATERIAL SUBSIDIARY UNDER THE INCOME-TAX ACT,
1961 (THE “ACT”)

The Material Subsidiary is not entitled to any special tax benefits under the Act.
Note:

a. The above Statement is set out in a summary manner only and is not a complete analysis or listing of all
potential tax consequences of the purchase, ownership and disposal of shares.

b. The above statement covers only certain relevant direct tax law benefits and does not cover any benefit
under any other law.

c. This Statement is intended only to provide general information to the investors and is neither designed nor
intended to be a substitute for professional tax advice. In view of the individual nature of tax consequences,
each investor is advised to consult his/her own tax advisor with respect to specific tax consequences of
his/her investment in the shares of the Company.

No assurance is given that the revenue authorities/courts will concur with the views expressed herein. Our views
are based on the existing provisions of law and its interpretation, which are subject to changes from time to time.

112
SECTION IV: ABOUT OUR COMPANY
INDUSTRY OVERVIEW

Unless otherwise indicated, the information in this section is obtained or extracted from industry research
report on “Wealth Management” dated July, 2021 prepared and released by Care Advisory Research and
Training Limited (“CART”) and commissioned by and paid for by us. Neither we nor any other person
connected with the Offer have independently verified this information. The data may have been re-classified by
us for the purposes of presentation. Industry sources and publications generally state that the information
contained therein has been obtained from sources generally believed to be reliable, but that their accuracy,
completeness and underlying assumptions are not guaranteed and their reliability cannot be assured. Industry
sources and publications are also prepared based on information as of specific dates and may no longer be
current or reflect current trends. Industry sources and publications may also base their information on
estimates, projections, forecasts and assumptions that may prove to be incorrect. Accordingly, investors must
rely on their independent examination of, and should not place undue reliance on, or base their investment
decision solely on this information. Financial information used herein is based solely on the audited financials
of the Company and other peers. The recipient should not construe any of the contents in this report as advice
relating to business, financial, legal, taxation or investment matters and are advised to consult their own
business, financial, legal, taxation, and other advisors concerning the transaction. We commissioned and paid
for the CARE Advisory Research for the purposes of confirming our understanding of the industry specifically
for the purpose of the Offer, as no report is publicly available which provides a comprehensive industry
analysis, particularly for our Company’s services, that may be similar to the CARE Advisory Research.

The CARE Advisory Research is available on website of our company at
https://rathi.com/Wealth/Investorrelations. php

Global Economy

The world economy contracted by -3.1% in CY2020 owing to the global outbreak of Covid-19. However, it is
expected to grow by 5.9% in CY2021 and moderate to a growth rate of 4.9% in CY2022 on the back of
vaccination inoculation drive and resumption of economic activities as pandemic induced restrictions are eased
across the globe. The base effect of negative growth rate in 2020 has resulted in higher growth in 2021 across.
the spectrum of countries though the impact varies.

Exhibit 1: Global Growth Outlook Projections (in %)

Country/Group 2020. -2021E 2022E
World Output 3.1 5.9 49
Advanced Economies 45 5.2 45
United States 3.4 6.0 5.2
Euro Area 6.3 5.0 4.3
Japan 4.6 2.4 3.2
United Kingdom 9.8 6.8 5.0
Canada 5.3 5.7 49
Remaining Advanced Economies -1.9 46 3.7
Developing Economies 21 6.4 5.1

Emerging and Developing Asia 0.8 72 63
China 2.3 8.0 5.6
ASEAN** 3.4 2.9 5.8
Emerging and Developing Europe 2.0 6.0 3.6
Latin America and the Caribbean -7.0 6.3 3.0
Middle East and Central Asia 2.8 41 41
Sub-Saharan Africa -1.7 3.7 3.8

Notes:

E-Estimate

“For India, data and forecasts are presented on a fiscal year basis and GDP from 2011 onward is based on GDP at market
prices with fiscal year 2011/12 as a base year.

Includes Indonesia, Malaysia, Philippines, Thailand and Vietnam

Source: IMF ~ World Economic Outlook, Oct 2021

113
Advanced economies are projected to grow by 5.2% in CY2021 after a negative growth of 4.5% in CY2020. It
is expected to moderate to a growth of 4.5% in CY2022. The growth forecast for the advanced economies has
been marked up by IMF from its April 2021 projections on the back of the pace of the vaccine rollouts and
additional fiscal support. Amongst the advanced economies, United States is projected to grow by 6% in CY21
and moderate to a growth of 5.2% in CY2022. Meanwhile, the projections for Japan has been downgraded due
to strict restrictions in first half of CY2021 and is expected to see stronger recovery in the second half of
cy2021.

Emerging market and developing economies are estimated to grow by 6.4% in CY2021 after contracting by -
2.1% in CY2020. It is projected to grow by 5.1% in CY2022.The projections for emerging market and
developing economies were downgraded by IMF from its April 2021 estimates primarily due to markdowns
carried out in the emerging Asian economies group. Within this group, India was marked down on account
surge in Covid-19 cases during March-May 2021. Similarly, the ASEAN-5 group is also witnessing rise in cases
which is in turn impacting the pace of economic recovery. China’s forecast was downgraded too due to scaling
back of overall government support. Meanwhile, growth projections for other regions in general in the emerging
market and developing economies have been marked up depending on the vaccine rollouts and government
policy support which in turn has led to stronger than expected recovery in QICY2021.

IMF highlighted in its report that the economic recovery is highly dependent on vaccine access across regions,
hence economies will witness diverging recovery rates which may not remain steady as long as people are
exposed to the virus and its emerging variants. Close to 40% of the population is vaccinated in the advanced
economies while only around 10% of the population is vaccinated in the emerging market and developing
economies and only a tiny proportion of population is vaccinated in low-income group. Hence, the economic
growth projections are dependent on several factors such as access to vaccine, pace of its rollout, its ability to
fight emerging variants of the virus and the fiscal and monetary support provided by the governments.

Indian Economy!

CARE Ratings Economics Research projects GDP growth to be in the range of 8.8% to 9% for FY22. The
growth rate should be viewed with caution as it is followed by a -7.3% decline in FY21.

The economic outlook for the economy for FY22 would seem to look better on almost all counts than FY21 due
to negative base effect. The pandemic induced lockdown pushed the growth down to -7.3% in FY21. It was
expected that subsequently growth would be rapid in FY22 with both the negative base effect as well as the
pent-up demand for consumption and investment helping to accelerate the growth. However, the advent of the
second wave of Covid-19 in the beginning of the current financial year which led to state induced lockdowns
has upended this assumption to an extent.

Business, as seen ex post, has been better equipped to face the lockdown and while activity did reduce across the
country as well as sectors, the impact was less severe. The reverse migration which took place in large numbers
last year was of a lower magnitude this time. SMEs were again under pressure in this phase, but as they were
operating at less than normal potential, they were not pushed back that severely. Therefore, while the projections
made by CARE Ratings Economics Research have come down significantly from March as can be seen from
exhibit 2 below, the drop is less damaging this time.

Exhibit 2: Movement in CARE Ratings Economics Research forecasts for GDP growth (in %)

GDP growth
Date of forecast
2020-21 (Actual) [ -8.0
2021-22: 24 March’21 11-11.2
2021-22: 5 April’21 | 10.7
2021-22: 21 April’21 | 10.2
2021-22: 12 May’ 21 9.2

 

‘Source: CARE Ratings Economics Research report titled ‘Economic Outlook for India FY2021-22" dated 26" July, 2021

Some of the major economic indicators are mentioned below.

1 Source : CARE Ratings Economics Research Report titled “Economic Outlook for India FY 2021-22 dated 26th
July, 2021

114
Gross Domestic Product (GDP)

GDP is the sum of private consumption, gross investment in the economy, government investment, government
spending and net foreign trade (difference between exports and imports). In FY19, quarter wise growth in GDP
remained in the range of 5% to 8% while in FY 20 it declined and was in the range of 3% to 6%. During FY 21, it
contracted by -24.4% in QIFY21 to a growth of 1.6% in Q4FY21. However, in Ql FY22, the jump in GDP
numbers of 20.1% is mainly due to a weak base last year and also a rebound in consumer spending during the
quarter.

Figure 1: Quarter wise yearly growth in GDP at constant prices (in %)

Growth Rate of Quarterly Estimates of GDP at Constant Prices

 

20.10%
7.6%
at iced 5A% 4.65 3 3%, 3.056
. 1.6%
04%
BSS See.
FY19 FY20, FY22

 

73%

24.4%

mQl =Q2 =Q3 mQ4a
Source: MOSPI

Gross Value Added (GVA)

Gross value added (GVA) is the measure of the value of goods and services produced in an economy. GVA
gives a picture of supply side whereas GDP represents consumption. CARE Ratings Economics Research
expects GVA to grow by 7.8% in FY22 after declining by -6.2% in FY21. Agriculture and Industry are expected
to lead the economic recovery while a growth rate of 8.2% in services may not suffice as the lockdown imposed
during the second wave of Covid-19 severely affected sectors like hotels, restaurants, tourism and retail malls.

    

Figure 2: GVA Growth in FY22 Figure 3: Sectoral GDP Projections

4 13.1 s

12 40
10

7.3 . 5

x 8 6.4 x
£6 5.6 = 6
icul
4 5 Agriculture i
2
-10 z
0 -8.4
Qi Q2 Q3 Q4 mFY21 mFY22E

Source: CARE Ratings Economics Research
Industrial Growth

During FY21, industrial output as measured by index of industrial production — IIP declined by -8.6% as
compared with a negative growth rate of 0.8% in FY20. This implies that industrial production contracted for 2
consecutive years and the fall in FY21 has been the steepest in the series of 2011-12. There has been a sustained
decline in industrial production growth from FY17 and that has been exacerbated in FY21 following the nation-
wide lockdowns, state-wise restrictions to control the spread of the COVID-19 infections. 8 out of the 12
months in FY21 have registered negative growth with the highest growth of 4.5% observed in October 2020.

115
Further, in the last month of FY21, the index registered a growth of 24.2% followed by a 134.6% growth in
April-21 and 29.3% growth in May-21. For all the 3 consecutive months, the growth rate was backed by the
statistical push of low base.

Figure 3: Yearly growth in IIP (in %)

Yearly growth in IIP (in %)

11.9%

  
 

Apr-20 Jun-20 Aug-21

“57.3%

Source: CMIE
1.1.1 Per Capita GDP, Income and Final Consumption
India’s per capita gross domestic product (GDP) de-grew by -8.2% in FY21 from 3.0% growth in FY20. Gross
national income (GNI) dropped by 8.2% in FY21 from a 3.1% growth in FY20. The per capita private final
consumption expenditure (PFCE), that represents consumer spending, declined by -10.1% in FY21 after
growing by 4.4% in FY20.

Figure 4: Growth in per capita GDP, Income & Final Consumption

3.0 3.1 aa

 

 

8.2 8.2
-10.1

Per capita GDP Per capita GNI Per capita PFCE
mFY20 mFY21

Source: CMIE
Indian Economy outlook

CARE Ratings estimated India’s GDP growth rate at 9.2% for the FY2022. India’s growth outlook has
improved significantly and the covid-19 vaccination drive will help the economic rebound. The Reserve Bank of
India’s (RBI) Monetary Policy Committee (MPC) kept the repo rate unchanged at 4% while maintaining an
accommodative stance as long as necessary to mitigate the impact of the COVID-19 pandemic. The Indian
central bank was widely expected to keep key interest steady amid a surge in COVID-19 cases in the country.

The recent surge in COVID-19 cases has caused lockdown and curfew in many states resulting in a dip in
consumer confidence and reignited uncertainty regarding the near-term outlook. Second wave of COVID-19
infections and subsequent lockdowns are derailing economic momentum, RBI interventions will help maintain
adequate liquidity as well as prevent hardening of yields in bond market. These measures will ensure economic
stability.

116
The Government has declared that vaccine will be given to every adult citizen (above 18 years) which may help
to reduce the transmission of COVID-19 in the near future. The world’s largest vaccine maker, Serum Institute
of India (SII), has sought Rs.30 billion grant from the Government to ramp up capacity of the Covishield
COVID-19 vaccine beyond 100 million doses a month that the institute is expected to reach by the end of May
2021.

In the 2021-22 Union Budget, for FY22 capital expenditure is likely to increase by 34.5% at US$ 76 billion over
FY21 to boost the economy.

Increased government expenditure is expected to attract private investments, providing excellent opportunities
with production-linked incentive scheme. Consistently policy support is anticipated to boost the Indian
economy.

Indian Capital Market Outlook

Index Movement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

64,000 21,000
60,000
$5000 19,000
52,000 17,000
43,000
3as,000 15,000
£40,000 13,000
36,000
32,000 11,000
28,000 ate
24,000
20,000 7,000
PPPS FAIA AIP SSSS SPSS IIPS a gd gags as
SPS2FR2TFSSRPPIAEST TIS SE TESZELF TE
Sensex —niew —Nitty Financial Services Index
(Source-NSE,BSE )
Nifty Movement —
Date Nifty Closing Change (Y-0-Y)
March 31, 2019 11,623.90
March 31, 2020 8,597.75 -26.32%
March 31, 2021 14,690.70 70.87%
September 30, 2021 17,618.15 19,93%*
* March 2021 to Sep 2021
e Primary Market Trends (Public & Rights Issues)
(in Million)
Particulars 2019-20 2020-21 2021-22*
Items No.of | amount | No.of Amount No. of | Amount
Issues Issues Issues
I. Public Issues (Debt) 34 1,49,840 18 1,05,873 10 53,895
(a) Public Issue (Equity) 60 2,13,221 57 4,60,597 38 4,58,999
(b) FPOs - - -
(© Rights Issues 16 5,56,420 21 6,40,588 9 7,924
IL. Total Equity Issues 76 7,69,641 78 11,01,185 47 4,66,923
(atb+c)
Grand Total (I+I1) 110 9,19,481 96 12,07,058 57 5,20,818

 

 

 

 

 

 

 

 

117
(Source ~ SEBI Bulletin)* Data till August 2021.

Notes:

1. Equity public issues also includes issues listed on SME platform.

2. From April, 2020 onwards the data of equity is being prepared based on the listing date.
3. The data of Debt is being prepared based on closing date.

Capital Raised by Listed Companies through QIPs

 

 

 

 

 

 

2015-16 24 145,880
2016-17 20 84,640

2017-18 53 672,570
2018-19 14 86,780

2019-20 14 5,43,890
2020-21 31 7,87,380
2021-22* 15 1,71,910

 

 

 

 

 

(Source ~ SEBI Bulletin)* Data till August 2021.

Government initiative of introducing Goods & Service Tax and the Insolvency & Bankruptcy Code (IBC) and
increasing participation of the domestic mutual fund industry as a strong counterbalance to foreign funds has
been an important factor for the shift in the country’s financial space. The BSE Sensex on 30" September 2021,
closing at 59,126 witnessing 63.09% rise from its 1“ January, 2019 closing at 36,255. The Nifty 50 index also
rose 61.48% at 17,618 on 30"" September 2021 compared to closing on 1* January, 2019 at 10,910. Increase in
global liquidity, the government’s demonstration of its serious intent for economic reforms, signs of a
turnaround in corporate earnings has boosted the Capital Market’s attractiveness for the investors during the
calendar year 2021. Total amount mobilized through public issues and private placement of both debt and
equity was Rs. 520.82 billion with total issue of 57 from April 1% 2021 till August 31“ 2021 as compared to Rs.
1207.05 billion with total issue of 96 from April 1* 2020 till March 31% 2021 a decrease of 56.85% in the
amount mobilized and 40.62% decrease in No. of issues.

Indian Wealth Management Industry Overview

The Indian Wealth Management market is on a sustained path of growth, given India’s long-term economic
prospects, positive demographics, rising income levels and current low penetration. While the percentage of
wealthy individuals in India is very small compared with developed markets, very high potential of growth in
wealth is estimated in future. India has the key ingredients of a high-growth wealth management market,
namely driven by a very large and young mass affluent segment; an increase in the wealth of global Indians; the
Indian government’s push to control illegal channel of funds and push for tighter regulations of the capital
markets.

Number of millionaires in 2020 and 2025 (Selected countries)

United States 21,951 28,055 28 5.03%
China 5,279 10,172 93. 14.02%
Japan 3,662 5,411 48 8.12%
United Kingdom 2,491 3,711 49 8.30%
Germany 2,953 4,240 44 7.50%
World 56,084 84,014 49% 8.42%

(Source- Global Wealth Report 2021)
The demographic difference presents an opportunity to create new products to address the needs of a young
population and leverage new technologies, such as social and software-based investing applications as a key
differentiator. Indian wealth management industry is largely focused mainly on the urban segment, leaving
untapped majority of Indian population. One of the key factors for Advisors is to develop trust with the
potential investors where advisors constantly need to build its brand, focus on overcoming trust barriers, invest
in technology and focus on transparency and compliance.

In 2018, top 8% of the total population in India represents 45% of the total wealth and of the above only 20%
take advice from wealth managers. With increase in start-ups, rising income levels and friendly macro factors

118
with ease of doing business will drive growth of young HNI population in India; there is a big opportunity for a
wealth management firm to tap into an underpenetrated market with huge upside growth potential for wealth
managers (Source — CART).

There is steady growth in number of client’s interest towards:

1) Access to Mutual Fund / Other financial Product Distribution

2) Financial Planning (specific short term and long term goals) Advice
3) Tax Planning Advice

4) Estate Planning Advice

5) Wealth Management Advice

Based on the investment corpus available with the individuals, CART have grouped individuals in following
four categories -

Retail — With financial assets of Rs. 1 million and lower

Mass Affluent — With financial assets between Rs 1 million to Rs. 50 million
HNI — With financial assets between Rs 50 million to Rs. 500 million

Ultra HNI — With financial assets of more than Rs. 500 million

Wealth Pyramid

 

ee. > _# B.5004 million in Financial Assets.
IY + 8550-500 milion in Financial Assets

Indian Mutual Fund Industry Overview

 

 

 

 

 

MF AUM Y-o-Y Growth
(Rs. in Billion)

36,739

21,360

se
17,546 j
ss 10,828 ae
6,140 5,923 5,872 7,014 .
3260 052 4,178
=m Beee

| Mar-O7 = Mar-08  Mar-09 = Mar-10 = Mar-11 = Mar-12 = Mar-13 =Mar-14 = Mar-15 = Mar-16 = Mar-17 © Mar-18 = Mar-19 = Mar-20 © Mar-21 = Sep-21,

 

 

 

(Source -AMF1)

The Indian mutual fund industry has a long history of over 50 years, starting with the formation of UTI, a joint
initiative of the Government of India (“GOI”) and the RBI in 1963. It was regulated and controlled by the RBI
until 1978, after which the Industrial Development Bank of India (“IDBI”) took over. UTI launched its first
scheme, Unit Scheme 1964, in 1964 and its AUM reached 2 67 billion by 1988. The year 1987 witnessed the
entry of other public sector banks to set up mutual fund business in the country. Since 2003, the mutual fund
industry has witnessed a healthy growth, supported by various regulatory measures as well as investor education

119
initiatives, where AUM of the Indian MF Industry has grown from % 3.26 trillion as on 31“ March 2007 to =
36.73 trillion as on 30" September, 2021, more than 11.27 times in a span of about 14.5 years.

Digital presence by mutual fund houses and wealth management players is enhancing distribution reach. Digital
advances have ensured distribution efficiencies, and also helped to create predictable revenue streams in the
business. Digital platforms have helped distributors to focus more on research and tracking markets rather than
operational tasks such as individual client visits and extended paperwork. Tablet and mobile apps are helping
mutual funds increase reach in B30 locations. Moreover, there have been several industry-wide initiatives to
help distributors build digital capabilities in order to serve investors better. While there are all types of
distributors — robots, fee-based advisors and transaction-only distributors — will co-exist as there is low
penetration of distributors in the country, with only a small number of distributors catering to the large
population base.

Note: As per SEBI circular SEBI/HO/IMD/DF2/CIR/P/2018/16 dated 02.02.2018, the terms and definition of
“15 cities”, “T15” and “B15” are substituted with “30 cities”, “T30” and “B30” respectively, with effect from
April 1, 2018.

 

Players in the Indian wealth management space

Products offered: Wealth managers in India mainly sell mutual funds, private equity funds, real estate funds,
non-convertible debentures, portfolio management services, structured products and tax-free bonds to investors.

 

 

 

 

 

 

 

 

 

Business model Market Key characteristics
positioning
Universal banks Strong | e Includes large players, mainly private banks; recently some PSU
© Banks have also announced plans to launch wealth-management
services
© Extensive reach
@ Relatively high entry barriers
© Cross-sell potential with both retail and corporate customers
Wealth management Medium | e Mainly foreign players with strong understanding of advisory
Specialists services
© Offerings are mainly managed/structured products
© Typically high entry barriers
¢ Focus on the UHNI segment
Global investment banks Weak | e Focus on the UHNI segment
Institutional approach to serve clients with investment banking
products
Brokers/dealer discount Strong | ¢ Large number of players
online brokers Focus on the mass affluent segment
Mainly offer mutual fund products
National distributors Strong | e Some firms are affiliated to a brokerage firm with a large
network of sub-brokers
e Large firms with extensive distribution network
Multiple products
Family office Weak | e Holistic advisory services for specific client segments such as
entrepreneurs
Robo-advisors Upcoming | e Fully automated or hybrid investment managers
© Algorithm-based advice without human intervention
© Suitable for small-ticket retail investors
© Available at a lower cost
© Consistent and transparent advice
Others (independent Medium | © Very low entry barriers
funds/insurance advisors, © Commission-driven model
Etc) © No dedicated wealth management offering

 

 

 

 

 

120
Key Growth Drivers

1. Increasing Penetration of Mutual Fund Market in India

Assets managed by the Indian mutual fund industry has increased from Rs. 27.74 trillion in September 2020 to
Rs. 37.41 trillion in September 2021. That represents 34.84% increase in assets over September 2020. (Assets
are measured as average assets for the month).

Despite the size and growth profile, India continues to be underpenetrated with a mutual fund penetration rate
(the ratio of period ending mutual fund AUM to GDP) of 16.0% in 2020, as compared to 140% in the United
States, 84% in Brazil and a global average of 63%. Further, India accounts for less than 2% of the global mutual
fund industry, representing a significant growth opportunity.

«© Mutual Fund Penetration of various Countries CY2020 - AUM to GDP

121
 

Mutual Fund Penetration of various Countries CY 2020 — AUM to GDP

140%
99% 100%
Leal 79% wee

49%

a =
US France Canada Brazil UK = Germany Japan China

 

(Source: CART, Statista.com)

There is lack of healthy participation from investors in B30 (beyond top 30) locations. Recently, the mutual
fund sector is witnessing rising activity from B30 locations, especially in the equity segment due to improved
distribution and regulatory changes in fee structure. Lack of awareness about financial instruments and
prevalence of low financial knowledge has been one of the key factors in a lower inflow of investments as
compared to that in other BRIC nations like China and Brazil. Favorable demographics and rising income levels
make it one of the most attractive sectors in the financial services industry. Robust macroeconomic
fundamentals outlook and various government reforms have strengthened investor confidence, prompting them
to participate in the equity market, especially increased participation of investors from tier 3 and tier 4 cities.
With increasing mobile phone penetration and increasing wealth managers’ use of technology enables
transparency and systematic products in an efficient manner which in turn helps to develop informed customers
and distributors to penetrate deeper across the wealth management space.

a. Distributors — Key to drive growth of MF Industry September — 2019

 

Distributor Vs Direct

Investor Type

 

Grand Total ———
Retail
Institutions
Hints
comorates

7 sox soos
mbrect __mDlstributors

(Source-AMFI)

About 13% of the retail investors chose to invest directly, while 22% of HNI assets were invested directly.

 

Distributor Vs Direct
Scheme Type

Grand Total
Liquid/ Money Market

ETFs, Fors.

Equity oriented
schemes

Debt oriented schemes

a
i

mDirect Distributors

 

 

 

(Source-AMFI)

122
March - 2021

 

Distributor Vs Direct
Investor Type

Scone 1
5)

0% 50% 100%

mbirect lm Distributors

 

 

 

(Source-AMF1)

About 16% of the retail investors chose to invest directly, while 24% of HNI assets we!
of the assets of the mutual fund industry came directly. A large proportion of direct it
equity-oriented schemes where institutional investors dominate.

re invested directly. 47%
investments were in non-

 

Distributor Vs Direct

Scheme Type

5 TT
ue) oy 4
Equity oriented schemes z= lUlUltt~™
eh oventes eres EE

0% 20% 0% = GOK BOK «100%

m Direct = Distributors

 

 

 

(Source-AMFI)

76% of liquid/money market scheme assets where institutional investors dominate, were direct, whereas 57% of
debt-oriented scheme assets and 21% of equity scheme assets were direct.

August — 2021

 

 

 

 

Distributor Vs Direct
Investor Type
Grand Total
Retail
Institutions
HNIs
conorates
0% 50% 100%
Direct BDistributors
(Source-AMFI)

123
About 17% of the retail investors chose to invest directly, while 24% of HNI assets were invested directly. 46%
of the assets of the mutual fund industry came directly. A large proportion of direct investments were in non-
equity-oriented schemes where institutional investors dominate.

 

Distributor Vs Direct

Scheme Type

{rand Total
Lquid/ Money Market
TEs, FoFs

Equity oriented schemes
Debt oriented schemes

0% = «20% = a0% GOK OK 100%
mire mDitabutore

 

 

 

(Source-AMFI)

76% of liquid/money market scheme assets where institutional investors dominate, were direct, whereas 59% of
debt-oriented scheme assets and 22% of equity scheme assets were direct.

Distributors have been a key player for strong participation from retail investors that has led to overall growth in
the industry. Commission rates for the distributors have relatively remained stable and the increase in
participations of investors through distributors has been a key driver for increase in total AUM of mutual fund
industry. Retailers /HNIs have preferred to invest through distributors. As of August 2021, about 83% of the
retail investors chose to invest through distributor, while 76% of HNI assets were invested through distributor.
In the equity schemes, 78% of the assets were through distributors who have been an important factor for
growth of domestic equity market. Distributors are becoming more and more prominent with private players
dominating the distribution market where advisors still play a critical role in providing information to potential
investors. Distributors from B30 cities are also key drivers for increasing penetration of mutual funds in the
smaller cities and attractive incentives in low per capita state.

« Investors — Overall Composition

 

Investors — Overall Composition - August'21

B30 - Direct
4%

  

 

 

 

(Source-AMFI)

Distribution channel accounted for 79% of total mutual fund assets under management (AUM) as on August
2021, of which 58% belongs to top 30 cities.

124
State-wise new ARN registration as on March 2021

State / Union territory % of ARN/ EUIN
Maharashtra 25.29%
Gujarat 12.26%
| Uttar Pradesh 8.35% |
| Tamil Nadu 5.99%
West Bengal 5.52%
Delhi 5.48%
Karnataka 5.22% |
Rajasthan 3.81%
Madhya Pradesh 3.66% |
Telangana 3.63% |
Haryana 3.27% |
| Odisha 2.62%
"Andhra Pradesh 2.36%
| Jharkhand 2.14%
Kerala 2.14%
Bihar 1.92%
Punjab 1.81%
Remaining states 453%
Total 100.00%

 

 

 

 

 

125
(Source-AMFI)

Maharashtra continues to be the top state to add the highest number of new MFDs/EUIN in the industry.
Maharashtra accounts for 25% of the new ARN and EUIN registrations, shows the latest AMFI data on
geographical spread of the new ARN holders as on March 2021.

Meanwhile, Gujarat and Uttar Pradesh have secured second and third position in terms of bringing in new
distributors in the industry. Gujarat and Uttar Pradesh have contributed 12% and 8% new distributors,
respectively. The top three states collectively contribute over 45% of the new ARN and EUIN registrations.

AMFI data shows that 46% of the individual distributors has come from B30 cities as of March 2021. Of the
94,510 registered individual distributors, 43,823 has come from B30 cities while the remaining 50,687 or 54%
distributors were from T30 cities.

B30 cities have added 3,405 new individual MFDs while T30 cities saw an addition of 3,475 new MFDs under
individual category in the last one year.

Overall, the mutual fund industry has over 0.243 million ARNs of which over 0.094 million are individual
distributors, 0.133 million are employees & 0.016 falls Under Other Category.

b. Increase in Retail participation and mass affluent

 

B30 VS T30 (Rs in Trillion)

Mar-18.

Mar-19

Mar-20 =730 = B30

26.94
Mar-21.

30.23
Aug-21

 

 

 

(Source-AMFI)

c. B30 and T30 Asset Mix

 

 

= Equity oriented scheme 1 Debt oriented scheme
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
BIS T15 B30 130 B30 130
Mar-18 Mar-21 Aug-21
(Source-AMF1)

 

Note: As per SEBI circular SEBI/HO/IMD/DF2/CIR/P/2018/16 dated 02.02.2018, the terms and definition of “15
cities”, “T15” and “B15” are substituted with “30 cities”, “T30” and “B30” respectively, with effect from April 1,
2018.

126
The wealth management market (assets under advisory) in India is about 2 21.77 trillion in July 2021, which is
only approx. 9% of the country’s GDP, as compared to 60% to 75% of GDP in established markets. The
increase in penetration of wealth management companies into Tier II and III cities will also help to drive the
growth given more than 44% of the UHNIs live in non-Metro where currently wealth is majorly managed by
IFAs and Chartered Accountants. (Source-AMFI).

The investable wealth across HNI and mass affluent segment is rising due to fast growing economy, creating a
need for wealth services across various potential investors group. More than 50% of the Indian population is
under 25 years of age and this is the largest and fastest-growing adult segment across the globe which represents
a greatest opportunity for the wealth management industry. Favourable demographics, rising income levels and
a burgeoning affluent middle class will provide a strong customer base for wealth management sector.

As investors are getting more educated, retail investor's style of investing is becoming more mature and they are
becoming aware of the potential that equities offer along with the associated risks. Individual investor’s
component of total number of folios in the industry has steadily increasing over the years where mass affluent
retail investors are spearheading the growth rate. Mutual funds remain a largely under represented asset class in
India where a large part of mutual fund savings originate from the large cities. Growing popularity of mutual
funds has seen increasing participation from retail investors in B30 cities.

The top five cities, Mumbai, Delhi, Bangalore, Kolkata and Pune contributed to 57.31% of the AUM of mutual
fund for the quarter ending in June 2021. But with rising income levels and a growing affluent middle class,
Retail investors are becoming more inclined towards equities as an investment option over traditional preference
of savings towards physical assets, especially from B30 cities. As of March 2021, Mumbai and New Delhi
attributed to 43% of the average AUM compared to 56% in March 2015. 16% of the assets of the mutual fund
industry came from B30 locations in July 2021. Assets from B30 increased from Rs.4.45 trillion in August 2020
to 5.86 trillion in August 2021, representing an increase of 32%.

Investors from B30 locations are attracted towards equity as compared to T30 (T30 refers to the top 30
geographical locations in India and B30 refers to the locations beyond the top 30) where debt portion is higher
due to large participation from institutional investors. As of August 2021, 71% of the assets from B30 locations
are in equity schemes as compared to 62% from B30 locations in March 2018.

Investors in urban cities get advice from several large bank and wealth managers, but mass affluent retail clients
depends on IFAs for advice on mutual fund where there is immense potential to tap the untapped market. Small
investors are opting for mutual funds through systematic investment plans (SIPs) in order to create long term
wealth and meet their financial goals.

d. Increase in folios

 

Increase in Investors Accounts
(In Million)

 

Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Jun-21

 

 

 

(Source-AMF1)

Retail investor’s preference is becoming more mature as they get more informed regarding equities potential and
risk associated in investing in it. Since March 2014, there is an increase in investor accounts from 39.5 million
to 102.6 million in June 2021. Increase in penetration of mutual funds products driven by increase in number of
folios and participation from mass affluent segment. Total number of accounts (or folios as per mutual fund
parlance) as on June 30, 2021 stood at 102.6 million, while the number of folios under Equity, ELSS and
Balanced schemes, wherein the maximum investment is from retail segment stood at 92.8 million. Individual
investor’s component of total number of folios in the industry has been steadily increasing over period of years
where mass affluent retail investors are spearheading the growth rate. The total number of retail investor folios

127
increased from 45.40 million as of March 31, 2016 to 92.8 million as of June 30, 2021, adding 47.45 million
folios in 5.25 years growing at CAGR of 14.60%.

2. Increase in Wealth and HNI population in India

For the past decade, India has been classified as a lower-middle income country which aspires to move a step up
in the global prosperity ladder. In the past three decades, per capita incomes have multiplied, poverty has
reduced, illiteracy rates have fallen, and health conditions have improved. An expanding economy has provided
the much-needed resources to address chronic infrastructure deficits and improve the lives of millions. India is
now poised to transition to a higher and more widely shared level of prosperity. Households in the global middle
class can fulfil a range of aspirations, such as affordable housing, health care, education, clean water, sanitation
facilities, reliable electricity, a safe environment, and discretionary income to spend on leisure pursuits.
According to World Bank draft report, unlike East Asia, there is an expanding share of young adults in India, so
there is limited risk of sustained wage increases for low-skilled workers and unlike Latin America, India is a net
importer of minerals, timber, and many other commodities, so that India’s growth does not fade with declining
commodity prices. The share of population in extreme poverty of India was reduced from 45% in 1994 to 13.4%
in 2015. If this trend continues, India is on track to eliminate extreme poverty by 2026 (to below 3%). The rapid
decline in poverty between 2005 and 2015 was driven mainly by higher labour earnings (Source — Policy
Research Working Paper by World Bank Group). Non-farm jobs, supported by an unprecedented rise in wages
for unskilled labor, helped millions of Indian households to move up the poverty line.

Increase in GDP to drive growth of Wealth in India

Strong correlation between Wealth/GDP

 

Wealth to GDP Ratio
6.00
5.00
4,00
3.00
2.00
100
Australia. = UK US Japan China’ Singapore Germany India Vietnam France World
62000 62005 #2010 =2015 =2019

 

 

 

(Source-Global wealth Report 2019)

The average per capita GDP of India rose from US$ 443 in CY 2000 to US$ 2,104 in CY 2019. In the past three
decades, per capita incomes have quadrupled, poverty has retreated, illiteracy rates have declined, and health
conditions have improved. An expanding economy has provided the much-needed resources to address chronic
infrastructure deficits and improve the lives of millions. Increase in GDP/Adult ratio of selected developed
nations such as United States, Japan, Australia; has also led to increase in their wealth/GDP ratio. While India’s
GDP is expected to grow at much faster rate, it is estimated that it will mirror similar increase in its wealth/GDP
ratio as growth observed by developing nations. Wealth per adult grew by 1.2%, raising global mean wealth to a
record high of $70,850 per adult in CY2019. Most of the top performing countries were boosted by strong stock
market gains during the year. In developed regions such as North America and Europe, financial savings
represents a high proportion of overall wealth per adult as compared to other regions. Strong underlying
economic expansion along with significant growth per capita income will drive the pace of wealth creation in
India where investment towards financial savings is gradually increasing with increase in GDP.

128
b. Increase in HNI population and reliance on wealth managers for investment
advice

Growth of Ultra HNIs in India

Growth of Ultra HNHs in India

Assets Rs in Trillion

 

352
135 153
86 108 ad

 

2010-11 2oni-12 2012-13 2013-18 2014-15 2015-16 2016-17 2021-20226
62000 181000 100900 117000 337100 146600 1160600 330400
T
Number of Ultra HNHs

 

 

(Source-Kotak Wealth-Top of the Pyramid Report)

India currently has one of the youngest populations in the world, with a median age of 27.73 years and has the
world’s highest number of 10 to 24-year-olds, with 242 million, compared to China, which has 185 million
young people. By 2021, India is expected to have 34.33% share of youth in total population. Although India is
one of the world’s fastest growing UHNI’s populations both in terms of the number of individuals and the
wealth levels, percentage of wealthy Indians remains very small compared with developed economies. With
increase in start-ups, rising income levels and friendly macro factors with ease of doing business will drive
growth of young HNI population in India, a big opportunity for wealth management firm to tap into
underpenetrated market. In 2017 around 69% of total HNI population in India is below the age of 55 years
where majority of them seeks a wealth manager to advice on investment opportunity as they neither have the
expertise nor the time to monitor their investments. The number of UHNIs grew to 1,60,600 (with Rs.153
trillion worth of assets) at the end of 2017, up 10% from that in 2016 , which roughly equalled the combined
market-capitalization of all companies listed on BSE. Ultra-HNIs in India are expected to double to 3,30,400
with Rs.352 trillion worth of assets by 2022 at a CAGR of 18.13% mostly increase driven by young Indians
getting wealthier. UHNHs in India are inclining towards ‘opportunity-driven approach’ to equity investing and
are keen on reducing exposure to real estate and debt instruments in pursuit of bigger profits in equity market.
(Source-Kotak Wealth-Top of the Pyramid Report)

3. Increase in Household savings with high proportion of savings towards financial
assets.

a. Increase in preference of investing in financial assets
Changes in Household savings in India

 

Changes in Household savings in India

‘= Saving in the form of valuables
1m Saving in physical assets
‘| Net Financial Savings

2014-15 2015-16 2016-17 2017-18 2018-19 2019-20

 

 

(Source-www.rbi.org.in)

Sector-Wise Domestic Saving at Current Prices
(@ in Billion)

129
 

 

 

 

 

 

 

IGross financial saving 12,572 | 14,962 16,147 20,564 21,341 22,846
[Less-financial liabilities 3,768 3,854 4,686 7,507 7,784 6,641
[Net Financial Savings 8,804 11,108 11,460 13,057 13,557 16,205,
[Saving in physical assets 15,131 [13,176 15,946 19,442 22,481 23,272
[Saving in the form of valuables 456 465 465 467 427 431
GVA 97,121 | 1,04,919 | 113,283 | 120,342 | 1,27,442 | 1,32,715
[Net Financial Savings as % of GVA 9.07% | 10.59% | 10.12% 10.85% 10.64% | 12.21%

 

 

 

 

 

 

 

(Source-www.rbi.org.in)

As can been seen from the above graph, share of Financial Savings increased to 41% in 2019-20 from 2014-15.
The Financial Savings is at Rs. 16,205 billion 2019-20.

Changes in Financial Assets / Liabilities of the Household Sector

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2 In Billion)
1 | Currency 1333 | 2,005 | (3,329) | 4847 | 2,779 | 2,826
2_ | Bank deposits 5,793 | 6,224 | 9,386 5,216 7,800 | 8,374
3_[ Non- banking deposits 289 181 349 6 301 281
4_[ Life insurance fund 2993 | 2,642 | 3,543 3440_| 3,588 | 3,178
5 _| Provident and pension fund 1,909 | 2,907 | 3,255 3,604 | 3,977 | 4,655
6 __| Claims on Govern- ment 10 679 1,155 1,557 2,064 2,715
7 Shares & debent- ures 204 284 1,745 1,774 790 774
8___| Units of UTI E : 2 P 2
9 | Trade Debt (Net) 2 a1 a 2 2 B
10 | Changes in financial assets (2 to9) | 12,572 | 14,962 | 16147 | 20,564 | 21,341 | 22,646
11 _| Bank advances 2,824 2,694 3,458 5,255 6,090 5511.57
49 | leans Scatlvences fromeutter 942 1,156 1,229 2,250 1,688 1128.32
financial institutions
13 _| Loans & advances from Government 2 4 © 2 6 1.19
14 _ | Loans & advances from co-operative :
non-credit societies
15 idee ta financial abilities (11 | 4 765 3,854 4,686 7,507 7,784 6,641
Net Financial Savings (10-15) 8,804 11,108 11,460 13,057 13,557 16,205,

 

130

 

 
(Source-www.rbi.org.in)

 

 

Changes in Financial Assets / Liabilities of the Household Sector (Rs. in Billion)

 

24,000

20,000

16,000 —
12,000 i +— — =

‘8,000 —

4,000 _ Se

2014.15 2015.16 2016.17 2017.18 2018.18 2019.20
—+changes in tnanclal acts changes in financial abies —+-Net Fnancla Savings

 

(Source-www.rbi.org.in)
As can be seen from the above table, across the key asset classes, there has been an increase in proportion,
primarily in financial asset class and the trend is likely to continue to grow in the coming years.

Figure: Breakup of changes in financial assets / liabilities of the household sector

 

 

soon reve et

oom

un tere fd
non-banking depots

20%

(Source-www.rbi.org.in)

4. Digitalizing Wealth Management Sector

Technology is poised to change the nature and delivery of financial advice in some significant ways.
Technology is enabling platform convergence and creating opportunities for new client engagement. There is an
increasing number of online trading, brokerage, investment, direct-to- consumer (D2C) and robo-advisors
offering user friendly, low-cost, automated solutions for core functions such as investing, asset allocation, and
portfolio management and reporting. Asset managers revamp their business models — standardize, centralize
and outsource through the use of technology. Processes are becoming paperless, efficient, easy and real-time.

Trends driving the emergence of robo advisors

Focus on mass market

Wealth managers have traditionally focused on the HNI and ultra-HNI segments, which align better with the
economics of their advisor-based business model, providing sophisticated products and face-to-face service.
This leaves less affluent investors devoid of high-quality wealth management advice.

Robo-advisers have the ability to make wealth advice economically feasible to the mass market. Their operating
model differs from that of traditional players in that it is less sophisticated in terms of products but clear and

efficient in scalability. This, in turn, has enabled these players to reach client segments that have traditionally
been out of reach of wealth managers.

The mass market offers tremendous potential for wealth managers worldwide. Although these clients may be
relatively small on an individual level, when aggregated they represent a significant asset base (for instance, in
the US, the mass affluent segment offers a market potential of ~US$ 10t). These digital firms have made it
possible to bring investment advice to the masses and unlock the large potential of underserved segments
through their low-cost and potentially highly scalable solutions in order to meet core wealth management needs.

131
Demographic shift

The wealth management industry is witnessing a phase of significant demographic change as its largest investor
segment — the baby boomers (born between 1946 and 1965) — retires and assets are transferred to the next
generation — Gen-X (born between 1966 and 1980) and Gen-Y/millennial (born after 1980).

Younger set of investors have largely been underserved by traditional players, with only 18% of financial
advisors in the US targeting Gen-Y clients

Traditional wealth managers are facing challenges in maintaining relationship with clients, who are tech-savvy
and believe in a do-it-yourself approach. On average, a financial advisor is over 50 years of age, which results in
a generational gap and a slight disconnect with the younger generation.

The simple technology platforms offered by new-age digital wealth managers resonate well with the needs of
millennials. Digital entrants have also benefited from the fact that many millennials do not have a trusted
advisor relationship and feel comfortable using technology to manage their finances. Hence, digital firms are
well positioned to capitalize on the generational shift.

Advanced digital capabilities

Digital has changed the way people interact, creating opportunities for new engagement models with end
investors.

These technology-backed automated investment services (robo-advisors) have been developed on the premise
that many of the activities performed by traditional investment advisors can be replicated by adopting advanced
digital capabilities.

Robo-advisors have successfully leveraged the demand for user friendly and interconnected digital services and
deployed a simple streamlined digital experience for clients.

These firms have created direct-to-consumer models to provide the basic elements of wealth management
advice, minimizing the traditional reliance on human advisors. Digital platforms automatically invest and
rebalance according to clients’ goals and risk tolerances sans human interference.

Government Initiatives

In order to promote investors participation, government / regulators are boosting investor’s confidences to
participate in equity / debt market by increased focus on client centricity, fiduciary responsibility and
compliance. Regulator have been more stringent in their requirements regarding advisor qualifications,
infrastructure, risk profiling and suitability criteria. To enhance the penetration of mutual funds in the country,
SEBI sought to increase the sales in the B15 location through the commission structure. In 2011, SEBI proposed
a self-regulatory organization (SRO) for the Indian wealth management sector that would help regulate business
and serve as a medium for SEBI to implement various wealth management initiatives. In September 2012, SEBI
allowed fund houses to charge an additional 30 basis points on daily net assets in the total expense ratio, should
the new inflows from B15 cities be at least 30% of the gross new inflows in the scheme or 15% of the average
AUM, whichever is higher. As per SEBI circular SEBI/HO/IMD/DF2/CIR/P/2018/16 dated 02.02.2018, the
terms and definition of “15 cities”, “T15” and “B15” are substituted with “30 cities”, “T30” and “B30”
respectively, with effect from April 1, 2018. Later in April 2019, SEBI issued a consultation paper on SROs for

132
intermediaries including investment advisors. In August 2020, SEBI notification called for a wholly-owned
subsidiary of a stock exchange to administer and supervise such advisers.

COVID — 19 Impact on Wealth Management firms

As the COVID -19 sunsets, firms are likely to take measures to improve and rebuild customer confidence in
their investment portfolios. In FY21, with the onset of covid there was apprehension amongst investors
especially in the equity category of mutual funds. Given below is a brief table on how the net sales for the
certain classes of Mutual funds.

Net Inflow (+ve)/ Outflow (ve) for the period in Rs. Billion

 

 

  
 

 

   

 

Category

Q2FY22 QIFY22 Q4FY21 Q3FY21 Q2FY21 QIFY21
Multi Cap Fund $$ (3716 | 20.06 | 6744 | -8286 | -3334 | 12.21
Large Cap Fund 5.28 | 1810 | -3410 | -77.16 | -2495 | 30.34
Large & Mid Cap Fund 19.43 23.53 9.14 -16.47 -0.12 11.38
Mid Cap Fund 30.01 40.55 197. 35.08 -12.50 8.14
Small Cap Fund - 13.67 19.70 16.88 -22.12 0.62 | 9.27
Dividend Yield Fund 040 | 697 0.19 | 13.62 0.82 | -0.29
Value Fund/ContraFund = -11.93 6.98 | -32.17 | -41.65 18.17 0.98
Focused Fund | 41.97 20.06 6.99 | -19.02 13.63 | 17.30
Sectoral/Thematic Funds | 102.32 40.49 42.30 46.39 2.05 | 7.27
ELSS (Open ended) /-2162  -12.18 “116 -23.53 269 | 20.51
Flexi Cap Fund 182.58 | 24.78 | -90.45 | - - | -
ELSS | 3. -0.27
Other | -3.04
Total 872.85 | 156.27 | -117.07  -301.16  -88.83 113.79

Source: AMFI, Year FY21

¢ It could raise the need to use data and analytics to fine-tune their customer, product and pricing strategy to
meet customer expectations.

¢ — Since the COVID-19 period has forced branch lockdowns leaving investors no option but to use online and
digital services, the firms could see possible drive and upsurge in demand for digital channels and therefore
the need to upscale and upgrade them.

* COVID-19 could possibly trigger regulation changes on fees, commissions, advice, risk assessment,
margin exposures, investment strategies, portfolio valuations etc.

e Ifthe COVID -19 period stretches longer it could create workforce reduction. There could also be probable
salary restructuring from commission based to increased fixed salary component or full time employment
along with changes in benefits.

e There could be push in the industry for retirement planning with investment protection, digital estate
planning.

e The market could witness large scale sale of portfolio for tax harvesting and large number of portfolio
gifting to take advantage tax exemptions due to low portfolio value.

Evolution of Digital Wealth Management

The global wealth management industry is being revolutionized by the rapid pace of digital innovation. After the
global financial crisis, while traditional asset managers focused on meeting the enhanced regulatory
requirements and resolving other crisis-driven complexities, several new age digital players focused on
developing simpler and cheaper methods of delivering financial advice in an innovative way. This paved the
way for virtual advice, and amidst the increasing evolution of virtual advice, one of the most recent disruptions
is the robo-advisor movement, i.e., the emergence of a new group of digital wealth management firms offering
automated investment advice services. Notably, these firms are challenging one of the main paradigms of the
wealth management industry: the need for face-to-face interaction and a personalized human touch to financial
advice.

Robo advisors are automated, low-cost money management providers that mirror the role of a traditional

financial advisor. They offer user-friendly digital platforms and conduct individualized risk profiling via
algorithms to determine an optimal asset allocation for investor’s portfolio vis-a-vis the archetypal time-

133
intensive face-to-face consultations carried out by traditional wealth managers. The basis for this technology is
that algorithms can provide sound and logical financial advice at a fraction of a cost compared to human
advisors.

How robo-advisors work

Robo-advisors use a combination of simplified client experience, lower fees and increased transparency to offer
automated advice direct to consumers. These digital entrants have changed the fundamental economics and
scalability of servicing the underserved segments by combining the basic components of a wealth management
offering with seamlessly integrated technology, lower pricing, greater transparency and client-relevant digital
content. The process followed by most robo-advisors is as follows:

Step 1: Investors are required to complete a comprehensive online questionnaire designed by behavioral finance
experts. This comprises questions related to the investors’ specific needs, financial goals and risk appetite.

Step 2: The robo-advisor platform uses proprietary algorithms to process the inputs, and select a portfolio
(mainly focusing on exchange-traded funds [ETFs]) to provide a tailored investment plan to investors. The
portfolio is periodically rebalanced to optimize profits and taxes.

Step 3: The portfolios are monitored consistently by computers. Investors can re-adjust their goals and risk
tolerance, which will trigger re-balancing of the portfolio.

Robo-advisors mainly provide automated portfolio management, with limited focus on tax, retirement and estate
planning, and can charge lower fees because of automation. They offer passive investment and charge lower
fees. Technology has revolutionized the wealth management space, leading to the emergence of two alternatives
to the traditional wealth management model: fully automated digital wealth managers and hybrids, which pair
computerized services with a human touch (advisor-assisted digital wealth managers).

Traditional vs. digital wealth managers

 

Traditional wealth managers

 

Advisor-assisted
a

Full automated

<———_

 

 

 

Retirement
services

Investment
management

Banking/
lending

Estates/
trusts

Financial planning Insurance

 

 

 

 

 

 

 

 

 

Robo-advisors

 

Traditional wealth
management firms

Fully automated digital wealth ‘Advisor-assisted digital
managers wealth managers

 

Business model

Software-based delivery of
customized and automated
investment advice

Phone-based financial advisor
accessible through _ digital
channels for personal advice

Face-to-face advice mainly
through the branch network for
comprehensive wealth
management

 

Client type

Millennial, tech-savvy and price
sensitive customers who want to
match market returns and pay low
fees

Mass market and mass

affluent clients who value
human guidance —and
technology

Affluent, HNI and ultra-NHI
clients who value guidance from
a trusted financial advisor

 

Value proposition

A convenient, easy-to-use and
low-cost online platform offered
directly to consumers

A digital platform combined
with advisor relationship;
affordable pricing for a fully
diversified portfolio

A dedicated FA with full range
of investment choices and
comprehensive wealth planning

 

 

Fee structure

 

A 0.25%-0.50% fee on assets
managed; minimums may apply

 

A 0.30%-0.90% fee on assets
managed; monthly fees per
planning program; minimums
may apply

 

A 0.75%-1.5%+ fee on assets
managed; varies by investment
type; minimums may apply

 

134

 
 

Investment process _] Risk profile, target asset Virtual FA meetings, financial | In-person meetings with

allocation, managed planning, risk profile, target | dedicated advisor, _ financial

investment account, automated | asset allocation, managed planning, investment proposal,

rebalancing and easy access investment account, target asset allocation, brokerage
automated rebalancing, easy | and managed —_ accounts,
access and periodic reviews automated __ rebalancing,

person access and reviews

 

 

 

 

 

structured products

Investment vehicles | ETFs and direct indexing ETFs and stocks Stocks, bonds, ETFs, mutual
funds, options, _ alternative
investments, commodities and

 

 

Retail — With financial assets of Rs. 1 million and lower

Mass Affluent — With financial assets between Rs 1 million to Rs. 50 million
HNI — With financial assets between Rs 50 million to Rs. 500 million

Ultra HNI — With financial assets of more than Rs. 500 million

Developments in the robo-advisor space in India

As the prevalence of rob-advisors has increased globally, these platforms have also made their way to India.
Typically, robo-advisors across the globe channelize client’s funds into low-cost index funds and ETFs. Robo
advisors in India offer a variety of mutual funds products. The Indian wealth management landscape has not
witnessed a proliferation of robo-advisors as there is a lack of a wide range of index funds and ETFs.

Robo-advisers in India are mainly of three kinds:

Ready portfolio of pre-selected funds

Limited risk profiling and customization

Customized mutual fund portfolio construction; goal-based financial advice
Comprehensive financial counselling (telephonic)

Extensive risk profiling and customization

Customized mutual fund portfolio construction

Goal-based financial advice; basic life and health insurance related advice
Tax optimization; expense restructuring

Extensive risk profiling and customization

 

Basic

 

Advanced

 

Evolved

 

 

 

 

Robo-advisors operate on a very low-cost model compared to traditional wealth management firms. In India, most
professional financial planners charge Rs.15,000 to Rs.40,000 a year to manage a client’s portfolio, while wealth
management firms, which mainly cater to wealthy clients, charge 0.75% to 1.5% of AUM per year. Robo-advisors
are mostly free of cost and earn either from trail commissions from fund houses or charge a very low advisory fee.
The typical fee structure of robo-advisors is either of the following:

+ Charge levied on investors: They generally charge between Rs.1,000 and Rs.7,500 per annum, or ~0.15% of
AUM

+ Compensated by fund: They only work on commissions they get from fund houses, with no charge from
investors

Wealth Management Operating Models in the future

Pure Automated Hybrid Advice Model Holistic Goal-Based Financial

Advisory Model Planning and Wealth Management
Model

 

+ Pure Automated Advisory Model-Suitable for HNIs with basic investment needs with no need for a
personal touch, and primarily relies on technology for investment guidance as well as act as a touch point.

135
+ Hybrid Advice Model-This model lies in between the above two models and takes advantage of both
technology-driven and traditional advice, where the wealth manager takes the calls on whether to steer
clients to the digital or personal relationship services.

+ Holistic Goal-Based Financial Planning and Wealth Management Model-Characterized by a personal
relationship between the client and wealth manager and frequent human interaction, this model provides
holistic and customized advice.

Key Industry Player Overview

India AUM League Table 2020- Non Bank Category

 

 

 

 

 

 

  

 

 

 

 

 

 

 

AUM
Rank Private wealth manager Type
1 | IIFL Wealth & Asset Management [Non-Bank | 27.5
2 | Edelweiss Wealth Management Non-Bank 19.9
3 Julius Baer (Non-Bank 17.5 |
4 | ASK Asset & Wealth Management _ Non-Bank 92 |
5 JM Financial Wealth Management _ Non-Bank 78 |
6 Client Associat : _ Non-Bank 45 |
7 | Karvy Private “Non-Bank | 4.2
8 | Ambit Global Private “Non-Bank | 4.2
9 | Waterfield Advisors _ Non-Bank 36
10 ~~ Centrum Wealth Management | Non-Bank 3.5
11 | Anand Rathi Wealth Limited Non-Bank | 3.4
12 Avendus Wealth Management Non-Bank | 3.3

 

 

(Source-Asian private banker 2020 Report, Company website & Presentation)

India AUM League Table 2020 — Bank Category

1 Kotak Wealth Management | Bank 51.3
2 | ICICI Bank Private Banking Bank 47.1
3 Axis Bank Burgundy Bank 26.6
4 | Standard Chartered Private Bank Foreign Bank 12.7
5 HDFC Private Bank Bank 12

6 Barclays Private Clients, India Foreign Bank 12

7 | Credit Suisse Private Banking Foreign Bank 53

(Source-Asian private banker 2020 Report, Company website & Presentation)

India 2020 RM Headcount League Table- Non Bank Category

Rank Type RM headcount
TIFL Wealth & Asset Management Non-Bank 269
Karvy Private Wealth Non-Bank 259
Anand Rathi Wealth Limited Non-Bank | 240
Edelweiss Wealth Management Non-Bank — 125
Centrum Wealth Management Non-Bank | 132
Motilal Oswal Private Wealth Management | Non-Bank 124
Validus Wealth Non-Bank 81
ASK Asset & Wealth Management Non-Bank 68
JM Financial Wealth Management Non-Bank 65
Julius Baer Non-Bank 49

136
Client Associates Non-Bank 47

Sanctum Wealth Management Non-Bank 40

Avendus Wealth Management Non-Bank 40
(Source-Asian private banker 2020 Report)

India 2020 RM Headcount League Table — Bank Category

Rank Type RM headcount
ICICI Bank Private Banking Bank 1740
Axis Bank Burgundy Bank 573
HDFC Private Bank Bank 309
Kotak Wealth Management Bank 114
IDFC FIRST Bank Wealth Management Bank 94
Credit Suisse Private Banking Foreign Bank 33

(Source-Asian private banker 2020 Report)

As can be seen from the above tables, there are various players in Banking and Non-Banking space that are
growing rapidly like Kotak Wealth Management, IIFL, Edelweiss in terms of AUM and Anand Rathi, ASK
Wealth in terms of number of wealth advisors.

Summary of profitability for wealth management players
(@ in Million)

Financial PAT
Company ‘Type of Financials Yeo Revenue PAT EBITDA itn
FY21 9,150 | 3,690 | 3,480 | 40%
IIEL Wealth & Asset Coeertitaeal FY20 9,200 2,060 3,560 22%
Management FY19 10,592 3,741 9,658 35%
FY18 | 10,749 3,853 | 5,109 36%
- FY21 2,792 453 838 16%
pea a Wealth Consolidated FY20 3,364 616 1113 18%
FY19 2,842 584.1055 | 21%
FY21 10,430 2,450. NA 23%
Edelwene avrg oe aie | _F¥20 8,610 1,620 NA 18%
ny a ry FY19 7,250 1,620 NA 22%
P FY18 5,577 1,087 NA | 19%
; FY20 1,063 “138 62 NM
fale Baer Weal a Standalone FY19 1151 62 84 NM
: FY18 1,243 26 207 2%
FY20 203 -351_| -344_| NM
eee ra Standalone FY19 210 -359 “342 NM
e a FY18 220 -284 273 NM
‘Adc investment FY19 4908 1,251 —*1,950 25%
ee Consolidated FY18 4649-1211 +1934 26%
Bers Lt eee: FYI7 3,328 752 NA 23%
FY20 764 “369 -244.~=S«NM
comer Standalone FY19 1,238 1 94 NM
es : FY18 975 107 247*11%
FY20 571 “344 -323——~-60%
ene ee cg Standalone FY19 686 “183-176 -27%
ei ate FY18 460 =105 -101 NM
FY21 1271 275 383_22%
Motilal Oswal Wealth Standalone FY20 1,007 61 98 6%
Management Pvt. Ltd FY19 1,104 153 226 14%
FY18 1,036 266 374 26%
. FY20 3 -68 =) NM
fea) Wealth Savisors Standalone FY19 7 24 NM NM
Ltd. FY18 8 4 NM 52%

(Source-Investors Presentation)
*NM — Not meaningful

In recent years there has been growing concern that individual IFA’s and even small advice firms are being
forced out of the market. For many, the weight and cost of complying with regulation have become too heavy to

137
bear if they aren’t shared in a corporate environment with a large support staff that brings economies of scale.
This has created some concern that independent financial advice is going to be harder and harder to find. If not
because large wealth managers are absorbing smaller players, but because many individual advisors feel it is
simply too risky to operate independently.

However, the growing use of technology in the industry may provide a way for IFAs to manage the costs and
risks of operating on their own.

Following are the major players who provide a technology platform for IFAs to service their clients & grow
their business as on March-2021.

Se: No: Technology Platform Subscribed IFAs

Providers for IFAs (appx)
1 OFA 5000+
2 IFA Planet 4200
3 DataComp (Wealth Magic) 3000
4 Redvision 3000
5 Investwell 2500
6 Finsys 2500
qi Vijaya 1600
8 Optimum 1450
9 IFA Now 1000
10 | Ticker Wealth 1000

(Source: CART)
Distributor Commissions

As per AMFI, the commissions paid by mutual funds to distributors grew from 224,000 million in fiscal 2013 to
266,166 million in fiscal 2021, representing a CAGR of 13.50%. Increased financial savings, superior returns
from mutual funds, greater reliance on distributors and government policies acted as key catalysts in driving the
distribution revenue growth.

Linking of expense ratios with asset size: To cut the cost of investing, SEBI linked expense ratios with asset
slabs in September 2018. This enforced schemes with higher asset size to charge lower expense ratios. By doing
so, SEBI updated accommodated schemes that had become larger over the years. The total expense ratio (TER)
includes expenses such as fund management fee and distribution commissions. Due to this the total MF
distributor commission has reduced in FY19 by 7.06% y-o-y and 22.41% y-o-y in FY20.

 

MF Distributor Commission (Rs. in Billion) Data is based on AMFI disclosures on
commissions of distributors that comprises

distributors meeting any of the below four
criteria:

1. Present in at least 20 locations.

2. AUM of 21 billion.

3. Total commission greater than 210 million.
4. Commission received from at least one fund
house should be greater than <5 million.

ess 8eeeaR8

 

m3 oPié ASSP. PbS. PRD. PRD

 

(Source-AMF1)

Mutual Fund Distributors Commission- Non Bank Category FY2020-21
(& in Million)

Sr. No. Name of the ARN Holder Gross Gross Net Inflows Average Yield on
Amount Inflows Assets. Average
: _ Assets
1 | NU Indialnvest Pvt Ltd [8739 | 3,28,872 | 4,688 | —_7,70,050 1.13%

 

138
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2 Prudent Corporate Advisory 2,632 1,01,598 5,051 2,49,147 1.06%
Services Ltd
3 Anand Rathi Wealth Limited 988 _1,57,500 797 | «11,268 (0.89%
4 Darshan Services Private Limited 917 5,97,125 1,41,682 1,80,272 0.51%
5 IIEL Wealth Finance Limited 888 4,23,850 -48,478 2,34,796 0.38%
6 | Julius Baer Wealth Advisors (India) 709 1,16,605 9,105 1,51,804 0.47%
Private Limited
7 Bajaj Capital Ltd. 655 36,449 8442 90,946 (0.72%
8 Karvy Stock Broking Limited 596 38,880 -15,484 93,022 0.64%
9 JM Financial Services Limited 591 1,32,751 -1,407 1,07,585 0.55%
10 Geojit Financial Services Ltd 480 18,397 -880 47,104 1.02%
(Source-AMFI)
Note: Non-Bank Category excludes banks and its affiliates
Mutual Fund Distributors Commission- Non Bank Category FY 2019-20
(@ in Million)
Yield on
Sr. No Name of the ARN Holder Gross Gross Net Average average
Amount — Inflows Inflows —_—_ Assets.
Assets
_1 | Nu Indiainvest Pvt Ltd 7,772 | 3,02,492 | 51,843 | [1.09% |
_2 Prudent Corporate Advisory Services Ltd 2,297. ‘1,18,460 [ 24,422 | | 1.01%
_3__| Anand Rathi Wealth Limited 1149 4,06,325 23,109 1,29,225 0.89%
Coa | IIFL Wealth Management Limited 1,005 6,41,429 | -25,721  1,89,904 0.53% |
5 Julius Baer Wealth Advisors (India) Private 731 ~—~—«‘1,10,989—-14,708 ~—1,38,850 0.53%
Limited
ie | Bajaj Capital Ltd. 718 | 40,974 (98,267 | 0.73%
[_&@ IE Karvy Stock Broking Limited / 666 COC | | 1,03,468 | 0.64% |
8 __ Pioneer Client Associates Private Limited 523 I (67,834 | 0.77%
_ 3] 509 | [110,779 | 0.46%
| 10 Geojit Financial Services Ltd | 440 | 45,615 | (0.96%
(Source-AMFI) 7
Note: Non-Bank Category excludes banks and its affiliates
Mutual Fund Distributors Commission- Non-Bank Category FY 2018-19
(@ in Million)
1 NJ Indialnvest Pvt Ltd 8,077 283,566 | 111,487 | 629,466 | 1.28%
2 Prudent Corporate Advisory Services Ltd 2,347 113,772 | 40,813 | 190,333 | 1.23%
3 Anand Rathi Wealth Limited 1,211 278,943 16,340 | 112,416 | 1.08%
4 IIFL Wealth Management Limited 1,761 | 1,446,158 | -35,901 | 305,682 | 0.58%
; Julius Baer Wealth Advisors (India) Private ears 109,628 1615 | 138380 | 0.65%
Limited
6 Bajaj Capital Ltd. 921 60,648, -1,447 | 101,275 | 0.91%
7 Karvy Stock Broking Limited 880 71,965 10,385 | 101,702 | 0.87%
8 Pioneer Client Associates Private Limited 593 32,480 2,343 63,188 0.94%
9 JM Financial Services Limited 622 581,221 | -21,257 | 119,263 | 0.52%
10 Geojit Financial Services Ltd 463 27,104 10,602 | 38,153 1.21%
(Source-AMFI)
Note: Non-Bank Category excludes banks and its affiliates
Mutual Fund Distributors Commission- Foreign Bank Category FY 2020-21
(@ in Million)
Yield on
Sr. No. Name of the ARN Holder Grass Gruss Net ‘Average Average
Amount Inflows Inflows Assets hea
1 __| Citibank N.A. _ 1,073 | 144,012 | 11,298 | 2,15,368 | 0.50%

 

139

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2 Hongkong & Shanghai Banking 845 1,00,456 3,788 1,67,254 0.51% |
Corporation Ltd.
3 | Standard Chartered Bank 767 81488-6172 1,47,125 0.52%
4 | Deutsche Bank AG 361 67,126 -8,429 84,045 0.43%
5 __ DBS Bank India Limited 76 10,243 -3,445 19,125 0.40%
(Source-AMFI)
Mutual Fund Distributors Commission- Foreign Bank Category FY 2019-20
(@ in Million)
Gross Gross Net Average Yield on
Sto Nameot ihe aRh Holeer Amount Inflows Inflows Assets Average Assets
| 1 Citibank N.A. 1,145, | 1,37,660  -31,567 258,838 0.44%
2 Hongkong & Shanghai Banking 0.53%
__ Corporation Ltd. 996 -3,460  1,88,416
9
3 Standard Chartered Bank 765 | 19,265 1,60,837 0.48%
9
4 Deutsche Bank AG 394 | oii 96,282 0.41%
[ 5 DBS Bank India Limited a | 9,09,406 7922 | 20,646 0.37%
(Source-AMFI)
Mutual Fund Distributors Commission- Foreign Bank Category FY 2018-19
(in million)
Yield on
Sr. No. Name of the ARN Holder Gross Amount; (Gross Net Average average
paid Inflows Inflows Assets
Assets
1 Citibank N.A 1,818 1,46,246 | -8,692  2,86,642 0.63%
2 | Standard Chartered Bank 1,507 1,13,552 | -526 1,79,049 0.84%
3 Hongkong & Shanghai Banking 1,136 85,601 | 20,787 —_‘1,81,067 0.63%
Corporation Ltd.
4 Deutsche Bank AG 51L 41,984 | -5,073 97,879 0.52%
5 | DBS Bank Ltd. 172 2,912 | -338 8,020 2.15%

 

 

 

 

 

 

 

140
(Source-AMFI)

Outlook for Wealth Management in India

1)

hift in savings from physical assets to financial assets

Historically, households in India have been quite risk averse and wary of investing their savings into volatile or
uncertain return-based assets. A pursuit of safe bets has always driven India towards making investments in
physical assets like gold. However, this pattern is slowly changing over time, especially post announcement of
demonetization in November 2016. Also, the country has seen a major shift in attitude from capital preservation
to wealth creation since FY17.

With a likely growth rate of India’s GDP projected at 9.2% in 2022, the country will remain a key growth driver
of global economy. Against this backdrop, individual wealth in India is expected to grow at a CAGR of 11.76%
till FY25 and is likely to nearly double to Rs. 8,11,293 billion by FY25*. In the next five years, financial assets
will witness much faster growth rate as compared to physical assets. As far as individual contribution is
concerned, financial assets are expected to form almost 63% of the total individual assets by FY25 vs 57% in
FY20, physical assets are expected to be restricted to 37% of the total wealth vs 43% in FY20*. The reduction
in bank deposit rates in the past year has further led to a shift in investment to mutual funds and the stock
markets.

*(Source-Karvy India Wealth Report 2020)

The implementation of various reforms such as GST, RERA, new insolvency and bankruptcy code and
recapitalization of banks & Corporate Tax cuts among others are likely to shift informal sectors into the formal
economy and hence, boost GDP growth and individual wealth in the medium to long term.
(Rs. In Billion)
Category FY 15 FY 16 FY17 FY18 FY19 FY20 FY25P

Financial Assets 160,560 177,880 201,289 236,347 2,62,106 2,62,912_5,12,157
Physical Assets 119,890 132,270 142,894 156,101 1,67,942 2,02,282_2,99,136

Total 280,450 310,150 344,182 392,448 4,30,048 4,65,194 8,11,293
(Source-Karvy India Wealth Report 2020)

 

Breakup of Financial and Physical Assets

mFYAS mFYIG mrya7 mFYis aFyis = FY20 = FY25P

57% 57% 58% 60% 61%

63%
TT THE

Financial Assets Physical Assets

 

 

(Source-Karvy India Wealth Report 2020)

(8)
rojected financial wealth — Asset Class Wise distribution in FY25

Financial assets are likely to almost double by FY25 to reach a figure of Rs. 5,12,157 billion as compared to Rs.
2,62,912 billion in FY20. Direct Equity investments is expected to be the key growth driver for the future and
expected to grow at a CAGR of more than 21.9% over the next 5 years. The positive sentiment also helped
propel Mutual Funds which grew at over 17.9% over the previous year as individuals increasingly identify this
asset Class as a better way to participate in the equity markets. It is therefore expected that by FY25, the share of
financial assets in the total investment pool will rise to 63% from 57% in FY20.

Projected Financial Wealth Asset Class Wise Distribution
(Rs. In Billion)
Proportion Proportion

Category FYI7 FYI8 -FYI9.— FY20.— FY25 a3 aye

141
 

 

 

 

 

 

     

 

 

 

    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

| Fixed Deposits & Bonds 45,820 18.52%
Direct Equity 52,103 13.74% |
| Insurance 36,907 14.46% |
| Saving Deposits 34,223 14.25% |

i - 20,522 8.94%
7.77% |
/ Mutual Funds | 13,770 | 4.53% |
_ NRI Deposits 9,020 3.93%
_ Unlisted Equity | 10,543 4.96% |
_ Small Savings 8,610 3.74%
"Current Deposits 4,872 3,036 (0.81%
Pension Funds | 7,249 | 15,289 3.43%
Alternative Investments _ | 1491 | 2,000) 4,247 0.76%
International assets 341 458 1,181 0.17% |
|
|

 

| 2,01,289 | 2,36,347  2,62,106 | 2,62,912 5,12,157 10.00% | 100.00%

 

(Source-Karvy India Wealth Report 2020)

India has the lowest mutual fund penetration globally. The total Assets under Management (AUM) to GDP ratio
of India stands at a mere 16% below the global average of 63% in 2020. Countries like US have AUM to GDP
ratios of over 100%. Hence, the mutual fund industry in the country presents huge scope for growth and
development.

(9)
rojected physical wealth — Asset Class Wise distribution in FY24

Despite rise in share of financial assets, physical assets will remain resilient to an extent. Individual wealth in
physical assets is likely to grow at a CAGR of 7.56% to around Rs. 270,783 billion in FY24 from Rs. 202,282
billion in FY20. Real estate (43.67% contribution in FY24) and gold (48.69% contribution in FY24) will remain
the most favored asset classes in the overall physical assets pie. Meanwhile, performance of physical assets will
remain subdued as compared to financial assets primarily due to factors like attitudinal shift, liquidity, faster
growth of equity markets among others.

Projected Physical Wealth Asset Class wise Distribution

(Rs, In Billion)

 

 

 

 

 

Gold 68,450 | 74,513 | 80,941 | 1,09,500 | 131,848 | 54.13% 48.69%
Real Estate 60,250 | 69,568 | 74,529 | 80,145 | 1,18,247 | 39.62% 43.67%
Diamond 7,980 | 8384 | 8581 | 8,304 | 14318 | 4.11% 5.29%
Silver 2,290 | 1,319 | 2,427 | 2,854 | 3,718 1.41% 1.37%
Platinum 70 77. 82 129 0.04% 0.05%
Others Gems and Jewellery | 1,050 | 2,243 1,394 | 2,520 0.69% 0.93%

 

 

 

 

 

 

 

 

 

 

142
(Source-Karvy India Wealth Report 2020)
Wider Reach of Wealth Management Industry

Increasing awareness levels, attitudinal shift to grow wealth rather than preserve wealth and the advancements
in technology would define the wealth management needs of this potential clientele. The players who would be
successful in catering to this increased demand would be required to develop cost effective methods to service
this clientele in a relevant manner. Technology adoption is likely to play an important role in deciding the
winners in this sub segment.

Consolidation in Indian Wealth Management Industry
The wealth management industry is also witnessing market consolidation along its value chain. In addition,
private equity funds are increasingly looking to participate in the growth story of Indian wealth management

industry.

Key transactions in Indian Wealth Management/Asset Management Industry

 

Date Target Investor
Jan-2021 Principal Asset Management Sundaram Asset Management Company (Acquisition 338.53
crore (US$ 46.78 million)).
Sep-20 Groww Wealth Management YC Continuity = fund = & =~ Sequoia._—_—India
Invested US$ 30 Million
Aug-20 Edelweiss Global Wealth Management PAG agreed to invest Rs. 2244 Crs for 51 % stake
limited
Aug-20 Yes Bank MF White Oak Capital Management
Dec-19 Waterfield Advisors Zephyr Management, Vernalis Capital, Gaja Advisors, TVS
Capital Funds, Dalmia Family Office, Individuals
Nov-19 IDBI AMC Muthoot Finance
Aug-19 L&T Capital Markets Ltd IIFL Wealth Management Ltd.
June —19 Wadhawan Wealth Managers Pvt. Ltd. LGT Impact Ventures
(Subject to regulatory approval)
Oct-18 Wealth Advisors IIFL Wealth Management Ltd.
Jun-18 IIFL Wealth Management Ward Ferry, RIMCO, Amansa, GA, Steadview, HDFC Life
Apr-18 Sanctum Wealth Management Pvt. Ltd. Multiples Alternate Asset Management Pvt. Ltd.
Dec-17 Fullerton Securities & Wealth Advisors Ltd. Blueblood Ventures Ltd.
Feb-17 Religare Wealth Management Ltd. Anand Rathi Wealth Services Ltd.
Dec-16 ASK Investment Managers Pvt. Ltd. Advent India PE Advisors Private Ltd.
Apr-16 The Royal Bank of Scotland NV India Sanctum Wealth Management Pvt. Ltd.
Oct-15 IIFL Wealth Management Ltd. General Atlantic LLC
May-13 Morgan Stanley Private Wealth Standard Chartered Bank
Management

 

 

 

Other trends in India’s wealth management space

There is increasing trend of HNIs investing in unlisted equity to be part of the startup / private equity story apart
from the quest to have higher anticipated returns on account of unlocking of potential valuations upon listing on
stock exchanges. There is an increasing trend of ultra HNIs looking at engaging with Family Office set-ups to
not only help them in managing investments but also help in ensuring a relevant structure to preserve, grow and
manage their wealth for generations to come.

Emergence of Robo Advisors:

1. Impact of robo-advisors on the wealth management space

The new mass affluent investors have not been well-served by traditional private wealth managers, especially
because of the absence of a viable business model. Financial advice from such traditional wealth managers
requires a higher minimum investment than what many small investors can afford. The only available option so
far for such investors was to either do it themselves, or avail the services of distributors or IFA’s, or explore
traditional investment instruments such as term deposits.

  

With the introduction of robo-advisors, investors have access to the same professional advice at a lower cost and
with a more affordable minimum investment amount. Robo-advisors have brought accessibility, transparency,
simplicity and unbiased opinion to the whole investment process, especially for small investors. It is more

143

 
attractive to a generation that demands speed, customisation, accuracy and control from their financial advisers.
With new use of data, analytics span the spectrum from institutional trading and risk management to even small
notional retail wealth management.

Globally as well, Robo-advisors are swarming into the wealth management industry. They have been able to
develop a streamlined digital experience for clients, which had been largely lacking in traditional wealth
managers’ digital offerings. This combined with increased transparency and lower fees have the ability to make
wealth advice economically feasible for the mass market.

Globally, the current market share of robo-advisor firms is marginal as they have only gained a miniscule share
of (AUM) but several companies already have over US$ 1bn of AUM. Several research studies forecast that
robo-advisors are going to witness significant growth going forward as these firms have managed to make
quality financial advice available across demographics at an affordable cost. Robo-advisors will be key to
unlocking access to the mass market services, which, in turn, would help in growing the overall wealth
management market. Moreover, these firms have received strong funding support from venture capital funds.
The study predicts that the total market size for hybrid robo-advisors (Hybrid Robo-advisory is robo-advisory
with substantial component of human interaction to the use of software for the client advisory process) will
further increase to US$ 16.3 trillion by 2025, which will be 10% of total investable wealth around the world by
that date. In contrast pure robo-advisors (fully automated) are likely to hold only 1.6% of the total global wealth
by the middle of the next decade.

Robo-advisors steps to streamline the client online experience, provide greater transparency and improve the
economics for the mass segments are irreversible and they are making traditional financial advisers rethink their
business models. According to research by Accenture, robo advisors could result in possible fee reduction of as
much as 70% for some services. Traditional advisors will need to ensure that their service offering is
commensurate with the fees tagged to it. Moreover, robo-advisors will also force traditional advisers to increase
focus on their digital channels.

2. International trends in robo-advisory

Since the launch of Robo Advisory, it has gained significant traction. There are predominantly two types of
players in this space internationally 1) independent robo-advisors 2) Leading investment managers with robo-
advisor capabilities. Below are some of the key players operating in this space.

Investment Managers with Robo-Advisor Capabilities
asin sadam nes en nee aie eeedlars ke kare alana

Potonk. Fidelity = SS UBS LEGG MASON

Qsicr Morgaiistanley HSBC <> Bewvestner
faemit tye CapltalOne

wealthfront &
«“ om &' wi #

ve
wegnsouat  () cxtrave = > vanguare’ BLACKROCK CBOE

 

 

Betterment

® WiseBanyar

 

e Leading Independent Robo-advisors
1, Betterment 4.Wealthfront

2.Hedgeable 5.WiseBanyan
3.SigFig Wealth Management 6.Personal Capital Corporation

e Leading Investment Managers With Robo-advisor capabilities built in-house or acquired through
MLA

144
1. Fidelity Investments 10. NatWest Holdings Limited
2. UBS Group AG 11. Royal Bank of Canada

3. Legg Mason 12. The Charles Schwab Corporation
4. Morgan Stanley 13. The Vanguard Group

5. HSBC Holdings 14. John Hancock

6. Bank of America Corporation (Merrill Lynch) 15. E-Trade Financial Corporation

7. Envestment Management 16. Goldman Sachs

8. Capital One Financial Corporation 17. BlackRock

9. TIAA Holdings 18. CBOE Global Markets

Robo-advisory market is expected to grow to US$ Stn by 2025.
With over 300% growth expected in AUM managed by Robo-Advising (AUM (US$B))

 

 

 

2500 _\ 340% 2200
1500 _— 900
1000 500
ss =
o |
2017 2018 2019 2020
New Money From Existing Portfolios

 

 

(Source-Reuters, Gartner, Venture Scanner, Press search)

Partnership route has also been actively pursued as the same can deliver promptly-realized advantages through
process automation, cost reduction and the attraction of new customers. This route also avoids the costs and
risks inherent in implementing a customer solution into legacy systems.

Risks to Wealth Management Industry
Going forward, we expect wealth managers to focus on the below areas that will impact the industry.

Regulatory landscape: Regulators are moving their focus towards other parts of the financial system including
private wealth managers. There is an increased regulatory focus on transparency of pricing, fees and
independence of PWMs. Changes to commission and incentive structures and obligations could change
intermediaries’ product selection processes. Regulation of distribution through digital channels and robo-advice
could also change.

Privacy: Security and privacy are HNWIs’ key concerns about digital technology, and more than half of
HNWIs are concerned about exploitation generally. However, they are becoming increasingly comfortable with
the use of technology and now expect online and digital functionality in many aspects of their lives. Wealth
managers will have to continue to strengthen their existing infrastructure to protect against potential security
breaches.

Business model disruption: The rise of technology solutions could disrupt the value chain including
competition from quantitative investment technologies that have the potential to assimilate more data and make
investment decisions, and which will help to realize alpha more efficiently than active managers. Increased
investment and asset allocation through robo-advice services could displace active management and an
increased asset allocation to passive investments.

Rising costs: Rising costs within the industry driven by changing and increasing regulatory requirements and
technological advancement could impact margins. This effect is further accentuated by downward pressure on
fees charged by the wealth managers.

Regulatory Guidelines on Wealth Management Services:

The regulatory environment in the Indian wealth management industry is still evolving. This presents
opportunities for established wealth managers to expand their offerings. Regulations covering fiduciary duties
and investor protection are imminent.

Some key proposals/guidelines by regulators affecting the Indian wealth management space:

SRO for wealth management

145
In 2011, capital markets regulator, SEBI proposed an SRO for the Indian wealth management sector that would
help regulate business and serve as a medium for SEBI to implement various wealth management initiatives.

Investment advisor guidelines by SEBI

SEBI’s Investors Advisor Regulations, which came into force in January 2013, focuses on the independence of
investment advisors. According to the new regulations, investment advisory services have to be separated from
all other activities such as distribution. A distributor can sell product but cannot offer advice. In addition, banks,
NBFCs and various corporate bodies would have to set up a separate subsidiary for investment advisory
services.

Any entity/individual willing to engage in the business of providing investment advice to clients is required to
be registered with SEBI. Moreover, an investment advisor should be professionally qualified, with a post-
graduate degree in finance, accountancy, business management, banking, etc. or a graduate degree with relevant
experience of at least five years. The individual also needs to be certified by NISM or FPSB. To be an
investment advisor, corporate bodies need to have a minimum net worth of Rs.2.5 million and individuals Rs.0.1
million.

Investors should ensure proper risk-profiling of clients, and the investment advice provided should be
appropriate to the client’s risk profile. Investors also need to maintain a record of KYC, risk profiling and
assessment, suitability assessment of advice provided, agreements with clients, investment advice provided
(written as well as oral), rationale for arriving at investment advice and a list of clients with date of advice,
nature of advice and fees charged.

SEBI guidelines for MF scheme classification

SEBI introduced guidelines in October 2017 on consolidation and merger of mutual fund schemes with the aim
to make it simpler for the investors to compare various mutual fund schemes. Moreover, it will reduce the
clutter and make it simple to compare performance amid a level-playing field.

In a bid to reduce the number of schemes in mutual funds, SEBI recently came out with uniform definitions for
fund categories. SEBI’s move will be applicable only on open-ended funds. The market regulator has broadly
divided mutual funds into five categories-

. Equity funds

. Debt funds

. Hybrid funds

. Solution-oriented funds
. Other funds

To ensure uniformity, the following definitions of large cap, mid cap and small cap were adopted:
Large Cap: 1-100" company in terms of full market capitalization

Mid Cap: 101* -250" company in terms of full market capitalization

Small Cap: 251 company onwards in terms of full market capitalization

Overall, there are over 1,789 Schemes in the industry. Out of them, 696 are close-ended Schemes, 1018 are
open-ended Schemes as on March 2021. (Source: www.sebi.gov.in)

The RBI’s guidelines on regulating wealth management services (WMS)

In June 2013, the Reserve Bank of India (RBI) issued draft guidelines on wealth management and distribution
services offered by banks:

In April 2016, RBI asked banks that currently offer investment advisory services through an internal department
to reorganize their operations within three years and set up a subsidiary for investment advisory services. This is
to ensure an arm’s length distance between banking activities and investment advisory services. Banks will need
specific approval from the RBI to set up the subsidiary. The subsidiary would have to be registered with SEBI
and would be subsequently regulated by SEBI.

Banks must ensure segregation of the marketing function from operational processes, such as
approval/transaction processes at branches. Banks must ensure that the sales process is transparent and products
are sold through trained employees in bank branches. Banks should strictly follow KYC and AML rules, have a

146
robust internal grievance redressal machinery, and prevent their staff from receiving any incentive (cash as well
as non-cash) directly from a third-party issuer.

Regulatory pressure is forcing wealth management players to rework operating models

After the announcement of the Investor Advisors Guidelines, there has been increased focus on client centricity,
fiduciary responsibility and compliance. Regulatory requirements regarding advisor qualifications,
infrastructure, risk profiling and suitability criteria have become more stringent. For the past few years, there has
been a push from regulators and industry bodies to move toward a trail commission— based model and reduce
up-front commissions to reduce misselling and the chances of churn.

One of the biggest impediments to the current wealth management model is the stipulation that investment
advisors must maintain an arm’s length from distribution activities. The income of investment advisors must be
in the form of fees from clients and not through commissions earned on the distribution of mutual fund products.
Players are skeptical about separating advisory and distribution businesses as this may prove to be an
inconvenience. Moreover, the cost of running two separate firms is high.

Additional regulatory layer proposed by SEBI may keep foreign players away from Indian wealth
management business

With the aim to root out undeclared wealth and ensure tax compliance, SEBI wants to gain oversight of foreign
banks managing Indian wealth. The capital market regulator has reached out to large international banks and
wealth managers to register their offshore units with SEBI if they are soliciting business in India. By registering
with SEBI, private banks would have to admit to managing funds of wealthy Indian clients and may also prompt
further requests from SEBI to share information. Many foreign banks and wealth managers have already exited
the Indian wealth management business because of the high cost of operations and regulatory burden. This
might deter foreign players from having any presence in the Indian wealth management segment and offering
services to wealthy Indians. The Royal Bank of Scotland NV India and Morgan Stanley Private Wealth
Management are Foreign Players who have recently exited the wealth management business in India.

Product Overview
Structured Products

Structured Products / market-Linked debentures (MLD) are a blend of fixed-income and derivative instruments.
Its layer of derivatives gives it the flexibility needed to blend with a portfolio and enhance its risk-to-return
performance while matching an investor’s objectives.

Market-Linked Debentures (MLD) is a debt instrument that differs from a standard fixed-income security in the
sense that the coupon on the instrument is linked to a variable market indicator such as an equity index,
commodity price such as gold, etc. Structured Products / MLDs are generally close ended hybrid instruments
which could be either with principle protection or without principle protection. The underlying security is
generally a non-convertible debenture of the issuer linked to an equity index (nifty 50, bank nifty etc), 10 year
G-Sec, gold index etc. They are issued for the period of 13 months to 60 months. Unlike a bond that pays a fixed
interest either monthly, quarterly, half yearly or annually, MLDs do not pay any regular income, it comes only
at maturity. Theoretically these MLDs can be considered to be a zero coupon bond and an embedded
customized payoff that could be an equity option.

MLDs are primarily of two types. First type wherein MLD is a principal-protected instrument designed to return
100% of the original investment at maturity subject to credit risk of the issuer. While a portion of the capital
may be invested by the issuer in debt instruments to bring in the feature of capital protection, the return may be
linked to an external market indicator such as equity index to capture the market upside.

In the second type, the issuers may also issue non-principal protected instruments wherein both the principal as
well as coupon are linked to performance of external market indices.

SEBI had released guidelines for issue and listing of structured products/market linked debentures on September
28, 2011. These guidelines specify that for Principal Protected Market Linked Debentures, credit rating agency
shall prefix ‘PP-MLD” followed by standardised rating symbols for long term/short term as per SEBI circular
dated June 15, 2011.

Advantages of MLDs —

« These products come with predefined payoffs and tend to provide good risk adjusted returns on the overall
portfolio

147
e These products can be historically back-tested from the time Futures and options were introduced in India
(Jan-2001) to ensure that they have high probability of generating the desired returns

e These products are all weather products — can be structured depends on the expected market movement.

As on June 20, 2019, the total rated volume for PP-MLD increased to Rs.450 billion from ~Rs.370 billion at the
end of FY19. During QIFY20 some NBFCs/HFCs/MFIs rated AA- and below raised fund via MLDs which
accounted for around 11% of total MLD issuances in QIFY20. This indicates increasing interest of investors for
lower rated MLDs for higher yields/returns.

However, Indian MLD market issuance is minuscule as compared to EU, USA and other Asian countries. At the
end of FY19, EU’s structure product market was ~US$ 300 billion, while India’s structured product market
(known as MLD) was merely ~US$ 2 billion. In India, MLD issuances in FY19 accounted for merely 1% of
UM of private wealth industry (Top 25 companies AUM as per Asian Private Banker/Wealth Manager report),
Jead arrangers/distributors of MLDs.

This is primarily due to both demand and supply side expansion. The demand of MLDs grew on account of
- Higher participation from corporates in addition to existing HNIs,

- Increase in ticket size

- Acceptance of MLDs with underlying other than Nifty (i.e. G-sec, corporate bonds etc.)

- Investors’ emphasis on downside protection in volatile market conditions.

The supply side of market grew on the back of

- Rise in number of issuers and

- Increase in number of distributors.

The tenure of these MLDs ranges between 13 to 60 months depending upon issuers funding requirement. The
average maturity of MLDs issued has been 2.89 years in FY19 as against average maturity of 2.92 years in
FY18.

MLDs are of two types i.e. principal protected (PP) and non-principal protected (NPP). Investor’s inclination
towards downside protection continued supporting PP-MLDs share which accounted for 95% of the total
issuances in QIFY20. The average monthly borrowing via PP-MLDs is expected to increase to Rs. 13 billion
from ~Rs.10 billion in FY19.

Proportion of MLDs with different underlying index

 

 

100%

80%
60%

9

cep
40%
eS

20%

FY17 FY18 FY19, Qiry20

MNifty Underlying l= G-Sec/Bond Underlying

 

 

(Source — CARE Ratings report on Market Linked Debentures: issuance at 5-year high)
Portfolio management services

AMCs in India have started offering strategies with higher flexibility to investors through PMS. As of
September 29, 2021, there were 360 portfolio managers registered under the SEBI. This avenue has seen a sharp

148
rise in the asset size, which increased more than thrice to Rs.5,727 billion as of July 2021 from Rs.1,430 billion
as of March 2013.

This AUM can be classified under three sections — non-discretionary, discretionary and advisory. Discretionary
assets dominated the PMS space with a 84.6% share, followed by advisory (8.8%) and non-discretionary
(6.6%).

Wealth Management industry in India

Wealth Management, in contextually has been in existence for quarter of a century in India. From serving the
Ultra-Rich individuals and families way back in the 1970s to what it is today, Wealth Management has evolved
to become a multi-disciplinary approach with multiple solutions. However, from single product advisory to a
multi-product, goal-oriented wealth management approach has been a gradual progression.

This line of business function can credit its emergence from the banking system. The banks in the 1970s have
functioned merely on deposits and providing credit to investors. With the emergence and expansion of the
banking system in the 1970s, India’s savings rate rose from 16% of the GDP (Gross Domestic Product) from
early 1970s to 35% of the GDP by 1980. While financial deepening through banks played its vital role, rising
per capita income and diminishing share of agriculture in the GDP also helped. This period was aptly called the
Golden Era, as far as Indian Savings were concerned.

Banking till 1970s has been mostly about, accumulating and preserving wealth within the boundaries of bank
deposits. Early 1970s also saw the rise of Insurance Advisory, specifically life insurance. Life Insurance
Corporation of India (LIC) since its formation in 1956 has played a vital role in insuring lives till then. Apart
from mere risk cover, LIC encouraged investors to consider investments through its conventional plans. An
Indian Investor till 1980s, considered a bank account and an LIC policy as his means to accumulate wealth.
Though the UTI started in 1963, it took UTI 25 years to reach AUM of Rs.67,000 million. With the emergence
of the Bombay Stock Exchange (BSE) in 1980s, there emerged a new avenue to make investments, shares or
stocks as it is popularly known. However, this was essentially for the risk friendly investors and neither could
many comprehend nor have access to. However, it was during the second phase of the Mutual Fund Industry
(1987-1993), did High Net worth Investors take cognizance of the Mutual Funds and Capital markets in total.
By 1993, the Mutual Funds AUM touched Rs.470,000 million, with the emergence of non-UTI, PSU mutual
funds. By then Life Insurance business was open to Non LIC, private participants as well. Banks and financial
institutions, found a new revenue model with a combination of Mutual Funds, Insurance and Deposits.

Wealth Management today, has evolved to an end to end Money Management Solutions for every investor
ranging from an Individual Investor / family, Corporate Investor, HUF (Hindu Undivided Family) to a Trust.
Private Wealth Management involves providing prudent investment solutions, Corporate and Treasury
Advisory, Off Shore Advisory and Family Office.

Average Returns by various benchmarks

Benchmarks 10 year Average
(1 year rolling returns)

G-sec Yield 7.50%

Crisil Short Term Bond 8.36%

Nifty 50 (Ex dividend) 12.21%

Nifty Midcap (Ex Dividend) 15.29%

Nifty Small Cap (Ex Dividend) 14.32%

*Data till September 2021

Importance of Wealth Management in India:

The Hurun Research Institute published its annual report in March 2021, where it mentioned that from its survey
it found that the average age of an India Millionaire (With net-worth above USD1mn) was 38 years, one year
older than last year. This population seeks a wealth manager as they neither have the expertise nor the time to
monitor their investments.

149
Trends within the wealth management space

The wealth management industry is also witnessing market consolidation along its value chain. In addition,
private equity funds are increasingly looking to participate in the growth story of Indian wealth management
industry.

Other trends in India’s wealth management space

I. There is an increasing trend of ultra HNIs looking at engaging with Family Office set-ups to not only help
them in managing investments but also help in ensuring a relevant structure to preserve, grow and
manage their wealth for generations to come

Il. There is increasing trend of HNIs investing in unlisted equity to be part of the startup / private equity
story apart from the quest to have higher anticipated returns on account of unlocking of potential
valuations upon listing on stock exchanges.

IFA

With rising inflows in mutual funds, of Rs 36,095 billion AAUM as on August 2021 is seeing a steady increase
in new distributors joining. The IFA category has contributed majorly to this growth. If we take into account
employees holding Employee Unique Identification Number (EUIN), the total distributors (excluding non-
individual distributors) have gone up. This suggests that banks and national distributors are ramping up their
sales force to cater to the increased demand for mutual funds. The increased demand for mutual funds could be
leading to more players taking up MF distribution. B30 distributors are entitled to earn higher commissions as
compared to T30 distributors. Many brokers are offering mutual funds to clients, realizing the long-term revenue
potential in the form of trail commissions. The distribution space is attracting talent from asset management
firms, wealth management/banks and new age robo advisers that are backed by investors.

Direct Equity

In FY20, due to tax cut reforms taken by the government in September 2019, equity as an asset class has
outshined all other financial assets in terms of performance this year. As the impact of demonetization started
waning and slew of economic reforms were rolled out, bulls took complete control of equity markets.

In FY20 at the end, individual wealth in direct equity decreased by 30.69% to a massive Rs.36,115 billion due to
surge in Covid -19 cases and global lockdown and temporary shutoff of all activities which led to steep fall in
Stock market.

Table: Composition of Direct Equity holding based on Investor class
( In Billion)

Category FY20 Amount FY19 Amount % of Market Capitalization Y-O-Y (%) Change

Promoters 57,615, 73,847 51% -21.98%

Institution 44,133 61,563 39% -28.31%
Retail 11,739 15,676 10% -25.11%
Total 1,13,488 1,51,086 100% -24.89%

(Source-SEBI)

Table: Break-up of Individual Investments in Direct Equity
(& In Billion)

Category FY20 Amount — FY19 Amount Y-O-Y (%) Change
Promoter individual 24,375 36,427 -33%
Retail individual 11,739 15,676 -25%
Total 36,115 52,103 -31%

150
(Source-SEBI)

Penetration, Current Structure and Trend in Mutual Fund Industry

 

     

 

 

Average Assets under Management
(Rs. in Billion)
ara O88
27259
23250 9 797 23570-24313, 240as 24880 84 Ae 24709 26,089
Jan-18— Mar18—Jun-18—Sep-18_— “Dec 18—Mar-19_—Jur19_—Sep-19.—Dec19.«Mar-20.Jun-20 © Sep-20Dec'20—Mar-21—Sep-21
(Source-AMFI)

Average Assets managed by the Indian mutual fund industry have grown from Rs. 23,250 billion in January
2018 to Rs. 37,408 billion in September 2021. That represents a 60.89% growth in assets over January 2018.

Growth in Assets (Rs. In Billion)

 

Growth in Assets (Rs. in Bi

  

27,782
19,401
16,694
a |
Individual Institution Total AUM
=Aug21 = Aug-20

(Source-AMF1)

The value of assets held by individual investors in mutual funds increased from Rs.14,320 billion in August
2020 to Rs.19,401 billion in August 2021, an absolute increase of 35.48%.

The value of Institutional assets increased to Rs.16,694 billion in August 2021 from Rs. 13,461 billion in August
2020.

Scheme wise Composition of Assets

The proportionate share of equity-oriented schemes is now 46.0% of the industry assets in August 2021, up from
40.1% in August 2020.

The proportionate share of debt-oriented schemes is 27.7% of industry assets in August 2021, down from 30.3%
in August 2020.

Investor Categories across Scheme Types

Individual investors now hold a marginally higher share of industry assets, i.e. 53.7% in August 2021, compared
with 51.5% in August 2020.

Institutional investors account for 46.3% of the assets, of which corporates are 95%. The rest are Indian and
foreign institutions and banks.

Composition of Investors’ Holdings

Individual investors primarily hold equity-oriented schemes while institutions hold liquid and debt-oriented
schemes.

151
75% of individual investor assets are held in equity-oriented schemes.

68% of institutions assets are held in liquid/money markets schemes and debt-oriented schemes.

Growth in B30 Assets
Growth in B30 Assets (Rs. in Billion)
mT30 = B30
Aug-21
Jub2a

(Source-AMFI)
*730 refers to the top 30 geographical locations in India and B30 refers to the locations beyond the top 30.

16% of the assets of the mutual fund industry came from B30 locations in July 2021.

Assets from B30 locations increased from Rs.5,664 billion in July 2021 to Rs.5,860 billion in August 2021,
representing an increase of 3%.

State-Wise AUM Data

 

 

 

 

 

 

AUM % of GDP (August 2021)
(Top 10 States)
59.8%
35.3%
280%. 24.8%
16.5% 16.5% 14.7% 14.7%
Benes = =
Maharashtra New Delhi Goa ‘Chandigarh Haryana Gujarat West Bengal Karnataka Jharkhand Tamil Nadu
(Source-AMFI)
AUM % of GDP (August 2021)
(Bottom 10 States)
ai ore cise aA% 4.3%
3.8%
3.4%
2.7%
| | l : i
Himachal Bihar ‘Andhra Pondicherry Sikkim Arunachal © Mizoram) Jammuand Tripura. = Manipur
Pradesh Pradesh Pradesh Kashmir

 

 

 

(Source-AMFI)

As can been seen from above graph Maharashtra contributes highest AUM as % of GDP which is 59.8% as
compared to North Eastern regions like Manipur which contributes 2.3% the least as on August 2021.

152
 

 

 

 

AUM per Capita (Rs) August 2021
1,52,425 (Top 10 States)
1,33,042 428,900
88,758
47,982
37,836 36,497

LI a 21,088 20,334 18,963

New Delhi Goa Maharashtra Chandigarh Haryana Karnataka Gujarat’ ~— Sikkim Tamil Nadu West Bengal
(Source-AMFI)

 

AUM per Capita (Rs) August 2021

(Bottom 10 States)
6,279

5,492 8
3,135
l UW a

Uttar Arunachal Nagaland = Madhya = Mizoram = Assam_=— Tripura. Jammuand = Bihar. = Manipur
Pradesh Pradesh Pradesh Kashmir

(Source-AMF1)

 

 

 

When it comes to per capita AUM, New Delhi ranks 1* with assets of Rs. 1,52,425 per person. New Delhi tops
the list of per capita AUM followed by Goa, Maharashtra, Chandigarh and Haryana. While Manipur has the
lowest per capita AUM of Rs.2,106 as on August 2021. The variation happens because of population in each
state. States with lower populations have higher per capita AUMs.

Top 20 States -AUM Composition August 2021

 

TOP 20 States-AUM Composition
Maharashtra 43.6%
New Delhi 6.4%
Karnataka 6.9%
Gujarat 6.9%

‘West Bengal 5.1%
Tamil Nadu 4.3%
vttar Pradesh 4.0%
Haryana 3.8%
Rajasthan 1.8%
Telangana 1.7%
‘Madhya Pradesh 1.4%
Andhra Pradesh 1.2%
Punjab 1.1%

Kerala 1.196

rissa 1.0%
sharkhand 0.9%
Bihar 0.3%

Goa 0.6%
Chhattisgarh 0.5%
Assam 0.5%

LIQUIO/MONEY MARKET m DEBTORIENTED EQUITY ORIENTED mETF/FOF's

(Source-AMF1)

153
% share of the top 20 states in the total industry AUM is indicated in brackets next to each state respectively.

The AUM composition gives us an idea of various schemes that contribute to the AUM. Haryana has its largest
assets under debt oriented schemes while Jharkhand and Bihar have the same in equity oriented schemes.

Investor Type-wise Composition of Mutual Fund Assets

Individual investors now hold a higher share of industry’s assets, i.e. 53.7% in August 2021, compared with
46.2% in March 2015.

 

Investor Type-wise Composition of Mutual Fund
Assets

Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Aug-21

mlnstitution = Individual

 

 

 

(Source-AMFI)
*Institutions include domestic and foreign institutions and banks.

B30 has a more balanced mix than T3

B30 and T30 - Asset Mix (August 2021)

B30 130
= Equity Oriented Schemes Non Equity Oreinted Schemes

(Source-AMFI)

In August 2021, 71% of assets from B30 locations were in equity schemes. T30 location, equity —oriented
schemes accounted for 41%.

Increasing Share of Equity based Fund in Asset class over the years

Equity funds have increased their share by approx. 14.1% points from Mar-15 to Aug-21, driven by strong
growth in equity markets and steady inflows.

154
 

Industry AUM break up across asset classes

Mar-15 — Mar-16 = Mar-17_— Mar-18 = Mar-19- Mar-20. Mar-21 = Aug-21

mOther Liquid mDebt m Equity

 

 

 

(Source-AMFI)

Equities contributed about 46.0% of the total mutual fund AMC asset size as on August 2021 up from 31.9% 6.4
years ago.

Investors — Overall Composition

An individual or an entity facilitating buying and selling of units of mutual fund by investors. A distributor earns
upfront/trail commission for bringing in investors into the mutual fund schemes.

A Direct plan in which investor buy directly from the mutual fund company (usually from their own website)
whereas a Regular plan investor buy through an advisor, broker or distributor (intermediary). In a regular plan,
the mutual fund company pays commission to the intermediary. This is then recovered as an expense from the
plan. In mutual fund, the expense ratio is higher for a regular plan. Mutual fund industry saw its assets base
increase from Rs.21,360 billion in March 2018 to Rs. 36,594 billion in August 2021 adding more than Rs.
15,234 billion in 3.4 years.

Key Drivers of growth for Wealth Management Industry

Increasing population of affluent clients with rising income levels- With expanding economy, income of the
middle class and the investable assets of the UHNI in the country have increased dramatically over the last few
years. This, along with higher financial literacy and growing customer awareness, has led to an increase in
demand for wealth products. India is one of the world’s fastest growing UHNI populations both in terms of the
number of individuals and the wealth levels. The rise in UHNI population has been partly driven by e-commerce
start-ups and rising income levels.

With increase in GDP/Adult of developed nations such as United States, Switzerland, Australia, wealth/GDP of
respective country also increased. While India’s GDP is expected to grow at much faster rate, it is estimated that
is will witness similar increase in its wealth/GDP as was observed in developed nations.

Increase in wealth allocated towards financial products- Individuals and investors are increasingly moving
away from traditional physical investments such as real estate and gold and making higher allocations into
financial assets such as equity, bonds and alternate investments, thereby creating higher potential for wealth
products. This coupled with ease in accessibility of different investment products on one platform will also help
drive growth.

155
A large fraction of the wealth of Indian households is in the form of physical assets (in particular, gold and real
estate). The average Indian household holds 84% of its wealth in real estate and other physical goods, 11% in
gold and the residual 5% in financial assets (Source-www.rbi.org.in). Financial savings has higher proportion to
household’s savings in advanced economies as they are more likely to finance home purchasing with a
mortgage, and allocate a sizeable fraction of their wealth to retirement savings over the course of their lifetime.
Individuals and investors in India are increasingly moving away from traditional physical investments such as
real estate and gold and allocating higher proportion of their investment into financial assets such as equity,
bonds and alternate investments, thereby creating higher potential for wealth products. Lower expected returns.
on physical assets have been one of the major factors for shift in investments preference of investors towards
financial products. With stable gold price and falling real estate price, investment in physical savings has
declined. Investment attractiveness towards fixed deposit has also declined as fixed deposit returns have fallen
over the past three years. Whereas, Nifty index rose, driving the shift of household savings preference from
physical assets towards financial products.

Financial savings shifting to mutual funds- Gradual pick-up in economic growth, benign inflation, and
diminishing attractiveness of gold and real estate as investment options to lead to a surge in household financial
savings in India. This financial savings will find its way into mutual funds, owing to increased awareness of the
product.

e Low penetration and strong fundamentals to aid industry growth- Despite growth in assets, India
accounts for less than 1.5% share of the global mutual fund industry. Furthermore, mutual fund
penetration, as measured by AUM-to-GDP ratio, was a mere 16% in 2020 as compared with the global
average of 63%.

e Increased reach of mutual funds beyond top 30 cities- Mutual funds are expanding their distribution
reach and focusing on securing customers from smaller markets. Beyond top 15 (B15) cities have seen
faster growth in assets in past three Fiscals ended March 2017, at 30% CAGR, compared with top 15
(T15) cities (27% CAGR). Further, individual investors’ (retail and HNIs) assets grew even faster in
B15 cities at 35% CAGR compared with 28% CAGR in T15 cities. This growth can be attributed to
increasing digitization along with government policies like allocation of expenses for investor
education. Furthermore, SEBI has incentivized fund houses to garner assets from tier II and III cities by
allowing them to charge an additional expense ratio of up to 30 bps on inflows above the defined limits
(30% of gross new inflows or 15% of average AUM for a scheme, whichever is higher) from beyond
T15 cities. As per SEBI circular SEBI/HO/IMD/DF2/CIR/P/2018/16 dated 02.02.2018, the terms and
definition of “15 cities”, “T15” and “B15” are substituted with “30 cities”, “T30” and “B30”
respectively, with effect from April 1, 2018.

e Retail participation increasing with rise in SIP investments- Retail investor folios, which were on a
decline post the financial crisis of 2008, reversed course in the past few Fiscals. Due to political
stability, low inflation, central bank rate cuts, higher than expected monsoons, and tax cut by
government for corporates led retail investors to increase their allocation to equity mutual funds.
Mutual Fund SIPs accounts stood at 43.2 million and the total amount collected through SIP during
August 2021 was 299.23 billion & Total amount contributed in FY22 was 2461.03 billion.

 

SIP Contribution (Rs. in Billion)

27 1,002 961
672
i UJ

(Source-AMFI) * Data till August 2021.
“ Supportive policies

e The government and SEBI have over the years come out with a number of regulations to educate
investors, simplify products and lower costs, with the eventual aim of enhancing the acceptance of

156
mutual funds as an investment avenue and protecting the interest of investors. While some of these
policies, such as banning entry load (2009), mandating exit loads to be credited back to the scheme
(2012), and mandating AMCs to offer a direct plan option with lower expense ratio for investors who
do not wish to invest through distributors (2013), have led to short-term gyrations. But these have
contributed in making the sector more attractive.

e In April 2016, the RBI asked banks that currently offer investment advisory services through an
internal department to reorganize their operations within three years and set up a subsidiary for
investment advisory services. This is to ensure an arm’s length distance between banking activities and
investment advisory services. Banks will need specific approval from the RBI to set up the subsidiary.
The subsidiary would have to be registered with SEBI and would be subsequently regulated by SEBI.
In order to promote investors participation, government / regulators are boosting investor’s confidences
to participate in equity / debt market by increased focus on client centricity, fiduciary responsibility and
compliance. Regulatory have been more stringent in their requirements regarding advisor
qualifications, infrastructure, risk profiling and suitability criteria.

e In 2011, SEBI proposed a self-regulatory organization (SRO) for the Indian wealth management sector
that would help regulate business and serve as a medium for SEBI to implement various wealth
management initiatives. To enhance the penetration of mutual funds in the country, SEBI sought to
increase the sales in the B15 location through the commission structure. In September 2012, SEBI
allowed fund houses to charge an additional 30 basis points on daily net assets in the total expense
ratio, should the new inflows from B15 cities be at least 30% of the gross new inflows in the scheme or
15% of the average assets under management, whichever is higher. Note: As per SEBI circular
SEBI/HO/IMD/DF2/CIR/P/2018/16 dated 02.02.2018, the terms and definition of “15 cities”, “T15”
and “B15” are substituted with “30 cities”, “T30” and “B30” respectively, with effect from April 1,
2018.

e SEBI’s recent guidelines on consolidation and merger of mutual fund schemes will make it simple for
the investors to compare various mutual fund schemes being offered by the fund houses. Moreover, it
will reduce the confusion and make it simple to compare performance among a level-playing field.

e The implementation of various reforms such as GST, RERA, new insolvency and bankruptcy code and
recapitalization of banks among others are likely to shift informal sectors into the formal economy and
hence, boost GDP growth and individual wealth in the medium to long term.

e@ = The Indian government’s financial inclusion drive and the growth of small rural banks are bringing
large number of unbanked people into the formal banking system. This is reflected in the growth in Jan
Dhan accounts and bank deposits.

Equity mutual funds perceived as long-term wealth creators- Equity mutual funds have created wealth in
multiples for investors over the long term. For e.g., = 1,000 invested in equity funds in 1999, would have grown
46 times, compared with 29.4 times and 22.0 times of the Nifty 500, Nifty 50 and S&P BSE Sensex indices,
respectively till September 2021.

SEBI drive to push mutual fund products in B30 cities and beyond in the last five years has begun to show
results. Asset management companies (AMCs) have increased their focus on rural markets, which is reflecting
in the numbers — both in terms of investors and assets under management. Campaigns like the Mutual Fund Sahi
Hai drive have been immensely successful in creating awareness about the benefits of investing in MFs across
India.

157
Rural recovery brings a lot of good news for the Indian economy as rural demand constitutes a major portion of
overall consumption demand in the country. If consumption from vicinity retains its momentum, it can be a
force multiplier for India’s GDP growth in the coming years.

Classification & Characteristics of Ultra HNI & HNI

Global wealth is projected to rise by 39% over the next five years, reaching USD 583 trillion by 2025. Low- and
middle-income countries are responsible for 42% of the growth, although they account for just 33% of current
wealth. Wealth per adult is projected to increase by 31%, passing the watershed mark of USD 100,000. The
number of millionaires will also grow markedly over the next five years, reaching 84 million by CY25, while
the number of UHNWIs should reach 344,000 by CY25.

Wealth Management to benefit the most due to equity component in wealth to GDP.

In order to analyze the distribution of wealth, the data have been segregated into four wealth ranges: 1) below
10,000 dollars; 2) 10,000—100,000 dollars; 3) 100,000—1,000,000 dollars; 4) above 1 million dollars. Since the
first issue of the Global Wealth Report in 2010, the composition of the pyramid has remained largely stable. The
only wealth segment with an unbroken spell of expansion and wealth accumulation is the top tier, representing
dollar millionaires.

Individual taxpayers declaring Gross Total Income more than Rs 10 Million

 

 

Assessment Year Financial Year Number of returns
2018-19 2017-18 97,689
2017-18 2016-17 81,344
2016-17 2015-16 67,783
2015-16 2014-15, 59,830
2014-15 2013-14 48,417
2013-14 2012-13 44,078
2012-13 2011-12 36,690

(Source: Income Tax India)

Individual taxpayers declaring Gross Total Income more than Rs 10 Million have increased from 36,690 in AY
2012 — 13 to 97,689 in AY 2018-19 with an increase of over 17.73% CAGR, considering the same growth rate
Individual taxpayers declaring Gross Total Income more than Rs 10 Million will reach to approx. 3,00,000 by
AY 2025-26.

Outlook for Wealth management in India — Overall

Indian household savings have been witnessing some considerable structural shifts of late. Households in India
have historically been quite risk averse and wary of investing their savings into volatile or uncertain return-
based assets. A pursuit of safe bets has always driven India towards making investments in unproductive assets.
like gold. This pattern is slowly changing over time, especially since demonetization in November 2016. Also,
the country has seen a major shift in attitude from Capital preservation to wealth creation from FY17.

With a likely growth rate of India’s GDP projected at 9.2% in 2022 the country will remain a key growth driver
of global economy. Against this backdrop, individual wealth in India is expected to grow at a CAGR of 11.77%
till FY25 and is likely to nearly double to Rs. 811,293 billion by FY25. The GDP of India is estimated to be
around US$ 4.2 Trillion by 2025 as projected by IMF.

GDP Forecast in Absolute terms (USD Trillion)

GDP, current prices 2,701 2,871 2,709 3,050 3,310 3,590 3,880 4,199

158
(Source: IMF) *F-Forecasted

In the next five years, financial assets will witness much faster growth rate as compared to physical assets. As
far as individual contribution is concerned, financial asset will form almost 63% of the total individual assets by
FY25. Physical assets will be restricted to 37% of the total wealth.

Table: Individual Wealth Estimation
(& In Billion)

 

 

Category FY20 Amount  FY25 Amount  CAGR(%) Proportion FY20 Proportion FY25. 4
Financial Assets 2,62,912 5,12,157 14.27 | 56.5% 63.1%
Physical Assets 2,02,282 2,99,136 8.14 43.5% 36.9%

Total 4,65,194 8,11,293 11.77 100.0% 100.0%

 

Breakup of Financial and Physical Assets

63.1%
56.5%

m Financial Assets

m Physical Assets

  

 

 

FY20 FY25
(Source-Karvy India Wealth Report 2020)

 

The share of financial assets is increasing in total assets gradually from 56.5% to 63.1%.

Conclusion

India has the lowest mutual fund penetration globally. The total AUM to GDP ratio of India stands at a mere
16%, way below the global average of 63%. Countries like the US have AUM to GDP ratios of over 100%. So,
the mutual fund industry in the country provides huge scope for growth and development. Real estate and gold
have become less attractive forms of investments post demonetisation. Even the reduction in bank deposit rates
in the past year has led to a shift in investment to mutual funds and the stock markets.

Financial Assets are expected to reach Rs.512 trillion by FY25 at a CAGR of 14.27% and Physical Assets
would grow at 7.56% CAGR to reach Rs.270 trillion by FY24.

India is expected to be the fourth largest private wealth market globally by 2028.

159
OUR BUSINESS

Unless otherwise stated or the context otherwise requires, references in this section to “we”, “our” or “us” are
to the Anand Rathi Wealth Group. This section should be read in conjunction with the sections titled “Risk
Factors”, “Industry Overview” and “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” on pages 26, 113 and 297, respectively, of this Prospectus, respectively, as well as the
financial information included in the section titled “Financial Information” on page 225 of this Prospectus. The

CARE Advisory Research is available on the website of our Company at
https://rathi.com/Wealth/Investorrelations.php

 

We have included various operational and financial performance indicators in this Prospectus, some of which
may not be derived from our Restated Financial Information or otherwise subjected to an examination, audit or
review by our Statutory Auditors or any other expert. The manner in which some of the operational and
financial performance indicators are calculated and presented, and the assumptions and estimates used in such
calculation, may vary from that used by other wealth management companies in India and other jurisdictions.

Overview

We are one of the leading non-bank wealth solutions firms in India and have been ranked amongst one of the
three largest non-bank mutual fund distributors in India by gross commission earned in Fiscal 2019, 2020 and
2021 (Source — CARE Advisory Research, Pages 46 and 47. The CARE Advisory Research is available on the
website of our Company at https://rathi.com/Wealth/Investorrelations.php). We serve a wide spectrum of clients
through a mix of wealth solutions, financial product distribution and technology solutions. We provide services
primarily through our flagship Private Wealth (“PW”) vertical where we manage = 294.72 billion in AuM as on
August 31, 2021. Our Company: (a) acts as a mutual fund distributor, registered with the Association of Mutual
Funds in India. It distributes mutual fund schemes managed by asset management companies and earns
distribution commissions on a trail basis from asset management companies; (b) purchases non-convertible
market linked debentures (“MLDs”) and offers them to its clients and earns income from these sales. Therefore,
the AUM of our Company comprises mutual fund schemes and other financial products such as bonds, MLDs
and other securities held by clients in their own demat accounts. Further, our Company does not include demat
holdings of the clients in the AUM unless the client has also used the distribution service of ARWL or have
bought MLDs through ARWL. As per the industry practice, all such assets kept in the demat account of the
clients belong to the respective clients and indicate the value of their assets. Such assets are shown as the AUM
of our Company. All decisions regarding purchase and sale of mutual funds and other securities are taken by the
clients. Our Company is not engaged in any portfolio management of its clients. Our Clients or active client
families include client families/groups with at least = 5 million in cumulative AuM. Each ‘client family’ or
‘Client’ may have one or more sub-accounts or family member accounts through which they invest.

We believe we have achieved a dominant position in the distribution of financial products, with a focus on the
growing HNI segment through an uncomplicated, holistic and standardised offering, delivered through an
entrepreneurial team of private wealth professionals, known as Relationship Managers (“RMs”).

We commenced activities in Fiscal 2002 as an AMFI registered mutual fund distributor and have evolved into
providing, well researched solutions to our Clients by facilitating investments in financial instruments through
an objective driven process. As of August 31, 2021, PW vertical caters to 6,564 active client families, serviced
by a team of 233 RMs (including 8 RMs working on contractual basis). As on August 31, 2021, 54.69% of our
Clients have been associated with us for over 3 years, representing 73.55% of our total PW AuM, which shows
our strength in vintage of both clients and their AuM in our business. We are currently present across 11 cities in
India, namely, Mumbai, Bengaluru, Delhi, Gurugram, Hyderabad, Kolkata, Chennai, Pune, Chandigarh,
Jodhpur and Noida and we have a representative office in Dubai.

We believe, the HNI segment of clients (i.e., individuals with net worth between % 50 — 500 million), is an
attractive and underserved segment in terms of quality of service and creating a platform to serve this segment is
often time consuming and difficult to build. In our experience, Clients belonging to the HNI segment are less
price sensitive and appreciate the quality of personalized services we offer. Our client families have consistently
grown with new family additions of 965, 863, 988 and 455 in Fiscal 2019, Fiscal 2020, Fiscal 2021 and for the
period ended August 31, 2021 respectively. Correspondingly, our PW AuM has also grown at a CAGR of

160
22.47% from % 180.37 billion as of 31 March, 2019 to % 294.72 billion on August 31, 2021. Our growth in the
PW vertical is driven by our experienced management team with decades of experience in financial services led
by Rakesh Rawal, our Chief Executive Officer and Feroze Azeez, our Deputy Chief Executive Officer. Our
business strategies are implemented by a team of experienced professionals, with relevant functional and
product expertise. We have been ranked in top 50 in India’s Great Mid-Size Workplaces 2017, 2018 and 2020
by Great Place to Work Institute India.

Our process driven approach, aims to achieve consistent Client outcomes through a standardised investment
strategy, augmenting our RM capability. With regards to mutual fund distribution, we have devised in-house
methodologies that consider a defined set of parameters for mutual fund selection. Non-Convertible Market
Linked Debentures (MLDs) form an integral part of our model portfolios enabling predictable returns, with
lower risk as compared to equity investment over a medium to long term period. Our product mix of mutual
funds and MLDs, further positions us well to capture our target clientele.

As part of our holistic approach to clients, we also facilitate estate planning, succession planning and create
wills as part of our core objectives, without charging any cost to our Clients. As of the date of this Prospectus,
we have a dedicated in-house team of 4 specialists who are qualified lawyers and servicing clients across all
locations to advise and create wills or designing and creation of private family trust.

We have digitized our operational process, including opening of an account, client approvals and investment
transactions and on-boarding process. This has led to cost efficiencies and making execution less cumbersome,
more transparent and contributed to the growth of our Company. Our Client engagement and marketing efforts
have also significantly converted to digital with a move to a virtual process of meeting clients during the
pandemic and conducting official meetings and training with multiple stakeholders. Moving to paperless
documentation and operational process coupled with work from home model had fundamentally reduced our
operating cost relating to stationery and printing costs, travel, business development and rental expenses.

In addition to PW vertical, we have two other new age technology led business verticals, i.e., Digital Wealth
(“DW”) and Omni Financial Advisors (“OFA”). We believe that technology is the key to keeping our business
future proof. Our DW and OFA verticals are examples of our tireless efforts to create a technology platform to
acquire new clients at lower cost as well as service and retain our existing clients. These in-house developed
technologies, including mobile application for clients and partners provides us a ready platform to integrate with
our PW vertical in future as and when required reducing our time to market for a digital solution.

Our DW vertical is a fin-tech extension of our proposition and addresses the large mass affluent segment (i.e.
group of individuals with financial assets between 2 1 million to % 50 million) of the market with a wealth
solution delivered through a ‘phygital channel’ i.e. a combination of human interface empowered with
technology. Starting September, 2016, our DW vertical has seen encouraging results in its attempt to build a
‘Partner’ led distribution model. As of August 31, 2021, the AuM for our DW vertical was 2 7.37 billion with
3,491 clients and 195 client engagement partners.

Our OFA vertical is another strategic extension for capturing the wealth management landscape through which
we provide a technology platform for Independent Financial Advisors (“IFAs”) to service their clients and grow
their business. Within a short period of over five years since its launch in September, 2016, it has become
India’s leading technology platforms for IFAs in terms of subscribers with over 5,000 subscribers as of March
31, 2021 (Source — CARE Advisory Research, Page 45. The CARE Advisory Research is available on the
website of our Company at https://rathi.com/Wealth/Investorrelations.php). As of August 31, 2021, 5,062 IFAs
had subscribed to our IFA platform. These IFAs handle around 1.63 million clients.

Our AuM comprises mutual fund schemes and other financial products such as bonds, non-convertible market
linked debentures other securities held by clients in their own demat accounts. The detailed break-up of our
AUM for the Fiscal 2019, 2020, 2021 and for the five months ended August 2021 is as under:

Break-up of AuM: PWM

 

 

 

 

 

ERA As at March 31, 2019 As at March 31, 2020 AsatMarch31, 2021 | APHID 20210 August
Coe Amount % Amount % Amount % Amount %
Equity Mutual Fund 78.38 43.45% 58.17 32.38% 94.95 36.44% 123.12 41.77%
Debt Mutual Fund 46.75 25.92% 49.07 27.31% 45.31 17.39% 44.11 14.97%

 

 

 

 

 

 

 

 

 

161

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total MF - A 125.13 | 69.37% 107.24 59.69% 140.26 53.83% 167.23 56.74%
Siructured Products! 3959 | 21.95% 5752] 32.02% 93.28 | 35.80% 92.93 | 31.53%
Total -B 164.72 | 91.32% 164.76 91.71% 233.54 89.63% 260.16 88.27%
Bie Baul and 15.65 8.68% 14.90 8.29% 27.03 10.37% 34.56 11.73%
Total - (A+B) 180.37 | 10.00% 179.66 | 10.00% 260.57 | 10.00% 294.72 | 10.00%
Break-up of AUM: DWM

Equity Mutual Fund 2.60 73.03% 2.45 62.83% 4.30 70.26% 5.47 74.22%
Debt Mutual Fund 0.88 24.72% 0.99 25.38% 1.03 16.83% 1.05 14.25%
Total MF — A 3.48 | 97.75% 3.44| 88.21% 5.33 | 87.09% 652 | 88.47%
panne Eroducts) 0.08 2.25% 0.46 11.79% 0.79 12.91% 0.85, 11.53%
Total - B 3.56 | 10.00% 3.90 | 10.00% 6.12 | 10.00% 7.37 |  100.00%
Direct Earn ane eZ 0.00% e 0.00% . 0.00% wi 0.00%
Total - (A+B) 3.56 | 10.00% 3.90 | 10.00% 6.12 | 10.00% 7.37 | — 100.00%

 

 

 

 

 

 

 

 

 

 

 

Break-up of AuM: PWM and DWM

 

 

 

 

 

 

 

 

Equity Mutual Fund 80.98 44.03% 60.62 33.03% 99.25 37.21% 128.58 42.56%
Debt Mutual Fund 47.64 25.90% 50.06 27.27% 46.34 17.38% 45.16 14.95%
Total MF - A 128.62 | 69.93% 110.68 | 60.30% 145.59 | 54.59% 173.74] 57.51%
ce Y-o-¥ (%) NA -13.95% 31.54% 19.34%

coun Eroducts 39.66 21.56% 57.97 31.58% 94.08 35.28% 93.79 31.05%
Total -B 168.28 | 91.49% 168.65 | 91.88% 239.67 | 89.87% 267.54 | 88.56%
Pireet Equlty and 15.65 8.51% 14.90 8.12% 27.03 10.13% 34.56 11.44%
Total — (A+B) 183.93 | 10.00% 183.55 | 10.00% 266.70 | 100.00% 302.09 | 10.00%

 

 

 

 

 

 

 

 

 

 

 

Corporate Structure

Anand Rathi Group corporate structure is as set out below:

162
 

Anand Rathi Financial Services Limited )

Anand Rathi a
Insurance Co ies
Brokers Limited

 

  
   
    

 

nasat Freire.

Anand Rathi Global
Finance Limited

Calculated by taking up to 9,285,000 Equity shares in offer for sale as mentioned in DRHP

Note: ARIPTL, one of our group companies does not appear in the above chart, as 67.0495
shareholding is held by our Individual Promoters and remaining by other promoter group.

Additionally, the details of activity currently undertaken and registration details are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sr. | Name Relation] Authority | Business activity Registration
No. details
1 ‘Anand Rathi | Company | AMFI Engaged in business of Services for Distribution | ARN-111569
Wealth and sale of Financial Products.
Limited
2 AR Digital | Subsidiary | AMFI Engaged in Business of Distribution and sale of | ARN-100284
Wealth Private | Company Financial products.
Limited
3 Ffreedom Subsidiary | AMFI Omni Financial Advisor (OFA) is FIINFRA’s | ARN-158079
Intermediary Company tech platform for Mutual Fund Distributors
Infrastructure (MEDs). OFA provides a technology platform
Private for Independent Financial Advisors and MFDs
Limited
4 Freedom Subsidiary | SEBI Engaged in Business of providing Consultancy | INA00014164
Wealth Company of Wealth Management Services, Wealth,
Solutions Financial, Retirement and Investment Planning,
Private Property Management, Will writing, Property
Limited Valuation.
5 ‘Anand Rathi | Group RBI A NBFC engaged in lending and Investment | B-13.01682
Global Company activities
Finance
Limited
6 ‘Anand Rathi | Group IRDA ‘Composite Insurance broking Lic No. 175
Insurance Company
Brokers
Limited
7 ‘Anand Rathi | Group SEBI- Engaged in business of Investment Banking, | INP000000282
Advisors Company | PMS Forex Consultancy, Financial Advisory and
Limited SEBI- Distribution of Financial Products. INA000000268
Investment
Advisory
SEBI- INM000010478
Merchant
Banking
8 ‘Anand Rathi | Group BSE The entity is a member of various exchanges | INZ000170832
Share and | Company [yep and provides Services for dealing in Securities,
Stock Brokers Currency and Commodities.
Limited MSEIL
MCX
NCDEX
ICEX

 

 

 

 

 

 

163

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sr. | Name Relation | Authority | Business activity Registration
No. details
SEBI- INH000000834
Research
Analyst
SEBI- INA000014784
Investment
Advisor
AMFI 4478
NSDL IN-DP-437-2019
CDSL
CDSL- 12010500
CCRL
9 Anand Rathi | Promoter INDIA The entity is registered in Gift Special | INZ000292939
International | Group INX Economic Zone (Gift City), in the Gujarat State.
Venture IFSC NSEIFSC | The company is registered stock brokers in
Private equity and equity derivative segment with India
Limited International Exchange (IFSC) Limited and
NSE IFSC Limited respectively.
10 | Anand Rathi | Group - Engaged in business of IT related activities *
IT Private | Company
Limited
Our Strengths

1. Focus on the underserved and less price sensitive HNI segment

Our PW vertical focuses on the HNI segment with AuM potential of = 50 - = 500 million, who are seeking
quality and value addition rather than low cost solutions. While the targeted AuM potential is above = 50
million, we typically on-board clients with a relationship value of a minimum of 2 5 million. Through our
uncomplicated, standardized and well researched approach, the client relationship value increases over a period
of time. Below is a split of our AuM and Client count across different categories:

ery)
Cer
SITET reve

B seek

ated ee

Me Tp 51.50%

SL
core

CO are) 32.28%

 

(1: Data as on August 31, 2021)

We believe, the HNI segment of clients is the most attractive and underserved segment in terms of the quality of
service. Creating a platform to serve this segment is often time consuming and difficult to build, however, this
platform has the potential to provide us a better opportunity to be the sole or a dominant wealth services
provider to clients. Based on our experience, our clients belonging to the HNI segment are less price sensitive
for the value of the service we offer.

164

 
 

The number of active client families with respect to our PW vertical stood at 6,564 as on August 31, 2021,
wherein 54.69% of our Clients have been associated with us for a period of over three Financial Years.

Our value proposition has enabled us to make consistent additions to our number of Clients during the last three
Fiscals as showcased in the table below:

 

 

Fiscal 2018-2019 2019-2020 2020-2021 April 01, 2021 to
August 31, 2021
No. of Clients added 965 863 988 455

 

 

 

 

 

 

Our Clients in the UHNIs category represents families having an AuM of greater than = 500 million and these
UHNIs were mostly HNIs when they were on-boarded and have subsequently elevated as UHNIs over a period
of time.

2. Uncomplicated, holistic and standardized solutions offered to clients based on an objective-driven
approach

Our Company follows a process driven approach in providing wealth solutions and aims to achieve consistent
client outcomes through a standardized investment strategy which augments the RM’s ability to deliver our
service proposition. Our model portfolio consists of an optimal combination of mutual funds and MLDs making
it relatively simpler for clients to understand. This combination envisages liquidity along with limited risk to
capital to our clients in the medium term. We believe in an ‘uncomplicated’ objective-oriented approach which
helps our potential Clients identify their wealth goals and create conviction to act upon their investment
decisions. Our solutions, coupled with a motivated team of trained RMs help us in attracting and retaining
clients.

Below chart explains our end-to-end, process driven, standardized and well researched solution approach:

Standardized Solution

® Client goals

peeled

2», Discussion with clients on investment Pe rely

‘Y" principles, risk and portfolio strategy

 

=| Provide comparative investment options

 

PNA CR CELL)

MTU Be rE uci

Create client conviction to act

 

 

 

Execution and reporting PYer irl s)-3

{Ongoing monitoring and portfolio rebalancing

 

Our model portfolios are created using our in-house research and analytical tools in allocating assets and
selecting securities that are aligned to each client’s liquidity and risk profile. The portfolio is periodically
monitored and if required, strategic calls are organized with clients to modify strategy and help them reach their
financial goals.

3. One of the leading non-bank mutual fund distributor in India coupled with presence in Non-Convertible
Market Linked Debentures

Mutual Fund: We are amongst one of the three leading Mutual Fund Distributor (“MFD”) in India (Source —
CARE Advisory Research, Page 46. The CARE Advisory Research is available on the website of our Company
at https://rathi.com/Wealth/Investorrelations.php). We distribute mutual fund schemes managed by leading
Asset Management Companies (‘AMCs’) in India and receive commissions linked to the outstanding market
value of financial assets procured by us.

165
We are the third largest mutual fund distributor on the basis of the gross commission non-bank MFDs in Fiscal
2019, 2020 and 2021 (Source — CARE Advisory Research, Page 46 and 47. The CARE Advisory Research is
available on the website of our Company at https://rathi.com/Wealth/Investorrelations.php).

Non-Convertible Market Linked Debentures (MLDs): Apart from distribution of mutual funds, we also sell
non-convertible market linked debentures to our Clients. MLDs form an important part of our model portfolio
acting as a hedge to market variability providing more predictable returns based on the market performance
movement with medium to lower return risk as compared to equity investment over the maturity period.

In line with our process driven approach in providing wealth solutions, with an aim to achieve consistent client
outcomes, we presently choose MLDs issued by Anand Rathi Global Finance Limited, which fit into our
standardized investment strategy and target returns. We buy these products from ARGFL which are then sold to
certain of our clients and the income is earned by our Company from such sale. Our MLDs are back-tested to
assess probability of delivering target returns. This process has resulted into delivery of favorable returns to our
Clients.

As can be seen in the table below, a large portion of the MLDs gross mobilization comes from repeat
purchasers, i.e. Clients who have invested in ARGFL MLDs before. Over the last three Fiscals and five months
ended August 31, 2021, 78% of our MLDs sales (% 69.16 billion out of % 88.67 billion) has come from our
repeat purchasers.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(@ in billion
2021-
: 2018- 2019- 2020- 2022 (till
Fiscal 2019 % 2020 % 2021 % ‘Aug- % Total %

2021)

No of Products 331 530 634 177 1,672

Gross Mobilisation

@n billion) 18.66 100 29.73 100 28.71 | 100 11.57 100 88.67 100

Repeat Purchase by 67

existing clients (#In 16.36 | 87.65 24.46 82.28 19.31 25 9.04 78.11 | 69.16 78

billion)

 

“Repeat purchase have been identified based on existing / previous MLD holding by same PAN number
4. Focus on value added services i.e., safety net and estate planning services

We believe in a holistic approach, and as part of managing wealth for our Clients, our proposition also includes
estate planning, succession planning and creating wills as part of our core objectives, without any cost to our
Clients. It safeguards and enables smooth transmission of wealth, which brings effective long-term relationship
with the Clients. For us, the estate planning services are critical and imperative, for which, we have in-house
team of four qualified lawyers, who are providing services to our Clients with succession and estate planning
services across all locations.

Our focus on estate planning is through a two-fold process:

e Advising and creation of wills — Our estate planning team comprise of various subject-matter experts
which provide relevant legal advice and case studies to decide on the distribution of wealth as per the
client’s desire and create customized documents as per the client’s requirements.

e Designing and creation of private family trust — We believe that the safety nets are critical for
Clients since it increases the probability of protecting the accumulated wealth against any liability or
encumbrance that the Client may face in its business or profession. We typically recommend our
Clients for creation of private family trusts that can help them achieve their wealth goals.

5. Focused towards attracting and retaining talent through an entrepreneurial work culture
We hire account managers, who are business management graduates / Cas by qualification. These Ams assist

RMs in servicing clients. Each RM is usually assisted by one AM. As of August 31, 2021, we had a total of 228
Ams. We provide intensive training and guidance, to develop the skills of Ams which helps in their smooth

166
transition to the role of an RM. Over the last 3 years and for the five months ended August 31, 2021, 58 Ams
have successfully progressed into the role of RM.

We constantly strive towards enhancing our work environment and our work culture, which we believe are of
utmost importance and have contributed towards us being able to retain our current RMs as well as attract new
talent. We are led by a professional management team with extensive experience in the wealth management
business.

We have built several people practices that we believe provides a competitive advantage in our business. All
employees in the role of business heads, including unit heads and team leaders, actively also work as RMs and
manage client relationships. As a result, our entire management, product and advisory teams bring a deep and
hands-on understanding of the market that we believe enables us to be extremely agile as a business, identify
and take advantage of strategic opportunities quickly and proactively respond to the changing competitive and
regulatory landscape in India.

We promote and focus on an entrepreneurial and low-ego work culture as an integral part of our business
strategy. We encourage and help our RMs to prepare their own business plans, focus on new client acquisitions
without any geographical restrictions or collaborate with other team members, and actively mentor new hires.
Our RMs have uncapped financial upside linked to their business.

6. Strategic approach to the marketing initiatives

While references given by existing clients is the most popular mechanisms to on-board new families, another
mechanism that has been successful for us is the focused group discussions. In this event, groups of RMs invite
prospective clients, and a speaker does the rendition of our proposition. These sessions were conducted
physically during Fiscal 2018 and 2019. In addition, some of the focused group discussions were covered by
leading business news channels. Such events were conducted across all major locations in India. We also
sponsor various programs in India, including elite clubs like golf events, pre and post budget discussions and
commercial policy discussions. We also leverage the research, intellectual and informative referencing material
developed in-house on macro-economic trends for lead generation. Several of our leadership team participates in
various electronic media discussions around wealth solutions and offerings, which effectively helps in
generating new Clients.

The Fiscal 2020-2021 saw new challenges due to the COVID-19 pandemic. We conducted digital webinars and
our interactive webinars increased as against our physical events giving us a wider outreach. While the new
client acquisitions seem to have been challenging, given the constraints of not doing physical meetings, the team
still acquired 988 clients, with an average of approximately 82 clients per month in the Fiscal ending March 31,
2021.
Strategies
The key elements of our strategy are as follows:

1. Increasing RM count with a focus on higher vintage RMs:
RMs are the building blocks for our business. The greater is the vintage of a RM, the more productive such
person is able to garner clients and increase high yield AuM. Currently, 87.02% of the AuM is generated by the

RMs having a vintage of three years or more.

A vintage wise break-up of RM’s as on August 31, 2021 is as follows:

167
86
68
54
, 0 a
<1 Year 1 to 3 Years 3 to 5 Years >5 Years

We aim to improve our RMs strength and increase the higher vintage RMs to generate maximum business. The
basis for growth in RMs shall be supplemented by our efforts on developing quality in-house talent. These RMs,
who have been with us know the nuances of our operations, are better placed to garner high quality business and
deliver desired growth.

2. Focus on scaling our business by capitalizing on current market opportunities and through geographic
expansion

The number of millionaires in India is expected to reach to 1.27 million (Source - CARE Advisory Research,
Page 17. The CARE Advisory Research is available on the website of our Company at
https://rathi.com/Wealth/Investorrelations.php) by 2025, set out in the chart below:

 

 

 

 

 

 

 

 

 

Number (thousand) | Change
Counny 2020 2025, : Goi

United States 21,951 | _ 28,055 28
China 5,279 | 10,172 93
Japan 3,662 5,411 48
United Kingdom 2,491 3,711 49
Germany 2953 | __4,240 44
World 56,084 | 84,014 49

 

 

 

 

India has the key ingredients of a high-growth wealth management market, namely driven by a very large and
young mass affluent segment; an increase in the wealth of global Indians; the Indian government’s push to
control illegal channel of funds and push for tighter regulations of the capital markets. Currently, 8% of the total
population in India represents 45% of the total wealth and of the above only 20% take advice from wealth
managers. With increase in start-ups, rising income levels and friendly macro factors with ease of doing
business will drive growth of young HNI population in India; there is a big opportunity for a wealth
management firm to tap into an underpenetrated market with huge upside growth potential for wealth managers
(Source — CARE Advisory Research, Page 17. The CARE Advisory Research is available on the website of our

Company at https://rathi.com/Wealth/Investorrelations.php

Also, as part of our expansion plans, we will continue the hub-and-spoke model to leverage common
infrastructure and increase operational efficiency and aim for our geographic expansion to include tier 1, tier 2
and tier 3 cities across the country. We also intend to grow our branches in other key states in India. Although,
we would explore the growing concept of e-office which is gaining momentum, our expansion through digital
outlets across state levels will be rapid. Till such time, our business will continue to be managed centrally with
the overall supervision from our corporate office.

3. Brand-building efforts with an increased digital focus

We intend to increase our brand recognition through various brand-building efforts, communication and various
promotional initiatives. Such promotion would enhance the visibility of our brand and also improve our business
positioning and credibility. In addition, several of our leadership team participates in various electronic media

discussions around the private wealth sector, which also helps build brand visibility and attract new clients.

We want to continue our efforts to build financial awareness, create brand awareness and become the preferred
private wealth firm of our target client segments. We want to enhance our brand as the most uncomplicated

168
private wealth firm in the HNI segment by engaging our existing and potential clients through social media
campaigns and participation in relevant programs on popular business channels. Our brand enhancement will
also include multi-channel initiatives like electronic media, Social media, articles in magazines and newspapers
etc.

The core of our business is the thought process that we will grow by educating our clients. We want to enhance
the knowledge of our clients through interactive media sources that will allow our clients to become smarter
decision-makers.

Awards and Accolades

The table below sets forth some of the certifications, awards and accreditations received by our Company:

 

 

 

 

Fiscal Accreditation
2012 Voted “The Overall Best Private Bank in India as voted by HNWIs” in AuM US$Im-5m category in the
Asiamoney Private Banking Polls 2012*
2013 The Overall Best Private Bank in India as voted by HNWIs : #1 in AUM>US$25m, #4 in AuM US$5.01m-
25m, #2 in AuM US$1m-5m category — Asiamoney Private Banking Polls*
2014 The Best Overall Private Bank in India as voted by HNWIs : #1 in AUM> US$25m, #1 in AuM US$5.01m -

25m Asiamoney Private Banking Polls*

 

Ranked among the “Best Domestic Private Banks in Asia 2005-2013” in India in the Asiamoney Private
Banking Poll of Polls*

 

 

 

2015 Best Wealth Manager India Award — Capital Finance International, London*
2016 Best Wealth Manager India Award — Capital Finance International, London*
2017 Voted the Best Wealth Manager India by Capital Finance International, London

 

Ranked 34 in India’s Great Mid-Size Workplaces 2017 by HT Media Limited and Great Place to Work
Institute India

 

2018 Best Wealth Manager India Award — Capital Finance International, London

 

Great Place to Work — 2018 in the Small and Mid-Sized Organizations category, by the Great Place to Work
Institute, India

 

 

 

 

 

 

 

2019 Amity Corporate Excellence Award for Most Strategic Private Wealth Management

2020 Fastest Growing Wealth Management Organisation by World BFSI Congress, 2020

2020 Customer Service Excellence Award by World BFSI Congress, 2020

2020 Great Place to Work — 2020 in the Small and Mid-Sized Organizations category, by the Great Place to Work
Institute, India

2021 Customer Service Excellence Award by World Leadership Congress & Awards 2021

 

 

*The award was received by ARFSL for the business that was subsequently transferred to ARAL and thereafter transferred to us.
Our Business
Private Wealth Vertical

Our PW vertical caters to HNI and UHNI segment vertical where we manage % 294.72 billion in AuM as on
August 31, 2021. We commenced activities in Fiscal 2002 as an AMFI registered mutual fund distributor and
have evolved into providing, well researched solutions to our clients by facilitating investments in financial
instruments through an objective driven process. As of August 31, 2021, our PW vertical caters to 6,564 active
client families, serviced by a team of 233 RMs. As on August 31, 2021, 54.69% of our clients have been
associated with us for over 3 years, representing 73.55% of our total PW AuM, which shows our strength in
vintage of both clients and their AuM in our business. We are currently present across 11 cities in India, namely,
Mumbai, Bengaluru, Delhi, Gurugram, Hyderabad, Kolkata, Chennai, Pune, Chandigarh, Jodhpur and Noida
and we have a representative office in Dubai

Our process driven approach, aims to achieve consistent client outcomes through a standardized investment
strategy, augmenting our RM capability. With regards to mutual fund distribution, we are amongst one of the
three leading Mutual Fund Distributor (“MFD”) in India (Source — CARE Advisory Research, Page 46. The
CARE Advisory Research is available on the website of our Company at
https://rathi.com/Wealth/Investorrelations.php). We distribute mutual fund schemes managed by leading Asset
Management Companies (‘AMCs’) in India and receive commissions linked to the outstanding market value of
financial assets procured by us. Over the years, we have devised in-house methodologies that consider a defined
set of parameters for mutual fund selection. We are the third largest mutual fund distributor on the basis of the
gross commission non-bank MFDs in Fiscal 2019, Fiscal 2020 and Fiscal 2021 (Source — CARE Advisory
Research, Page 46 and 47. The CARE Advisory Research is available on the website of our Company at

169
https://rathi.com/Wealth/Investorrelations.php). The total gross commission earned by our Company during
Fiscal 2020 is higher than the foreign banks for the similar period (Source - CARE Advisory Research, Page 47
and 48. The CARE Advisory Research is available on the website of our Company at

https://rathi.com/Wealth/Investorrelations.php).

Apart from the mutual funds, we also sell non-convertible market linked debentures (MLDs) to our Clients.
Non-Convertible Market Linked Debentures (‘MLDs’) form an integral part of our model portfolios enabling
more predictable and stable returns, with lower risk as compared to equity investment over a medium to long
term period. MLDs are NCDs where the maturity pay-off (principal and coupon) is linked to performance of a
market variable, such as the stock indices, designed to complement and enhance the probability of generating
desired returns for client portfolio. These products typically have a maturity period of three to five-years to
increase the probability of achieving the maximum pay-off for clients. The majority of these products have
limited degree of principal protection in scenarios where market performance is negative.

A large portion of the MLDs gross mobilization comes from repeat purchasers, i.e. Clients who have invested in
ARGFL MLDs before. Over the last three Fiscal and five months ended August 31, 2021, 78% of our MLDs
sales (% 69.16 billion out of = 88.67 billion) has come from our repeat purchasers.

Our primary revenue stream under this vertical is distribution and sale of financial products

We are registered with the Association of Mutual Funds of India (AMFI), as a MFD and distribute mutual fund
products to our clients. We earn distribution commissions primarily on a trail basis from Asset Management
Companies (“AMCs”). We are engaged with most of the leading AMCs in India and the commissions that we
receive from them are linked to the contribution to their respective AuM from our distribution. We also
purchase non-convertible market linked debentures (MLDs) and offer them to our clients. We also endeavour to
facilitate in providing exit liquidity to our clients, in case required by the client. Such MLDs are issued by
financial institutions including Anand Rathi Global Finance Limited and other NBFCs.

As part of managing wealth for our Clients, our proposition also includes estate planning, succession planning
and creating wills as part of our core objectives, without any cost to our Clients. It safeguards and enables
smooth transmission of wealth, which brings effective long-term relationship with the Clients. For us, the estate
planning services are critical and imperative, for which, we have in-house team of four qualified lawyers, who
are providing services to our Clients with succession and estate planning services across all locations.

A brief summary of the wills and estate planning services provided to our Clients over the last three Fiscal and
for the 5 months ended FY 22 is as follows:

 

 

 

 

 

Fiscal Wills creation ‘Trusts
2018-2019 254 53
2019-2020 589 190
2020-2021 398 80

April 2021-August 2021 224 57

 

 

 

 

 

Employees and manpower of PW vertical

We believe that our entrepreneurial and collaborative work culture is one of the critical factors for the success of
our business.

Our business structure is elaborated below:

e¢ Anemployee either joins directly as a Relationship Manager or he/she is recruited as an Account Manager
who provides assistance in client servicing and then later evolves in to a Relationship Manager.

e Each Relationship Manager is generally assisted by an Account Manager.

¢ Once the Relationship Manager gains experience in our business, they can play a role of team leader and
can actively mentor or guide newer Relationship Managers in building their businesses; each team leader
typically mentors three to five Relationship Managers.

e We designate one team leader at each location as unit head who is responsible for reporting and
administrative work related to each location.

170
¢ Product team — This team is allowed to manage clients so they are aware of the changing requirements and
customise the products according to the dynamic trends.

e Estate planning team — We have an experienced team of professionals who help our clients with estate
planning solutions or succession planning through creation of wills and private family trusts, depending on
the requirement of the client.

Business heads including unit heads and team leaders actively work as Relationship Managers.

We have an entrepreneurial work culture, which incentivise our Relationship Managers to maximize efforts and
aligns their objectives with the corporate objectives. We have an attractive RM incentive policy which is
transparent and formula based giving complete clarity on the incentive payout based on RMs performance. Our
policy of keeping the formula consistent has helped us in attracting, retaining and motivating our RMs. Our
incentive structure allows the RMs to earn uncapped incentives on revenue generated by them through a
uniform and standardized formula based approach.

We encourage our Relationship Managers to collaborate in their efforts towards client acquisition and
management and income sharing. Our client acquisition is geographically unrestricted and we actively
encourage our unit heads and team leaders to work with Relationship Managers from other locations. We use
referrals by existing Relationship Managers as our main source of recruitment of new Relationship Managers.

We regularly train our Relationship Managers and Account Managers (approximately two days a month of
training for every Relationship Managers and Account Managers), thereby ensuring that a consistent service is
provided to all our clients. Our strong focus on regular training has helped us in two ways ~ firstly, we are able
to hire new Relationship Managers and train them to imbibe our wealth management process and secondly, it
enables us to groom the Account Managers into Relationship Managers.

Digital Wealth Vertical

AR Digital wealth (“DW vertical”) is a fin-tech extension of our proposition, born from the extensive learnings
from experience in the Private Wealth solutions. The idea was to address the large mass affluent segment of the
market with a wealth solution delivered through a ‘phygital channel’ i.e a combination of human distributor
empowered with technology. It seeks to build a scalable and profitable model by using this blend of technology
capabilities and human interface.

This segment of the business was launched in 2016 and in a short time frame has seen encouraging results in its
attempt to build a ‘Partner’ led distribution model through whom a packaged investment solution is delivered.
‘Partners’ are IFAs and AMFI registered Mutual Fund Distributors who are seeking to grow their business by
taking the Anand Rathi brand, product research, selection and investment insights to their clients through an
innovative easy-to-use technology interface. The business is also in the process of building a remote direct sales
team that will be able to deliver this proposition using virtual channels and onboard the client through its online
account opening process.

As of August 31, 2021, the AuM for our DW vertical was 2 7.37 billion with 3,491 clients and 195 client
engagement partners. The offering has a dedicated client mobile application and that is the primary mode of
engagement between the partner and the client. This enables a single Partner to service a larger number of
clients even though the client segment has a lower average AuM size. This results in positive unit economics of
the business. We believe this model is highly scalable with a disruptive channel strategy since is not dependent
on its geographical presence and can reach cities where physical scalability may not be cost effective.

 

Omni Financial Advisors (‘OFA”) Vertical

  

Our OFA vertical is another strategic extension for capturing the wealth management landscape. With OFA we
provide a technology platform for Independent Financial Advisors (“IFAs”) to service their clients and grow
their business.

Since its launch in September, 2016, it has become India’s leading tech platforms for IFAs in terms of
subscribers (as of March 2021) (Source - CARE Advisory Research, Page 45. The CARE Advisory Research is
available on the website of our Company at https://rathi.com/Wealth/Investorrelations.php) with 5,062 IFAs,
around 1.63 million Platform Clients as on August 31, 2021. Platform Clients are the clients that are serviced by
the IFAs.

171
This is mobile first platform servicing its users i.e. IFAs in mobile based client reporting, online transactions and
financial planning for their clients. Coupled with analytics, data management and business management systems
and a dedicated team of support and technology specialists, it endeavors to be one stop solution for an IFA.

Highest standards of data security, completeness, quality and authentication are ensured to service the clientele.
The core strength is to digitally enable IFAs for better client serving. ARWL’s experience of over 13 years in
the wealth industry, combined with technology platform has helped us to scale up the business.

We conduct roadshows / meetings at various cities across India to attract IFA clients. For an annual subscription
fees, an IFA receives access to our web portal and mobile application, which their clients can also access
through a co-branded mobile app. In addition, we support subscribing IFAs with dedicated business support
team. We also provide separate web logins and mobile app access for advisors and their clients.

OFA enables IFAs with the distinctive features such as:

Client reporting;

Business dashboard;

Client engagement;

Online mutual fund transactions; and
Goal planning.

This proposition is useful to extend our technology and capture the ancillary retail market. It enables the IFA
segment with a technology solution to capture and serve its clients and increase the size of the market in turn.
The open architecture of the platform gives the capability of advisory to the advisor and helps him take
complete ownership of his business.

Details of the mutual fund AUM and mutual fund distribution income for past three Fiscals and the five-month
period ended August 31, 2021, is presented below.

 

 

 

 

 

 

Five-month
Fiscal Fiscal Fiscal period ended
2019 2020 2021 August 31,
2021
MF AUM i a
(Rs. In Billion) 128.61 110.68 145.59 173.75
Mutual Fund Distribution Income ~ 5
(Rs. in Million) 1,040.00 996.00 902.34 555.63

 

Details of MLDs mobilised and income from the sale of MLDs for the past three Fiscals and the five month
period ended August 31, 2021, is presented below.

 

 

 

 

 

 

 

 

 

Five-month
Fiscal Fiscal Fiscal period ended
2019 2020 2021 August 31,
2021
MLDs Sold 5
(Rs. In Billion) 18.66 29.73 28.71 11.57
Income from Sale of MLDs
(Rs in Million) 1,231.50 | 2,135.22 | 1,478.97 922.35

 

COVID -19 Pandemic Initiatives
Product Initiatives: We navigated the Fiscal 2021 by closely associating with our Clients with a clear objective
of recovering the losses incurred in portfolios. In addition, we regularly shared our research and actionable with

our Clients. Some of these included:

© Our Clients shifted their corpus from debt mutual funds to overnight / liquid funds as the fear of a crisis in
bond markets started to rise.

172

 
e During the Fiscal, we released 10 research reports covering the various fundamentals of markets like
Impact of Covid on market volatility, GDP projections, corporate profitability, liquidity flow, sectoral
concerns like banking NPA and elaborating our positive view on the equity market.

¢ All these initiatives led to a net addition of 1.25 billion in FY21 and 210.18 billion in five months ended
August 31, 2021 in our growth / equity oriented mutual fund AuM

Digital Outreach

¢ Digital meetings — We shifted to a virtual process of meetings clients during the pandemic with meetings
on digital platforms such as Zoom, Microsoft teams and Google meets etc. Thus, our client engagement
became continuous, paving the way for quicker decision-making and increasing overall productivity.

¢ Digitizing operational process, the opening of an account, client approvals, transactions and onboarding
process became less cumbersome, more transparent and contributed to the growth of the organization

e We started digital training which allowed us to conduct training frequently. This step allowed more time
for clearing doubts, bringing in exhaustive case studies, answering data-related queries and improving the
knowledge and conviction of the RMs.

Cost Efficiencies

« With the pandemic forcing a work from a home model, we had a cost advantage as travel expenses reduced
significantly. From travelling domestically and internationally to meet clients and having product and
review meetings at different locations — everything reduced to meeting in a virtual office.

* Moving to paperless documentation and operational process coupled with work from home model
decreased stationery and printing costs.

« Although we intend to continue work from home model going forward for the office-going employees, we
have already renegotiated rental cost across specific locations to incorporate this initiative. We believe this
will help us reduce the cost of office space substantially.

« Physical client events turned digital, which increased the reach with the number of customers and decreased
the cost significantly. Going forward, we would conduct physical events, however, the majority of the
interactions will remain on digital platforms.

Information Technology (“IT”)

Our Company functions on the technology driven operating model with digital platform and in-house
technology team. We believe that technology will play an increasingly crucial role in delivering wealth
management services as well building superior client advisory and engagement. Recognizing that this would
need to be a core capability, we have built an internal technology team with over 49 members currently. The
entire stack from back office, middle office and RM and client front ends are proprietary and built internally on
a modern tech stack. This provides us not only the ability to build a differentiated tech platform, but also the
agility to build market leading capabilities and in responding to business and client needs. Our adoption of
technology has led to our cloud provider featuring us on their website as a case study for digital transformation.

Our current digital platforms cover the entire life cycle of our clients, from client onboarding, creating and
delivering customized advisory using proprietary algorithms, facilitating transactions, multi-channel reporting
and engagement. We provide our RMs, a web and mobile solution called the “Workstation”, which not only
allows them to access client information, facilitate transactions, but also digitizes most of their everyday internal
workflows (for example, collaboration of RMs and product specialists for clients). This Workstation is a one-
stop remote office.

173
Our systems are completely cloud-based and engineered ground-up to scale significantly. We have also built
monitoring systems to ensure rapid reaction times to such issues and therefore a seamless customer experience.
We are currently focused on building more self-service capabilities through chat bots, leveraging platform
generated insights that will allow our product teams to build better advisory as well as allow RMs to enhance
client engagement further. We create and manage our data security infrastructure in-house and use reputed cloud
and security vendors to continuously test and enhance our systems and practices in place to prevent security
breaches and cyber-attacks.

Compliance

Our compliance team aims to ensure that we comply with applicable regulations including the Securities and
Exchange Board of India (Intermediaries) Regulations, 2008, the Securities and Exchange Board of India
(Investment Advisers) Regulations, 2013, and various circulars and notifications issued by SEBI from time to
time.

The compliance function of our Company is managed by Ashish Chauhan, who acts as the Company Secretary
and Compliance Officer. The team is responsible for compliance with various laws including corporate law,
rules and regulations prescribed by the RBI and SEBI. Periodic compliance checks are carried out by the team
for our Company and our Subsidiaries. In addition, when required, the external consultant/ chartered accountant
also carry out certain additional procedures.

Risk Management

Our risk management practices have been designed and implemented taking into consideration the varying
needs of our organization, operating structure, business operations and regulatory requirements.

The Risk Management Committee is responsible for overseeing the risk management framework, reviewing the
key risks and mitigation strategies. Our management is also responsible for ensuring that the risk management
framework is effectively implemented within all areas of their respective functions.

Risk assessment and mitigation strategy is an integral part of the organization’s annual business reviews. The
key risk management activities include investment risk, operational and regulatory risk and business continuity.

Our internal auditor also carries out internal control reviews and provides an independent report to the Audit
Committee on the adequacy and effectiveness of the risk management and internal controls of the organization.
Our statutory auditor carries out a review of our internal controls over financial reporting to the extent of the
scope as laid out in their audit plans. Any material noncompliance and internal control weaknesses are reported
to the Audit Committee.

The systems that are in place are intended to provide reasonable but not absolute assurance against material
misstatements or loss, as well as to ensure the safeguarding of assets, the maintenance of proper accounting
records, the reliability of financial information, compliance with applicable legislation, regulations and best
practices, and the identification and management of business risk.

Marketing initiatives

Currently, we conduct marketing events across all major locations in India where prospective clients are invited
and our teams showcase our capabilities to these prospects in group meetings. Besides, references are the major
source of client addition in our business and there is active ongoing outreach to existing clients to encourage
them to provide prospective client references. We also undertake sponsorship of various programs in India,
including at elite clubs like golf events, pre and post budget discussions and commercial policy discussions. We
also leverage intellectual and informative reports on macro-economics prepared by the chief economist of the
Anand Rathi Group and circulate the same amongst our existing as well as prospective clients. Several of our
leadership team participates in various electronic media discussions around wealth management which also
helps in effective tractions wealth relationship.

We believe that we have reached a critical team size and geographical spread where we can begin to use

effective marketing across digital channels to create a meaningful business impact. We propose to increase our
brand recognition through various brand building efforts, communication and various promotional initiatives

174
across media including print, digital, hoardings and online platforms. Such promotion would enhance the
visibility, business positioning and credibility.

Competition

We face competition from asset management, wealth advisory and distribution and non-banking finance
companies, domestic and multinational banks with private banking operations that target clients in the segment
we operate in. Some of our key competitors are part of diversified financial institutions and may have greater
resources and offer a broader range of investment products and services than ours. For details, please refer
section titled “Industry Overview” on page 113 of this Prospectus. The CARE Advisory Research is available on

the website of our Company at www. https://rathi.com/Wealth/Investorrelations.php
Intellectual Property

We currently hold, and use, 7 trademarks, being the UNCAPPED ACCELERATOR, DECAY MULTIPLE,
PROTECTED ACCELERATOR, PROTECTED CALL, PROTECTED CALL PLUS, ARWEALTH and
REVERSE CHI SQUARE and three copyright Core Concept Note, Financial Strategy- V1 and Financial
Strategy- V34.

Further, we use, among others, the name, brand and trademark ‘ANANDRATHI and associated logos in the
ordinary course of our business and in our corporate name. The trademark ‘ANANDRATHI is owned by, and
is registered in the name of, ARFSL which is licensed to us through a license agreement dated April 1, 2018,
which was subsequently replaced by the new brand policy approved by the board of ARFSL on March 11, 2019,
which will continue to have effect unless mutually terminated by ARFSL and our Company.

Human Resources

Our employees have a significant role to play in our success and we constantly strive towards enhancing our
work environment and work culture. We enable an entrepreneurial culture with a flexible outlook to business,
uncapped incentives to RMs and an experienced management team which leads with example. As of August 31,
2021, our Company had 643 employees. We strive to maintain a work environment that fosters professionalism,
integrity, excellence and cooperation among our employees. The following table sets forth details of our
employees as of August 31, 2021:

 

 

 

 

 

 

 

 

 

 

Employee Role ARWL ARDWPL FINFRA TOTAL

Senior Management* 2 : 1 3
RM * 233# 3 = 236
Business Development

Manager - 7 18 25
Account Manager 228 = - 228
Product Team 52 2 3 57
Technology team 49 = = 49
Others 80 iL 54 145
Total 643 23 76 742

 

 

 

 

 

 

*Our Deputy CEO plays dual role as RM and management
#Out of 233 RMs, 8 RMs are working on contractual basis.

Insurance

We have a 360* Protector Directors and Officers Liability Insurance - Non-SEC policy in place, and our
employees, directors and officers are insured against business interruption, consequential damages,
environmental damages, terrorist acts and war — related events. We also maintain insurance policies with respect
to certain private four wheelers, fire and special perils.

Properties

Our Registered Office is located at 10‘ Floor, A Wing, Express Zone, Western Express Highway Goregaon
(East), Mumbai — 400 063, Maharashtra and is occupied by us, pursuant to a leave and license agreement dated
January 01, 2019. Our Corporate Office is located at 11" Floor, Times Tower, Kamala City, Senapati Bapat
Marg, Lower Parel, Mumbai 400013, Maharashtra which is occupied by us, pursuant to a leave and license
agreement dated March 24, 2017 and an agreement dated April 2, 2018.

175
As of August 31, 2021, we had the following branches / offices across India which are leased by us:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tenure | Residual
‘Company Location Name of lessor Address SoS Sess
Woof | vo of Years) | at
Years)
ARWL Bangalore MLC Estates LLP The Millenia, Tower A, 6* Floor, 5.0 17 | April 30, 2023
1 & 2, Murphy Road, Halasuru,
Bengaluru-560 008, Kamataka
ARWL Chandigarh Shui, Gurcharan Singh Brar, | Entire Second Floor, S.C.0. 10, 50 35 | February 28,
Smt. Bhupinder Kaur, shri, | Sector 26, Chandigarh-160026. 2025
Suraj Mohan Singh’ Brar,
Shri. Manav Mohan Sing
Brar , Shri, Kirat Singh Brar,
Smt. Tirath Singh Brar
ARWL Chennai Prestige Constructions | Anna Salai, Nandanam, No. 471, 30 23 | December 9,
Ventures Private Limited Prestige Polygon, Chennai 600035 2023
ARWL Dalit MIS Loknath Properties Pvt | A-J54, Defence Colony, New 60 Fe
Lid Delhi, 110049 2023
ARWL Dalit MIS Riddhi___Siddhi | A-254, Defence Colony, New 60 20 | August 31,
Commosales Pvt Ltd Delhi, 110049 2023,
ARWL Garagram ‘Adidev Warehouse LLP Unit No 129, 130, 131, & 135, 1" 30 70 | August 3,
Floor, DLF Star Tower, Sector 30, 2028
NHB, Gurugram 122001
ARWL Garugram Suneel Sodhi, Dhruv Sodhi, | Unit No 134, 1" Floor, DLP Star 30 70 | August 31,
Bhavna Sodhi (Pawan Gupta) | Tower, Sector 30, NH@, 2028
Gurugram-122001
ARWL Hyderabad Mi_RVR Projects Private | 4” Floor 1217/8, Veda Ark, Road 50 13 | December 2,
Limited No 36, Jubliee Hills, Hyderabad — 2022
500 033
ARWL Pune R Works Off No 601 & 602, Vikram 30 24 | January 31,
Monarch, Ganeshkhind Road, 2021
Pune 411016
ARWL Pune ‘Anuradha Milind Bhandarkar | 602, 6° Floor, Plot No. 490.A/1, 29 22 | November 30,
Cts No. 1115.A/1, Vikram 2023
Monarch, Ganeshkhind Road,
Shivaji Nagar, Pune — 411016
ARWL Pane Gaurav Milind Bhandarkar | Office No 601, 6” Floor, Plot No. 39 22 | November 20,
490.4/1, Cts No. 1115.A/1, 2023
Vikram’ Monarch, Ganeshkhind
Road, Shivaji Nagar, Pune —
411016
ARWL Noida Smartworks Coworking | Ground Floor, Plot 1 & 2, Sector 30 12 | Oaober 31,
Spaces Private Limited 125, Noida ~ 201301 2022
ARWL Kolkata ‘Abu Sayeed Jamil, Abul | Municipal Premise No. 69 Park 90 BS} aly 31, 2030
Balagh Mohammed’ Masud | Street, Kolkatta — 700016
Jamil, Abul Balagh
Mohammed Saud Jamil
ARWL Mumbai Vahin Advisors and Trades | Trade D, 10" Floor, Opp Times 43 34 | January 31,
Private Limited Tower, Kamala Mills Compound, 2025
Senapati Bapat Marg, Lower
Parel, Mumbai ~ 400 013
ARWL Mumbat ‘Asha Leasing & Finance Pvt | 11" Floor, Times Tower, Kamala 38 03 | December 31,
Lid , Senapati Bapat Marg, Lower 2021
Parel, Mumbai ~ 400 013
FINFRA Mumbat Shiv Raj Kapoor & Vishnu | 2 Floor, Seagull House, Shivaji 275 03 | December 31,
Raj Kapoor Colony, Off. Andheri Kurla Road, 2021
Chakala, Andheri, Mumbai ~ 400
099,
ARWL Mambat ‘Anand Rathi Global Finance | 10 Floor, A-Wing, Express Zone, 60 42 | October 31,
Limited Near Oberoi Mall, Westem 2025
Express Highway, Goregaon (E),
Mumbai - 400063

 

 

 

 

 

 

 

176

 
KEY REGULATIONS AND POLICIES IN INDIA

The following is a brief of certain sector specific Indian laws and regulations which are relevant to our
Company's and Material Subsidiary’s businesses. The overview set out below is not exhaustive and is only
intended to provide general information, and is neither designed, nor intended, to be a substitute for
professional legal advice. For details of material approvals obtained by our Company and Material Subsidiary
in compliance with these regulations, please see “Government and Other Approvals” on page 345 of this
Prospectus. The statements below are based on the current provisions of Indian law, which are subject to
change or modification by subsequent legislative, regulatory, administrative or judicial decisions.

KEY REGULATIONS APPLICABLE TO OUR COMPANY AND MATERIAL SUBSIDIARIES

A. SEBI Regulations

Securities and Exchange Board of India Act, 1992 (“SEBI Act”)

 

The SEBI Act, amongst other things, provides for powers, functions and duties of SEBI. The duties of SEBI
include (a) protection of the interests of investors investing in securities, and (b) promotion of the development
and regulation of the securities market, by such measures as it thinks fit. The SEBI Act provides for grant of
registration of merchant banker, underwriter, portfolio manager, investment adviser, depository participant or
any other intermediaries associated with the securities market, which are to be governed by various regulations
notified by SEBI.

Intermediaries Requlations

The Securities and Exchange Board of India (Intermediaries) Regulations, 2008, as amended (“Intermediaries
Regulations”) regulates intermediaries which include stock broker, sub-broker, share transfer agent, merchant
banker, portfolio manager, investment adviser, a trading member of a derivative segment or currency derivatives
segment of a stock exchange. The Intermediaries Regulations prescribe the criteria for determining whether an
applicant or the intermediary is a “fit and proper person’ for the purposes of registrations granted by SEBI under
various regulations issued by SEBI.

The Intermediaries Regulations empower SEBI to take actions against persons who have been granted a
certificate of registration and have failed to comply with any conditions subject to which a certificate of
registration has been granted to him or contravenes any of the provisions of the securities laws or directions,
instructions or circulars issued thereunder. The actions include (a) disposing of the proceedings without any
adverse action, (b) suspension of certificate of registration for a specified period, (c) cancellation of certificate
of registration, (d) prohibition of taking up new assignment or contract or launch a new scheme for a specified
period, (e) debarment of a branch or an office from carrying out activities or an officer from being employed or
associated with any registered intermediary or other registered person for the period specified in the order, or (f)
issuance of a regulatory censure to the noticee. Further the Intermediaries Regulations provide for special
procedure for action on expulsion from membership of the stock exchange(s) or clearing corporation(s) or
termination of all the depository participant agreements with depository(ies).

Pursuant to the SEBI (Regulatory Sandbox) (Amendment) Regulations, 2020, SEBI may exempt any person or
class of persons from the operation of all or any of the provisions of these regulations for a period as may be
specified but not exceeding 12 months, for furthering innovation in technological aspects relating to testing new
products, processes, services, business models, etc. in live environment of regulatory sandbox in the securities
markets. Under this regulatory sandbox framework, entities regulated by SEBI shall be granted certain facilities
and flexibilities to experiment with fintech solutions in a live environment and on limited set of customers for a
limited time frame. These features shall be fortified with necessary safeguards for investor protection and risk
mitigation.

Investment Advisers Regulations

The Securities and Exchange Board of India (Investment Advisers) Regulations, 2013, as amended
(“Investment Advisers Regulations”) govern the law pertaining to registration and regulation of the working
of investment advisers. An investment adviser is a person, who for consideration, is engaged in the business of
providing investment advice to clients and includes any person who holds out himself as an investment adviser.
In terms of the Investment Advisers Regulations, an investment advice means an advice relating to investing in,
purchasing, selling or otherwise dealing in securities or investment products, and advice on investment portfolio

177
containing securities or investment products, whether written, oral or through any other means of
communication for the benefit of the client and shall include financial planning. Investment advice given
through newspaper, magazines, any electronic or broadcasting or telecommunications medium, which is widely
available to the public is not considered as investment advice. “Financial planning” includes analysis of clients’
current financial situation, identification of their financial goals, and developing and recommending financial
strategies to realize such goals. The Investment Advisers Regulations lay down, amongst other things, the
obligations and responsibilities of investment advisers including (a) not receiving any consideration by way of
remuneration or compensation or in any other form from any person other than the client being advised, in
respect of the underlying products or securities for which advice is provided, (b) acting in a fiduciary capacity
towards its clients and disclosing conflicts of interests as and when they arise (c) maintaining an arms-length
relationship between its activities as an investment adviser and other activities, (d) ensuring that its investment
advisory services are clearly segregated from all its other activities, (e) ensuring that in case of any conflict of
interest of the investment advisory activities with other activities, such conflict of interest is disclosed to the
client, (f) not divulging any confidential information about its client, which has come to its knowledge, without
taking prior permission of its clients except where such disclosures are required to be made in compliance with
any law for the time being in force, and (g) maintaining the records prescribed under the Investment Advisers
Regulations. An investment adviser shall not act on its own account, knowingly to sell securities or investment
products to or purchase securities or investment product from a client. In case of change in control of the
investment adviser prior approval from SEBI is required to be taken.

The Investment Advisers Regulations stipulate liability for action in case of default by an investment adviser,
which include (a) failure to furnish any information relating to its activity as an investment adviser as required
by SEBI; (b) furnishment of false or misleading information to SEBI in any material particular; (c) failure to
submit periodic returns or reports as required by SEBI; (d) non co-operation in any enquiry, inspection or
investigation conducted by SEBI; (e) failure to resolve the complaints of investors or failure to give a
satisfactory reply to SEBI in this behalf; or (f) contravention of any provisions of the SEBI Act or any
regulations or circulars issued thereunder.

As per the current provisions of the Investment Advisers Regulations, a distributor of mutual funds who is a
member of the Association of Mutual Funds in India (“AMET”) and is providing any investment advice to its
clients which is incidental to its primary activity is exempted from being registered as an investment adviser
under the Investment Advisers Regulations. SEBI has in their frequently asked questions also clarified that
mutual fund distributors registered with AMFI can only provide basic advice to its mutual funds clients
incidental to its distribution activity. Incidental activities with respect to distribution of mutual funds means
providing basic advice pertaining to investment in mutual fund schemes limited to such schemes / products
being distributed by the distributor to its clients/ investors or any other mutual fund product. SEBI has also
clarified that if a distributor of mutual fund is engaged in providing investment advice to general investors other
than or in addition to its mutual fund clients, and in securities (such as shares, debentures, bonds, derivatives,
securitized instruments, structured products, units of AIF, real estate investment trusts, infrastructure investment
trusts, etc.) other than or in addition to mutual fund schemes distributed by him, then such distributor is required
to get registration as an investment adviser.

SEBI has however, from time to time, issued Consultation Papers setting out proposals to amend the Investment
Advisers Regulations. To effectuate certain proposals suggested by SEBI in its Consultation Paper on Review of
Regulatory Framework for Investment Advisers, dated January 15, 2020, SEBI enacted certain amendments to
the Investment Advisers Regulations which have come into force from September 30, 2020, which include,
amongst other things, client level segregation at group level for investment advisory and distribution services,
fees to be charged to clients, increase in minimum net-worth requirements of investment advisers and a
prohibition on charging implementation fee by investment advisers. The current Investment Advisers
Regulations requires client level segregation at group level for investment advisory and distribution services
wherein the same client cannot be offered both advisory and distribution services within the group of the non-
individual investment adviser. A client can either be an advisory client where no distributor consideration is
received at the group level or distribution services client where no advisory fee is collected from the client at the
group level. A non-individual investment adviser is required to maintain an arm’s length relationship between
its activities as investment adviser and distributor by providing advisory services through a separately
identifiable department or division. While an investment adviser is permitted to provide implementation services
to the advisory clients only through direct schemes/ products in securities market, an investment adviser is not
permitted to charge any implementation fees from the client. Further the investment adviser is required to ensure
that no consideration including any commission or referral fees, whether embedded or indirect or otherwise, by
whatever name called is received, directly or indirectly, at investment adviser’s group or family level for the
said implementation service.

 

178
Our Company will be required to comply with any directions issued by SEBI in the future and/or any
amendments that may be made to the Investment Advisers Regulations.

SEBI Circular on Mutual Fund Distributors

SEBI by way of its circulars no. CIR No.10 / 310 /01 dated September 25, 2001, MFD/CIR/20/23230/2002
dated November 28, 2002, SEBI/MFD/CIR No.01/6693/03 dated April 3, 2003, SEBI/IMD/CIR No.2/254/04
dated February 4, 2004 and Cir / IMD / DF / 5 / 2010 dated June 24, 2010, has amongst others directed that (a)
agents/ distributors of mutual fund units are required to obtain certification from the National Institute of
Securities Markets (“NISM”) and registration from AMFI, (b) AMFI shall create a unique identity number of
the employee/ relationship manager/ sales person of the distributor interacting with the investor for the sale of
mutual fund products, in addition to the AMFI Registration Number (“ARN”) of the distributor.

SEBI by way of its circular no MFD/CIR/ 06/210/2002 dated June 26, 2002 provided that all distributors and
agents of mutual funds units are required to follow the code of conduct for intermediaries of mutual funds
provided therein.

SEBI by way of circular no. SEBI/IMD/DF/13/2011 dated August 22, 2011 has provided guidance on due
diligence process to be conducted by AMCs on certain categories of distributors

SEBI by way of its circular on “Facilitating transaction in mutual fund schemes through the stock exchange
infrastructure” bearing reference number CIR/IMD/DSA/32/2013 dated October 4, 2013, has permitted a
mutual fund distributor registered with the Association of Mutual Funds in India (*AMFI”’) and who has been
permitted by BSE to be eligible to use the stock exchanges’ infrastructure, to purchase and redeem mutual fund
units directly from mutual fund and asset management companies (AMC), in addition to the existing channels of
mutual funds distribution The recognized stock exchange shall grant permission to a mutual fund distributor on
a request made by a AMFI registered mutual fund distributor on the basis of criteria including fee, code of
conduct as laid down by AMFI. Additionally, it clarified that a mutual fund distributor shall not handle payout
and pay in of funds as well as units on behalf of investors. The recognized stock exchange shall put necessary
system in place to ensure that pay in will be directly received by recognized clearing corporation and payout
will be directly made to investor account. In the same manner, units shall be credited and debited directly from
the demit account of investors. SEBI has also by way of its circulars bearing reference no.
SEBI/HO/MRD/DSA/CIR/P/2016/113 dated October 19, 2016 and SEBI/HO/MRD1/DSAP/CIR/P/2020/29
dated February 26, 2020, permitted (a) investment advisers registered with SEBI to use infrastructure of the
recognized stock exchanges to purchase and redeem mutual fund units directly from mutual fund and AMCs, on
behalf of their clients, including direct plans; and (b) investors to directly access infrastructure of the recognized
stock exchanges to purchase and redeem mutual fund units directly from mutual fund and AMCs.

SEBI by its circular on “Categorization and Rationalization of Mutual Fund Schemes”, bearing reference
number SEBI/HO/IMD/DF3/CIR/P/2017/114 dated October 6, 2017 (“SEBI Circular”) has specified the
framework for categorization and rationalization of mutual fund schemes. This circular is applicable to the
open-ended schemes of the mutual funds, which are either existing, or are in the process of being launched, or
draft of the scheme document has been filed/ will be filed with SEBI. Pursuant to the SEBI Circular the mutual
fund schemes are classified under five groups, namely, equity schemes, debt schemes, hybrid schemes, solution
oriented schemes and other schemes. These five groups collectively have 36 different categories of each of these
schemes under them, details of which are provided in the SEBI Circular. Further, the investment objective,
investment strategy and benchmark of each existing scheme, is required to be suitably modified to be aligned
with these classifications.

In relation to investment universe for the equity schemes, the SEBI Circular has defined large cap, mid cap and
small cap companies in terms of full market capitalization, as: (a) large cap to be in the range of 1*-100"; (b)
mid cap falling under 101*-250" and (c) small cap to be a company which is 251% onwards. In this regard,
mutual funds will be required to adopt the list of stocks prepared by AMFI and in the event of any updation
thereto, mutual funds will have to rebalance their portfolios as per the updated list, within a period of one month
thereof. Further, SEBI by its circular on “Asset Allocation of Multi Cap Funds”, bearing reference number
SEBI/HO/IMD/DF3/CIR/P/2020/172, dated September 11, 2020, has partially modified the scheme
characteristics of multi cap funds, such that requirement for minimum investment in equity and equity related
instruments has been increased from 65 per cent. To 75 per cent. Of the total assets, with minimum investment
of 25 per cent. Of the respective total assets in equity and equity related instruments of large cap, mid cap and
small cap companies, each. Further, SEBI by its circular on “Introduction of “Flexi Cap Fund” as a new

179
category under Equity Schemes”, bearing reference number SEBI/HO/IMD/DF3/CIR/P/2020/228, dated
November 6, 2020, has introduced a new category of scheme named “Flexi Cap Fund” under equity schemes
which requires to make a minimum investment in equity and equity related instruments of 65% of total assets of
the scheme and will be an open ended dynamic equity scheme investing across large cap, mid cap, small cap
stocks.

SEBI by its circular on “Total Expense Ratio (TER) and Performance Disclosure for Mutual Funds” bearing
reference number SEBI/HO/IMD/DF2/CIR/P/2018/137, dated October 22, 2018 provided that all scheme
related expenses including commission paid to distributors is required to necessarily be paid from the scheme
only within the regulatory limits and not from the books of the AMC, its associate, sponsor, trustee or any other
entity through any route and that the AMCs should adopt full trail model of commission in all schemes without
payment of any upfront commission to mutual fund distributors. Further, SEBI by its circular on “Review of
Commission, Expenses, Disclosure norms etc. — Mutual Fund” bearing reference number
SEBI/HO/IMD/DF2/CIR/P/2019/42 dated March 25, 2019 carved out for upfronting of trail commission for
inflows through systematic investment plans from new investors to the mutual fund industry.

Insider Trading Regulations

The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, as amended,
(“Insider Trading Regulations”) prohibits subscribing, buying, selling, dealing, or agreeing to subscribe, buy,
sell, or deal in any securities by an insider on the basis of having possession or access to the unpublished price
sensitive information (“UPSI”) of a listed entity. An insider is a person who is connected with the company and
is reasonably expected to have certain price sensitive information in respect of the securities of the company or
has received or has access to certain UPSI. In accordance with the Insider Trading Regulations, no insider shall
communicate, provide, or allow access to any UPSI, relating to a company or securities listed or proposed to be
listed, to any person. Any information is referred to as price sensitive information if it is likely to materially
affect the price of the securities of the company to which it relates.

The Insider Trading Regulations essentially prescribes a model code of conduct to be followed by all companies
and organizations associated with the securities markets. Under the Insider Trading Regulations, all listed
companies and organizations associated with the securities market including, amongst other, intermediaries as
defined under the SEBI Act, AMCs, trustees of mutual funds are under an obligation to formulate certain
internal procedures and conduct following the model code of conduct as provided under the Insider Trading
Regulations, by adopting the minimum standards set out in the relevant schedules and will further abide with the
code of corporate disclosure practices.

Through amendments issued on December 31, 2018 and July 17, 2020 (the “Amendments”) SEBI has provided
for stricter norms pursuant to the report of the Committee on Fair Market Conduct. In terms of the Amendments,
every listed or proposed to be listed company is required to maintain a digital database containing the names of
all persons with whom UPSI is shared, names of all persons who have shared UPSI and the nature of UPSI. A
“proposed to be listed company” includes securities of an unlisted company, (i) if such unlisted company has
filed offer documents or other documents, as the case may be, with SEBI, stock exchange(s) or registrar of
companies in connection with the listing; or (ii) if such unlisted company is getting listed pursuant to any
merger or amalgamation and has filed a copy of such scheme of merger or amalgamation under the Companies
Act, 2013. The board of directors of a listed company is required to make a policy for determination of
‘legitimate purposes’ as a part of the Code of Fair Disclosures and Conduct. The Amendments have permitted
the sharing of UPSI in the ordinary course of business with an indicative list of persons, provided that such
information has not been shared to evade or circumvent the provisions of the Insider Trading Regulations.

AMFI Directions

AMEFI issues circulars from time to time to its members on various aspects relating to distribution of mutual
fund schemes by distributors.

OTHER APPLICABLE LAWS
Shops and Commercial Establishments legislations in various states

Under the provisions of local shops and commercial establishment legislations applicable in the states in which
establishments are set up, establishments are required to be registered under the respective legislations.

180
Contravention to provision of shops and commercial establishment legislations may entail penalty including
imprisonment along with fine. These legislations regulate the condition of work and employment in shops and
commercial establishments and generally prescribe obligations in respect of registration, opening and closing
hours, daily and weekly working hours, holidays, leave, health and safety measures and wages for overtime
work, among others.

Trade Marks Act, 1999

In India, trademarks enjoy protection under both statutory and common law. Indian trademark law permits the
registration of trademarks for goods and services. The Trade Marks Act, 1999 (“Trademark Act”) governs the
statutory protection of trademarks and for the prevention of the use of fraudulent marks in India. Certification
marks and collective marks can also be registered under the Trademark Act. An application for trademark
registration may be made by individual or joint applicants and can be made on the basis of either use or
intention to use a trademark in the future.

Applications for a trademark registration may be made for in one or more international classes. Once granted,
trademark registration is valid for 10 years unless cancelled. If not renewed after 10 years, the mark lapses and
the registration has to be restored. The Trademark (Amendment) Act, 2010 has been enacted by the Gol to
amend the Trademark Act to enable Indian nationals as well as foreign nationals to secure simultaneous
protection of trademark in other countries, and to empower the Registrar of Trademarks to do so. It also seeks to
simplify the law relating to transfer of ownership of trademarks by assignment or transmission and to bring the
law generally in line with international practice.

B. Miscellaneous

In addition to the above, an entity operating in the securities market in India, is required to comply with
applicable securities laws in India, including, amongst others, the Takeover Regulations, the Securities and
Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market)
Regulations, 2003 and Securities and Exchange Board of India (Depositories and Participants) Regulations,
2018. Further, we are required to comply with labour laws applicable in India, including, amongst others,
Employees’ Compensation Act, 1923, Employees’ Provident Funds and Miscellaneous Provisions Act, 1952,
Employees’ State Insurance Act, 1948, Payment of Gratuity Act, 1972 and Payment of Bonus Act, 1965 and the
Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The
Government of India has enacted ‘The Code on Wages, 2019’, ‘The Occupational Safety, Health and Working
Conditions Code, 2020’, ‘The Industrial Relations Code, 2020’ and ‘The Code on Social Security, 2020’
(collectively, the “Labour Codes”), which propose to subsume several separate legislations such as the Payment
of Bonus Act, 1965, the Employees’ State Insurance Act, 1948, the Employees’ Provident Funds and
Miscellaneous Provisions Act, 1952, and the Payment of Gratuity Act, 1972, however, the Labour Codes have
not yet been completely notified.

181
HISTORY AND CERTAIN CORPORATE MATTERS

History of our Company

Our Company was incorporated at Mumbai on March 22, 1995 as Hitkari Finvest Private Limited, a private
limited company under the Companies Act, 1956. The details of changes to its name are set out below:

Changes to the name of our Company:

 

Name

Reason for change

Date of certificate of
incorporation/ fresh certificate
of incorporation/ effective date
of change of name

 

AR Venture Funds
Private Limited

Management

To reflect the objects of our Company.

April 6, 2005

 

AR Venture Funds
Limited

Management

Conversion to a public limited company
pursuant to Sections31 and 21, read with
Section 44, of the Companies Act, 1956.

March 8, 2007

 

AR Venture Funds
Private Limited

Management

Conversion to a private limited company
pursuant to Section 14, read with Section 18, of
the Companies Act, 2013.

July 7, 2015,

 

AR Venture Funds
Limited

Management

Conversion to a public limited company
pursuant to Section 14, read with Section 18, of
the Companies Act, 2013.

April 3, 2017

 

Anand Rathi
Limited

Wealth Services

To reflect the objects of our Company of wealth
management business.

July 6, 2017

 

Anand Rathi Wealth Limited

Pursuant to the amendment in Regulation 3(3)
of the SEBI (Investment Advisers) Regulations,
2013, no person, while dealing in distribution of
securities, to use the nomenclature
“Independent Financial Adviser or IFA or
Wealth Adviser or any other similar name”
unless registered with SEBI as an Investment
Adviser. Accordingly, AMFI had advised to the
mutual fund distributors (MEDs) inter alia not
to use the words “Wealth Services” as part of
their names and also to get their registered name
changed, where the name coincides with the list
of 52 names, as identified by AMFI, which
included “Wealth Services” being used by the
Company.

 

 

January 7, 2021

 

Changes to the address of the Registered Office of our Company

 

 

 

Change in Address Date of change Reason
From To
11/850, M.H.B. Colony, Gorai | 9, Parekh Vora Chambers, 66, | March 22,1995 | Ease of business
Road, Borivali (West), Mumbai | Nagindas Master Road, Fort,

400 091, Maharashtra

Mumbai 400 023, Maharashtra

 

9, Parekh Vora Chambers, 66,
Nagindas Master Road, Fort,
Mumbai 400 023, Maharashtra

Podar Chamber, 2" Floor, 109, SA
Brelvi Road, Fort, Mumbai 400
001, Maharashtra

July 10, 2001

Ease of business

 

 

 

 

 

 

 

Podar Chamber, 2™ Floor, 109, | J.K Somani Building, 3" Floor, November 23, | Ease of business
SA Brelvi Road, Fort, Mumbai | Bombay Samachar Marg, British 2001
400 001, Maharashtra Hotel Lane, Mumbai 400 023,

Maharashtra
J.K Somani Building, 3 Floor, | Shubham Centre, B-2, 5" Floor, | May 9, 2007 Ease of business
Bombay Samachar Marg, British | Cardinal Gracious Road, Chakala,
Hotel Lane, Mumbai 400 023, | Andheri (E), Mumbai 400 099,
Maharashtra Maharashtra
Shubham Centre, B-2, 5" Floor, | 4° Floor, Silver Metropolis, Jai | December 23, | Ease of business
Cardinal Gracious _Road, | Coach__ Compound, _Opposite | 2009

 

182

 
 

Change in Address

Date of change

Reason

 

Chakala, Andheri (E), Mumbai
400 099, Maharashtra

Bimbisar Nagar, Goregaon (East),
Mumbai 400 063, Maharashtra

 

 

4® Floor, Silver Metropolis, Jai

 

Express Zone, A Wing, 10" Floor,

 

January 19, 2019

 

Ease of business

 

Coach Compound, Opposite | Western Express —_ Highway,
Bimbisar Nagar,  Goregaon | Goregaon (East), Mumbai 400 063,
(East), Mumbai 400 063, | Maharashtra

Maharashtra

Main objects

The main objects of our Company as per the Memorandum of Association are:

 

“1. To carry on the activities of raising or acquiring funds for and managing venture capital funds, offshore
funds, pension funds, provident funds, insurance funds, or any other funds and to act as managers,
consultants, advisors, administrators, attorneys, agents, or representative of or for venture capital funds,
offshore funds, pension funds, provident funds, insurance funds, or any other funds formed or established in
India or abroad by the company or any other person or by any government, state, local authority,
association, institution or any other agency or organization.

2. To act as Financial Advisors and Investment Advisors and to render such financial management, financial
consultancy and advisory services to individuals, companies, corporations, trusts and other entities as
supplemental activity of the company.

3. To act as the wealth managers, financial consultants, management consultants, advisors and provide
consultancy, advisory, financial services and facilities of every description and to manage and mobilise
funds and assets of/for various companies, mutual fund, individual investors, firms, associations and other
bodies corporate, private and institutional investors and carry on the activities of managing investment in
equity and derivative instruments, structured products, commodities and commodity derivatives, currency
and currency derivatives, debt instruments, mutual funds, government securities, saving instruments,
insurance products, money market instruments and securities of all types and artworks and to promote,
support and to carry on the business of providing wealth management services to the individuals, firms,
associations, institutions, corporate and body corporate and to pass on the benefits of such investments as
interest, dividend, bonus, etc.

4. To carry on all kinds of agency business and to act as advisors, consultants, agents, sub-agents, brokers,
distributors, sellers of Deposits, loans, Mutual Funds, shares, stocks, debentures, Bonds, Government
securities, insurance products, National Savings Certificates and such other financial, investment, personal
loans, home loans products, securities and debt instruments and real estate including residential,
commercial, agricultural land, plots, shops etc. and to acquire and hold one or more
memberships/dealership with or without trading privileges of associations of bankers, associations of
mutual funds, merchant bankers, insurance companies, fund managers, brokers, securities dealers or
commodity dealers, clearing houses, stock exchanges, commodity exchanges in India or any part of the
world which will or is likely in any way to facilitate the conduct of the company’s business.”

The main object and objects incidental and ancillary to the attainment of the main objects, as contained in the
Memorandum of Association, enable our Company to carry on its existing business.

Changes to our Memorandum of Association in the last 10 years
Our Memorandum of Association was amended from time to time pursuant to sub-division, or reclassification
of, the authorized share capital of our Company. For details of changes to the authorized share capital of our

Company since its incorporation, please see “Capital Structure” on page 79 of this Red Herring Prospectus.

For details of changes to the name of our Company, see “Changes to the name of our Company” above on page
182 of this Prospectus.

In addition to the aforesaid amendments to the Memorandum of Association, the following changes have been
made to our Memorandum of Association in the last 10 years preceding the date of this Prospectus:

183
 

Date of the Nature of amendment
shareholders’
resolution

 

 

March 22, 2017 Clause Nos. 3 and 4 of the main objects of our Memorandum of Association were added

to reflect the following:

“3. To act as the wealth managers, financial consultants, management consultants,
advisors and provide consultancy, advisory, financial services and facilities of
every description and to manage and mobilise funds and assets of/for various
companies, mutual fund, individual investors, firms, associations and other
bodies corporate, private and institutional investors and carry on the activities
of managing investment in equity and derivative instruments, structured
products, commodities and commodity derivatives, currency and currency
derivatives, debt instruments, mutual funds, government securities, saving
instruments, insurance products, money market instruments and securities of all
types and artworks and to promote, support and to carry on the business of
providing wealth management services to the individuals, firms, associations,
institutions, corporate and body corporate and to pass on the benefits of such
investments as interest, dividend, bonus, etc.

 

4. To carry on all kinds of agency business and to act as advisors, consultants,
agents, sub-agents, brokers, distributors, sellers of Deposits, loans, Mutual
Funds, shares, stocks, debentures, Bonds, Government securities, insurance
products, National Savings Certificates and such other financial, investment,
personal loans, home loans products, securities and debt instruments and real
estate including residential, commercial, agricultural land, plots, shops etc. and
to acquire and hold one or more memberships/dealership with or without
trading privileges of associations of bankers, associations of mutual funds,
merchant bankers, insurance companies, fund managers, brokers, securities
dealers or commodity dealers, clearing houses, stock exchanges, commodity
exchanges in India or any part of the world which will or is likely in any way to
facilitate the conduct of the company s business.”

Clause Nos. 56 to 98 of the other objects of our Memorandum of Association were
deleted.

 

 

Major events and milestones

The table below sets forth some of the major events and milestones in the history of our Company:

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal Particulars

2002 ARFSL received the certificate of registration from the Association of Mutual Funds in India with respect to
its mutual fund distribution business.

2008 Our Company entered into contractual arrangement with ARFSL to use their premises to commence
overseas operations in Dubai; and expanded wealth operations in India by setting up office in Delhi.

2015 AuM of wealth management business of ARFSL crossed % 50,000 million.

2017 Our Subsidiary, AR Wealth Management Private Limited, acquired Freedom Wealth Solutions Private
Limited (involved in investment advisory business) and Ffreedom Intermediary Infrastructure Private
Limited.

2017 Our Company acquired the mutual fund distribution business of ARAL which ARAL had acquired from
ARFSL.

2017 Our Company acquired the private wealth management business from Religare Wealth Management
Limited.

2018 Our Company expanded wealth operations in eastern India by setting up office in Kolkata.

2018 ‘AuM of our Company crossed & 150,000 million.

2019 AuM of our Company crossed % 200,000 million.

2021 AuM of our Company crossed % 250,000 million.

 

 

Certifications, Awards and Accreditations received by our Company

The table below sets forth some of the certifications, awards and accreditations received by our Company:

184

 
 

Fiscal Accreditation

 

 

 

2012 Voted “The Overall Best Private Bank in India as voted by HNWIs” in AuM US$1m-5m category
in the Asiamoney Private Banking Polls 2012*

2013 The Overall Best Private Bank in India as voted by HNWIs : #1 in AUM>US$25m, #4 in AuM
US$5.01m-25m, #2 in AuM US$1m-5m category — Asiamoney Private Banking Polls*

2014 The Best Overall Private Bank in India as voted by HNWIs : #1 in AuM> US$25m, #1 in AUM

US$5.01m -25m Asiamoney Private Banking Polls*

 

Ranked among the “Best Domestic Private Banks in Asia 2005-2013” in India in the Asiamoney
Private Banking Poll of Polls*

 

 

 

2015 Best Wealth Manager India Award — Capital Finance International, London*
2016 Best Wealth Manager India Award — Capital Finance International, London*
2017 Voted the Best Wealth Manager India by Capital Finance International, London

 

Ranked 34 in India’s Great Mid-Size Workplaces 2017 by HT Media Limited and Great Place to
Work Institute India

 

2018 Best Wealth Manager India Award — Capital Finance International, London

 

Great Place to Work — 2018 in the Small and Mid-Sized Organizations category, by the Great
Place to Work Institute, India

 

 

 

 

 

 

 

 

2019 Amity Corporate Excellence Award for Most Strategic Private Wealth Management

2020 Fastest Growing Wealth Management Organisation by World BFSI Congress, 2020

2020 Customer Service Excellence Award by World BFSI Congress, 2020

2020 Great Place to Work — 2020 in the Small and Mid-Sized Organizations category, by the Great
Place to Work Institute, India

2021 Customer Service Excellence Award by World Leadership Congress & Awards, 2021
2021 Great Place to Work — by the Great Place to Work Institute, India

 

 

 

*The award was received by ARFSL for the business that was subsequently transferred to ARAL and thereafter transferred to us.
Time and cost overrun in setting up projects by our Company
We have not encountered any time and cost overruns in respect of our business.

Details regarding material acquisitions or divestments of business/undertakings, mergers and
amalgamation, and revaluation of assets in the last 10 years

Other than as disclosed under ‘History and Certain Corporate Matters ~ Share Purchase and Shareholders’
agreement’ on page 186 of this Prospectus, our Company has not acquired any material business or undertaken
any mergers or amalgamations or divestments of business or undertaking in the last 10 years preceding the date
of this Prospectus.

Transfer of business from ARFSL to ARAL and subsequently to our Company

ARFSL, an AMFI registered mutual fund advisor and a SEBI registered portfolio manager and investment
advisor, transferred its core businesses (i.e. mutual fund distribution business and portfolio management
business and investment advisor business) in Fiscal 2016 to ARAL, which held a merchant banker registration,
with a view to achieving a simplified business structure and facilitating a dedicated management structure for its
core businesses. Subsequently, in Fiscal 2017, ARAL further transferred its mutual fund distribution business to
our Company.

Strategic and financial partners

As of the date of this Prospectus, our Company does not have any strategic and/or financial partners.

Defaults or rescheduling or restructuring of borrowings from financial institutions or banks

There are no defaults or rescheduling or restructuring of borrowings with financial institutions or banks.
Holding company

As on the date of this Prospectus, our Company is not a subsidiary of any company.

Subsidiaries and joint ventures

185
As of the date of this Prospectus, our Company has three Subsidiaries, namely, AR Digital Wealth Private
Limited, Freedom Wealth Solutions Private Limited and Ffreedom Intermediary Infrastructure Private Limited.
For details regarding the Subsidiaries of our Company, see “Our Subsidiaries” on page 188 of this Prospectus.
Our Company does not have any joint ventures as on the date of this Prospectus.

Details of Shareholders’ Agreements

Except as disclosed below, our Company does not have any subsisting shareholders’ agreements among our
Shareholders vis-a-vis our Company:

Share Purchase and Shareholders’ agreement
Acquisition of FWSPL and FIINFRA

A shareholders’ agreement dated August 10, 2016 was entered into amongst our Company, Mr. Anand Rathi,
Mr. Amit Rathi and Ms. Supriya Rathi (collectively referred to as “Anand Rathi Group Shareholders”),
certain other Anand Rathi Group Shareholders, AR Digital Wealth Private Limited (“ARDWPL”) (a subsidiary
of our Company), and Mr. Sumeet Vaid, Sumeet Surindernath Vaid HUF, Ms. Menka Vaid, Ms. Nandita Sud,
Ms. Swati Agrawal, Mr. Bhupendra Sharma, Mr. Jitendra Tanna, Ms. Anisha Chaturvedi, Techno Auto-
Components (I) Private Limited, Mr. Jayant Davar, Mr. Vikram Nirula, Mr. Sujan Sinha, Mr. Harshavardhan
Raghunath, Parth Infracon Private Limited, Mr. Sandeep Parwal, Ms. Honey Parwal and Mr. Sandeep Parekh
(collectively referred to as the “Other Shareholders”) erstwhile shareholders of FWSPL (the “ARDWPL
Shareholders Agreement”), pursuant to share purchase agreements entered into between each of the Other
Shareholders, ARDWPL and FWSPL. Under the aforementioned share purchase agreements, the Other
Shareholders of FWSPL agreed to sell their entire shareholding in FWSPL to ARDWPL, aggregating to
2,496,381 equity shares in FWSPL for 850,000 equity shares of ARDWPL in aggregate.

The key provisions of the ARDWPL Shareholders Agreement are summarized below:

Board of Directors: The Anand Rathi Group Shareholders will have sole control of ARDWPL and the board of
directors of ARDWPL and any committees formed thereunder shall be responsible for the management,
supervision, direction and control of ARDWPL. The Chairman of the board of directors at all times will be a
nominee of the Anand Rathi Group Shareholders.

Operations and day to day management of ARDWPL: The Anand Rathi Group Shareholders, through their
nominees appointed as directors, will continue to operate and manage the business of ARDWPL on a day to day
basis.

Transfer of shares:

a) The Other Shareholders are required to obtain the prior written consent of the Anand Rathi Group
Shareholders for transfer of equity shares of ARDWPL, subject to a put option available with the Other
Shareholders (the put option would be exercisable at the end of 18 months from the date of allotment of
equity shares of ARDWPL, against the Anand Rathi Group Shareholders except Mr. Sumeet Vaid,
Ms. Menka Vaid and Sumeet Vaid HUF).

b) The Anand Rathi Group Shareholders have a right of first refusal in case any of the Other Shareholders
decide to sell any equity shares of ARDWPL.

c) The Anand Rathi Group Shareholders have a right to drag along the Other Shareholders (subject to certain
conditions) in the event the Anand Rathi Group Shareholders intend to transfer equity shares of ARDWPL
to any third person.

Exit rights: The Anand Rathi Group Shareholders have an option to offer an exit to the Other Shareholders in
the event of an increase in the share capital of ARDWPL, which may result in dilution of shareholding of the
Other Shareholders in ARDWPL.

186
Acquisition of wealth management business from Religare Wealth Management Limited

An asset purchase agreement dated February 17, 2017 was entered into between our Company, Religare Wealth
Management Limited (“RWML”), ARAL, ARSSBL, which was amended on March 15, 2017 and,
subsequently, again on March 30, 2017 (the “Asset Purchase Agreement”), for the purchase of assets
pertaining to the mutual fund products distributed by RWML, assets pertaining to the third party venture capital
fund products, alternate investment fund products, structured products and portfolio management services
distributed by RWML and assets in relation to purchase and sale transactions entered into by RWML in relation
to listed equity shares, debentures, exchange traded funds, exchange traded futures and options and similar
securities through Religare Securities Limited (acting in its capacity as a stock broker) by our Company. The
total consideration for the asset purchase was % 80 million payable by our Company in two tranches, i.e. the first
tranche of % 60 million upon completion of certain conditions precedent (closing) and the second tranche of =
20 million upon completion of additional conditions precedent, namely, cancellation of registration number
allotted by AMFI to RWML as a registered mutual fund distributor and transfer by RWML to our Company of
at least 50% of the combined value of the mutual funds underlying the assets sold by RWML to our Company
and the portfolio management services underlying the assets sold by RWML to our Company (“Milestone
Event”).

Guarantees given by the Promoter Selling Shareholders

The Promoter Selling Shareholders have not provided any guarantees to third parties on behalf of our Company
and Subsidiaries.

Other material agreements

Our Company has not, in the last two years preceding this Prospectus, entered into any material contracts, in
respect to which there is any obligation subsisting as on the date of the filing of this Prospectus, not being a
contract entered into in the ordinary course of business.

187
OUR SUBSIDIARIES
As of the date of this Prospectus, our Company has three Subsidiaries, details of which are as follows:

1. AR Digital Wealth Private Limited;
2. Freedom Wealth Solutions Private Limited; and
3. Ffreedom Intermediary Infrastructure Private Limited

Details regarding our subsidiaries
1. AR Digital Wealth Private Limited
Corporate Information

ARDWPL was originally incorporated as a private limited company under the name of Vecare Investments
Private Limited under the Companies Act, 1956 on February 14, 1996. Subsequently, Vecare Investments
Private Limited received a fresh certificate of incorporation pursuant to change of name of Vecare Investments
Private Limited dated June 13, 2003 as K. B. Productions Private Limited. Thereafter, K. B. Productions Private
Limited received a fresh certificate of incorporation pursuant to change of name of that company dated
December 29, 2014 as AR Wealth Management Private Limited. Thereafter, AR Wealth Management Private
Limited received a fresh certificate of incorporation pursuant to change of name of that company dated January
07, 2021 as AR_ Digital Wealth Private Limited. Its corporate identification number is
U65923MH1996PTC097270. Its registered office is situated at 11" Floor, Times Tower, Kamala City, Senapati
Bapat Marg, Lower Parel, Mumbai 400013, Maharashtra, India.

Nature of business
ARDWPL is engaged in the business of:

a) acting as advisors, consultants, counselors, management consultant, in all kind of wealth management
services, undertake activity as portfolio manager and services to individuals, non-residents, firms,
bodies corporate including overseas corporate bodies, institutions, banks, financial institutions, foreign
institutional investors, trust, mutual funds, undertaking of any central, state, local or municipal
authorities, whether in India or elsewhere and to provide financial advisory services; and

b) carrying on the business of portfolio management subject to Securities and Exchange Board of India
(Portfolio Managers) Rules, 1992 and SEBI (Portfolio Managers) Regulations, 1993 and such other
approval as may be required from other authorities subject to compliance of any other law in this
regard, but as contemplated by the Reserve Bank of India Act / Banking Regulation Act, 1949 and to
act as portfolio managers, portfolio advisors, to engage in the business of managing portfolio of
securities, to manage investment pools, stocks, securities and finance, to mobilize and manage funds of
any person or company by investment in various avenues like stocks, shares, debentures, bonds, mutual
fund units, bank deposits, like growth fund, income fund, risk fund, tax — exempt funds, pension funds,
superannuation funds, derivatives, commodities etc. and to pass on the benefit of portfolio investments
to the investors as dividend, bonus, interest and to provide complete range of portfolio management
services and personal financial services.

Capital Structure

The authorised share capital of ARDWPL is = 100,000,000 divided into 10,000,000 equity shares of = 10 each.
The issued, subscribed and paid up share capital of ARDWPL is 2% 53,729,760 divided into 5,372,976 equity
shares of face value of = 10 each.

Shareholding of the Company in ARDWPL

Our Company holds 4,057,059 equity shares, aggregating to 75.51% of the equity share capital of ARDWPL.

Other

188
One of our subsidiaries, Ffreedom Intermediary Infrastructure Private Limited (“FIINFRA”) was earlier the
subsidiary of AR Digital Wealth Private Limited (‘ARDWPL”) and a step-down subsidiary of our Company.
Both, FIINFRA and ARDWPL required further capital infusion to grow their businesses. Further, our Company
from time to time infused capital into the said Subsidiaries. In order to simplify the structure, FIINFRA was
made a direct subsidiary of our Company in compliance with the applicable laws.

2. Freedom Wealth Solutions Private Limited
Corporate Information

FWSPL was incorporated as a private limited company under the Companies Act, 1956 on February 13, 2009.
Its corporate identification number is U74990MH2009PTC190352. Its registered office is situated at Express
Zone, A Wing, 10" Floor, Western Express Highway, Goregaon (E), Mumbai 400063, India.

Nature of business

FWSDPL is engaged in the business of providing consultancy in the field of wealth management services, wealth
planning, financial planning, retirement planning, investment planning, property management, will writing,
property valuation, sales, marketing, finance and accounts, human resource, legal and secretarial, business
management, manufacturing, construction and project management functions. SEBI vide its circular dated 23"
September 2020 issued guidelines for Investment Advisors, requiring them to ensure segregation of advisory
and distribution activities at the client level. In view of captioned circular the company decided to discontinue
advisory activities effective from 1‘ October 2020 and hence no business activity is being carried out by the
company from the aforesaid date. As on date of this Prospectus, FWSPL has not surrendered the license.

Capital Structure

The authorised share capital of FWSPL is % 29,500,000 divided into 2,950,000 equity shares of = 10 each. The
issued, subscribed and paid up share capital of FWSPL is = 24,963,810 divided into 2,496,381 equity shares of
face value of = 10 each.

Shareholding of the Company in FWSPL

Our Company holds 2,371,625 equity shares, aggregating to 95.00% of the equity share capital of FWSPL.
3. Ffreedom Intermediary Infrastructure Private Limited

Corporate Information

Ffreedom Intermediary Infrastructure Private Limited was originally incorporated as a private company under
the name of Ffreedom Financial Planners and Investment Advisors Private Limited under the Companies Act,
1956 on July 19, 2013. Subsequently, Ffreedom Financial Planners and Investment Advisors Private Limited
received a fresh certificate of incorporation pursuant to change of name of that company dated February 3, 2014
as Ffreedom Intermediary Infrastructure Private Limited. Its corporate identification number is
U74999MH2013PTC245870. Its registered office is situated at 2" Floor, Seagull House, Shivaji Colony, Off
Andheri Kurla Road, Chakala, Andheri(East) Mumbai, Maharashtra 400099 India.

Nature of business

FIINFRA is engaged in the business of collecting, processing information in various manner using manual,
electronic, mobile or any other mediums or devices from clients, intermediaries, corporate and people in
general, to create analytics, statistics, reports, educational information, educational programmes, investor
education information, store, digitise, collate data and information and to create, design, invent, prepare, own,
develop, market, distribute, franchise out, rent, outsource, operate as service of software systems, software
solution, hardware and to deal with computers data processing machines or any other equipment and materials
of every kind and description useful in connection with collections, evaluations and storage of data/information,
data input tool, and output reports and provide guidelines and actionables, engage with clients, intermediaries
and other corporate, providing various kinds of calculators, risk assessment engines, loan eligibility calculators,
and various planning tools, providing any type of tools, mobile applications, computer programs, to undertake

189
assignments from clients on knowledge process outsourcing model and to deliver as per their requirements in
terms of building infrastructure on the basis of information technology (IT) or non IT and make it available
worldwide.

Capital Structure

The authorised share capital of FIINFRA is = 20,000,000 divided into 2,000,000 equity shares of = 10 each. The
issued, subscribed and paid up share capital of FIINFRA is = 8,292,520 divided into 829,252 equity shares of
face value of = 10 each.

Shareholding of the Company in FIINFRA

Our Company holds 829,252 equity shares, aggregating to 100.00% of the equity share capital of FIINFRA.
FIINFRA was earlier the subsidiary of AR Digital Wealth Private Limited (‘ARDWPL”) and a step-down
subsidiary of our Company. Both, FIINFRA and ARDWPL required further capital infusion to grow their
businesses. Further, our Company from time to time infused capital into the said Subsidiaries. In order to
simplify the structure, FIINFRA was made a direct subsidiary of our Company in compliance with the
applicable laws.

Other confirmations

Accumulated profits or losses

There are no accumulated profits or losses of any of our Subsidiaries not accounted for by our Company.

Listing

None of our Subsidiaries are listed on any stock exchange in India or abroad. Further, neither have any of the
securities of our Subsidiaries been refused listing by any stock exchange in India or abroad, nor has any of our
Subsidiaries failed to meet the listing requirements of any stock exchange in India or abroad.

Business interest of our Subsidiaries in our Company

Except as disclosed in “Financial Information -Related Party Transactions”, our Subsidiaries do not have any
interest in our Company’s business.

Common pursuits

One of our Subsidiaries, ARDWPL, is in the same line of business as our Company and accordingly, there are
certain common pursuits amongst our Subsidiaries and our Company. As on the date of this Prospectus, there is
no material conflict of interest amongst our Subsidiaries and our Company. Our Company and our Subsidiaries
will adopt the necessary procedures and practices as permitted by law to address any conflict situation as and
when they arise.

190
Board of Directors

OUR MANAGEMENT

Under our Articles of Association, unless otherwise determined by our Company in a general meeting, our
Company is required to have not less than three and not more than fifteen Directors. Our Company currently has
eight Directors, comprising one Executive Director, and seven Non-Executive Directors, out of which four are
Independent Directors (including one woman Director). The following table sets forth the details regarding the

Board as on the date of this Prospectus:

 

 

 

 

 

‘Name, Address, Designation, Occupation, Age Other Directorships
Nationality, Term, Date of Birth, Period (Years)
of Directorship and DIN
Mr. Anand Rathi 78 Indian companies:
Address: 274-A, Kalpataru Horizon Co. Op. Private companies:
Hsg Society, S. K. Ahire Marg, Worli,
Mumbai 400018 a) Anand Rathi IT Private Limited;
b) AR Trustee Company Private Limited;
Designation: Chairman and Non-Executive c) Ffreedom Intermediary Infrastructure Private
Director Limited;
d) Maa Gou Products Private Limited; and
Occupation: Business e) Sapphire Human Solutions Private Limited.
Nationality: Indian Public compar
Term: Liable to retire by rotation® a) Anand Rathi Financial Services Limited;
b) Anand Rathi Global Finance Limited; and
Date of Birth: June 25, 1946 c) Anandrathi Housing Finance Limited.
Period of Directorship: Since March 18, Companies incorporated _under_section 25 of _the
2005 erstwhile Companies Act, 1956:
DIN: 00112853 a) IMC Chamber of Commerce and Industry.; and
b) Pushpalata Rathi Foundation.
Mr. Pradeep Gupta 54 Indian companies:

Address: 301-C, Beau monde, Appasaheb
Marathe Marg, Prabhadevi, Mumbai 400
025,

Designation: Non-Executive Director
Occupation: Business

Nationality: Indian

Term: Liable to retire by rotation

Date of Birth: July 20, 1967

Period of Directorship: Since March 18,
2005

DIN: 00040117

 

 

Private companies:

a) Anand Rathi International Ventures (IFSC) Private
Limited;

b) AR Trustee Company Private Limited;

c) Ashadeep Holdings (India) Private Limited;

d) Daman Ganga Textiles Private Limited;

e) Jaipur Securities Private Limited;

f) Jakhetia Finances Private Limited;

g) LXME Money Private Limited;

h) Network Synthetics Private Limited;

i) PKG Finstock Private Limited;

j) Rukmani Mercantile Private Limited; and

k) Swati Capitals Private Limited.

 

a) Anand Rathi Advisors Limited;

b) Anand Rathi Financial Services Limited;

©) Anand Rathi Global Finance Limited;

d) Anand Rathi Share And Stock Brokers Limited;
and

e) Anand Rathi Wealth Advisors Limited.

 

191

 
 

Name, Address, Designation, Occupation,

Age

Other Directorships

 

 

 

Nationality, Term, Date of Birth, Period (Years)
of Directorship and DIN
Mr. Amit Rathi 47 Indian companies:
Address: 274-A, Kalpataru Horizon Co. Op. Private companies:
Hsg Society, S. K. Ahire Marg, Worli,
Mumbai 400018 a) AR Trustee Company Private Limited; and
b) AR Digital Wealth Private Limited.
Designation: Non-Executive Director (formerly AR Wealth Management Private
Limited)
Occupation: Business Public companies:
Nationality: Indian a) Anand Rathi Financial Services Limited;
b) Anand Rathi Global Finance Limited; and
Term: Liable to retire by rotation c) Anand Rathi Wealth Advisors Limited.
Date of Birth: October 7, 1974 Companies incorporated under section 25 of the
erstwhile Companies Act, 1956:
Period of Directorship: Since March 18,
2005 and re-designated as Non-Executive a) Pushpalata Rathi Foundation.
Director effective July 16, 2021
DIN: 00029791
Mr. Rakesh Rawal 65 Indian companies:

Address: No. 1002, Embassy Oasis, 46-1,
Promenade Road, Near Ulsoor, Bangalore
North, Bengaluru 560005

Designation: Executive Director and Chief
Executive Officer

Occupation: Service
Nationality: Indian

Term: Liable to retire by rotation and
appointed as a Chief Executive Officer for a
period of three years with effect from April
1, 2020

Date of Birth: January 7, 1956

Period of Directorship: Since March 1,
2017

DIN: 02839168

 

 

Private companies:

a) AR Digital Wealth Private Limited
(formerly AR Wealth Management
Limited); and

b) Freedom Wealth Solutions Private Limited.

Private

 

Public compani

a) Anand Rathi Wealth Advisors Limited.

 

192

 
 

Name, Address, Designation, Occupation,

Age

Other Directorships

 

 

 

 

 

 

Nationality, Term, Date of Birth, Period (Years)
of Directorship and DIN
Mr. Mohan Tanksale 68 Indian companies:
Address: C-3105, Oberoi Exquisite, Oberoi Private companies:
Garden City, Off Western Express
Highway, Goregaon East, Mumbai — a) Green Bridge Capital Advisory Private Limited;
400063 b) New Opportunity Consultancy Private Limited;
c) Rubix Data Sciences Private Limited;
Designation: Independent Director d) Reach Ajcon Technologies Private Limited;
e) Nearby Technologies Private Limited; and
Occupation: Strategic Consultant f) Lachhmidhar Kanshiram Finserv Private Limited
Nationality: Indian Public companies:
Term: For a period of five years with effect a) Centrum Housing Finance Limited;
from February 6, 2021* b) Edelweiss Asset Reconstruction Company Limited
c) Electronica Finance Limited;
Date of Birth: July 31, 1953 d) Fort Finance Limited;
e) India Pesticides Limited
Period of Directorship: Since February 6, f) Ladderup Finance Limited;
2018 g) Raja Bahadur International Limited;and
h) Yes Asset Management (India) Limited.
DIN: 02971181
Mr. Ramesh Chandak 75 Indian companies
Address: Tower No-5, Flat No-2901, Private companies:
Crescent Bay, Jerbai Wadia Road, Parel,
Mumbai City, Mumbai 400 012 a) First Bridge Fund Managers Private Limited.
Designation: Independent Director Public companies:
Occupation: Service a) KEC International Limited;
b) Parag Milk Foods Limited;
Nationality: Indian c) Prince Pipes and Fittings Limited;
d) Ram Ratna Wires Limited; and
Term: For a period of five years with effect e) Summit Securities Limited.
from March 15, 2021*@
Foreign companies
Date of Birth: November 7, 1946 a) KEC Investment Holdings.; and
b) SAE Towers Holdings LLC.
Period of Directorship: Since March 15,
2018
DIN: 00026581
Mr. Kishan Gopal Somani 82 Indian companies:

Address: 163, Tagore Park, Dr. Mukherjee
Nagar, Model Town, Delhi 110 009

Designation: Independent Director
Occupation: Business and Profession
Nationality: Indian

Term: For a period of five years with effect
from March 15, 2021**

Date of Birth: July 11, 1939

Period of Directorship: Since March 15,

 

 

Private companies:

a) K.G. Somani Insolvency Professionals Private
Limited; and

b) K.G. Somani Management Consultants Private
Limited.

 

a) KEI Industries Limited; and
b) NTB Bowsmith Irrigation Limited.

 

193

 
 

Name, Address, Designation, Occupation, Age Other Directorships
Nationality, Term, Date of Birth, Period (Years)
of Directorship and DIN

 

2018

DIN: 00014648

 

 

Ms. Sudha Navandar 55 Indian companies:

Address: Flat No.603,604/209, Anita Kutir Private companies:

CHS, HIG Colony, 90 feet road, Opposite

State Bank of India, Near Ganpati Mandir, a) Kshitij Capital Advisors Private Limited.

Ghatkopar (East) Mumbai 400 075
Public companies:
Designation: Independent Director
a) Route Mobile Limited;

Occupation: Professional b) Anand Rathi Financial Services Limited ; and
c) Tribhovandas Bhimji Zaveri Limited
Nationality: Indian

Term:For a period of five years with effect
from March 15, 2021*

Date of Birth: November 2, 1966

Period of Directorship: Since March 15,
2018

DIN: 02804964

 

 

 

"Pursuant to resolutions passed by the Nomination and Remuneration Committee and the Board of Directors on August 5, 2020,
respectively and a resolution passed by the Shareholders on September 28, 2020, the Nomination and Remuneration Committee, Board and
Shareholders have respectively approved the re-appointment of: (i) Mr. Mohan Tanksale for a period of five years with effect from February
6, 2021; (ii) Mr. Ramesh Chandak for a period of five years with effect from March 15, 2021; (iii) Mr. Kishan Gopal Somani for a period of
five years with effect from March 15, 2021; and (iv) Ms. Sudha Navandar for a period of five years with effect from March 15, 2021.

* Pursuant to the resolutions passed by the Nomination and Remuneration Committee and the Board of Directors on August 5, 2020,
respectively and a resolution passed by the Shareholders on September 28, 2020, the Nomination and Remuneration Committee, Board and
Shareholders have respectively approved the re-appointment of Mr. Kishan Gopal Somani, who is aged above 75 years, for a period of five
years with effect from March 15, 2021 as an Independent Director of our Company

® Pursuant to resolutions passed by the Board on June 14, 2021 and special resolutions passed by the Shareholders at the annual general
meeting held on July 15, 2021, the Board and the Shareholders have respectively, approved the continuation of directorship of Mr. Anand
Rathi who has attained the age of 75 years and Mr. Ramesh Chandak, who will attain the age of 75 years, for the remaining period of his
existing term of directorship as non-executive Director and an Independent Director of our Company respectively.

Brief profiles of our Directors

Mr. Anand Rathi is the Chairman and Non-Executive Director of our Company. He has been associated with
our Company since March 18, 2005. He is a gold medalist Chartered Accountant of November 1966 batch from
the ICAI. Since completing his Chartered Accountancy over 50 years back, and prior to joining our Company,
he was with Aditya Birla Nuvo Limited, with BSE (where he also held the position of President) and was one of
the first directors of Central Depository Services Limited. He has been a regular speaker on various platforms of
the ICAI and was a central council member of the ICAI. He is associated with philanthropic organisations
including those involved in education.

Mr. Pradeep Gupta is a Non-Executive Director of our Company. He has been with our Company since March
18, 2005. He holds a Bachelor of Commerce degree from University of Rajasthan and he started his professional
journey as a stock broker at Jaipur in 1992, besides being associated with textiles business at Daman Ganga
Textiles Private Limited. He has promoted Anand Rathi Share and Stock Brokers Limited (formerly known as
Navratan Capital and Securities Private Limited) and thereafter he joined ARFSL (formerly known as Anand
Rathi Securities Private Limited) with Mr. Anand Rathi in the year 1998. He has over 30 years of experience in
capital markets. He has been selected as a member of Who’s Who Historical Society, International Who’s Who
of Professionals in 2009.

Mr. Amit Rathi is a Non-Executive Director of our Company. He has been associated with our Company since

194

 
March 18, 2005. He is a qualified Chartered Accountant from the ICAI and has a Masters’ degree in Business.
Administration from New York University’s Leonard N Stern School of Business. He is associated with the
private wealth management and investment banking businesses of the Anand Rathi Group. He is also a director
on the board of our corporate Promoter, ARFSL (formerly known as Anand Rathi Securities Private Limited).

Mr. Rakesh Rawal is an Executive Director and the Chief Executive Officer of our Company. He has been
associated with the wealth management business of Anand Rathi Group since April 2, 2007. He holds a
Bachelor of Technology degree in Mechanical Engineering from the Indian Institute of Technology, Kanpur and
a Masters’ in Management Studies degree from Jamnalal Bajaj Institute of Management Studies. Prior to joining
our Company, he worked with Deutsche Bank and Hindustan Lever Limited. He currently focusses on the
business development and client acquisition for the private wealth management business of our Company.

Mr. Mohan Tanksale is an Independent Director of our Company. He has been associated with our Company
since February 6, 2018. He has a Bachelor’s degree in Science from Bhopal University and Master’s degree in
Arts (English) from Awadhesh Pratap Singh University and Diploma in Russian language from Bhopal
University. He is a Fellow Member of Institute of Cost Accountants of India and a Certified Associate of the
Indian Institute of Bankers. He has more than 42 years of experience having served three major public sector
banks being, Union Bank of India, Punjab National Bank as Executive Director and Central Bank of India in the
capacity of chairman and managing director. He has also served on the board of various subsidiaries of Punjab
National Bank and Central Bank of India and Life Insurance Corporation of India. He has also served as chief
executive of Indian Banks Association and has been on the board of International Banking Federation. He has
also been engaged as a Consultant to SWIFT India Domestic Services Private Limited. He was awarded as
“Person of the year’? by SKOCH Foundation in year 2012.

Mr. Ramesh Chandak is an Independent Director of our Company. He has been associated with our Company
since March 15, 2018. He is a Chartered Accountant and has been honoured with the CA Business Leader
Corporate Award by ICAI in the year 2008. He is a former president of Indian Electrical and Electronics
Manufacturers’ Association. He was also the managing director of KEC International Limited. He has also
successfully completed the program on ‘leading change and organizational renewal’ from Harvard Business
School. He is also a proprietor at Ramesh D. Chandak.

Mr. Kishan Gopal Somani is an Independent Director of our Company. He has been associated with our
Company since March 15, 2018. He is a qualified Chartered Accountant from the ICAI. He is also an associate
member of the Institute of Company Secretaries of India. Additionally, he is also a fellow member of the
Institution of Valuers and has qualified the Limited Insolvency Exams of IBBI under IBC, 2016. He has around
50 years of experience. Prior to joining our Company, he was a president of ICAI. He had previously served as a
director on the board of Delhi Stock Exchange Association Limited. He is partner at M/s K.G. Somani & Co.,
Chartered Accountants, Delhi.

Ms. Sudha Navandar is an Independent Director of our Company. She has been associated with our Company
since March 15, 2018. She is a qualified Chartered Accountant from the ICAI and a certified Public Accountant,
USA. She is also an insolvency professional registered with the Insolvency and Bankruptcy Board of India. She
is currently a partner in M/s. Pravin R. Navandar & Co., Chartered Accountants, with main focuses on corporate
audits (internal and statutory), bank audits, company law cases, income leakage and corporate leakage and
corporate advisory services. She is also a designated partner at Saksham Insolvency Resolution LLP.
Relationship between our Directors
The relationship between our Directors is as follows:-

e Mr. Amit Rathi is Mr. Anand Rathi’s son.

e Mr. Pradeep Gupta is Mr. Anand Rathi’s son in law and Mr. Amit Rathi’s brother in law.

Arrangement or understanding with major shareholders, customers, suppliers or others

None of our Directors or other members of senior management have been appointed pursuant to an
understanding or arrangement with shareholders, customers, suppliers or others.

Payments or benefits to Directors by our Company

Other than as disclosed below, our Company and our Subsidiaries have not paid any compensation or granted

195
any benefit to any of our Directors (including contingent or deferred compensation) in all capacities in Fiscal
2021.

With respect to our Executive Director, there is no contingent or deferred payment accrued for Fiscal 2021.
Terms of appointment of Executive Director
. Mr. Rakesh Rawal

The appointment of Mr. Rakesh Rawal as a Director was approved by the Board of Directors of our Company
through a resolution dated March 1, 2017, and the Shareholders, through a resolution at the annual general
meeting dated September 29, 2017, approved his appointment as a Director with effect from March 1, 2017.

The Board of Directors, through a resolution dated August 29, 2017, and the Shareholders, through a resolution
at the annual general meeting dated September 29, 2017, approved the remuneration of Mr. Rakesh Rawal as the
Chief Executive Officer of our Company, up to an amount not exceeding = 80 million per annum (exclusive of
perquisites and employee provident fund contribution of the employer) payable to him during the term of his
appointment for a period of three years from April 1, 2017 to March 31, 2020, on such terms and conditions, as
may be decided by the Board of Directors, with the authority to the Board of Directors to determine and vary or
increase the terms of remuneration payable to him within the aforesaid limits as may be agreed between the
Board of Directors and Mr. Rawal.

Subsequently, the Board of Directors, through a resolution dated February 7, 2020, and the Shareholders,
through a resolution dated September 28, 2020, approved the appointment of Mr. Rakesh Rawal as Executive
Director and Chief Executive Officer of our Company for a further tenure of a period of three years with effect
from April 1, 2020 for an aggregate remuneration (exclusive of incentives, perquisites and Employee Provident
Fund (EPF) Contribution of the employer) of = 34.31 million per annum, with the authority to Board to alter and
vary the terms and conditions of appointment including remuneration, without any further approval from the
members of the Company, subject to the condition that at no point of time, the remuneration payable to Mr.
Rakesh Rawal shall exceed 2 80 million per annum.

Further, pursuant to the resolutions dated February 7, 2020 and September 28, 2020, the Board and Shareholders
have respectively resolved that if during the currency of his tenure as Executive Director and Chief Executive
Officer, the Company has no profits or if its profits are inadequate, he shall be entitled to aforesaid remuneration
as minimum remuneration, subject to the limits specified in Part II of the Schedule V of the Companies Act,
2013 after obtaining necessary approval, if any, and as may be required.

In Fiscal 2021, he was paid a remuneration of % 43.38 million.
Remuneration paid by our Subsidiaries

None of our Directors have received any remuneration, sitting fees or commission from any of our Subsidiaries
in Fiscal 2021.

Remuneration/sitting fees for Non-Executive Directors and Independent Directors

Pursuant to the Board resolution dated March 15, 2018, each Independent Director, was entitled to receive
sitting fees of = 20,000 per meeting for attending meetings of the Board. The Board of Directors pursuant to
resolution dated July 10, 2018 approved the revision in sitting fees of = 50,000 per meeting for attending
meetings of the Board and % 25,000 per meeting for attending meetings of committees of the Board. The sitting

fees are within the limits prescribed under the Companies Act, and the rules made thereunder.

Mr. Amit Rathi ceased to be managing director of our Company with effect from July 16, 2021 and continues to
be the non-executive director of our Company.

In Fiscal 2021, he was paid a remuneration of 2 20.00 million in the capacity of managing director of our
Company

Details of the sitting fees paid by our Company to our Independent Directors during Fiscal 2021 are as follows:

196
 

 

 

 

 

Sr. Name of Director Total amount of sitting
No. fees paid (Zin million)
1. Mr. Ramesh Chandak 0.25
2 Ms. Sudha Navandar 0.32
3. Mr. Mohan Tanksale 0.28
4. Mr. Kishan Gopal Somani 0.13

 

 

 

 

 

There is no remuneration paid by our Subsidiaries to the Independent Directors in Fiscal 2021. Further, no
remuneration was paid by our Company or our Subsidiaries to the Non-Executive Directors.

Changes in the Board of Directors in the last three years preceding the date of this Prospectus

 

 

 

 

 

 

 

 

Sr. Name* Date of appointment | Date of Reason

No. cessation

1. | Mr. Amit Rathi July 16, 2021 - Designation changed from Managing
Director to Non-Executive Director

2.__| Ms. Sudha Navandar March 15, 2021 = Re-appointment as Independent Director

3. | Mr. Kishan Gopal Somani | March 15, 2021 - Re-appointment as Independent Director

4. | Mr. Ramesh Chandak March 15, 2021 - Re-appointment as Independent Director

5. | Mr. Mohan Tanksale February 6, 2021 - Re-appointment as Independent Director

6. | Mr. Rakesh Rawal ‘April 1, 2020 - Re- appointed as Executive Director and
Chief Executive Officer

7.__| Mr. Amit Rathi April 1, 2020 - Re-appointment as Managing Director

 

 

 

 

 

 

 

“Pursuant to a resolution passed by the Board of Directors on August 5, 2020 and a resolution passed by the Shareholders on September 28,
2020, the Board and Shareholders have respectively approved the re-appointment of: (i) Mr. Mohan Tanksale for a period of five years with
effect from February 6, 2021; (ii) Mr. Ramesh Chandak for a period of five years with effect from March 15, 2021; (iii) Mr. Kishan Gopal
Somani for a period of five years with effect from March 15, 2021; and (iv) Ms. Sudha Navandar for a period of five years with effect from
March 15, 2021.

Service contracts with Directors and Key Management Personnel

Our Company has not entered into any service contracts, pursuant to which its officers, including its Directors
and Key Management Personnel, are entitled to benefits upon termination of employment.

Bonus or profit sharing plan of our Directors

None of our Directors are a party to any bonus or profit sharing plan by our Company.
Shareholding of our Directors in our Company

The Articles of Association do not require the Directors to hold any qualification shares.

For details on shareholding of the Directors in our Company please see “Capital Structure — Notes to Capital
Structure — Shareholding of our Directors and/ or Key Management Personnel” on page 92 of this Prospectus.

Details regarding directorships of our Directors in listed companies

Except as disclosed below, none of our Directors is or was a director on the board of listed companies that have
been/ were delisted from any stock exchange in India during the term of their directorship in such company.

1. Mr. Ramesh Chandak

 

 

 

 

 

 

 

Sr. Details Particulars
No.
1. | Name of the company KEC International Limited (“KEC”)
2. | Name of the stock exchange(s) on which KEC was listed BSE, NSE and MCX Stock Exchange
Limited*
Date of delisting on stock exchanges March 20, 2015 from MCX Stock Exchange
Limited*

 

 

 

197
 

 

 

 

 

 

 

 

 

 

 

 

Sr. Details Particulars

No.

4. Compulsory or voluntary delisting Voluntary

a Reasons for delisting Limited trading on MCX Stock Exchange
Limited* of shares of KEC

6. Whether KEC has been relisted KEC has not been relisted

7.__ | Date of relisting, in the event KEC is relisting Not Applicable

8.__| Name of the stock exchange on which KEC was relisted Not Applicable

9. Term of directorship in KEC December 26, 2005 till date

* Name changed to Metropolitan Stock Exchange of India Limited.

None of our Directors is or was a director on the board of any listed company whose shares are / were
suspended from trading on any stock exchange for a period of five years prior to the date of filing of this
Prospectus, during the term of their directorship in such company.

None of our Directors have been identified as Wilful Defaulters.
Borrowing powers of our Board

In accordance with the Articles of Association, the Board may, borrow or raise any monies required by our
Company upon such terms and in such manner with or without security as it may determine. In this regard, our
Company, at its meeting of the Board dated November 28, 2016 and its meeting of the shareholders dated
December 26, 2016 has resolved that pursuant to the provisions of Section 179(3) of Companies Act, 2013, the
Board is authorized to borrow money for the purpose of our Company availing credit facilities up to an amount
of = 3,000 million.

Corporate governance

The provisions of the Listing Regulations with respect to corporate governance will be applicable to our
Company immediately upon the listing of Equity Shares on the Stock Exchanges. Our Company is in
compliance with the requirements of applicable regulations, specifically the Listing Regulations, the Companies
Act, 2013 and the SEBI ICDR Regulations, in respect of corporate governance, particularly in relation to
constitution of the Board and committees of our Board. The corporate governance framework of our Company
is based on an effective independent Board, separation of the Board’s supervisory role from the executive
management team and constitution of the Board committees, each as required under law.

The Board of Directors functions either as a full board or through various committees constituted to oversee
specific operational areas.

Currently, our Board has eight Directors, comprising one Executive Director, and seven Non-Executive
Directors, out of which four are Independent Directors including one woman director. In compliance with the
provisions of the Companies Act, 2013 at least two-third of our Directors, other than our Independent Directors,
are liable to retire by rotation.

Committees of the Board

Our Board has constituted the following committees of the Board in terms of the SEBI Listing Regulations and
the Companies Act.

(a) Audit Committee;

(b) Nomination and Remuneration Committee;

(c) Stakeholders’ Relationship Committee;

(d) Corporate Social Responsibility Committee and
(e) Risk Management Committee.

In addition to the above, our Board of Directors may, from time to time, constitute committees to delegate
certain powers for various functions, in accordance with applicable laws

198
A. Audit Committee

The members of the Audit Committee are:

 

 

 

 

 

 

 

 

 

 

 

Sr.No. | Name of the Director Nature of Directorship Position in the Committee
1. Mr. Mohan Tanksale Independent Director Chairman

2s Ms. Sudha Navandar Independent Director Member

3. Mr. Amit Rathi Non-Executive Director Member

4. Mr. Anand Rathi Non-Executive Director Member

by Mr. Ramesh Chandak Independent Director Member

6. Mr. Kishan Gopal Somani Independent Director Member

 

The Audit Committee was constituted by a resolution of our Board dated August 29, 2017. By a resolution of
the Board dated March 15, 2018, the Audit Committee was re-constituted. The Committee was further re-
constituted by a resolution of our Board dated October 12, 2021. Pursuant to a resolution of the Board dated
July 16, 2021, the latest terms of reference of the Audit Committee, which were revised in accordance with the
applicable provisions of the Companies Act, 2013, and the Listing Regulations, are as follows:

Powers of the Audit Committee

The Audit Committee shall have powers, including the following:

PN

25

to investigate any activity within its terms of reference;

to seek information from any employee;

to obtain outside legal or other professional advice; and

to secure attendance of outsiders with relevant expertise, if it considers necessary.

Role of the Audit Committee

The role of the Audit Committee shall include the following:

a)

b)

°)

4d)

e)

oversight of the Company’s financial reporting process and the disclosure of its financial information to
ensure that the financial statements are correct, sufficient and credible;

recommendation for appointment, remuneration and terms of appointment of auditors of the Company;
reviewing the financial statements with respect to its subsidiaries, in particular investments made by the
unlisted subsidiaries;

approval of payment to statutory auditors for any other services rendered by the statutory auditors;

reviewing, with the management, the annual financial statements and auditor’s report thereon before
submission to the Board for approval, with particular reference to:

a. matters required to be included in the Director’s Responsibility Statement to be included in the
Board’s report in terms of clause © of sub-section 3 of section 134 of the Companies Act, 2013;

b. changes, if any, in accounting policies and practices and reasons for the same;

c. major accounting entries involving estimates based on the exercise of judgment by management;
d. significant adjustments made in the financial statements arising out of audit findings;

e. compliance with listing and other legal requirements relating to financial statements;

f. disclosure of any related party transactions; and

199

 
8)

h)

dD
k)

m)

n)

0)

P)

q)

»

s)
0
u)

v)

w)

x)

g. modified opinion(s) in the draft audit report.

reviewing, with the management, the quarterly financial statements before submission to the Board for
approval;

reviewing, with the management, the statement of uses / application of funds raised through an issue
(public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other
than those stated in the offer document / prospectus / notice and the report submitted by the monitoring

agency monitoring the utilization of proceeds of a public or rights issue, and making appropriate
recommendations to the Board to take up steps in this matter;

reviewing and monitoring the auditor’s independence and performance, and effectiveness of audit
process;

approval of any subsequent modification of transactions of the company with related parties;

scrutiny of inter-corporate loans and investments;

valuation of undertakings or assets of the company, wherever it is necessary;

evaluation of internal financial controls and risk management systems;

reviewing, with the management, performance of statutory and internal auditors, adequacy of the

internal control systems;

reviewing the adequacy of internal audit function, if any, including the structure of the internal audit
department, staffing and seniority of the official heading the department, reporting structure coverage
and frequency of internal audit;

discussion with internal auditors of any significant findings and follow up there on;
reviewing the findings of any internal investigations by the internal auditors into matters where there is
suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting

the matter to the Board;

discussion with statutory auditors before the audit commences, about the nature and scope of audit as
well as post-audit discussion to ascertain any area of concern;

looking into the reasons for substantial defaults in the payment to depositors, debenture holders,
shareholders (in case of non-payment of declared dividends) and creditors;

reviewing the functioning of the whistle blower mechanism;

overseeing the vigil mechanism established by the Company, with the Chairman;

approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the
finance function or discharging that function) after assessing the qualifications, experience and
background, etc. of the candidate;

review of utilization of loans and / or advances from investment by the holding company in the
subsidiary exceeding 2100 crore or 10% of the asset size of the subsidiary, whichever is lower

including existing loans/advances/investments;

Consider and comment on rationale, cost-benefits and impact of schemes involving merger, demerger,
amalgamation etc., on the listed entity and its shareholders. And;

carrying out any other function as is mentioned in the terms of reference of the Audit Committee and
any other terms of reference as may be decided by the board of directors of the Company or

200
specified/provided under the Companies Act, 2013 or by the SEBI Listing Regulations or by any other
regulatory authority.”

B. Nomination and Remuneration Committee

The members of the Nomination and Remuneration Committee are:

 

 

 

 

 

Sr. | Name of the Director Nature of Directorship Position in the Committee
No.
1.__| Mr. Kishan Gopal Somani Independent Director Chairman
2.__| Mr. Ramesh Chandak Independent Director Member
3. | Mr. Anand Rathi Chairman and Non-Executive | Member
Director

 

 

 

 

The Nomination and Remuneration Committee was constituted by a resolution of our Board dated August 29,
2017 and re-constituted pursuant to a resolution of the Board dated March 15, 2018. The scope and functions
of the Nomination and Remuneration Committee are in accordance with the Companies Act, 2013 and the
Listing Regulations.

By a resolution of the Board dated March 15, 2018, the terms of reference of the Nomination and
Remuneration Committee were approved and by a resolution of the Board dated November 26, 2021 the terms
of reference of the Nomination and Remuneration Committee were revised, by our Company, which are as
follows:

a)

formulation of the criteria for determining qualifications, positive attributes and independence of a director
and recommend to the Board a policy relating to the remuneration of the directors, key management
personnel, Senior Management and other employees;

(i) For every appointment of an independent director, the Nomination and Remuneration Committee shall
evaluate the balance of skills, knowledge and experience on the Board and on the basis of such
evaluation, prepare a description of the role and capabilities required of an independent director. The
person recommended to the Board for appointment as an independent director shall have the
capabilities identified in such description. For the purpose of identifying suitable candidates, the
Committee may:

a. use the services of an external agencies, if required;
b. consider candidates from a wide range of backgrounds, having due regard to diversity; and
c. consider the time commitments of the candidates.

The Nomination and Remuneration Committee, while formulating the above policy, should ensure that —

b)
9)
qd)

iii,

the level and composition of remuneration be reasonable and sufficient to attract, retain and motivate
directors of the quality required to run the Company successfully;

relationship of remuneration to performance is clear and meets appropriate performance benchmarks;
and

remuneration to directors, key management personnel and senior management involves a balance
between fixed and incentive pay reflecting short and long term performance objectives appropriate to
the working of the Company and its goals.

formulation of criteria for evaluation of independent directors and the Board;

devising a policy on Board diversity;

identifying persons who are qualified to become directors and who may be appointed in senior

management in accordance with the criteria laid down, and recommend to the Board their appointment and
removal and shall carry out evaluation of every director’s performance (including independent director);

201

 
e)

f)

8)

ii

whether to extend or continue the term of appointment of the independent director, on the basis of the
report of performance evaluation of directors;

recommend to the Board all remuneration, in whatever form, payable to senior management;

frame suitable policies, procedures and systems to ensure that there is no violation of securities laws, as
amended from time to time, including:

i. the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; and

ii. the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices
Relating to the Securities Market) Regulations, 2003, by the trust, the Company and its employees, as
applicable.

ii. perform such other activities as may be delegated by the Board or specified/ provided under the
Companies Act, 2013 to the extent notified and effective, or by the Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements) Regulations, 2015, in each case as amended,
or by any other applicable laws or regulatory authority.

C. Stakeholders Relationship Committee

The members of the Stakeholders Relationship Committee are:

 

 

 

 

 

Sr. Name of the member Nature of Directorship Position in the Committee
No.

1. Mr. Ramesh Chandak Independent Director Chairman

2. Mr. Pradeep Gupta Non-Executive Director Member

3. Mr. Amit Rathi Non-Executive Director Member

 

 

 

 

The Stakeholders Relationship Committee was constituted by way of a Board resolution dated March 15, 2018.
The scope and functions of the Stakeholders Relationship Committee are in accordance with the Companies

Aci

By
Co

t, 2013 and the Listing Regulations.

a resolution of the Board dated March 15, 2018, the terms of reference of the Stakeholders Relationship
mmittee were approved and by a resolution of the Board dated November 15, 2019, the terms of reference

of the Stakeholders Relationship Committee were revised by our Company, which are as follows:

(a)
(b)

(©
(d)

(e)
109)
(g)

(hy
@

considering and resolving grievances of shareholders’, debenture holders and other security holders;
redressal of grievances of the security holders of the Company, including complaints in respect of,
allotment of equity shares, transfer/transmission of shares, non-receipt of declared dividends, annual
reports, balance sheets of the Company, general meetings, etc;

approval of transfer or transmission of shares, debentures or any other securities;

resolving the grievances of the security holders of the listed entity including complaints related to transfer/
transmission of shares, non-receipt of annual report, non-receipt of declared dividends, issue of new/
duplicate certificates, general meetings, etc;

review of measures taken for effective exercise of voting rights by shareholders;

reviewing adherence to the service standards adopted in respect of various services being rendered by the
registrar and share transfer agent;

reviewing various measures and initiatives taken for reducing the quantum of unclaimed dividends and
ensuring timely receipt of dividend warrants/annual reports/statutory notices by the shareholders of our
Company;

issue of duplicate certificates and new certificates on split/consolidation/renewal, etc; and

carrying out any other functions required to be undertaken by the Stakeholders Relationship Committee
under applicable laws”.

D. Corporate Social Responsibility Committee

The members of the Corporate Social Responsibility Committee are:

202

 
 

 

 

 

 

Sr.No. | Name of the | Designation Position in the
member Committee
A Mr. Anand Rathi Chairman and Non-Executive Director | Chairman
2. Mr. Pradeep Gupta Non-Executive Director Member
3. Ms. Sudha Navandar | Independent Director Member

 

 

 

 

 

The Corporate Social Responsibility Committee was constituted by way of a Board resolution dated March 15,
2018.

Further, by a resolution of the Board dated March 15, 2018, the terms of reference of the Corporate Social
Responsibility Committee were approved by our Company and are as follows :

(a) To formulate and recommend to the board, a Corporate Social Responsibility Policy which shall indicate
the activities to be undertaken by the company as specified in Schedule VII of the Companies Act, 2013
and make any revisions therein as and when decided by the Board;

(b) To recommend the amount of expenditure to be incurred on the activities referred to in (a);

(c) To monitor the Corporate Social Responsibility Policy of the company from time to time;

(d) To do such other acts, deeds and things as may be required to comply with the applicable laws; and

(e) To perform such other activities as may be delegated by the Board or specified/ provided under the
Companies Act, 2013 or by the Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015, as amended, or statutorily prescribed under any other law or
by any other regulatory authority.

E. Risk Management Committee

The members of the Risk Management Committee are:

 

 

 

 

 

 

 

Sr.No. | Nameofthemember | Designation Position in the Committee
1. Mr. Anand Rathi Chairman and Non-Executive Director Chairman
25 Mr. Pradeep Gupta Non-Executive Director Member
3. Ms. Sudha Navandar Independent Director Member
4, Mr. Mohan Tanksale Independent Director Member
5. Mr. Ramesh Chandak __| Independent Director Member
6. Mr. Rajesh Kumar | Chief Financial Officer Member
Bhutara

 

 

 

 

 

 

The Risk Management Committee was constituted by way of a Board resolution dated July 16, 2021. The
terms of reference of the Risk Management Committee were approved by our Company and are as follows:

(a) To formulate a detailed risk management policy which shall include:
i. A framework for identification of internal and external risks specifically faced by the listed entity, in
particular including financial, operational, sectoral, sustainability (particularly, ESG related risks),

information, cyber security risks or any other risk as may be determined by the committee;

ii. Measures for risk mitigation including systems and processes for internal control of identified risks;
iii. Business continuity plan;
(b) To ensure that appropriate methodology, processes and systems are in place to monitor and evaluate

risks associated with the business of the Company;

(co) To monitor and oversee implementation of the risk management policy, including evaluating the
adequacy of risk management systems;

(d) To periodically review the risk management policy at least once in two years, including by considering
the changing industry dynamics and evolving complexity;

203
()

©

(s)
(hy
@

To keep the board of directors informed about the nature and content of its discussions,
recommendations and actions to be taken;

To appointment, removal and terms of remuneration of the chief risk officer (if any) shall be subject to
review by the Risk Management Committee;

Monitoring and reviewing of the risk management plan of the company;
Review of the Cyber security and related risks and;

Carry out any other function as is mandated by the Board from time to time and/or prescribed by any
statutory notification, amendment or modification as may be applicable.

F. IPO Committee

 

 

 

 

 

 

 

 

 

 

The members of the IPO Committee are:
Sr.No. | Name of the member _| Designation Position in the Committee
Ty Mr. Anand Rathi Chairman and Non-Executive | Chairman
Director
2. Mr. Pradeep Gupta Non-Executive Director Member
3. Mr. Amit Rathi Non-Executive Director Member
4. Ms. Sudha Navandar Independent Director Member
The IPO Committee was constituted by way of a Board resolution dated February 3, 2018 and last

reconstituted on November 15, 2019.

Further, by a resolution of the Board dated November 15, 2019, the terms of reference of the IPO Committee
were approved by our Company and are as follows:

(a)

(b)

©

(d)

()

@

to decide, in consultation with the book running lead managers to the Offer “the BRLMs”, on the Offer
size (including any reservation for employees, to take on record the number of equity shares proposed to
be offered by the selling shareholders respectively, and/or any other reservations or firm allotments as may
be permitted, green shoe option ), timing, pricing (price band, offer price, including to anchor investors,
discount, etc.) and all other terms and conditions of the Offer, as permitted under applicable laws, and to
make any amendments, modifications, variations or alterations thereto;

to make applications to the concerned stock exchanges for their respective in-principle approvals for listing
of the equity shares and file such papers and documents, including the draft red herring prospectus, red
herring prospectus and / or prospectus, as may be required for the purpose;

to approve consolidated restated financial statements and taking on record of the examination reports and /
or auditor reports in relation thereto;

to take all actions as may be necessary or authorized, in connection with the Offer, including taking on
record the approval of the Offer, taking on record the consents of the selling shareholders offering their
equity shares in the offer for sale, and the number of equity shares proposed to be offered by the selling
shareholders respectively, extending the bid/offer period, revision of the Price Band, revisions to the size
and structure of the Offer, in accordance with applicable laws;

if required or desirable, to invite the existing shareholders of the Company to participate in the Offer to
offer for sale their equity shares in the Offer;

authorisation of any director or directors of the Company or other officer or officers of the Company,
including by the grant of power of attorney, to do such acts, deeds and things as such authorized person in
his/her/their absolute discretion may deem necessary or desirable in connection with the Offer and any
matter ancillary thereto;

204

 
(g)

(h

@)

Cs

oO

(m)

(a

(0

0)

giving or authorising any concerned person to give such declarations, affidavits, certificates, consents and
authorities as may be required from time to time;

to appoint and enter into arrangements with the BRLMs, registrars to the Offer, advertising agencies,
advisors to the Offer, legal counsel , syndicate members to the Offer, escrow collection banks to the Offer,
refund banks to the Offer, sponsor bank to the Offer, public issue account banks to the Offer, underwriters
to the Offer and any other agencies or persons or intermediaries to the Offer and to negotiate and finalise
the terms of their appointment;

to seek, if required, the consent of the lenders to the Company and/or the lenders to the subsidiaries of the
Company, industry data providers, parties with whom the Company has entered into various commercial
and other agreements including without limitation customers, suppliers, strategic partners of the Company,
any concerned government and regulatory authorities in India or outside India, and any other consent,
approval or waiver that may be required in connection with the Offer, if any;

to make applications to, seek clarifications and obtain approvals from, if necessary, RBI, SEBI or any
other statutory or governmental authorities in connection with the Offer and, wherever necessary,
incorporate such modifications/ amendments/ alterations/ corrections as may be required to the draft red
herring prospectus, red herring prospectus and Prospectus;

to negotiate, finalise, settle, execute and deliver or arrange the delivery of the BRLMs’ mandate or
engagement letters, the offer agreement, registrar agreement, syndicate agreement, cash escrow and
sponsor bank agreement, share escrow agreement, underwriting agreement and all other documents, deeds,
agreements, memorandum of understanding and other instruments whatsoever, including any
amendment(s) or addenda thereto, including with respect to the payment of commissions, brokerages and
fees, with the BRLMs, registrar to the Offer, legal advisors, auditors, Stock Exchanges and any other
agencies/intermediaries in connection with the Offer with the power to authorize one or more officers of
the Company to negotiate, execute and deliver all or any of the aforestated documents;

to issue advertisements in such newspapers and other media as it may deem fit and proper in accordance
with the Securities Exchange Board of India ( Issue of Capital and Disclosure Requirements) Regulations
2018,as amended “SEBI ICDR Regulations”, Companies Act, 2013 and rules thereunder and applicable
laws;

approving the draft red herring prospectus, red herring prospectus and prospectus (including amending,
varying or modifying the same, as may be considered desirable or expedient and approving and adopting
any subsequent changes, correction, updates, alterations, revisions, modifications or amendments required
for the finalization of the DRHP prior to filing with SEBI, settling or giving instructions and directions for
settling any questions, difficulties or doubts that may arise in this regard and to give effect to such
changes, correction, updates, alterations, revisions, modifications, deletions or amendments as may be
deemed fit and proper in the best interest of the Company in accordance with the applicable laws and
regulations) and the preliminary and final international wrap for the Offer together with any addenda,
corrigenda and supplement thereto as finalised in consultation with the BRLMs, in accordance with all
applicable laws, rules, regulations, notifications, circulars, orders and guidelines; withdrawing the DRHP
or the RHP or to decide not to proceed with the Offer at any stage in accordance with the SEBI ICDR
Regulations and applicable laws;

to issue receipts/allotment letters/confirmation of allocation notes either in physical or electronic mode
representing the underlying Equity Shares in the capital of the Company with such features and attributes
as may be required and to provide for the tradability and free transferability thereof as per market practices
and regulations, including listing on one or more Stock Exchanges, with power to authorise one or more
officers of the Company to sign all or any of the aforestated documents;

to make applications for listing of the Equity Shares on the stock exchanges for listing of the Equity Shares
of the Company and to execute and to deliver or arrange the delivery of necessary documentation to the
Stock Exchanges and to take all such other actions as may be necessary in connection with obtaining such
listing;

to authorise and approve the incurring of expenditure and payment of fees, commissions, remuneration and
expenses in connection with the Offer;

205
@

©

oO

ww

wv

to do all such acts, deeds, matters and things and execute all such other documents, etc. as it may, in
consultation with the BRLMs, deem necessary or desirable for the Offer, including without limitation,
determining the anchor investor portion and allocation to anchor Investors, finalizing the basis of
allocation and allotment of Equity Shares to the successful allottees and credit of Equity Shares to the
demat accounts of the successful allottees in accordance with applicable laws;

to settle all questions, remove any difficulties or doubts that may arise from time to time in regard to the
Offer, including with respect to the offer or allotment of the Equity Shares, terms of the Offer, ,
appointment of intermediaries for the Offer and such other issues as it may, in its absolute discretion deem
fit;

to take such action, give such directions, as may be necessary or desirable as regards the IPO and to do all
such acts, matters, deeds and things, including but not limited to the allotment of Equity Shares against the
valid applications received in the IPO, as are in the best interests of the Company;

to open and operate separate bank accounts of the Company in terms of Section 40(3) of the Companies
Act, 2013, and to authorize one or more officers of the Company to execute all documents/deeds as may
be necessary in this regard;

to negotiate, finalise, settle, execute and deliver any and all other documents or instruments and doing or
causing to be done any and all acts or things as may be deemed necessary, appropriate or advisable in
order to carry out the purposes and intent of the foregoing or in connection with the Offer. Any documents
or instruments so executed and delivered or acts and things done or caused to be done by the Board shall
be conclusive evidence of the authority of the Board in so doing; and

to delegate any of the powers mentioned herein above to such persons as the IPO Committee may deem
necessary.

Policies

In accordance with the applicable provisions of the Listing Regulations and other applicable law, we have
formulated various policies, including the following, copies of which are available on our website:

vi.

vii.

viii.

xi.

xii.

xiii.

xiv.

Archival policy;

Policy for evaluation of the performance of the Board of Directors;
Code of practices and procedures for fair disclosure of unpublished price sensitive information;
Code of conduct for Board members and Senior management;
Policy on Corporate Social Responsibility;

Dividend Distribution policy;

Nomination and Remuneration policy;

Policy for determining material subsidiaries;

Policy for determination of materiality of an event/information;
Policy on preservation of documents;

Policy on Prevention of Money Laundering Act 2002 (“PMLA”);
Policy on related party transactions;

Vigil mechanism policy and whistle blower policy;

Anti-sexual harassment policy;

206
XV. Code of Conduct for prevention of Insider Trading;

Xvi. Materiality Policy for determination of Group Company and litigation;
xvii. Policy on familiarization programme for Independent Directors;

xviii. Policy on Board diversity;

xix. Risk management policy; and

XX. Succession planning policy.

Interest of Directors

All Independent Directors may be deemed to be interested to the extent of sitting fees payable to them for
attending the meetings of our Board and the committees of our Board. Our Executive Directors are interested to
the extent of remuneration payable to them by our Company. Further, our Directors may also be interested in
our Company to the extent of reimbursement of expenses payable to them.

Our Directors do not have any interest in any property acquired or proposed to be acquired of or by our
Company as on the date of this Prospectus.

Further, our Directors do not have any interest in any transaction by our Company for acquisition of land,
construction of building or supply of machinery since incorporation.

No consideration, either in cash or shares or in any other form have been paid or agreed to be paid to any of our
Directors or to the firms, trusts or companies in which they have an interest in, by any person, either to induce
any of our Directors to become or to help any of them qualify as a director, or otherwise for services rendered
by them or by the firm, trust or company in which they are interested, in connection with the promotion or
formation of our Company.

Our Company had entered into a trademarks licensing agreement dated April 1, 2018 with our Promoter Selling
Shareholders for the grant of permission and license to use the tradename, “ANANDRATHI” for its corporate
name, domain name and in corporate material. The agreement shall continue unless terminated by mutual
written consent of both the parties. Further, our Company is required to pay a license fee of = 500,000 on or
before April 10 of each financial year in advance. The said trademarks licensing agreement was subsequently
replaced by the new brand policy approved by the board of Anand Rathi Financial Services Limited on March
11, 2019, which will continue to have effect unless mutually terminated by Anand Rathi Financial Services
Limited and our Company. The said brand policy became effective from January 1, 2019. For further details in
relation to risk involved in this regard, see- “Risk factor- we cannot ensure that our intellectual property is
protected from being copied or used by others, including our competitors, and intellectual property
infringement actions may be brought against us, which could have a material adverse effect on our business.”
On page 44. Our Directors, Mr. Anand Rathi, Mr. Pradeep Gupta and Mr. Amit Rathi, may be deemed to be
interested to the extent of their shareholding in Anand Rathi Financial Services Limited, one of our Promoter
Selling Shareholders.

Except as stated in “Other Financial Information -Related Party Transactions” on page 295 of this Prospectus
and described herein to the extent of shareholding in our Company, if any, our Directors do not have any other
interest in the business of our Company.

All the Directors may be deemed to be interested in the contracts, agreements/arrangements entered into or to be
entered into by our Company with any company which is promoted by them or in which they hold directorships
or any partnership firm in which they are partners.

No loans have been availed by our Directors or our Key Management Personnel from our Company.

Except as stated in “Other Financial Information -Related Party Transactions” on page 295 of this Prospectus,
none of the beneficiaries of loans, advances and sundry debtors are related to our Directors.

207
Management Organisation Structure
Board of
Directors

Chief
Executive
Officer

 

Company Secretary Chief Financial
& Compliance Officer
Officer

 

208
Key Management Personnel

In addition to our Executive Director and Chief Executive Officer, Mr. Rakesh Rawal, the following persons are
the Key Management Personnel of our Company:

i) Mr. Ashish Chauhan, Company Secretary and Compliance Officer; and
ii) Mr. Rajesh Kumar Bhutara, Chief Financial Officer.

All our Key Management Personnel are permanent employees of our Company. For details of the brief profile
of our Executive Directors, please see “Our Management ~ Brief profiles of our Directors” on page 194 of this
Prospectus.

The brief profiles of our other Key Management Personnel are as set out below:

Mr. Ashish Chauhan, aged 35 years, is the Company Secretary and Compliance Officer of our Company. He
has been associated with our Company since December 2, 2019. He is a Fellow Member of the Institute of
Company Secretaries of India and has a Bachelor’s degree in Commerce from the University of Mumbai, along
with a Bachelor’s degree in Law from the University of Mumbai. Prior to joining our Company, he worked with
Sutlej Textiles and Industries Limited, Cipla Limited and Hindustan Construction Company Limited, and has
over 10 years of experience in secretarial functions. In Fiscal 2021, he was paid = 1.58 million as total
remuneration.

Mr. Rajesh Kumar Bhutara, aged 51 years, is the Chief Financial Officer of our Company. He has been
associated with Anand Rathi Group since August 8, 2000. He is a member of the Institute of Chartered
Accountants of India. He also holds a Bachelor’s degree in Commerce from Jiwaji University, Gwalior. In his
experience of over 21 years with Anand Rathi Group he has played a key role in looking at various functions
areas like finance, accounts and taxation. In Fiscal 2021, he was paid % 8.49 million as total remuneration.

Family relationships of Directors with Key Managerial Personnel

Except as disclosed above in relation to our Executive Directors, none of our Key Management Personnel are
related to each other or to any of our Director.

Arrangement or understanding with major shareholders, customers, suppliers or others

Further, none of our Key Management Personnel have been appointed pursuant to any arrangement or
understanding with major shareholders, customers, suppliers or others. Additionally, with respect to our Key
Management Personnel, no contingent or deferred payment has accrued for Fiscal 2021.

Shareholding of Key Management Personnel

For details on shareholding of the Key Managerial Personnel in our Company please see “Capital Structure -
Shareholding of our Directors and/ or Key Management Personnel” on page 92 of this Prospectus.

Bonus or profit sharing plan of the Key Management Personnel

Except for the bonus payable, at the sole discretion of the Board, as part of the remuneration to our Key
Management Personnel in accordance with the terms of their respective appointment letters, none of our Key
Management Personnel are a party to any bonus or profit sharing plan.

Interests of Key Management Personnel

Except as disclosed above in “~Interest of Directors” in relation to our Executive Director, and in “—
Shareholding of Key Management Personnel”, the Key Management Personnel of our Company do not have
any interest in our Company other than to the extent of the remuneration, allowances, perquisites or benefits to
which they are entitled to as per their terms of appointment, the reimbursement of expenses incurred by them
during the ordinary course of business, and the employee stock options held under the ESOP 2017 and ESOP
2018 as disclosed in “Capital Structure — Notes to Capital Structure - Employee Stock Option Schemes”.

Changes in the Key Management Personnel

209
In addition to the changes in our Board with respect to our Executive Directors as set forth under “Changes in
the Board of Directors in the last three years” herein above, the changes in the Key Management Personnel in
the last three years prior to the date of filing of this Prospectus are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

Sr. | Name Designation Date of | Date of | Reason
No. appointment cessation
1. | Mr. Amit Rathi Non-Executive July 16, 2021 - Change in
Director designation from
Managing Director
to Non-Executive
Director
2. | Mr. Rakesh Rawal Executive Director and | April 1, 2020 Re-appointment
Chief Executive
Officer
3. | Mr. Amit Rathi Managing Director April 1, 2020 July 16, 2021 Re-appointment and
subsequent re-
designation as Non-
Executive Director
4. | Mr. Ashish Chauhan Company Secretary | December 2) - ‘Appointment
and Compliance | 2019
Officer
5. | Mr. Hardik Chauhan Company Secretary | November 30, | November 28, | Appointment and
and Compliance | 2018 2019 subsequent
Officer resignation

 

The rate of attrition of our Key Managerial Personnel is not high in comparison to the industry in which we
operate.

Retirement and termination benefits

Except applicable statutory benefits none of our Key Managerial Personnel would receive any benefits on
their retirement or on termination of their employment with our Company.

Contingent and deferred compensation payable to the Key Managerial Personnel

There is no contingent or deferred compensation payable to the Key Managerial Personnel, which does not
form part of their remuneration.

Employee stock option and stock purchase schemes

We do not have any employee stock options or stock purchase schemes except for ESOP 2017, which was
approved pursuant to a resolution of our Board dated November 28, 2016, and a Shareholders’ resolution dated
December 26, 2016, and ESOP 2018, which was approved pursuant to a resolution of our Board dated February
3, 2018 and a Shareholders’ resolution dated March 3, 2018. For details of ESOP 2017 and ESOP 2018, see
section titled “Capital Structure - Employee Stock Option Schemes” on page 98 of this Prospectus.

Payment or benefit to officers of our Company

Except as disclosed above under “Interest of Directors” on page 207 of this Prospectus and grant of options to
our Directors and Key Management Personnel, no non-remuneration related amount or benefit has been paid or
given within two years preceding the date of this Prospectus, or is intended to be paid or given, to any of our
Company’s officers, including the Directors and Key Management Personnel.

Service contracts with Key Management Personnel
Except as stated in the respective letters of appointment and statutory entitlements, if any, upon termination of
their employment or retirement, our Company has not entered into any service contracts, pursuant to which any

of the officers including Key Management Personnel are entitled to benefits upon termination / retirement of
employment.

210

 
OUR PROMOTERS AND PROMOTER GROUP

A. Our Promoters

Our Company’s Promoters are Mr. Anand Rathi, Mr. Pradeep Gupta and Anand Rathi Financial Services

Limited.

As on date of this Prospectus, our Promoters’ shareholding in our Company is as follows:

 

 

 

 

 

 

 

 

Sr. No. Name of Promoter Number of Equity Shares % of pre-Offer issued,
subscribed and paid-up
Equity Share capital
1 Mr. Anand Rathi 5,346,390 12.85
2. Mr. Pradeep Gupta 2,277,012 5.47
3. Anand Rathi Financial Services | 17,946,123 43.12
Limited
Total 25,569,525 61.44

 

 

 

Brief profile of our Promoters is as under:

1, Mr. Anand Rathi

Mr. Anand Rathi, aged 75 years, is a promoter and chairman and Non-Executive
Director of our Company. Mr. Rathi does not have a driving license.

Date of birth: June 25, 1946

Address: 274-A, Kalpataru Horizon Co. Op. Hsg Society, S. K. Ahire Marg, Worli, Mumbai
400018

Permanent Account Number: AADPR6532R
Aadhaar Card Number: 4531 7907 8196

For further details, see “Our Management ~ Brief Profiles of our Directors” on page
194 of this Prospectus.

2. Mr. Pradeep Gupta

ah

Mr. Pradeep Gupta aged 54 years, is a promoter and Non-Executive director of our
Company.

Date of birth: July 20, 1967

Address: 301-C, Beau monde Tower, Appasaheb Marathe Marg, Prabhadevi, Mumbai
400 025

Permanent Account Number: ABRPG5512H
Aadhaar Card Number: 6665 9410 6932
Driving License: MH0219980028294

For further details, see “Our Management ~ Brief Profiles of our Directors” on page 194
of this Prospectus.

Our Company confirms that the permanent account number, bank account number and passport number of Mr.
Anand Rathi and Mr. Pradeep Gupta have been submitted to the Stock Exchanges at the time of filing of the
Draft Red Herring Prospectus.

211
3. Anand Rathi Financial Services Limited
Corporate Information and history

Anand Rathi Financial Services Limited was originally incorporated as a private limited company under the
name Anand Rathi Securities Private Limited under the Companies Act, 1956 on June 7, 1996. Thereafter,
Anand Rathi Securities Private Limited changed its name to Anand Rathi Securities Limited and received a
fresh certificate of incorporation dated May 29, 2006. Thereafter, Anand Rathi Securities Limited changed its
name to Anand Rathi Financial Services Limited and received a fresh certificate of incorporation dated January
29, 2008 pursuant to change of name. Its corporate identification number is U67120MH1996PLC100108. Its
registered office is situated at Express Zone, A-Wing, 10" Floor, Western Express Highway, Goregaon (East),
Mumbai-400063.

As per the terms of the memorandum of association of ARFSL, its main objects are to carry on business in share
and stock and purchase, sale, subscription, acquisition or dealing in shares, stocks, debenture stocks, bonds,
units, negotiable instruments, obligations, mortgages and securities of any kind and to act as brokers and sub-
brokers of any recognized stock exchanges subject to approval of SEBI rules and regulations and such other
approvals as may be required from other authorities, subject to compliance with any other law in this regard.

As on the date of this Prospectus, ARFSL carries on the business of financial services, investment in securities
of Group Companies and other companies and distribution of financial products. There have been no changes to
the activities of ARFSL since its incorporation.

Promoters of Anand Rathi Financial Services Limited (ARFSL)

The promoters of ARFSL are Mr. Anand Rathi and Mr. Pradeep Gupta.

Details of change in control or management of ARFSL

Except as disclosed below there has been no change in control or management of ARFSL in the last three years
preceding the date of this Prospectus;

Mr. Pradeep Gupta ceased to be managing director of ARFSL with effect from September 1, 2020 and continues
to be the director of ARFSL. Mr. Abhishek Rathi has been appointed as manager of ARFSL under Companies
Act, 2013 with effect from March 1, 2021.

Board of Directors

The Board of Directors of ARFSL, as on the date of filing of this Prospectus, comprises the following directors:

 

 

 

 

 

 

 

 

 

 

 

Sr.No. | Name Designation
4, Mr. Anand Rathi Director
2 ‘Mr. Pradeep Gupta Director
3. Mr. Amit Rathi Director
4. Mr. Charan Das Arha Independent director
5. Ms. Sudha Navandar Independent Director
Shareholding pattern

The shareholding pattern of ARFSL as on the date of this Prospectus is as provided below:

 

 

 

 

 

 

 

 

 

 

 

 

 

Sr. No. Name of shareholder Number of equity (%) of
shares shareholding

1. Mr. Anand Rathi 9,387,471 40.86
2. Mr. Pradeep Gupta 4,623,937 20.13
3: Ms. Priti Gupta 3,075,500 13.39
4. Mr. Amit Rathi 2,499,160 10.88
5. ‘Anand Rathi Capital Advisors Private Limited 1,092,011 4.75
6. Ms. Sushiladevi Gupta 485,000 241
a Ms. Supriya Rathi 360,000 1.57
8. Anand Rathi IT Private Limited 200,000 0.87

 

 

212
 

 

 

 

 

 

 

 

 

Sr. No. ‘Name of shareholder Number of equity (%) of
shares shareholding

9. Asha Leasing & Finance Private Limited 200,000 0.87

10. Vahin Advisors And Traders Private Limited 200,000 0.87

11. Ms. Pooja Maru 180,000 0.78

12. Other shareholders* 671,600 2.92

Total 22,974,679 100.00

 

 

*These include 50,000 equity shares held by AR Children Trust and shares issued under employee stock option
scheme to the employees of Anand Rathi Financial Services Limited.

Il. Other understandings and confirmations

Our Company confirms that in relation to each of the individual promoters, their respective PANs, bank
account numbers and passport numbers and in relation to corporate promoter, its PAN, bank account
number, registration number and address of the RoC where it is registered have been submitted to the Stock
Exchanges at the time of filing the Draft Red Herring Prospectus.

There has been no change in control of our Company in the last five years immediately preceding the date
of this Prospectus.

Our Promoters have adequate experience in the business activities undertaken by the Company.
Further, our Promoters have confirmed that they have not been identified as Wilful Defaulters.

Neither our Promoters nor members of our Promoter Group or any persons in control of our Company have
been debarred, or restricted from accessing the capital markets for any reason, by SEBI or any other
authorities. Our Promoters are not, nor have they been, promoters, directors or persons in control of any
company which is debarred, or restricted from accessing the capital markets for any reason, by SEBI or any
other authorities.

For further details in relation to litigation against our Promoters, see “Outstanding Litigation and Material
Developments — Litigation involving our Promoters” on page 337 of this Prospectus.

Nature and extent of interest of our Promoters

1.

Interest of our Promoters in promotion of our Company

As of the date of this Prospectus, Mr. Anand Rathi holds 5,346,390 Equity Shares, Mr. Pradeep Gupta holds
2,277,012 Equity Shares and Anand Rathi Financial Services Limited holds 17,946,123 Equity Shares.

Our Promoters are interested in our Company to the extent that they have promoted our Company; to the
extent of their shareholding, direct or indirect, in our Company; to the extent of Equity Shares/stock options
held by them or by any of their relatives in the Company and the shareholding of the companies, firms and
trusts in which they are interested as director, members, partners and/or trustees, and to the extent of
benefits arising out of such shareholding; to the extent of loans and advances availed by our Company from
ARFSL; to the extent of loans and advances given by our Company to them and to the companies, firms
and trusts in which they are associated; to the extent of any dividend distributions which may be made by
our Company; to the extent of being Directors on the board of our Company and the remuneration payable
by our Company to them; and in transactions which may be entered into by our Company with other entities
(i) in which our Promoters hold shares, or (ii) are controlled by our Promoters.

For further details, see “Capital Structure — Shareholding of our Promoters, members of the Promoter
Group and directors of our Promoter in our Company” on page 84, “Our Management — Interest of
Directors” on page 207 and “Other Financial Information -Related Party Transactions” on page 295 of this
Prospectus.

Interest in being a member of a firm or company
Our Promoters are not interested as members of a firm or company, and no sum has been paid or agreed to

be paid to any of our Promoters or to such firm or company in cash or shares or otherwise by any person
either to induce any of our Promoters to become, or to qualify any of our Promoters as a director or

213

 
otherwise for services rendered by our Promoters or by such firm or company in connection with the
promotion or formation of our Company.

3. Interest in property acquired or proposed to be acquired by our Company

Except as disclosed in the section, “Our Management — Interest of Directors” on page 207 of this
Prospectus, none of our individual Promoters have any interest in any property acquired by our Company
within two years from the date of this Prospectus or proposed to be acquired by our Company. Further,
ARFSL does not have any interest in any property acquired by our Company within three years from the
date of this Prospectus or proposed to be acquired by our Company.

4. Interest in acquisition of land, construction of building and supply of machinery

Except as disclosed below, our Promoters do not have any interest in any transaction with respect to the
acquisition of land, construction of building, supply of machinery or any other contracts, agreements or
arrangements entered into by our Company and no payments have been made or are proposed to be made in
respect of these contracts, agreements or arrangements.

ARFSL has entered into cost sharing agreements dated April 1, 2017, and April 1, 2019 , with our
Company, to provide resources of its centre and has agreed to mutually share the costs incurred like salary,
rental of the premises, electricity expenses, telephone expenses, postage expenses, printing and stationery,
repair and maintenance, computer and software maintenance charges, advertisement, with our Company.
Pursuant to the agreement, ARFSL raises debit notes on our Company for its share in the total cost incurred
on above items on periodical basis, which our Company is required pay ARFSL within a period of seven
days from the date of raising such debit note. Except as disclosed in “Other Financial Information — -
Related Party Transactions” on page 295 of this Prospectus, there are no other payments made by our
Company to ARFSL, in this regard.

Accordingly, ARFSL is interested in our Company to the extent it received monies from our Company in
this regard.

For further details including in relation to other transactions in which ARFSL may be deemed to be
interested, please see “Financial Information” on page 225 of this Prospectus.

Mr. Anand Rathi and Mr. Pradeep Gupta may also be deemed to be interested in the above transactions to
the extent of their respective shareholding in ARFSL.

5. Interest in our Company other than as promoters of our Company

Except as disclosed in “Our Management ~ Interest of Directors” on page 207, none of our Promoters have
any interest other than as promoters of our Company, including any business interests, in our Company.
Except as disclosed above in this section, ARFSL does not have any interest in our Company other than as a
promoter of our Company, including any business interests, in our Company.

6. Other ventures of our Promoters

Except for our Subsidiaries and ARSSBL and ARGFL as disclosed in the sections “Our Subsidiaries” and
“Our Group Companies” on pages 188 and 218, respectively, of this Prospectus, our Promoters are not
involved with any other venture which is in the same line of activity or business as that of our Company.

7. Payments of benefits to our Promoters or Promoter Group during the last two years

Except as disclosed above in “—Nature and Extent of interest of our Promoters” and “Other Financial
Information — Related Party Transactions” on pages 213 and 295 of this Prospectus, including in relation to
equity shares, there have been no amounts or benefits, paid or given, to our Promoters or our Promoter
Group during the two years preceding the date of this Prospectus nor is there any intention to pay or give
any benefit to our Promoters or Promoter Group.

IIL. Material Guarantees given to third parties by the Promoters in respect of the Equity Shares

214
As on the date of this Prospectus, no material guarantees in respect of the Equity Shares of our Company,
has been given by our Promoters.

IV. Disassociation by our Promoters in the last three years

Our Promoters have not disassociated themselves from any of the companies or firms during the last three
years preceding the date of this Prospectus.

 

Name of the
Promoter

Name of the entity from
which disassociated

Date of disassociation

Reasons for and
circumstances leading to
disassociation

 

Mr. Anand Rathi

 

 

Nu Vista Limited (formerly
known as Emami Cement
Limited)

 

December 12, 2019

 

Ceased to be director owing
to preoccupancy

 

V. Promoter Group

Natural persons forming part of our Promoter Group

In addition to our Promoters, the following persons form a part of our Promoter Group:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sr. No. Name of the member of the Promoter Group Relation
Mr. Anand Rathi
ke Mr. Suresh Rathi Brother
2 Dr. Phoolkaur Mundra Sister
3. Ms. Tara Mantri Sister
4. Mr. Amit Rathi Son
5. Ms. Priti Gupta Daughter
6. Ms. Pooja Maru Daughter
% Ms. Krishna Dhoot Sister-in-law
Mr. Pradeep Gupta
8. Mrs. Priti Gupta Spouse
9. Mrs. Sushila Devi Gupta Mother
10. Mrs. Prabha Mundra Sister
th Mrs. Asha Biyani Sister
12. Mr. Krishnav Gupta Son
13. Mrs. Aishwariya Dalmia Daughter
14, Mr. Anand Rathi Father-in-law
15. Mr. Amit Rathi Brother-in-law
16. Mrs. Pooja Maru Sister-in-law
Entities forming part of our Promoter Group
Sr. No. Entity
1 AAP Investments Limited
2 Aishwariya Capital Services Private Limited
3. Amit Capital and Securities Private Limited
4. Anand Rathi HUF
5. Anand Rathi IT Private Limited

 

 

215

 
 

Sr. No.

Entity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6. Anand Rathi Power Projects Private Limited
z Anand Rathi Advisors Limited

8. Anand Rathi Commodities Limited

9% Anand Rathi Global Finance Limited

10. Anandrathi Housing Finance Limited

i. Anand Rathi Insurance Brokers Limited

12. Anand Rathi International Ventures (IFSC) Limited
13. Anand Rathi Share and Stock Brokers Limited
14, Anand Rathi Wealth Advisors Limited

15. Anand Rathi Marketing Services Private Limited
16. Alphaplus Commodities Private Limited

a, Ardnum Corporate Services Private Limited
18. Aqua Proof Wall Plast Private Limited

19. AR Trustee Company Private Limited

20. Asha Leasing and Finance Private Limited

21. ‘Ashadeep Holdings (India) Private Limited
22. Daman Commodities Private Limited

23. Daman Ganga Textiles Private Limited

24. Emge Cylinders Private Limited

25. Flavoursome Foods & Beverages Private Limited
26. Girish Synthetics Private Limited

2% Ishka Films Private Limited

28. Ishka Focus Film Production LLP

29. Jaipur Securities Private Limited

30. Jakhetia Finances Private Limited

31. Jiva Capital Partners Limited

32. Krishnav Currencyex Private Limited

33. Marmik Traders Private Limited

34. Metro Woven Sacks Private Limited

35. Mihika Steels Private Limited

36. Morning Star Money Investors Private Limited
37. Nathulal Jakhetia HUF

38. Navratan Mal Gupta HUF

39. Navratan Foundation LLP

40. Network Synthetics Private Limited

41. Parth Infra Steels Private Limited

42. PKG Finstock Private Limited

43. Pradeep Kumar Gupta HUF

44, Prudent Money Movers Private Limited

45. Pushpalata Rathi Foundation

46. Rajasthan Engg. And Consultant Private Limited
47. Rathi IT Solutions Private Limited

 

 

216

 
 

Sr. No.

Entity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

48. Rathi Renewable Energy Private Limited
49. Rukmani Agencies Private Limited

50. Rukmani Mercantile Private Limited

51. Sapphire Human Solutions Private Limited
a Shine Capital and Securities Private Limited
53. Shri Shrimal Advisors Private Limited

54. Suresh Rathi Commodities Private Limited
55. Suresh Rathi Finvest Private Limited

56. Suresh Rathi HUF

57. Suresh Rathi Securities Private Limited
58. Swati Capitals Private Limited

59. Sarweshwer Enterprises

60. Septa Health Solutions Private Limited

61. Vahin Advisors & Traders Private Limited
62. Vidhi Sales Private Limited

63. QI Capital LLP

ae QU Brokerage LLP

65.

 

QICAP Markets LLP

 

217

 
OUR GROUP COMPANIES

In terms of the SEBI ICDR Regulations, the term “group companies”, includes (i) such companies (other than
promoter(s) and subsidiary(ies)) with which there were related party transactions during the period for which
financial information is disclosed in relation to the offer document, as covered under applicable accounting
standards, and (ii) any other companies considered material by the board of directors of the relevant issuer
company.

Accordingly, pursuant to the “Materiality Policy for Determination of Group Companies and Litigation”
approved by a resolution of our Board dated November 15, 2019 and July 16, 2021, our Board has determined
that other than the entities, being related parties determined in accordance with applicable accounting standards
(i.e., Indian Accounting Standard 24 issued by the Institute of Chartered Accountants of India) there are no other
entities which are considered material to our Company and ought to be classified as group companies of our
Company.

Consequently, as of the date of the Prospectus, the following companies have been identified as Group
Companies of our Company:

ARGFL;
ARSSBL;
ARAL;
ARITPL; and
ARIBL.

DRI. No

Unless otherwise specifically stated, none of our Group Companies described below: (i) are listed or have been
refused listing on any stock exchange in India or abroad during the last ten years or; (ii) have made any public or
rights issue of equity shares in the last three years or; (iii) have become a sick company within the meaning of
SICA; (iv) are under winding-up; (v) have become defunct; and (vi) have made an application to the relevant
registrar of companies in whose jurisdiction such Group Companies are registered in the five years preceding
from the date of filing this Prospectus with SEBI, for striking off its name; or (vii) have received any significant
notes on the financial statements from the auditors.

L Details of the top five Group Companies of our Company

The details of the top five Group Companies i.e. the five largest unlisted Group Companies based on turnover as
per the latest available audited financial statements of such group companies, are as below:

ARGFL

Corporate Information

ARGFL was originally incorporated as a private limited company under the name Rathi Global Finance Private
Limited under the Companies Act, 1956 on February 3, 1982. Subsequently, Rathi Global Finance Private
Limited changed its name to Rathi Global Finance Limited and received a fresh certificate of incorporation
dated November 13 2006. Subsequently, Rathi Global Finance Limited converted into a public company to
Anand Rathi Global Finance Limited and received a fresh certificate of incorporation dated March 29, 2010. Its
corporate identification number is U67190MH1982PLC140380.

ARGFL is a Non- Banking Financial Company — NDSI (Non-Deposit Systemically Important) under the
direction issued by Reserve Bank of India engaged in the business of non-banking financial services.

Financial Performance

Brief financial details of ARGFL, derived from its audited accounts for the past three Fiscals are as follows:

 

 

 

 

 

 

(in million)
Particulars Fiscal 2021 Fiscal 2020 Fiscal 2019
Sales 7,335.93 3,831.74 3,190.31
Other Income 15.40 30.33 13.93
Total Revenue 7,351.33 3,862.07 3,204.24
Profit/ (Loss) after tax 422.34 355.21 160.78

 

 

 

 

218

 
 

 

 

 

 

 

 

Particulars Fiscal 2021_| Fiscal 2020__| Fiscal 2019

Equity Capital 201.50 201.50 179.00
Reserves and Surplus (excluding revaluation reserve) 5,265.12 3,929.13 2,885.20
Earnings/ (Loss) per share (Rs.) 20.96 19.28 8.98
Diluted earnings per share (Rs.) 20.96 19.28 8.98
Net Asset Value 5,466.62 4,130.63 3,064.20

 

 

 

 

There are no significant notes of the auditors in relation to the aforementioned financial statements.

ARSSBL

Corporate Information

ARSSBL was originally incorporated as a private limited company under the name Navratan Capital and
Securities Private Limited under the Companies Act, 1956 on November 22, 1991. Subsequently, Navratan
Capital and Securities Private Limited received a fresh certificate of incorporation pursuant to conversion of
name to Navratan Capital and Securities Private Limited dated March 21, 2007. Subsequently, the name of
company got changed to Anand Rathi Share and Stock Brokers Limited and received a fresh certificate of

incorporation dated January 29, 2008. Its corporate identification number is U67120MH1991PLC064106.

It is currently engaged in the business of shares and stock broking, commodities broking, currency broking and
as a depository participant with CDSL and NSDL.

Financial Performance

Brief financial details of ARSSBL, derived from its audited accounts for the past three Fiscals are as follows:

 

 

 

 

 

 

 

 

 

 

 

(in & million)

Particulars Fiscal 2021 Fiscal 2020 Fiscal 2019
Sales 3,026.05 2,455.48 2,347.76
Other Income 4.09 36.54 0.94
Total Revenue 3,030.14 2,492.02 2,348.70
Profit/ (Loss) after tax 131.64 67.46 59.79
Equity Capital 96.01 96.01 86.92
Reserves and Surplus (excluding revaluation reserve) 1,176.68 1,037.46 884.19
Earnings/ (Loss) per share (Rs.) 13.71 7.76 6.88
Diluted earnings per share (Rs.) 13.71 7.76 6.88
Net Asset Value 1,272.69 1,133.46 971,11

 

 

 

 

There are no significant notes of the auditors in relation to the aforementioned financial statements.

ARAL

Corporate Information

ARAL was incorporated as a private limited company under the name Samarth Yarn Trading Company Private
Limited on May 26, 1987 under the Companies Act, 1956. ARAL received a fresh certificate of incorporation
pursuant to change of name dated September 9, 2015. Its corporate identification number is

U17100MH1987PLC043579.

As of the date of this Prospectus, it is engaged in the business of investment banking and PMS (Portfolio
Management Services).

Financial performance

Brief financial details of ARAL, derived from its audited accounts for the past three Fiscals are as follows:

 

 

 

(in & million)
Particulars Fiscal 2021 Fiscal 2020 Fiscal 2019
Sales 265.41 132.86 240.18

 

 

 

 

219

 

 

 
 

 

 

 

 

 

 

 

 

 

Particulars Fiscal 2021 Fiscal 2020 Fiscal 2019

Other Income 1.93 5.28 0.30
Total Revenue 267.34 138.13 240.48
Profit/ (Loss) after tax 66.15 1.69 1.43
Equity Capital 99.06 99.06 99.06
Reserves and Surplus (excluding revaluation reserve) 54,08 (12.23) (11.15)
Earnings/ (Loss) per share (Rs.) 6.68 0.17 0.14
Diluted earnings per share (Rs.) 6.68 0.17 0.14
Net Asset Value 153.14 86.83 87.91

 

 

 

 

There are no significant notes of the auditors in relation to the aforementioned financial statements.

ARITPL

ARITPL was incorporated as a private limited company under the Companies Act, 1956 on September 27, 2010.
Its corporate identification number is U72200RJ2010PTC032949. As of the date of this Prospectus, it is
currently engaged in the business of IT related activities.

Financial Performance

Brief financial details of ARITPL, derived from its audited accounts for the past three Fiscals are as follows:

 

 

 

 

 

 

 

 

 

 

 

(in & million)
Particulars Fiscal 2021 Fiscal 2020 Fiscal 2019
Sales 213.03 222.42
Other Income 2.00 1.05
Total Revenue 215.03 223.47
Profit/ (Loss) after tax 9.74 12.53
Equity Capital 14.20 14.20
Reserves and Surplus (excluding revaluation reserve) 60.56 33.81
Earnings/ (Loss) per share (Rs.) 6.86 8.82
Diluted earnings per share (Rs.) 6.86 8.82
Net Asset Value 74.76 48.01

 

 

 

 

 

There are no significant notes of the auditors in relation to the aforementioned financial statements.
ARIBL
Corporate Information

ARIBL was originally incorporated as a private limited company under the name Pooja Capital and Securities
Private Limited under the Companies Act, 1956 on March 20, 1992. Subsequently, Pooja Capital and Securities
Private Limited changed its name to AR Insurance Brokers Private Limited and received a fresh certificate dated
February 13, 2003. Thereafter, AR Insurance Brokers Private Limited converted into public company and
received fresh certificate of incorporation on March 20, 2007. Thereafter, AR Insurance Brokers Limited
received a fresh certificate of incorporation pursuant to change of name to Anand Rathi Insurance Brokers
Limited and got a fresh certificate of incorporation dated November 1, 2007. Its corporate identification number
is U67120MH1992PLC066006. It is currently engaged in the business of composite insurance broking as of the
date of this Prospectus.

Financial Performance

Brief financial details of ARIBL, derived from its audited accounts for the past three Fiscals are as follows:

 

 

 

 

 

 

(in & million)
Particulars Fiscal 2021 Fiscal 2020 Fiscal 2019
Sales 392.27 331.68 303.88
Other Income 16.19 7.54 5.86
Total Revenue 408.46 339,22 309.73,
Profit/ (Loss) after tax 75.33 6.71 7.44

 

 

 

 

220

 

 

 
 

 

 

 

 

 

 

Particulars Fiscal 2021 | Fiscal 2020 | Fiscal 2019

Equity Capital 58.28 58.28 58.28
Reserves and Surplus (excluding revaluation reserve) 177.13 136.96 130.68
Earnings/ (Loss) per share (Rs.) 12.92 1.15 1.28
Diluted earnings per share (Rs.) 12.92 1.15 1.28
Net Asset Value 235.41 195.24 188.96

 

 

 

 

There are no significant notes of the auditors in relation to the aforementioned financial statements.

Loss making Group Companies

None of our Group Companies have incurred a loss in the immediately preceding financial year.

Litigation

For details of pending litigation involving the Group Companies which may have a material impact on the
Company, see “Risk Factors — there are outstanding legal proceedings against our Company, our Subsidiaries,
our Promoters, our Directors and our Group Companies, which if determined adversely, could affect our
business and results of operations” on page 34 and “Outstanding Litigation and Material Developments — Any
pending litigation involving the Group Companies which has a material impact on our Company” beginning on
page 339.

Group Companies which are sick industrial companies

None of our Group Companies are sick companies under the erstwhile Sick Industrial Companies (Special
Provisions) Act, 1985, as amended.

Group Companies under winding up/insolvency proceedings

None of our Group Companies are under winding up / insolvency proceedings.

Defunct Group Companies

During the five years preceding the date of this Prospectus, none of our Group Companies have remained
defunct and no application has been made to the relevant registrar of companies for striking off the name of any
of the Group Companies.

Common pursuits

Our Group Companies do not have any common pursuits with our Company.

Related Business Transactions within the group and significance on the financial performance of the
Company

Except as disclosed in “Other Financial Information — Related Parties” beginning on page 295, there are no
other business transactions between the Company and the Group Companies which are significant to the
financial performance of the Company.

Business interests or other interests

Other than mentioned below, our Group Companies do not have any business interest in the Company:

 

 

 

 

 

 

a) ARGFL
(In million)
Sr. | Transaction details | Entity Fiscal 2021 Fiscal 2020 | Fiscal 2019
No.
1 Loan Taken Anand Rathi Wealth Limited - 1,916.40 2,929.61
2 Loan Repaid Anand Rathi Wealth Limited - 1,916.40 3,079.61
3 Loan Given Anand Rathi Wealth Limited 14.25 17,574.50 6,614.30
4 Loan Repayment | Anand Rathi Wealth Limited 14.25, 17,574.50 6,614.30

 

 

 

 

 

 

 

 

221
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

received
5 _| Sale of Debentures Anand Rathi Wealth Limited 26,912.36 26,211.78 _| 17,326.73
6 Support Service Taken | Anand Rathi Wealth Limited = =
7 | Support Service Given | Anand Rathi Wealth Limited 5.25 S
8 Interest Paid Anand Rathi Wealth Limited = - 8.39
9 Interest Received Anand Rathi Wealth Limited - 1.45 -
10 _| Sale of shares Anand Rathi Wealth Limited = 1,012.50 :
11_| Commission Paid Anand Rathi Wealth Limited : - 107.38
12_| Rent Received Anand Rathi Wealth Limited 0.24 0.24 0.04
b) ARSSBL
(In million)
Sy er Entity Fiscal 2021] Fiscal 2020 | Fiscal 2019
1_| Loan Taken Anand Rathi Wealth Limited Z = 154.56
2 | Loan Repaid Anand Rathi Wealth Limited : : 154.56
3__| Loan Given Anand Rathi Wealth Limited = = 16,587.50
4 | Loan Repayment Anand Rathi Wealth Limited - 16,587-50
received
S| Businesssupport Anand Rathi Wealth Limited B08 Ba 207
Charges paid
6 | Business Support Anand Rathi Wealth Limited 08 eo a
Charges income
7__| Interest Received Anand Rathi Wealth Limited z 31.95
§ | Demat Charges ‘Anand Rathi Wealth Limited 2.42 - -
Received
9 _| Brokerage Received Anand Rathi Wealth Limited 1.56 0.10 0.77
©) ARAL
(In million)
Sr] Transaction details Entity Fiscal 2021 | Fiscal 2020 | Fiscal 2019
No.
1. | Loan taken ‘Anand Rathi Wealth Limited 13,950.80 507.63 =
2.___[ Loan repaid ‘Anand Rathi Wealth Limited 14,458.43 z :
3.__[ Loan given Anand Rathi Wealth Limited 1,787.00 s z
4, | Loan repayment | Anand Rathi Wealth Limited 1,787.00 =
received
5. | Closing balance of loan | Anand Rathi Wealth Limited - 507.63
taken
6. Interest Income Anand Rathi Wealth Limited 2.00 - -
7.__| Interest Expense ‘Anand Rathi Wealth Limited 22.11 0.15 =
8. | Business Support | Anand Rathi Wealth Limited 1.54 0.65 -
Charges received
9. | Referral Commission | Anand Rathi Wealth Limited - 18.13 40.59
paid
10. | Business Support | Anand Rathi Wealth Limited = : 34.22
Charges paid
d) ARITPL
(in million)
Sr] Transaction details Entity Fiscal 2021 | Fiscal 2020 | Fiscal 2019
No.
1__| Rent Received Anand Rathi Wealth Limited 0.53 0.60 3
2 i er enabled Anand Rathi Wealth Limited 65.05 65.63 31.76
Service
g. | Business Support Anand Rathi Wealth Limited “ 1.25 2
Charges Received
e) ARIBL
(in million)
Sr. | Transaction details Entity Fiscal 2021 | Fiscal 2020. | Fiscal 2019
No.
1 Rent Paid ‘Anand Rathi Wealth Ltd 0.06 0.06 0.06

 

 

 

 

 

 

222

 

 

 

 
Other Confirmations

Other than a rights issue by ARSSBL in Fiscal 2020, our Group Companies have not made any public or rights
issue of securities in the three years preceding the date of this Prospectus. Further, our Group Companies do not
have any securities listed on a stock exchange.

Further, none of the securities of any of Group Companies have been refused listing by any stock exchange in
India or abroad during last ten years, nor have any of the Group Companies failed to meet the listing
requirements of any stock exchange in India or abroad.

Nature and extent of interest of our Group Companies

(i) Interest in promotion of our Company

Our Group Companies do not have any interest in the promotion of our Company. Our Group Companies have
no other interests, including any business interests, in our Company.

(ii) Interest in the properties acquired or proposed to be acquired by our Company

Our Group Companies have no interest in any property acquired by our Company in the three years preceding
the filing of this Prospectus or proposed to be acquired by our Company as of the date of this Prospectus.

 

)) Interest in transactions for acquisition of land, construction of building and supply of machinery

Our Group Companies have no interest in the transactions for acquisition of land, construction of building and
supply of machinery or any other contracts, agreements or arrangements entered into by our Company and no
payments have been made or are proposed to be made in respect of these contracts, agreements or arrangements
by our Company to its Group Companies.

223
DIVIDEND POLICY

The declaration and payment of dividends by our Company is governed by the applicable provisions of the
Companies Act, 2013, the dividend distribution policy approved by the Board of Directors in their meeting held
on March 24, 2021 and subsequently amended at their meeting held on October 11, 2021 (“Policy”), our
Memorandum of Association and Articles of Association. The declaration and payment of dividend on our
Equity Shares, if any, will be recommended by our Board and approved by our shareholders, at their discretion,
in accordance with the provisions of our Articles of Association and applicable laws, including the Companies
Act, 2013 (together with applicable rules issued thereunder).

As per the Policy, the final dividend can be paid once for the financial year after the annual accounts are
prepared. The Board of Directors of our Company has the power to recommend the payment of final dividend to
the shareholders for their approval at the general meeting of our Company. The interim dividend can be declared
by the Board of Directors one or more times in a financial year as may be deemed fit by it. The Board of
Directors shall have the absolute power to declare interim dividend during the financial year, in line with the
Policy and subject to the provisions of the Companies Act, 2013, the rules thereunder and any other applicable
regulations or stipulations, as the case may be. While recommending any payment of dividend by our Company,
the Board shall consider, amongst other things, financial parameters such as profits for the current year, future
outlook for our Company, working capital needs, operating cash flow, dividend pay-out ratio, investment plans
and related cash utilization, restrictive covenants under our current or future loan or financing documents and
any other relevant factors that the Board may deem fit.

The details of the dividend paid by our Company on the Equity Shares during the five-month period ended
August 31, 2021 and last three Fiscals as per our Restated Consolidated Financial Information, and from
September 1, 2021 up till the date of this Prospectus are given below.

 

 

 

 

 

 

 

 

Particulars From September | For the five | Fiscal 2021 | Fiscal 2020 | Fiscal 2019
1, 2021 to thedate | month
of this Prospectus period
ended
August 31,
2021
Number of Equity Shares at period 41,616,227 | 41,616,227] 27,513,560 | 27,027,440 | 26,908,600
ended
Face value per Equity Share (in 2) 5 5 5 5 5
Dividend paid on Equity Shares (in & Nil® 69.36 * 68.78 * Nil Nil
million)
Rate of dividend on Equity Shares Nil 50% 50% Nil Nil
(%)
Dividend distribution tax (in = Nil Nil Nil Nil Nil
million)
Dividend Tax (%) Nil Nil Nil Nil Nil

 

 

 

 

 

 

* Interim dividend @ % 2.50 per Equity Share paid during Fiscal 2021
# Final Dividend for FY 2020-21 @ @ 2.50 per Equity Share

The amount of dividends paid in past are not necessarily indicative of the dividend policy of our Company or
dividend amounts, if any, in the future. There is no guarantee that any dividends will be declared or paid or the
amount thereof will be decreased in the future. For details, see “Risk Factors — Our ability to pay dividends in
the future will depend on our future cash flows, working capital requirements, capital expenditures and
financial condition.” on page 41.

224

 
SECTION V: FINANCIAL INFORMATION
FINANCIAL INFORMATION

The audited standalone financial statements of our Company for Fiscals 2021, 2020 and 2019 (“Standalone
Financial Statements”) are available at https://rathi.com/wealth/Investorrelations.php. Further, the audited
standalone financial statements of our Company’s Material Subsidiaries for the year ended March 31, 2021,
2020 and 2019 (“Subsidiary Financial Statements”) are available at
https://rathi.com/wealth/Investorrelations.php. Our Company is providing a link to this website solely to comply
with the requirements specified in the SEBI ICDR Regulations.

The Standalone Financial Statements and Subsidiary Financial Statements do not constitute, (i) a part of the
Draft Red Herring Prospectus; or (ii) The Red Herring Prospectus; or (iii) This Prospectus, a statement in lieu of
this Prospectus, an offering circular, an offering memorandum, an advertisement, an offer or a solicitation of
any offer or an offer document to purchase or sell any securities under the Companies Act, the SEBI ICDR
Regulations, or any other applicable law in India or elsewhere in the world. The Standalone Financial
Statements and Subsidiary Financial Statements should not be considered as part of information that any
investor should consider to subscribe for or purchase any securities of our Company or our Subsidiaries, or any
entity in which it or its shareholders have significant influence (collectively, the “Group”) and should not be
relied upon or used as a basis for any investment decision. None of the Group or any of its advisors, nor any
BRLMs or the Selling Shareholders, nor any of their respective employees, directors, affiliates, agents or
representatives accept any liability whatsoever for any loss, direct or indirect, arising from any information
presented or contained in the Standalone Financial Statements and Subsidiary Financial Statements, or the
opinions expressed therein.

 

Particulars Page no.

 

 

 

Restated Consolidated Financial Information ak

 

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

225

 
To,

The Board of Directors,

Anand Rathi Wealth Limited (formerly known as Anand Rathi Wealth Services Limited)
Express Zone, A wing, 10th floor,

Western Express Highway,

Goregaon, Mumbai — 400 063,

Maharashtra, India.

Independent Auditor’s Examination Report on Restated Ind AS Consolidated Financial Information as at and
for the period ended August 31, 2021 and as at and for the year ended March 31, 2021, March 31, 2020 and
March 31, 2019 in connection with the proposed IPO of Anand Rathi Wealth Limited (formerly known as
Anand Rathi Wealth Services Limited)

Dear Sirs,

1) We have examined the attached Restated Ind AS Consolidated Financial Information of Anand
Rathi Wealth Limited (formerly known as Anand Rathi Wealth Services Limited) (the “Company”)
and its subsidiaries (together referred to as the “Group”), comprising the Restated Ind AS
Consolidated Summary Statement of Assets and Liabilities as at August 31, 2021, March 31, 2021,
March 31, 2020 and March 31, 2019, the Restated Ind AS Consolidated Summary Statement of
Profit and Loss (including other comprehensive income), the Restated Ind AS Consolidated
Summary Statement of Changes in Equity and the Restated Ind AS Consolidated Summary
Statement of Cash Flow for the period ended August 31, 2021 and for the years ended March 31,
2021, March 31, 2020 and March 31, 2019, the Summary Statement of Significant Accounting
Policies, and other explanatory information (collectively, the “Restated Ind AS Consolidated
Financial Information”), as approved by the Board of Directors at their meeting held on October
12, 2021 for the purpose of inclusion in the Red Herring Prospectus/ Prospectus (hereinafter
referred to as “Offer documents”) prepared by the Company in connection with its proposed
Initial Public Offering (the “IPO”) comprising of offer for sale (“OFS”) prepared in terms of the
requirements of:

a. Section 26 of Part | of Chapter Ill of the Companies Act, 2013 (the “Companies Act") as
amended;

b. the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2018 as amended (“ICDR Regulations”) and

c. The Guidance Note on Reports in Company Prospectuses (Revised 2019) issued by the
Institute of Chartered Accountants of India (“ICAI”), as amended from time to time (the
“Guidance Note”).

2) |The Company’s Board of Directors are responsible for the preparation of the Restated Ind AS
Consolidated Financial Information for the purpose of inclusion in the Offer documents to be filed
with the Securities and Exchange Board of India (“SEBI”), the National stock Exchange of India
Limited and BSE Limited where the equity shares of the Company are proposed to be listed and
the Registrar of Companies (‘RoC’), Maharashtra situated in Mumbai in connection with the
proposed IPO by the Company. The Restated Ind AS Consolidated Financial Information have been

226
3)

4)

5)

prepared by the management of the Company on the basis of preparation stated Annexure V —
2(A) to the Restated Ind AS Consolidated Financial Information. The responsibility of Board of
Directors of the respective Companies included in the Group includes designing, implementing
and maintaining adequate internal controls relevant to the preparation and presentation of the
Restated Ind AS Consolidated Financial Information. The Board of Directors are also responsible
for identifying and ensuring that the Group complies with the Companies Act, ICDR Regulations
and the Guidance Note.

We have examined such Restated Ind AS Consolidated Financial Information taking into
consideration:

a. The terms of reference and terms of our engagement agreed upon with you in accordance
with our engagement letter dated June 16, 2021 in connection with the proposed IPO of equity
shares of the Company;

b. | The Guidance Note also requires that we comply with the ethical requirements of the Code
of Ethics issued by the ICAI.

c. Concepts of test checks and materiality to obtain reasonable assurance based on verification of
evidence supporting the Restated Ind AS Consolidated Financial Information; and

d. The requirements of Section 26 of the Companies Act and the ICDR Regulations.

Our work was performed solely to assist you in meeting your responsibilities in relation to
your compliance with the Companies Act, the ICDR Regulations and the Guidance Note in
connection with the IPO.

These Restated Ind AS Consolidated Financial Information has been compiled by management
from:

a. Audited Special Purpose Ind AS Consolidated financial statements of the Group for the period
ended August 31, 2021 and audited Consolidated Ind AS Financial Statements of the Group for
the year ended March 31, 2021, March 31, 2020 and March 31, 2019 prepared in accordance with
the Indian Accounting Standards (referred to as “Ind AS”) as prescribed under Section 133 of the
Companies Act read with Companies (Indian Accounting Standards) Rules 2015, as amended, and
other accounting principles generally accepted in India, which have been approved by the Board
of Directors at their meeting held on November 17, 2021, June 14, 2021, August 05, 2020 and July
06, 2019 respectively.

For the purpose of our examination, we have relied on:

a. Auditors’ report issued by us dated November 17, 2021 on the audited Special Purpose Ind AS
Consolidated financial statements of the Group as at and for the period ended August 31, 2021
and Auditors’ reports issued by us dated June 16, 2021, August 26, 2020 and July 16, 2019 on the
Consolidated Ind AS Financial Statements of the Group as at and for the year ended March 31,
2021, March 31, 2020 and March 31, 2019 respectively as referred in Paragraph 4 above.

227
6)

7)

The audit report on the Special Purpose Ind AS Consolidated financial statements and the Consolidated
Ind AS Financial Statements issued by us is unmodified.

As indicated in our reports referred above, we did not audit the financial statements (including
Restated standalone financial information) of three subsidiaries, namely, AR Digital Wealth Private
Limited (formerly AR Wealth Management Private Limited), Freedom Wealth Solutions Private Limited
and Ffreedom Intermediary Infrastructure Private Limited, for the period ended August 31, 2021 and
for financial years ended March 31, 2021, March 31, 2020 and March 31, 2019, whose share of
total assets, total revenues, net cash flows included in the Restated Ind AS Consolidated Financial
Information is tabulated below, which have been audited by Bagaria & Co LLP (auditor of AR Digital
Wealth Private Limited (formerly AR Wealth Management Private Limited)) and Bathiya & Associates
LLP (auditor of Freedom Wealth Solutions Private Limited and Ffreedom Intermediary Infrastructure
Private Limited) (both the auditors are collectively referred to as ‘Other Auditors’) and whose
reports have been furnished to us by the Company’s management and our opinion on the
Restated Ind AS Consolidated Financial Information, in so far as it relates to the amounts and
disclosures included in respect of these components, is based solely on the reports of the other
auditors:

 

 

 

 

(Rs. in Million)
Particulars Amount for the | Amount for the | Amount for the | Amount for the
period ended | year ended | year ended March | year ended
August 31, | March 31, 2021 31, 2020 March 31, 2019
2021
Total Assets (as at 719.87 716.50 746.55 688.06
reporting date)
Revenue 64.55 180.6 234.62 94.5
Net Cash (Outflow)/ (260.88) 252.09 19.85 0.79
Inflow

 

 

 

 

 

 

 

Our opinion on the Consolidated Ind AS financial statements is not modified in respect of these
matters.

These Other Auditors of the subsidiaries as mentioned above, have examined the restated financial
information and have confirmed that the restated financial information:

a. have been prepared after incorporating adjustments for the changes in accounting policies,
material errors and regrouping/reclassifications retrospectively in the period ended August 31,
2021 and in the financial years ended March 31, 2021, March 31, 2020 and March 31, 2019 to reflect
the same accounting treatment as per the accounting policies and grouping/classifications followed
as at and for the period ended August 31, 2021;

b. does not contain any qualifications requiring adjustments or do not require any adjustments for the
matter giving rise to modifications mentioned in paragraph 6 above; and

228
8)

9)

10)

11)

12)

c. have been prepared in accordance with the Companies Act, ICDR Regulations and the Guidance
Note.

Based on our examination and according to the information and explanations given to us and also
as per the reliance placed on the examination report submitted by Other Auditors for the
respective periods, we report that the Restated Ind AS Consolidated Financial Information:

a. have been prepared after incorporating adjustments for the changes in accounting policies,
material errors and regrouping/reclassifications retrospectively in the period ended August 31,
2021 and in the financial years ended March 31, 2021, March 31, 2020 and March 31, 2019 to reflect
the same accounting treatment as per the accounting policies and grouping/classifications followed
as at and for the period ended August 31, 2021;

b. does not contain any qualifications requiring adjustments. However, those matters included in
Annexure to the Independent auditors' report issued on Internal Financial control with reference
to financial statements, as applicable, on the financial statements for the years ended March 31,
2021, 2020 and 2019 which do not require any corrective adjustment in the Restated Ind AS
Summary Statements have been disclosed in Annexure V — 53 to the Restated Ind AS Consolidated
Financial Information; and

c. have been prepared in accordance with the Companies Act, ICDR Regulations and the Guidance
Note.

The Restated Ind AS Consolidated Financial Information do not reflect the effects of events that
occurred subsequent to the respective dates of the reports on audited Special Purpose Ind AS
Consolidated financial statements and the Consolidated Ind AS Financial Statements as mentioned in
paragraph 4 above.

We have complied with the relevant applicable requirements of the Standard on Quality Control
(SQC) 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial
Information, and Other Assurance and Related Services Engagements.

This report should not in any way be construed as a reissuance or re-dating of any of the previous
audit reports issued by us, nor should this report be construed as a new opinion on any of the
consolidated financial statements referred to herein.

We have no responsibility to update our report for events and circumstances occurring after the
date of the report.

229
13)

Our report is intended solely for use of the Board of Directors for inclusion in the Offer documents
to be filed with the SEBI, the National Stock Exchange of India Limited, BSE Limited and the ROC
in connection with the proposed IPO. Our report should not be used, referred to or distributed to
any other purpose except with our prior consent in writing. Accordingly, we do not accept or
assume any liability or any duty of care for any other purpose or to any other person to whom
this report is shown or into whose hands it may come without or prior consent in writing.

For and on Behalf of

Khimji Kunverji & Co LLP

Chartered Accountants

Firm Registration Number: 105146W/W100621

Gautam V Shah

Partner

Membership Number — 117348
UDIN: 21117348AAAADB3776

Place: Mumbai
Date: November 17, 2021

230
 

[ANAND RATHI WEALTH LIMITED:
(Previously Known as Anand Rathi Wealth Services Limited)
CIN : U67120MH1995PLC086696
|ANNEXURE I
IRESTATED IND AS CONSOLIDATED SUMMARY STATEMENT OF ASSETS AND LIABILITIES
(Rs in Million)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

aS Ar. ASAT ASAT ASAT
RARTIGUEARS ANNEXURE V) AUGUST 3 MARCH 31, 2021 | MARCH 31, 2020] MARCH 31, 2019
I ASSETS
Non-Current Assets
Property, Plant and Equipment 3 66.76 71.59 88.62 74.78
Right-of-use Asset 3 87.07 122.55 251.43 312.83
Capital work in progress 3 702.19 690.39 653.86 -
Goodwill 38 29.01 29.01 29.01 29.01
Other Intangible assets 4 300.57 321.83 373.29 78.95
Intangible assets under development 4 : - : 316.63
Financial Assets
Investments 5) 1,018.15 1,018.15, 1,013.18 -
- Other Financial assets 70) 81.95 42.80 51.67 40.22
Deferred Tax Assets 8 43.78 45.02 SL.IS 46.48
Other Non Current Assets 9 217.68 111.18 72.33 285.52
2547.16 BAB2.52 2,584.54 1,184.42
Current Assets
Financial Assets
Investments sai) 28.04 26.79 18,32 750.85
- Trade Receivables 10 129.23 108.65 91.14 110.14
~ Cash and cash equivalents ul 573.24 653.18 28254 14.12
~ Bank balances other than above 12 0.48 0.47 0.43 ol
~ Loans 6 267.90 - 648.64 197
- Other Financial Assets mi) 463.64 137.12 333.41 122.49
Other Current Assets 13 13.55 15.28 131,62 23.88
1,476.08 941.49 1,506.10 1,123.85
TOTAL ASSETS 4023.24 3,394.01 4,090.64 2,308.27
IL EQUITY AND LIABILITIES
Equity
Equity Share Capital 14 208.08 137.57 135.14 134.54
Other Equity 15 2,659.85 2,275.27 1,720.09, 1,104.82
Non Controlling Interest 16 116.39 116.21 115.85 125,38
2,984.32 2,529.05 1,971.08 1,364.74
Liabilities
Non-Current Liabilities
Financial Liabilities
~ Borrowings 170i) 22851 249.64 333.60 3.68
- Lease Liabilities 19(i) 47.44 63.24 165.06 226.92
Provisions 220) 5.80 11.64 21.62 10.97
281.75 324.52 520.28 2aL57
Current Liabilities
Financial liabilities
- Borrowings amit) 83.75 83.96 83.70 2.28
~ Lease Liabilities 190i) 55.69 78.10 100.74 93.52
- Trade Payables 18
‘Total Outstanding dues of micro enterprises and small
enterprises : 081 3.43 -
Total Outstanding dues of creditors other than micro
enterprises and small enterprises 0.12 122 13.17 1.62
- Other Financial Liabilities 20 306.76 56.34 909.72 207.53
Other Current Liabilities 2 79.24 122.33 g1.41 65.59
Provisions 2244) 2161 197.68 397.41 331.42
757.17 540.44 7,599.28 701.96
TOTAL EQUITY AND LIABILITIES 4023.24 3,394.01 4,090.64 2,308.27

 

 

 

 

 

 

 

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies
appearing in Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V ~ 56,

As per our attached report of even dat. For and on Behalf of Board of Directors

For and on Behalf of
Khimji Kunverji & Co LLP
Chartered Accountants

 

Registration No,:105146W/W100621 Amit Rathi Rakesh Rawal
Director Officer
DIN : 00029791 DIN : 02839168,

Gautam V Shah

Partner

Membership No: 117348 Ashish Chauhan Rajesh Bhutara

Mumbai Company Secretary Chief Financial Officer

Date: November 17, 2021

 

 

231
 

[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

[CIN : U67120MH1995PI.C086696

|ANNEXURE II

IRESTATED IND AS CONSOLIDATED SUMMARY STATEMENT OF PROFIT & LOSS

 

(Rs in Million)
HCULARS ANNEXURE] FOF‘ Period Te the year Ended] POE Ye" Lege the Year Ended
PARTICULARS v Eoged March 31, 2021 Ene March 31, 2019
August 31, 2021 > March 31, 2020 ,
1 Revenue From Operation 1,669.26 2,653.30

I Other Income

‘Total Revenue

IL Expenses:

Employee Benefit Expenses
Finance Costs

Depreciation and Amortisation Expenses
Other Expenses

‘Total Expenses
IV Profit Before Tax

V_ Tax Expenses
1. Current Tax
2. Deferred Tax
‘Total Tax Expenses

VI Profit for the Period/Year

VII Other Comprehensive Income/(Loss)
(A) (i) Items that will not be reclassified to profit or loss
(Gi) Less : Income tax relating to items that will not be reclassified to
profit or loss

(B) (i) Items that will be reclassified to profit or loss
(i) Income tax relating to items that will be reclassified to profit or loss

‘Total Other comprehensive income/(loss)
‘TOTAL COMPREHENSIVE INCOME FOR THE PERIOD/YEAR

Profit for the period/year attributable to :
‘Owners of the Company
Non- Controlling Interest

Other Comprehensive income for the period/year attributable to :
Owners of the Company
Non- Controlling Interest

‘Total Comprehensive income for the period/year attributable to :
Owners of the Company
Non- Controlling Interest

VII Earning Per Equity Share of Face Value of Rs. 5 each *
Basic
Diluted
* not annualised for period ended August 31, 2021

19.77

139.18

 

1,689.03

2,792.48

3,364.14

2,841.87

 

 

743.65
8.59
65.11
188.27

1,507.56
29.06
172.92
447.10

1,665.73
32.96
210.48
585.36

1,321.73,
61.10
162.69
465.36

 

1,005.62

2,156.64

2,494.53

2,010.88

 

 

683.41

171.29

635.84

869.61

830.99

 

 

(10.67)

 

2.98

(10.67)

 

 

453.93

605.47

(10.65)
(0.02)

 

 

 

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies appearing in

Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56.

As per our attached report of even date.

For and on Behalf of
Khimji Kunverji & Co LLP
Chartered Accountants

Registration No.:105146W/W 100621 Amit Rathi

Director

DIN : 00029791

Gautam V Shah

Partner
Membership No: 117348 Ashish Chauhan
Mumbai Company Secretary

 

Date: November 17, 2021 3

For and on Behalf of Board of Directors

Rakesh Rawal

 

Director & Chief Executive Officer

DIN : 02839168

Rajesh Bhutara
Chief Financial Officer

 
 

[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)
[CIN : U67120MH1995PL.CoB6696

JANNEXURE IL

RESTATED IND AS CONSOLIDATED SUMMARY STATEMENT OF CASH FLOW

(Rsin Mition)

 

FOR THE PERIOD

FOR THE YEAR ENDED

FOR THE YEAR ENDED

FOR THE YEAR ENDED

 

 

 

 

 

PARTICULARS ENDED
aiigreran ai MARCH 31,2021 MARCH 31, 2020 MARCH 31, 2019,
A, |CASH FLOW FROM OPERATING ACTIVITIES
INET PROFIT BEFORE TAX AND EXTRAORDINARY ITEMS 6a3.a1 eas.04 ae9.61 #2099
Add / (Less):
Depreciation 65.1 1792 210.48 162.69
Innerest Income 1435) 6120) (14.16) 279)
Inerest Expenses 859 28.06 2.96 61.10
Dividend (0.08) (0.06) 007) :
Gain on Sale of Investments (159) 26.50) 23.03) 2466)
Fair Value of Financial Instruments eran} aan} 6.28 cosa)
(Gain)Loss on sale of Property, Plant and Equipment 020 (002) oa4
Employee Stock Option Plan 118 64.79 027 021
Gratuity 520 1181 aad 7.09
Leave 9.69 451 1326 394
Baad Debis written off : 6.03 101 :
Balance Writen Off 0.20 : =
(Gain) Loss om Investment in PMS - - (002)
e205, 196.27 235.96 196.93
| OPERATING PROFIT BEFORE WORKING CAPITAL CHAN 746.26 sa 4,105.57 4017.92
Adjustment for
Decrease/(ncrease) in Other Financial Assets (208.55) 193.83, (200.32) 123.40
Decrease/(increase) in Trade Receivables 057) 355) 17.99 1259
ecrease/(Increase) in Other Current Assets 174 116.33 (107.74) 18.60
(Decreasey/Inerease in Trade Payables ast) 456) 14.98 059
(Decrease)/Inerease in Other Financial Liabilties 250.42 (083.69) 702.20 2789)
(Decreasey/Inerease in Provisions 14.48 (222.49) 4356 7487
(Decrease) Increase Other Current Liabilities (43.09) 30.92 25.82 037]
(107.48) (203.20) 496.50 0.36
|CASH GENERATED FROM OPERATIONS. 628.78 28.90 1,602.06 1018.78
Add (Less)
Direct Taxes Paid (Net) (291.08) (239.03) (199.02) @4786)
INET CASH FROM OPERATING ACTIVITIES 347.70 210.13) 1403.05 670.92
B, |CASH FLOW FROM INVESTING ACTIVITIES :
Sale((Purchase) of Property, Plant and Equipment ass9y 2.6) (498.09) esa)
Dilution of NCL 0.00 0.00 = 20.48)
Acquisition of Intangible Assets - 33) 2.19)
Inangible Assets Under Development : 2 (239) 22.03)
Dividend received 0.04 0.06 0.07
Innerest Income 1397 4738 9.83 10.00
Advance paid for Purchase of property 1350 2143 4.93) (129.00)
Security Deposit (Given) Received 8.30) 17.98 (2.50) ar)
Sale((Purchase) of Other Investment 263 2127 (259.10) 2450)
Loans Given (267.90) 652.70 (646.65) 149.03
Investment in Fixed Deposit 029 (14.92) 25)
INET CASH FROM INVESTING ACTIVITIES (291.29) 74754 516.59) (423.39)
C. |CASH FLOW FROM FINANCING ACTIVITIES :
Loan Taken(Repayment) 139} (63.70) 41133 (089)
Innerest Paid @8a) (20.06) 638) e3.aa)
Issue of Shares LIS 10803 05a out
Dividend paid| 69.26) 8.79) - -
Lease Payments (2236) 11226) 123.59) (2045)
INET CASH USED IN FINANCING ACTIVITIES (436.35) (166.77) 281.96 239.14)
INET INCREASE / (DECREASE) IN CASH AND CASH
EQUIVALENTS 79.99) 370.64 168.42 108.44
|CASH AND CASH EQUIVALENTS - Opening Balance 653.18 202.54 142 5.68
|CASH AND CASH EQUIVALENTS - Closing Balance 573.24 653.18 a2. naz
Details of Cash and Cash equivalents atthe end ofthe period/year
= Cash in Hand oar og ost 156
= Balance in Current Account 569.67 11899 201.13 256
Balance in Deposit Account 3.10 534.00 050 110.00
Total s73.24 650.18 2a. 142

 

 

 

 

 

 

 

1) Restated Cash Flow Statement has been prepared under the Indirect Method as Set out in Ind AS-7 specified under section 133 of the Companies Act, 2013,

2) Figures in brackets indicate outflow.

"Nate: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting polices appearing in Annexure V

1 & 2 and information appearing from Annexure V -3 10 Annexure V - 56,
As per our attached report of even date.

For and on Behalf of

Khimji Kunverji & Co LLP

(Chartered Accountants
Registration No105146W/W100621

Gautam V Shah

  

Partner
Membership No: 117348,
Mumbai

Date: November 17,2021

 

233

For and on Behalf of Board of Directors

Amit Rathi
Director
DIN : 00029791

Ashish Chauhan,
‘Company Secretary

Rakesh Rawal

Director & Chief Executive Officer

DIN : 02839168

 

Chiet Financial Officer

 

 
 

[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)
[CIN : U67120MH1995PL.CO86696

JANNEXURE IV

RESTATED IND AS CONSOLIDATED SUMMARY STATEMENT OF CHANGES IN EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A. Equity Share Capital
Nes
Equity shares of Rs 10 each issued, subscribed and fully paid as at April 01, 2018 13,443,040 13443,
‘Changes in Equity Share Capital due to prior period errors Z “
Restated balance atthe beginning of the current reporting period 13,443,040 134.43,
‘Changes in equity share capital during the year 11,260 oat
Subdivision of shares (Refer Annexure V - 33) 13,454,300 -
Equity shares of Rs 5 each issued, subscribed and fully paid as at March 31, 2019 26,908,600 13458
‘Changes in Equity Share Capital due to prior period errors 2
Restated balance atthe beginning of the current reporting period 26,908,600 13454
Shares issued during the year for consideration of Rs 5 each (Refer Annexure V - 34) 118,840 0.60
Equity shares of Rs 5 each issued, subscribed and fully paid as at March 31, 2020 (027,440 735.14
‘Changes in Equity Share Capital due to prior period errors : :
Restated balance atthe beginning of the current reporting period 27,027,440 135,14
Shares issued during the year for consideration of Rs 5 each (Refer Annexure V - 34) 486,120 2.43
Equity shares of Rs 5 each issued, subscribed and fully paid as at March 31, 2021 F7513,560 13757
‘Changes in Equity Share Capital due to prior period errors e
Restated balance atthe beginning of the current reporting period 27,513,560 13757
Shares issued during the period as bonus 13,872,087 69.36,
Shares issued during the period for consideration of Rs 5 each (Refer Annexure V - 34) 230,580 115
Equity shares of Rs 5 each issued, subscribed and full paid as at August 31, 2021 7,616,227 708.08
B. Other Equity
(Rsin Million)
Movement in Non|
Reserve and Surplus Other Controting | rat omer | ee
PARTICULARS Gonpsehensive ar to | ‘Equity | Controlling
Capiial | Securities] Retained TSOP aaeting Interest
Reserve | Premium | Earnings — | Outstanding
Balance as at April 1, 2018 2495 251.97 458.13 0.07 (091) (6382) 670.39 202)
Profit for the Year 592.05, 2 < 592.05 (773)
Remeasurement of the net defined benefit lablty/asset = 2.26) 2.26) 0.03
Issue of shares on premium 0.03 cs g 0.03 f
Movement in Non Controlling Interest due to change in Shareholding . 2 asss7] —as57) 135,10
Addition in Share Options during the year o21 : 2 0.21
Less: Usiisation during the year = = 2 (0.03) z - (0.03) :
Balance as at March 31, 2019 2.95 352.00 1,050.18 0.25 Ga) @is39]| T1042 1538
Balance as at April 1, 2019 24.95 252.00 1,050.18, 0.25 17) (219.39) 1,108.82 125.38
Profit forthe Year : 613.83, 2 2 613.83 231
Remeasurement of the net defined benefit lablty/asset : (10.85) 2 (10.85) (0.02)
Issue of shares on premium 017 5 = 017
Movement in Non Controling Interest due to change in Shareholding 2 11.82 1.92 (1.82)
Addition in Share Options during the year 0m 027 5
Less : Utilization during the year (7) (0.17)
Reversal of Share Options : : oor (0.0) : 5 Z 2
Balance as at March 31, 2020 295 2a7 1,664.02 034 (3.82) 07.5] 1,720.09 Tiss
Balance as at April 1, 2020 24.95 252.17 1,664.02 034 (13.82) 207.57] 1,720.09 11585
Profit forthe year : 450.74 : : "450.74 021
Remeasurement of the net defined benefit labltyiasset - : 283 2.083 0.15
Issue of shares on premium 126.78 - - 126.78 :
‘Addition in Share Options during the year 64.79 . 64.79
Less : Transferred to Securities Premium - ia) : 1.18)
Less : Dividend Paid (68.78) : 3 (68.78)
Transfer on account of options not exercised - - 0.02 (0.02) = =
Balance as at March 31, 2021 295 7a 7,046.00 43.93 (70.99) (@o7sp| 2275.27 116.21
Balance as at April 1, 2021 24.95 378.95 2,046.00 43.93 (10.99) (207.57) 2,275.27 11621
Profit fr the period = 510, = . 510.67 022
Remeasurement of the net defined benefit labltyiasset - ; 1.48 1.48 (0.04)
Total 24.95 378.95 2,556.67 43.93 51) (20757) 2,787.42 116.39
Issue of shares on premium 3 21.20 " 3 < 21.20 .
Total za9s| 400.15, 2,556.67 43.93 si) 20757] 2,808.62 116.39
Addltion in Share Options during the period z a = 1s _ : 11.5, >
Less : Transferred to Securities Premium : (21.20) : : (21.20)
Less : Dividend Paid (69.38) 2 a : (69.36)
Less : Utlsed for isue of bonus shares (69.38) 2 a : (69.36)
Transfer on account of options not exercised z oor (0.01) a 2 Z ¥
Balance as at August 31, 2021 295 | __a00a5 2,417.96 33.87 sn) (@o7sy] 2659.86 T6a9

 

 

Note: ‘The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies appearing in Annexure V -1 & 2 and information|

appearing from Annexure V - 3 to Annexure V - 56.

AAs per our attached report of even date

For and on Behalf of
Khimji Kunverji & Co LLP
Chartered Accountants

Registration No.:105146W/W 100621

Gautam V Shah
Partner
Membership Ni
Mumbai
Date: November 17, 2021

 

17348

 

 

 

For and on Behalf of Board of Directors

Amit Rathi
Director
DIN : 00029791

  

Ashish Chauhan
‘Company Secretary

 

Rakesh Rawal

 

Director & Chief Executive Officer

pr

  

12839168

Rajesh Bhutara

Chief Financial Officer

 

 

 

 

 

234
[ANAND RATHI WEALTH LIMITED

(Previously Known as Anand Rathi Wealth Services Limited)

ICIN : U67120MH1995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION - BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING

1 CORPORATE INFORMATION

Anand Rathi Wealth Limited (the "Holding Company" or the "Company") (Formerly known as Anand Rathi Wealth Services Limited ) having CIN
U67120MH1995PL.C086696 was incorporated on March 22, 1995. On March 8, 2017, the Company was converted from Private Company to Public Company.
With effect from January 7, 2021 the name of the company was changed from Anand Rathi Wealth Services Limited to Anand Rathi Wealth Limited. Its
registered office is at Express Zone, A Wing, 10th Floor, Western Express Highway, Goregaon (E), Mumbai - 400 063, Maharashtra.

The Holding Company and its subsidiaries are engaged in the business of providing Services for Distribution and Sale of Financial Products. The Holding|
Company and its subsidiaries are together referred to as the "Group" and the Company and Holding Company is referred as Anand Rathi Wealth Limited.

2 SIGNIFICANT ACCOUNTING POLICIES

(A) (@ Statement of Compliance

The Restated Ind AS Consolidated Summary Statement of Assets and Liabilities of the Group as at August 31, 2021, March 31,2021, March 31, 2020, March]
31, 2019, Restated Ind AS Consolidated Summary Statement of Profit and Loss including Other Comprehensive Income, Restated Ind AS Consolidated|
Summary Statement of Changes in Equity, Restated Ind AS Consolidated Summary Statement of Cash Flows and Notes to Restated Ind AS Consolidated
Financial Information for the period ended August 31,2021 and year ended March 31,2021, March 31, 2020, March 31, 2019 (hereinafter collectively referred to]
as “Restated Ind AS Consolidated Financial Information”) have been prepared in accordance with the Indian Accounting Standards ("Ind AS") as per the|
Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of the Companies Act, 2013 (“the Act”), amendments thereto and other]
relevant provisions of the Act.

The Restated Ind AS Consolidated Financial Information have been prepared by management for inclusion in the Red Herring Prospectus ("RHP") and|
Prospectus (collectively referred to as the "Offer Documents") to be filed by the Holding Company with the Securities and Exchange Board of India (the "SEBI")
in connection with the proposed listing of equity shares of the Holding Company and an offer for sale by certain of its shareholders.

‘The Restated Ind AS Consolidated Financial Information have been prepared to comply in all material respects with the requirements of :
a) Section 26 of Part I of Chapter III of the Companies Act, 2013 ("the Act") as amended;

b) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended (the SEBI ICDR “Regulations”)
issued by the Securities and Exchange Board of India (‘SEBI') on 11 September 2018 as amended from time to time in pursuance of the Securities and Exchange|
Board of India Act, 1992.

c) Guidance Note on Report in Company Prospectus (Revised 2019) issued by the ICAI (referred to as the Guidance Note).

This Restated Ind AS Consolidated Financial Information were authorised for issue by the Company’s Board of Directors on November 17, 2021.

(ii) The Restated Ind AS Consolidated Financial Information have been compiled from:

The Restated Ind AS Consolidated Financial Information has been prepared by combining on a line by line basis the Restated Ind AS Financial Information of|
the Holding Company and it's Subsidiaries for the period ended August 31, 2021 and years ended March 31, 2021, March 31, 2020 and March 31, 2019 by|
adding together like items of assets, liabilities, equity, incomes, expenses and cash flows, after fully eliminating intra-group balances and intra-group]
transactions.

The Restated Ind AS Summary Statement of Assets and Liabilities as at August 31, 2021, March 31, 2021, March 31, 2020 and March 31, 2019, Restated Ind]
AS Consolidated Summary Statement of Profit and Loss including Other Comprehensive Income, Restated Ind AS Consolidated Summary Statement of changes}
in equity, Restated Ind AS Consolidated Summary Statement of Cash Flows and Notes to restated Ind AS Consolidated Financial Information for the period]
ended August 31,2021 and years ended March 31,2021, March 31, 2020 and March 31, 2019 of the Holding Company and it's subsidiaries have been prepared]
in accordance with the Indian Accounting Standards ("Ind AS") as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 off
the Companies Act, 2013 (“the Act’’), amendments thereto and other relevant provisions of the Act.

The Group has considered the amendments to Schedule III of the Companies Act 2013 notified by Ministry of Corporate Affairs (“MCA”) via notification dated]
24 March 2021 in the Restated Ind AS Consolidated Financial Information disclosures, wherever applicable.

 

235
[ANAND RATHI WEALTH LIMITED

(Previously Known as Anand Rathi Wealth Services Limited)

ICIN : U67120MH1995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION - BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING

(iii) Basis of Measurement of Restated Ind AS Consolidated Financial Information

These Restated Ind AS Consolidated Financial Information have been prepared on historical cost basis, except for certain financial instruments, which are|
measured at fair values at the end of each reporting period, as explained in the accounting policies below.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. The accounting policies adopted in the|
preparation of the Restated Ind AS Consolidation Financial Information are consistent with those followed in the previous year by the Group.

(iv) Functional and Presentation Currency

The Restated Ind AS Consolidated Financial Information are presented in Indian Rupees, which is the functional currency of the Group and the currency of the|
primary economic environment in which the Group operates.

(v) Fair Value Measurement

In addition, for financial reporting purpose, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value|
measurements are observable and the significance of the inputs to the fair value measurements in its entirety, which are described as follows:

- Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date;
- Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
- Level 3 inputs are unobservable inputs for the assets or liability.

Principles of Consolidation

The Restated Ind AS Consolidated Financial Information incorporates the financial statements of the Group. Control is achieved when the Group :
- has power over the investee;

- is exposed, or has rights, to variable returns from it’s involvement with the investee; and

has the ability to use it’s power to affect it’s returns.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. Group reassesses whether or not it controls an investee if facts and
circumstances indicate that there are changes to one or more of the three elements of control listed above. Subsidiaries are deconsolidated from the date the|
control ceases.

The restated Ind AS standalone financial statements of the Group are combined on a line by line basis by adding together like items of assets, liabilities, equity,
incomes, expenses and cash flows, after fully eliminating intra-group balances and intra-group transactions. Profits or losses resulting from intra-group]
transactions that are recognised in assets, such as Property, Plant and Equipment, are eliminated in full. The Restated Ind AS Consolidated Financial Information|
have been prepared using uniform accounting policies.

Goodwill represents the difference between the Holding Company’s share in the net worth of subsidiaries and the cost of acquisition at each point of time of|
making the investment in the subsidiaries.

Non-Controlling Interest’s share of profit / loss of consolidated subsidiaries for the period is identified and adjusted against the income of the Group in order to}
arrive at the net income attributable to shareholders of the Company. Non-Controlling Interest’s share of net assets of consolidated subsidiaries is identified and]
presented in the Consolidated Balance Sheet.

(© Critical Accounting Judgements and key Sources of Estimation Uncertainty

The preparation of the Group’s Ind AS Consolidated Restated Financial Information requires the Group's Management to make judgement, estimates and|
assumptions that affect the reported amount of revenue, expenses, assets and liabilities and the accompanying disclosures. Uncertainty about these assumptions|
and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in next financial years.

Estimates and underlying assumptions are reviewed on an on going basis. Revisions to accounting estimates are recognised in the period in which the estimates|
are revised and future periods are affected.

 

236
[ANAND RATHI WEALTH LIMITED

(Previously Known as Anand Rathi Wealth Services Limited)

ICIN : U67120MH1995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION - BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING

() Amortisation of Customer relationship cost: During the year 2016-17, the Holding company had acquired Private Wealth Management business from|
Religare Wealth Management Limited, for which the Holding Company had made payment which was capitalised as Customer Relationship Cost. The Holding|
Company expects that it will get future economic benefit of it over the period of 3 years.

(ii) Depreciation / Amortisation and useful lives of property, plant and equipment: The Group depreciates its tangible assets over the useful life of an Asset
as prescribed under Part C of Schedule I of Companies Act, 2013. The Group remeasures remaining useful life of an asset at the end of each reporting date.

(iii) Fair value measurement: Fair Value is a price of orderly transaction between market participants at the measurement date under current market conditions.
The Group determines Fair Value of Quoted Instruments from available market price. When the fair values of financial assets and financial liabilities recorded in]
the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using appropriate valuation techniques. The inputs to|
these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values,
Judgements include considerations of inputs such as liquidity risk, credit risk and volatility.

(iv) Provisions: Provisions are recognized when there is a present obligation (legal or constructive) as a result of past event; and it is probable that an outflow of|
resources will be required to settle the obligation. The Management estimates it by using its best judgement of future cash outflow.

(v) Taxes: The Group periodically assesses its liabilities and contingencies related to income taxes for all years open to scrutiny based on latest information|
available. For matters where it is probable that an adjustment will be made, the Group records its best estimates of the tax liability in the current tax provision,
‘The Management believes that it has adequately provided for the probable outcome of these matters.

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be|
utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and|
the level of future taxable profits.

(vi) Recognition and measurement of defined benefit obligations

The obligation arising from defined benefit plan is determined on the basis of actuarial assumptions. Key actuarial assumptions include discount rate, trends in]
salary escalation and attrition rate, The discount rate is determined by reference to market yields at the end of the reporting period on government securities.

(D) Current and Non-Current Classification
‘An asset shall be classified as current when it satisfies any of the following criteria:—
(a) it is expected to be realised in, or is intended for sale or consumption in, the Group’s normal operating cycle;
(b) it is held primarily for the purpose of being traded;
(0) it is expected to be realised within twelve months after the reporting date; or
(d) itis cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date.
All other assets shall be classified as non-current.

A liability shall be classified as current when it satisfies any of the following criteria:—
(a) it is expected to be settled in the Group’s normal operating cycle;

(b) it is held primarily for the purpose of being traded;

(0) it is due to be settled within twelve months after the reporting date; or

(@ the Group does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.
All other liabilities shall be classified as non-current.

Property, Plant and Equipment & Intangible Assets and Depreciation & Amortisation

Property, Plant and Equipment
Property, plant and equipment are stated at cost, less accumulated depreciation and impairment, if any. Direct costs in relation to the fixed assets are capitalized|
until such assets are ready for use.

 

237
[ANAND RATHI WEALTH LIMITED

(Previously Known as Anand Rathi Wealth Services Limited)

ICIN : U67120MH1995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION - BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING

() Tangible Assets: Depreciation on tangible assets is provided on the straight-line method over the useful lives of assets estimated by the Management.
Depreciation for assets purchased during a period is proportionately charged. The Management estimates the useful lives and residual values of the fixed assets|
as prescribed under Part C of Schedule II of the Companies Act 2013 as follows:

Fixed Assets Useful Life
Office Equipments 5 years
Computer Equipments
a. Server 6 years
b. Other Computer Equipments 3 years
Vehicles 8 years
Furniture and Fixtures 10 years

(ii) Improvements on leased premised are depreciated over the lease period.

(iii) Intangible Assets: Intangible assets are recorded at the consideration paid for the acquisition of such assets and are carried at cost less accumulated|
amortisation and impairment, if any.

Customer Relationship cost is amortised over the period of 3 years on the straight-line method.

Software of Holding Company is amortized over a period of 3 Years on the straight-line method.

Software (OFA Plus) of a subsidiary i.e. Ffreedom Intermediary Infrastructure Private Limited had been amortized over a period of 5 Years till FY 2018-19 and

7 years in FY 2019-20 and in the FY 2020-21 the same has been amortised for the period of 10 years. The estimation of amortisation period for software had
been reviewed by Management during the current financial year and the amortisation period has been revised to 10 years on the straight line method.

Software of a subsidiary A R Digital Wealth Private Limited is amortized over a period of 7 Years on the straight-line method till FY 2019-20. The estimation off
amortisation period for software had been reviewed by Management during the current financial year and the amortisation period has been revised to 10 years on|
the straight line method.

Trade mark of one of the subsidiary i.e. Ffreedom Intermediary Infrastructure Private Limited is amortized over a period of 10 Years on the straight-line method.

(iv) Intangible Assets under Development : Intangible assets not ready for the intended use as on the date of the Balance Sheet are disclosed under ‘Intangible|
Assets Under Development.

(v) Capital work-in-progress: Capital work-in-progress comprises cost of property, plant and equipment that are not yet ready for their intended use as at the
period/year end.

Financial Instruments

Financial assets and financial liabilities are recognised when a Group becomes a party to the contractual provisions of the instruments.

Initial Recognition :

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial}
assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss and ancillary costs related to borrowings) are}
added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable}
to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in Statement of Profit and Loss.

Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and|
interest.

(i) Classification & Subsequent Measurement of Financial Assets

Financial assets are classified as ‘Amortised Cost’, 'Fair Value through Profit and Loss' (FVTPL) and ‘Fair Value through Other Comprehensive Income’
(FVTOCI) on the basis of following:

+ the entity’s business model for managing the financial assets and
+ the contractual cash flow characteristics of the financial asset.

 

238
[ANAND RATHI WEALTH LIMITED

(Previously Known as Anand Rathi Wealth Services Limited)

ICIN : U67120MH1995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION - BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING

Financial assets are classified in the following categories :

Debt Instruments at amortised cost: Debt instruments that meet the following conditions are subsequently measured at amortised cost (except for those|
designated at FVTPL on initial recognition)

+ the asset is held within a business model whose objective is to hold asset to collect contractual cash flows; and
+ the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount|
outstanding

Debt Instruments at FVTOCI: Debt instruments that meet the following conditions are subsequently measured at FVTOCI (except for those designated at]
FVTPL on initial recognition)

+ the asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and
+ the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount|
outstanding

Debt Instruments at FVTPL: Any debt instrument which is either initially designated at FVTPL or which does not meets the criteria for amortised cost or]
FVTOCI is measured at FVTPL.

Effective Interest Rate Method: Interest income from security deposits and debt instruments is recognised using the effective interest rate method. The|
effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset. When calculating the|
effective interest rate, the Group estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment,
extension, call and similar options) but does not consider the expected credit losses.

Equity Instruments at FVTOCI: On initial recognition, the Group can make an irrevocable election (on an instrument by instrument basis) to present the|
subsequent changes in fair value in other comprehensive income pertaining to investments in equity instruments. This election is not permitted if the instrument]
is held for trading. The cumulative gain or loss is not reclassified to the Statement of Profit and Loss on disposal of the investment.

Financial Assets at FVIPL: Investments in equity instruments are classified at FVTPL, unless they were irrevocably elected on initial recognition as FVOCI.
Financial Assets at FVTPL are measured at Fair Value at the end of each reporting period, with any gains or losses arising on remeasurement recognised in the|
Statement of Profit and Loss.

Dividends are recognised in profit or loss only when the right to receive payment is established, it is probable that the economic benefits associated with the|
dividend will flow to the Group, and the amount of the dividend can be measured reliably.

ii) Impairment of financial assets

‘The Group assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost, FVOCI debt instruments, and other}
financial assets. The impairment methodology applied depends on whether there has been a significant increase in credit risk. Annexure V - 46 details how the|
Group determines whether there has been a significant increase in credit risk.

For trade receivables only, the Group applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to]
be recognised from initial recognition of the receivables.

(iii) Derecognition of financial assets
A financial asset is derecognised only when :

+ The Group has transferred the rights to receive cash flows from the financial asset or

+ retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more|
recipients.

 

239
[ANAND RATHI WEALTH LIMITED

(Previously Known as Anand Rathi Wealth Services Limited)

ICIN : U67120MH1995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION - BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING

Where the entity has transferred an asset, the group evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In]
such cases, the financial asset is derecognised. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the|
financial asset is not derecognised.

Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset is}
derecognised if the Group has not retained control of the financial asset. Where the Group retains control of the financial asset, the asset is continued to be|
recognised to the extent of continuing involvement in the financial asset.

(iv) Financial Liabilities:

Financial liabilities which are held for trading or are designated at FVTPL are measured at fair value with changes being recognised in the Statement of Profit]
and Loss.

Financial liabilities that are not held for trading and are not designated as at FVTPL, are measured at amortised cost. The carrying amounts of financial liabilities}
that are subsequently measured at amortised cost are determined based on the effective interest method.

(v) Derecognition of financial liabilitie

The Group derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or have expired. A substantial modification]
in the terms of an existing financial liability is accounted as a discharge of original financial liability and recognition of new financial liability. The difference|
between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised as profit or loss.

(vi) Offsetting financial assets and liabilities
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right and|
ability to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.

(G) Derivatives financial instruments

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured to their fair value at the end of|
each reporting period. The resulting gain or loss is recognised in the Statement of Profit and Loss.

(H) Impairment of Assets

Property, plant or equipment and intangible assets with finite life are evaluated for recoverability whenever there is any indication that their carrying amount may|
not be recoverable. If any such indication exists, the recoverable amount (i.e. higher of the fair value less cost to sell and the value in use) is determined on an|
individual asset basis unless the asset does not generate cash flows that are largely independent to those from other assets.

The Carrying Amount of Assets is reviewed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. An asset is|
treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss, if any, is charged to Statement of Profit and Loss in the|
period/year in which an asset is identified as impaired. Reversal of impairment losses recognized in prior years is recorded when there is an indication that the|
impairment losses recognized for the assets no longer exists or have decreased.

Cash and cash equivalents

(i Cash and cash equivalents in the balance sheet comprise cash at bank and on hand and short-term deposit with original maturity upto three months, which are|
subject to insignificant risk of changes in value.

(ii) For the purpose of presentation in the statement of cash flows, cash and cash equivalents consists of cash and short-term deposit, as defined above, net of|
outstanding bank overdraft as they are considered as an integral part of the Group's cash management.

Borrowing Cost and Finance Charges

Borrowing cost attributable to acquisition and construction of qualifying assets are capitalized as a part of the cost of such assets up to the date when such assets|
are ready for its intended use. Other borrowing cost are charged to the statement of profit and loss in the period in which they are incurred. Borrowing costs|
consist of interest and other costs that an entity incurs in connection with the borrowing of funds and is measured with reference to the effective interest rate|
applicable to the respective borrowings.

 

240
[ANAND RATHI WEALTH LIMITED

(Previously Known as Anand Rathi Wealth Services Limited)

ICIN : U67120MH1995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION - BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING

(K) Leases

‘The Group assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control]
the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified|
asset, the Group assesses whether: (i) the contract involves the use of an identified asset (ii) the Group has substantially all of the economic benefits from use of|
the asset through the period of the lease and (iii) the Group has the right to direct the use of the asset.

At the date of commencement of the lease, the Group recognizes a right-of-use asset and a corresponding lease liability for all lease arrangements in which it is a|
lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Group]
recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.

Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these|
options when it is reasonably certain that they will be exercised.

The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior}
to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated|
depreciation and impairment losses.

Right-of-use assets are depreciated on a straight-line basis over the lease term. Right of use assets are evaluated for recoverability whenever events or changes in|
circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the|
fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely|
independent of those from other assets.

The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest
rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are|
Temeasured with a corresponding adjustment to the related right of use asset if the Group changes its assessment if whether it will exercise an extension or a|
termination option.

Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.

\(L) Goodwill
Goodwill arising out of Consolidation of financial information of subsidiaries is tested for impairment at each reporting date.

(M) Business Combination:

The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the Group to obtain control of a business is|
calculated as the sum of the fair values of assets transferred, liabilities incurred and the equity interests issued by the Group as at the acquisition date i.e. date on|
which it obtains control of the acquire which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition-|
related costs are recognised in the Statement of Profit and Loss as incurred, except to the extent related to the issue of debt or equity securities.

Identifiable assets acquired and liabilities assumed in a business combination are measured initially at their fair values on acquisition-date.

Intangible Assets acquired in a Business Combination and recognised separately from Goodwill are initially recognised at their fair value at the acquisition date|
(which is regarded as their cost). Subsequent to initial recognition, intangible assets acquired in a Business Combination are reported at cost less accumulated]
amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.

Goodwill is measured as the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests, and any previous|
interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration]
transferred, the excess is termed as Gain on Bargain Purchase/Capital reserve.

 

241
[ANAND RATHI WEALTH LIMITED

(Previously Known as Anand Rathi Wealth Services Limited)

ICIN : U67120MH1995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION - BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING

(N) Employee Benefits
Defined Contribution plan — Retirement benefit in the form of Provident Fund is a defined contribution scheme. The Group is statutorily required to contribute a|
specified portion of the basic salary of an employee to a provident fund as a part of retirement benefits to its employees. The contributions during the period are|
charged to Statement of Profit and Loss. The Group recognizes contribution payable to the Provident Fund scheme as an expenditure when an employee renders|
related service.

Defined Benefit Plan ~ Gratuity, which is in the nature of Defined Benefit Schemes, are payable only to employees and accounted for on accrual basis. The Cost|
of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period,
Remeasurement, comprising actuarial gains and losses are recognised in other comprehensive income in the period in which they occur and are not reclassified to]
the Statement of Profit and Loss.

The Holding Company has funded its Gratuity liability under group scheme with an Insurer. The retirement benefit obligation recognised in the balance sheet
represents the present value of the defined benefit obligations reduced by the fair value of the scheme assets. Any asset resulting from this calculation is limited|
to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the scheme.

Short Term Employee Benefits - The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by}
employees are recognized during the period/year when the employees render the service. These benefits include incentive and Annual Leave which are expected|
to occur within twelve months after the end of the period in which the employee renders the related service.

(O) Revenue Recognition

Ind AS 115 - Revenue from contracts with customers became effective from the year under report. Accordingly, the Group assesses the nature, timing and extent|
of revenue based on performance obligations in its contracts/understanding/trade customs with customers & clients.

Revenue is recognised to the extent that is probable that the economic benefits will flow to the Group and the amount can be reliably measured. Revenue is}
measured at the fair value of consideration received or receivable taking into account the amount of discounts.

1. Income related with Distribution and sale of Financial product including Distribution income on Mutual Fund, Portfolio Management Service (PMS),
Advisory activities, Referral fees, Gain/Loss on sale of Investment (Structured Product), Consultancy, Commission Income, Software license & Subscription fees|
and Marketing Support charges is accounted on accrual basis.

2. In respect of financial planning fees since entire work is done at the initial stage entire revenue is recognized at the time of contract

3. Dividend income is accounted for when the right to receive the income is established.

4. Difference between the sale price and the carrying value of investment is recognised as profit or loss on sale/ redemption on investment on trade date of|
transaction. Carrying value of investments is determined based on weighted average cost of investments sold.

5, Interest income is recognised on a time basis using the effective interest method.

Taxes on Income

Current Tax: Provision for Income Tax is determined in accordance with the provisions of the Income Tax Act, 1961. Provision for Minimum Alternative Tax}
(MAT) is in accordance with the provisions of Section 115JB of the Income Tax Act, 1961.

Deferred Tax: Deferred tax is provided, on all temporary differences at the reporting date between the tax base of assets and liabilities and their carrying|
amounts for financial reporting purposes. Deferred tax assets and liabilities are measured at the tax rates that are expected to be applied to the temporary|
differences when they reverse, based on the laws that have been enacted or substantively enacted at the reporting date. Tax relating to items recognised directly in]
equity or OCI is recognised in equity or OCI and not in the Statement of Profit and Loss.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied]
by the same tax authority, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously

A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be|
utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable.

 

242
[ANAND RATHI WEALTH LIMITED

(Previously Known as Anand Rathi Wealth Services Limited)
ICIN : U67120MH1995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION - BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING

(Q) Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognized when there is a present obligation (legal or constructive) as a result of past event; and it is probable that an outflow of resources will be|
required to settle the obligation, in respect of which a reliable estimate can be made.

Provisions (excluding retirement benefits) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the|
Balance Sheet date, taking into account the risks and uncertainties surrounding the obligation.

Contingent Liabilities are possible but not probable obligations as on the Balance Sheet date, based on the available evidence. Contingent Liabilities are not]
recognised in the financial information.

Contingent Assets are neither recognized nor disclosed.

(R) Earning per share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders of the Holding company by the|
weighted average number of equity shares outstanding during the period/year.

Diluted earnings per share are computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the|
period/year. For the purpose of calculating diluted earnings per share, the net profit or loss for the period/year attributable to equity shareholders and the weighted|
average number of shares outstanding during the period/year are adjusted for the effects of all dilutive potential equity shares.

Foreign Currency transactions

Transactions in currencies other than the Group’s functional currency (i.e. foreign currencies) are recognised at the rates of exchange prevailing at the dates of|
the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the rates prevailing at that date. Non-|
monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was|
determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of initial]
transactions.

Exchange differences on monetary items are recognised in the Statement of Profit and Loss in the period in which they arise except for:

- exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those}
assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings.

- exchange differences relating to qualifying effective cash flow hedges and qualifying net investment hedges in foreign operations which are recognised in|
oc.

Cash Flow Statement

Cash flow statement is prepared using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature item off
income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Group are|
segregated.

(U) Share Based payment Arrangements

Equity settled share based payments to employees and others are measured at the fair value of equity instruments at the grant date. The fair value determined at
the grant date of the equity settled share based payments is expensed on a straight line basis over the vesting period, based on the Holding Company's estimate of|
equity instrument that will eventually vest, with a corresponding increase in equity.

(V) Rounding of amounts

All amounts disclosed in the restated Ind AS Consolidated financial information and notes have been rounded off to the nearest million as per the requirement of]
Schedule III, unless otherwise stated.

 

243
[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

CIN : U67120MH1995PLC086696
|ANNEXURE V
INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

3. RESTATED CONSOLIDATED SUMMARY STATEMENT OF PROPERTY, PLANT AND EQUIPMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

Description Right-of-Use Asset Leasehold Computer Office equipment Rumi. &
Improvements equipment Fixtures
Gross Block as at April 1, 2021 378.14 5.24 63.03 9.77 36.32
Additions - - 357 0.76 -
Disposals - - 0.03 - -
Gross Block as at August 31,2021 66.57 10.53
Accumulated depreciation as at April 1, 2021 35.43 5.43
Depreciation for the period 5.22 0.73
Disposals 0.03 :
Accumulated depreciation as at August 31,2021 40.62 6.16
‘Net carrying amount as at August 31,2021 25.95 437
Description Right-of-Use Asset Leasehold Computer Office equipment Fuenionre &
Improvements equipment Fixtures
Gross Block as at April 1, 2020 485.80 5.24 60.17 9.24 36.26
Additions - - 3.45 0.53 0.11
Disposals 107.66, - 0.59 = 0.05,
Gross Block as at March 31,2021 (378.14 63.03 9.77
Accumulated depreciation as at April 1, 2020 234.37 22.60 3.68
Depreciation for the year 100.40 13.40 1.75
Disposals 79.18 0.57 -
Accumulated depreciation as at March 31,2021 255.59 35.43, 5.43
Net carrying amount as at March 31,2021 122.55 27.60 4.34
Description Right-of-Use Asset Leasehold Computer Vehicles Office equipment Fuenionre & ‘Total
Improvements, equipment. Fixtures.
Gross Block as at April 1, 2019 438.56 5.24 31.93 16.45 8.57 32.26 533.01
Additions 47.24 - 28.52 - 0.68 i 80.67
Disposals = = 0.28 = 0.01 0.23, 0.52
Gross Block as at March 31,2020 485.80 5.24 60.17 16.45 9.24 36.26 613.16
Accumulated depreciation as at April 1, 2019 125.73, 0.13, 10.79 3.37 2.01 3.36, 145.39
Depreciation for the year 108.64 0.50 11.92 1.96 1.68 3.19 127.89
Disposals - - O11 - 0.01 0.06, 0.18
Accumulated depreciation as at March 31,2020 234.37 0.63 22.60 5.33 3.68 6.49, 273.10
Net carrying amount as at March 31,2020 251.43, 4.61 37.57 11.12 5.56 29.77 340.06,
Description Right-of-Use Asset Tescenolt ‘Computer Vehicles Office equipment Furniaire & Total
Improvements equipment Fixtures
Gross Block as at April 1, 2018 151.51 - 19.86 15.12 4.12 16.19, 206.80
Additions 287.05 5.24 12.10 1.33 4.45 16.07 326.24
Disposals - - 0.03 = = - 0.03
Gross Block as at March 31, 2019 438.56 5.24 31.93 16.45 8.57 32.26 533.01
Accumulated depreciation as at April 1, 2018 32.11 - 3.69 1.44 0.88 1.27 39.39
Depreciation for the year 93.62 0.13, 7.10 1.93 1.13 2.09 106.00
Disposals - - - - - - -
Accumulated depreciation as at March 31, 2019 125.73 0.13 10.79 3.37 2.01 145.39,
Net carrying amount as at March 31, 2019 312.83 5.11 21.14 13.08 6.56 387.62

 

 
[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

CIN : U67120MH1995PLC086696
|ANNEXURE V
INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

 

3(i) RESTATED CONSOLIDATED SUMMARY STATEMENT OF CAPITAL WORK IN PROGRESS
(Rs in Million)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Description Building ‘Total
‘As at April 1, 2021 690.39 690.39
Additions 11.80 11.80
Less : Disposals - -
‘As at August 31, 2021 702.19 702.19
Description Building ‘Total
‘As at April 1, 2020 653.86 653.86
Additions 36.53 36.53
Less : Disposals - -
‘As at March 31, 2021 690.39 690.39
Description Building ‘Total
‘As at April 1, 2019 = -
Additions 653.86 653.86
Disposals - -
‘As at March 31, 2020 653.86 653.86
Description Building ‘Total
As at April 01, 2018 = -
Additions - -
Disposals - -

 

‘As at March 31, 2019 = =

Capital work in progess ageing schedule
(Rs in Million)

 

 

 

 

 

 

 

Periods in Progress “iyo, 1-2 years 2-3 years More than 3 years Total

[AS at August 312021 32.07 670.12 : g 702.19
[AS at March 31 2021 36.53 653.86 : 7 690.39
[AS at March 31 2020 653.86 : z : 653.86
[As at March 31 2019 7 : 7 : :

 

 

 

 

 

 

 

There are no overdue or cost overrun projects compared to its original plan and no projects which are temporarily suspended, on the above mentioned reporting dates

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies appearing in Annexure V -1 & 2 and information appearing
from Annexure V - 3 to Annexure V - 56.

 

245
 

[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

CIN : U67120MH11995PL.C08696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

 

 

4 RESTATED CONSOLIDATED SUMMARY STATEMENT OF OTHER INTANGIBLE ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Rs in Million)
Descri ‘OFA Plus* Software ‘Trademark (Customer Relationship Total
Gross Block as at April 1, 2021 BOD 441.37 0.19 35.63 367.01
Additions : - :
Disposals - - - -
Gross Block as at August 31, 2021 30.82 441.37 019) 85.63 567.01
Accumulated amortisation as at April 1, 2021 813 151.33 0.09 85.63 245.18
Amortisation for the period 161 19.64 0.01 > 21.26
Disposals 3 = . 2 :
Accumulated amortisation as at August 31, 2021 9.74 170.97, 0.10 85.63 266.44
Net carrying amount as at August 31, 2021 30.08) 270.40 0.09) z 30057
Desa OFA Plus* Software ‘Trademark Customer Relationship Total
(Gross Block as at April 1, 2020 BORD ‘441.37 0.19 35.63
Additions - : : : :
Disposals : : - -
Gross Block as at March 31, 2021 30.82 441.37 019) 85.63 567.01
Accumulated amortisation as at April 1, 2020 429 104.02 0.07 85.34 193.72
Amortisation for the year 3.84 4731 0.02 0.29 51.46
Disposals s 3 : : :
Accumulated amortisation as at March 31, 2021 813 151.33, 0.09) 85.63 245.18
Net carrying amount as at March 31, 2021 31.69) 290.04 0.10 : 321.83
Description ‘OFA Plus* Software ‘Trademark ‘Customer Relationship ‘Total
(Gross Block as at April 1, 2019 = 104.26 0.19 35.63 790.08
Additions 39.82 337.11 - : 376.93
Disposals : - - -
Gross Block as at March 31, 2020 BORD 4137 O19 35.63 567.01
Accumulated amortisation as at April 1, 2019 é 50.95 0.05 60.13 11.13
Amortisation for the year 429 53.07 0.02 25.21
Disposals 5 3 : 3 3
Accumulated amortisation as at March 31, 2020 4.29 104,02 0.07 85.34 193.72
Net carrying amount as at March 31, 2020 35.53 337.35 O12 0.29 373.29
Description ‘OFA Plus* Software ‘Trademark ‘Customer Relationship ‘Total
(Gross Block as at April 1, 2018 102.08 019 35.63 187.90
Additions 218 - : 218
Disposals - - - -
Gross Block as at March 31, 2019 104.26 019 35.63 190.08
Accumulated amortisation as at April 1, 2018 22.82 0.03 31.59 54.44
Amortisation for the year 28.13, 0.02 28.54 56.69
Disposals 3 : 3 3
Accumulated amortisation as at March 31, 2019 50.95 0.05, 60.13 111.13
Net carrying amount as at March 31, 2019 53.31 O14 25.50 78.95

 

OFA Plus- Omni Financial Advisor Plus

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies appearing in Annexure V -1 & 2 and

information appearing from Annexure V - 3 to Annexure V - 56.

 

246

 
[ANAND RATHI WEALTHLIMITED SOS
(Previously Known as Anand Rathi Wealth Services Limited)

CIN : U67120MH1995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

 

4) RESTATED CONSOLIDATED SUMMARY STATEMENT OF INTANGIBLE ASSETS UNDER DEVELOPMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Rs in Million)
Software
Description eset peel
Costas at April 1, 2021
Additions
Capitalised during the period -
AS at August 31, 2021 :
Software
Development
Costas at April 1, 2020
Additions
Capitalised during the year :
As at March 31, 2021 z
Software
Development
Costas at April 1, 2019 316.63
Additions 52.37
Capitalised during the year 369.00
As at March 31, 2020 =
a Software
‘Deseriptlon: Development
Costas at April 1, 2018 234.60

Capitalised during the year

Additions 82.03
Cost as at March 31, 2019

 

ey

Intangible assets under development ageing schedule

 

    

(Rs in Million)
Pasiue a POR "Amount in Intangible assets under development for a period of Total
Less than 1 year 1-2 years 2-3 years, More than 3 years
As at August 31, 2021 - - - . -
As at March 31, 2021 - ‘ - -
As at March 31, 2020 £ = é z
As at March 31, 2019 82.03 123.28 111.32 2 316.63

There are no overdue or cost overrun projects compared to its original plan and no periods which are temporarily suspended, on the above mentioned reporting dates

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies appearing in Annexure V -1 & 2 and
information appearing from Annexure V - 3 to Annexure V - 56,

 

 

 

247
 

[ANAND RATHI WEALTH LIMITED

(Previously Known as Anand Rathi Wealth Services Limited)

CIN : U67120MH1995PL.C086696

|ANNEXURE V

NOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

 

RESTATED CONSOLIDATED SUMMARY STATEMENT OF INVESTMENTS

ASAT ASAT ASAT ASAT
AUGUST 31,2021 MARCH 31,2021 MARCH 31,2020 MARCH 31, 2019

Investments - Non current Quy. in Nos. Quy. in Nos. Quy. in Nos. Qty. in Nos.
Un-Quoted - Fully Paid

Investment in Equity Shares of Other Companies at Fair Value through
Profit and Loss

Anand Rathi Global Finance Limited* 2,250,000 2,250,000 2,250,000

Aggregate amount of Quoted Investment and market value thereof
Aggregate amount of Un-quoted Investment
Aggregate provision made for unquoted Investment

* During the FY 19-20, the Holding Company has purchased 22,50,000 shares of Anand Rathi Global Finance Limited for consideration of Rs, 1012.5 Million

ASAT ASAT ASAT ASAT

GO) Sinyesinens Chavet AUGUST 31, 2021 MARCH 31,2021 MARCH 31, 2020 MARCH 31, 2019

Qty. in Nos. Qty. in Nos. Qty. in Nos. Qty. in Nos.

uoted
Investment in Mutual Fund and PMS at Fair Value through Profit and
Loss

Franklin India Ultra Short Bond Fund - Super Institutional - Growth 6,100.49 41,405.24 :
Franklin Low Duration Fund Growth Plan 1,188.23, 13,182.28
Franklin India Low Duration Fund - Direct - Growth 320.33 3,553.75 :
LIC Liquid Fund - Regular Plan - Growth 133,776.26
Reliance Liquid Fund - Growth Plan** 22,070.90
Aditya Birla Sunlife Liquid Fund - Growth** 669,607.58
Investment in PMS

Unquoted,
Investment in PMS at Fair Value through Profit and Loss/

'=* The units have been pledged as collateral for margin as at March 31, 2019

ASAT
AUGUST 31, 2021

Amount

1,018.15
1,018.15

1,018.15,

ASAT
AUGUST 31, 2021

Amount

ASAT
MARCH 31, 2021,

Amount

41,018.15
1,018.15,

1,018.15

ASAT
MARCH 31, 2021

Amount

‘\The amount represents Investment in Portfolio which is managed by Anand Rathi Advisors Limited - PMS and includes equity shares, mutual fund units, debentures and other investments.

Aggregate amount of Quoted Investment and market value thereof
Aggregate amount of Un-quoted Investment
Aggregate amount of impairment in value of investments

17.68
10.36

ASAT
MARCH 31, 2020

Amount

1,013.18,
1,013.18

1,013.18

ASAT
MARCH 31, 2020

Amount

(Rs in Million)

ASAT
MARCH 31, 2019

Amount

(Rs in Million)
ASAT
MARCH 31, 2019

Amount

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies appearing in Annexure V -1 & 2 and information appearing from Annexure V - 3 to
Annexure V ~ 56.

248

 
[ANAND RATHI WEALTH LIMITED

(Previously Known as Anand Rathi Wealth Services Limited)
CIN : U67120MH1995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

6 RESTATED CONSOLIDATED SUMMARY STATEMENT OF LOANS (Rs in Million)
ASAT ASAT ASAT ASAT

Loans - Current AUGUST 31, 2021 MARCH 31, 2021___ MARCH 31, 2020 _ MARCH 31, 2019
Intercorporate Deposit To Related Party
(Un Secured, Considered Good)

Anand Rathi Financial Services Ltd

Anand Rathi Advisors Ltd

Anand Rathi Share and Stock Brokers Ltd

(Secured, Considered Good)
Others

 

- No Loans are due from directors or promoters of the Group either severally or jointly with any person.

(Rs in Million)
AS AT AUGUST 31, 2021 AS AT MARCH 31, 2021

AS AT MARCH 31, 2020 AS AT MARCH 31, 2019

 

Amount of loan or | Percentage to the | Amount of loan or | Percentage to the
; Amount of loan or _ | Percentage to the total
advance in the total advance in the total .
advance in the nature of | Loans and Advances
nature ofloan | Loans and Advances | nature of loan__| Loans and Advances 7 :
: F loan outstanding in the nature of loans
outstanding the nature of loans] outstanding _|in the nature of loans

Amount of loan or | Percentage to the
advance in the total
nature of loan —_| Loans and Advances
outstanding _|in the nature of loans|

‘Type of Borrower

[Promoters

 

0) 0
0 0
0) 0
100.00% 0)

Directors
IKMPs
Related Parties 267.90

 

0)
0
0

 

 

 

 

 

 

 

 

 

99.70%|

 

 

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies appearing in Annexure V -1 & 2 and information appearing from Annexure V - 3 to
Annexure V - 56.

 

249
 

[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

|CIN : U67120MH1995PI.C086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

 

 

7 RESTATED CONSOLIDATED SUMMARY STATEMENT OF OTHER FINANCIAL ASSETS

(Rs in Million)

 

(Other Financial Assets - Non current

 

 

Fixed Deposit with Bank (Lien against Bank Overdraft)
Staff Advance

Security Deposits - Rent

 

 

(i) Other Financial Assets - Current

 

 

Option Premium (net)
Accrued Interest

Advance for Investment in Liquid Fund

Fixed Deposit with Bank (Lien against Bank Overdraft)

Securities Held as Stock in trade
‘Un-Quoted - Fully Paid up
Debentures at Fair Value through Profit and Loss
Of Anand Rathi Global Finance Limited
Of Edelweiss Debentures

 

Staff Advances
Other Receivables

Security Deposit - Rent

Security Deposit - Telemarketing Primary Rate Interface Line

 

Aggregate amount of Un-quoted Debentures

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accountin

Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56.

ASAT ASAT ASAT ASAT

AUGUST 31, 2021 MARCH 31,2021 = MARCH31, 2020 MARCH 31, 2019
19.90 20.20 19.90 5.00

e 242 2 =
62.05 20.48 31.77 35.22
81.95 42.80 51.67 40.22
(Rs in Million)
ASAT ASAT ASAT ASAT

AUGUST 31, 2021 MARCH 31,2021 = MARCH31, 2020 MARCH 31, 2019
“ = 40.92 3
4.05 70 0.88 0.16
= = 5.00 +
103.80 35.00 5.00 2
301.80 83.62 248.15 102.03
= : 1.37
27.15 2.27 15.23 15.36

17.84 “ * -

8.95 11.48 18.18 asl
0.05 0.05 0.05 0.05
463.64 137.12 333.41 122.49
301.80 83.62 248.15 103.40

ng policies appearing in

(Rs in Million)

 

RESTATED CONSOLIDATED SUMMARY STATEMENT OF DEFERRED

ASAT

ASAT

AS AT

AS AT

 

 

 

 

 

8 TAX ASSETS / (LIABILITIES) AUGUST 31, 2021 MARCH 31, 2021__ MARCH31, 2020_ MARCH 31, 2019
Depreciation (23.93) (22.03) 0.01) 454
Long Term Capital Loss 0.99 0.99 0.99 0.88
Business Loss 50.65 49,92 40.08, 32.16
Leave Provision 11.63 9.20 8.06 5.05
Gratuity Provision 0.63 0.53 0.78 0.12
Fair Valuation of Financial Instruments (6.36) 7) 158 By)
MAT Credit Entitlements - - 0.08 0.17
Impact on recognition of Right-of-Use Asset and Lease Liability 9.18 9.58 9.59 6.67
43.78 45.02 SLIS 6.48
Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies appearing in
Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56.
(Rs in Million)
9 RESTATED CONSOLIDATED SUMMARY STATEMENT OF OTHER ASAT ASAT ASAT, ASAT,

NON CURRENT ASSETS

AUGUST 31, 2021

MARCH 31, 2021

MARCH 31, 2020

MARCH 31, 2019

 

 

Capital Advances
Advance Tax including Tax Deducted at Source (Net of Provision for Tax -
608.36 Million, FY 20-21 Rs. 436.89.16 Million, FY 19-20 Rs. 602.16 Million,
FY 18-19 Rs. 497.45 Million)

Other Advances,

 

x 13.50 34.93 189.00
217.68 97.68 37.40 96.52
217.68 Tis 72.33 285.52

 

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies appearing in]

Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56.

 

250

 
[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

CIN : U67120MH1995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

(Rs in Million)

 

 

 

 

ASAT ASAT ASAT ASAT
10 RESTATED CONSOLIDATED SUMMARY STATEMENT OF TRADE RECEIVABLES AUGESSigwE waned oun Madea! ARCHES. pie
(Unsecured, Considered good)
Outstanding for a period exceeding six months from due date - -
Trade Receivables (Refer Annexure V - 46(i)) 129.23 108.65 91.14 110.14
129.23 108.65 91.14 110.14

 

- No trade receivables are due from directors or other officers of the Company either severally or jointly with any other person nor any trade receivable are due from firms or private companies respectively in which any director is a partner, a
director or a member.

Trade Receivables ageing schedule

 

 

 

 

As at August 31, 2021 (Rs in Million)|
Outstanding for following periods from due date of payment
Particulars Unbilled Less than 6 months | 6 months - 1 year 1-2 years 2-3 years ‘More than 3 years Total
( Undisputed Trade receivables — considered good 126.05 37, 129.23
(ii) Undisputed Trade receivables — which have significant increase in
[Credit risk 8

 

(iii) Undisputed Trade Receivables — credit impaired =
(iv) Disputed Trade Receivables considered good =
(v) Disputed Trade Receivables - which have significant increase in
[Credit risk 8
(vi) Disputed Trade Receivables credit impaired =
Total 126.05 3.17 - = = = 129.23

 

 

 

 

 

As at March 31, 2021

 

Outstanding for following periods from due date of payment

 

 

 

Particulars Unbilled Less than 6 months | 6 months - 1 year 1-2 years 2-3 years ‘More than 3 years Total
( Undisputed Trade receivables — considered good 102.09 6.56 108.65
(ji) Undisputed Trade receivables — which have significant increase in

 

[Credit risk =
(ii) Undisputed Trade Receivables — credit impaired =
(iv) Disputed Trade Receivables considered good =
(v) Disputed Trade Receivables - which have significant increase in
[Credit risk =

(vi) Disputed Trade Receivables credit impaired =

Total 102.09 6.56 = = = = 108.65

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

251
[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

ICIN : U67120MH1995PI.C086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

‘As at March 31, 2020

 

Outstanding for following periods from due date of payment

 

 

 

Particulars Unbilled Less than 6 months | 6 months- 1 year 1-2 years 2-3 years ‘More than 3 years Total
(@) Undisputed Trade receivables — considered good 78.38 5.63 7.13 91.14
(ii) Undisputed Trade receivables — which have significant increase in

[Credit risk -

 

(iii) Undisputed Trade Receivables — credit impaired =

 

(iv) Disputed Trade Receivables considered good =

 

(v) Disputed Trade Receivables - which have significant increase in
[Credit risk -

 

 

(vi) Disputed Trade Receivables credit impaired =

 

Total 78.38 5.63 7.13 = = = 91.14

 

As at March 31, 2019

 

Outstanding for following periods from due date of payment

 

 

 

Particulars Unbilled Less than 6 months | 6 months - 1 year 1-2 years 2-3 years ‘More than 3 years Total
( Undisputed Trade receivables — considered good 91.84 10.15 8.15 110.14
(ii) Undisputed Trade receivables — which have significant increase in

[Credit risk 3

 

(iii) Undisputed Trade Receivables — credit impaired =

 

(iv) Disputed Trade Receivables considered good =

 

(v) Disputed Trade Receivables - which have significant increase in
[Credit risk 8

 

(vi) Disputed Trade Receivables credit impaired =

 

 

 

 

 

 

 

 

 

Total 91.84 10.15 8.15, = = = 110.14

 

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies appearing in Annexure V -1 & 2 and information appearing from Annexure V
3 to Annexure V - 56.

 

252

 
 

[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

CIN : U67120MH1995PL.C086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

 

i

12

13

 

(Rs in Million)
RESTATED CONSOLIDATED SUMMARY STATEMENT OF ASAT ASAT ASAT ASAT
CASH AND CASH EQUIVALENTS AUGUST 31, 2021 MARCH 31, 2021__ MARCH 31, 2020__ MARCH 31, 2019

 

 

Balances with Banks

 

~ in Current Accounts 569.67 118.99 281.13 2.56
~ in Deposit Accounts 3.10 534.00 0.50 110.00
Cash on Hand 0.47 0.19 0.91 1.56
573.24 653.18 282.54 114.12

 

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies}
appearing in Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56.

(Rs in Million)

 

 

 

 

RESTATED CONSOLIDATED SUMMARY STATEMENT OF ASAT ASAT ASAT ASAT

BANK BALANCES OTHER THAN AS PER NOTE 11 AUGUST 31, 2021 MARCH 31,2021 = MARCH31, 2020 MARCH 31, 2019

In Deposit Accounts with Original Maturity of more than 3 Months &

less than 12 months 0.48 0.47 0.43 041
0.48 0.47 0.43 0.41

 

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies}
appearing in Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56.

(Rs in Million)
RESTATED CONSOLIDATED SUMMARY STATEMENT OF ASAT ASAT ASAT ASAT
OTHER CURRENT ASSETS AUGUST 31, 2021 MARCH 31, 2021__ MARCH 31, 2020__ MARCH 31, 2019

(Unsecured, Considered good)

 

 

 

Income Tax Refund Receivable = - 94.84 *
Prepaid Expenses 6.27 177 2.59 151
Cenvat Claim / GST Credit 2.91 3.38 13.05 17.81
Advance to Vendors 0.01 0.10 8.83 0.01
TCS Recoverable 3.06 3.55 - -
Advance to Others 1.29 0.40 11.84 455
Advance Tax Including Tax Deducted at source = - 0.47 =
Others = 0.09 “ =

13.55 15.28 131.62 23.88

 

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies}
appearing in Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56.

 

 

253
[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

CIN : U67120MH1995PL.C086696

JANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

RESTATED CONSOLIDATED SUMMARY STATEMENT OF EQUITY SHARE CAPITAL

Authorised

5,00,00,000 (FY 2020-21 - 4,00,00,000 Equity Shares of Rs. 5/-each, FY 2019 - 20 - 4,00,00,000 Equity Shares of Rs. S/-each, FY 2018-19 - 4,00,00,000 Equity

Shares of Rs. S/-each) Equity Shares of Rs. 5i-each

Issued, Subscribed and Paid Up
4,16,16,227 equity shares of Rs. S/-each (FY 2020-21 - 27,513,560, FY 2019-20 - 27,027,440, FY 2018-19 - 26,908,600)

Reconciliation for No. of shares outstanding as on reporting date

(Rs in Million)

 

‘ASAT
AUGUST 31, 2021

‘ASAT
MARCH 31, 2021

ASAT
MARCH 31, 2020

ASAT
MARCH 31, 2019

 

 

 

 

 

FOR THE PERIOD ENDED
AUGUST 31, 2021

Equity Shares No. of Shares (Rs in Million)

FOR THE YEAR ENDED
MARCH 31, 2021
_ of Shares (Rs in Million)

FOR THE YEAR ENDED
MARCH 31, 2020
No. of Shares (Rs in Million)

FOR THE YEAR ENDED
MARCH 31, 2019
No. of Shares (Rs in Million)

 

27,513,560 137.
13,872,087.00 69.36

Shares outstanding at the beginning of the period/year
Shares Issued during the year by capitalising of reserve

Shares Issued during the period/year for consideration of Rs 10 each . .
Subdivision of Shares - -

Shares Issued during the period/year for consideration of Rs 5 each 230,580 1.15

27,027,440

486,120

135.14

26,908,600 134.54

118,840 0.60

13,443,040 134.43,

11,260

13,454,300

 

Shares outstanding at the end of the period/year 41,616,227 208.08

27,513,560

27,027,440 135.14

The face value of equity shares of the Holding Company has been subdivided from Rs. 10 per equity share to Rs. 5 per equity share vide approval of shareholders in extraordinary general meeting held on 14 August 2018,

Terms/Rights attached to the Equity Shares
Equity Shares

26,908,600

‘There is only one class of shares referred to as Equity Shares having a face value of Rs 5 per share. Each holder of equity share is entitled to one vote per share. The dividend is declared and paid in Indian Rupee. The dividend proposed by the Board of Directors, if any
is subject to the approval of the Shareholders in the ensuing Annual General Meeting. During the year ended March 31, 2021, interim dividend of Rs 2.5/- per share (PY 2019-20 - Rs nil , PY 2018-19 - Rs nil) has been paid and recognised as distribution to equity|
shareholders. During the period ended August 31, 2021, final dividend of Rs 2.5/- per share has been paid and recognised as distribution to equity shareholders for FY 2020-21

In the event of Liquidation, the holders of equity shares will be entitled to receive remaining assets, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the Shareholders.

Details of shares held by shareholders holding more than 5% of the aggregate shares in the Holding Company:

 

‘AS AT AUGUST 31, 2021

‘Name of Shareholders No. of shares held

rmss easy % of Holdings

‘AS AT MARCH 31, 2021

No. of shares held
(of Rs 5 each)

% of Holdings

‘AS AT MARCH 31, 2020

No. of shares held

(armas each) % of Holdings

AS AT MARCH 31, 2019

No. of shares held

ormse ca) % of Holdings

 

 

‘Anand Rathi Financial Services Limited
‘Anand Rathi
Pradeep Kumar Gupta

17,946,123
5,346,290
2,280,762

11,964,082
3,658,260
1,510,508

11,964,082
3,658,260
1,510,508

12,054,082
3,658,260
1,510,508

 

 
 

[ANAND RATHI WEALTH LIMITED

(Previously Known as Anand Rathi Wealth Services Limited)

cu

 

U67120MH1995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

iy)

™

wi)

Aggregate number of bonus shares issued, share issued for consideration other
immediately preceding the reporting date:

August 31, 2021
March 31, 2021
March 31, 2020
March 31, 2019
March 31, 2018
March 31, 2017
March 31, 2017
March 31, 2016
March 31, 2015

Shareholding of promoters

As on August 31, 2021
Name of the Promoter

Anand Rathi Financial Services Limited
Anand Rathi

Pradeep Kumar Gupta

‘As on March 31, 2021

Name of the Promoter

Anand Rathi Financial Services Limited
Anand Rathi

Pradeep Kumar Gupta

‘As on March 31, 2020

Name of the Promoter

Anand Rathi Financial Services Limited
Anand Rathi
Pradeep Kumar Gupta

As on March 31, 2019

Name of the Promoter

Anand Rathi Financial Services Limited
‘Anand Rathi
Pradeep Kumar Gupta

than cash and shares bought back during the period of five years

Issue of shares for

Bonus shares issued consideration other

13,872,087

6,230,464

No. of shares held
(of Rs 5 each)
17,946,123
5,346,390
2,280,762

No. of shares held
(of Rs 5 each
11,964,082
3,658,260
1,510,508

No. of shares held
(of Rs 5 each
11,964,082
3,658,260
1,510,508

No. of shares held
(of Rs 5 each)
12,054,082
3,658,260
1,510,508

Percentage change has been computed with respect to the number at the beginning of the year.

Share reserved for issue under options

For details of shares reserved for issue under the employee stock option (ESOP) plan, please refer Annexure V - 34

than cash

% of Holdings

43.12
12.85
5.48

% of Holdings

43.48
13.30
5.49

% of Holdings
44.27

13.54

5.59

% of Holdings

44.80
13.60
5.61

Shares
bought back

‘% Change during
the period*

0.36

0.45

0.01

% Change during
the year*

0.78

0.24

0.10)

‘% Change during
the year*

0.53]

0.06

-0.02

‘% Change during
the year*

“0.24

-2.28

-0.01

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting}
policies appearing in Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56

 

255
 

[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

cu

 

: U67120MH1995PLC086696

|ANNEXURE V
INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

(Rs in Million)

 

RESTATED CONSOLIDATED SUMMARY STATEMENT OF ASAT ASAT ASAT. ASAT,
OTHER EQUITY AUGUST 31, 2021 _ MARCH 31, 2021__ MARCH 31, 2020 __ MARCH 31, 2019

 

 

Capital Reserve
Opening balance
Less: Changes during the Period / Year

 

Balance as at the Period / Year end

 

Securities Premium
Opening balance

Less: Utilised for Bonus Issue

Add: Addition During the Period / Year

 

Balance as at the Period / Year end

Share Options Outstanding Account

Opening Balance 0.34
Addition during the Period / Year 64,79
Less : Transferred to Securities Premium ( (21.18)
Less : Reversal during the Period / Year (0.02)

 

Balance as at the Period / Year end 43.93

 

Retained Earnings

Opening Balance 2,046.00 1,664.02 1,050.18
Less: Utilised for Bonus Issue (69.36) - -
‘Add: Profit During the Period / Year 510.67 450.74 613.83,
Add : Reversal of ESOP. 0.01 0.02 0.01
Less: Dividend Paid (69.36) (68.78) -

 

Balance as at the Period / Year end 2,417.96 2,046.00 1,664.02

 

Other Comprehensive Income

Opening Balance (10.99) (13.82) (3.17)
Remeasurement of defined employee benefit plan 1.48 2.83 (10.65)
Balance as at the Period / Year end (9.51) (10.99) (13.82)

 

 

Movement in Non Controlling Interest due to change in Shareholding
Opening balance (207.57) (207.57) (219.39) (63.82)
‘Add: Changes during the Period / Year = 11.82 (155.57)

 

Balance as at the Period / Year end (207.57) (207.57) (20757) (219.39)|

 

TOTAL OTHER EQUITY 2,659.85 1,720.09 1,104.82

 

Nature & Purpose of Reserve :

Capital Reserve
Capital Reserve is created at the time of acquisition of business, on account of net assets acquired in excess of the consideration paid to the acquiree.

Securities Premium
Balance of Securities premium consists of amounts received on issue of share over its face value. The balance will be utilised as per provisions of Section 52 of the

Companies Act,2013.

Share Option Outstanding Account

‘The share option outstanding account is used to record the value of equity-settled share based payment transactions with employees.

Retained earnings
Retained earnings comprises of the amounts that can be distributed by the Group as dividends to its equity share holders.

Other Comprehensive Income (OCI)
account of Actuarial Gains and Losses as per

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting}
policies appearing in Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56

 

256
 

[ANAND RATHI WEALTH LIMITED

(Previously Known as Anand Rathi Wealth Services Limited)

ICIN : U67120MH1995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

 

 

(Rs in Million)

 

 

 

 

RESTATED CONSOLIDATED SUMMARY STATEMENT OF ASAT ASAT ASAT ‘AS AT

16 NON CONTROLLING INTEREST AUGUST 31, 2021 _MARCH 31, 2021__ MARCH 31, 2020 __ MARCH 31, 2019
Opening Balance 116.21 115.85 125.38 (2.02)
Add: At the time of acquisition = = s :
‘Add: Share in Profit for the year 0.22 0.21 231 (7.73)
‘Add: Share in Other Comprehensive Income (0.04) 0.15 (0.02) 0.03
Add: Change in Non Controlling Interest 2 = (11.82) 135.10

116.39 116.21 115.85 125.38

 

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting|

 

 

 

 

policies appearing in Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56
(Rs in Million)
RESTATED CONSOLIDATED SUMMARY STATEMENT OF ASAT ASAT ASAT "AS AT
17 BORROWINGS AUGUST 31, 2021__ MARCH 31, 2021 _ MARCH 31, 2020_ MARCH 31, 2019
() Borrowings - Non current

‘Term Loan - Loan against Property 228.23, 248.78 331.28 -
(Secured against 8th & 9th Floor (2nd & 3rd Office Floor), Block
&'C'of Wing E, Trade Link, Kamala City, Senapati Bapat Marg,
Lower Parel, Mumbai)

‘Terms of repayment - Repayable in 5 Years (20 quarters), last
instalment falling due on March 18, 2025,

 

‘The rate of interest will be IIMCLR 1 Year + Spread, determined at
the date of disbursement and reset at end of every 12 months from the
date of disbursement. The interest rate currently set is at 8.45% p.a.

Regular repayment of principal & interest due over the reporting
period has been made.

‘Term Loan - Vehicle Loan 0.28 0.86 2.32 3.68
(Secured against hypothecation of vehicle purchased)

‘Terms of repayment - Repayable in 36 to 60 equal monthly

instalments, last instalment falling due on March 02, 2020 to March

03, 2023.

‘The rate of interest ranges between 8% to 11% p.a.

Regular repayment of principal & interest due over the reporting

period has been made

 

228.51 249.64 333.60 3.68

 

(Rs in Mi

 

 

ASAT ASAT ASAT ASAT
AUGUST 31,2021 MARCH 31,2021 MARCH 31,2020 MARCH 31, 2019

 

 

 

Borrowings - Current

Current Maturity of Secured Loan from Banks
‘Term Loan - Loan against Property 82.59 82.51 82.33 -
‘Term Loan - Vehicle Loan 1.16 1.45 1.37 2.28
(Refer Annexure V - 17(i))

 

83.75 83.96 83.70 2.28

 

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Inform:
policies appearing in Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56

 

in - Basis of preparation and significant accounting]

 

257
 

JANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

ICIN : U67120MH1995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

1g RESTATED CONSOLIDATED SUMMARY STATEMENT OF TRADE

 

ASAT ASAT

ASAT

ASAT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease Liabilities

 

258

 

 

 

47.44 63.24

165.06

PAYABLES AUGUST 31, 2021__MARCH 31, 2021 __MARGH 31, 2020 _ MARCH 31, 2019
‘Total outstanding dues of micro, small and medium enterprises *
(Refer Annexure V - 44) - 081 3.43 -
Total outstanding dues to other than micro, small and medium enterprises 0.12 1.22 13.17 1.62
012 208 16.60 162
* The above disclosure is based on the responses received by the Group to its inquiries with suppliers with regard to applicability under the Micro, Small and Medium Enterprise
Development Act, 2006,
- No Payables are due to the directors or promoters of the Group either severally or jointly with any person,
‘Trade payables as at August 31 2021
(Rs in Million)|
Particulars ‘Outstanding for following periods from due date of payment
Less 12 23 More than 3
than 1 years years Total
years ’
year
(MSME = 5 : = 5
(ijOthers oz zi : = 012
(ii) Disputed dues — MSME = zi : = i
(iv) Disputed dues - Others = - : = -
‘Trade payables as at March 31 2021
Particulars ‘Outstanding for following periods from due date of payment
Less “9 23 More than 3
than 1 years years Total
years ’
year
(MSME Or zi = or
(omens 1.22 5 : = 122
(ii) Disputed dues — MSME ~ zi : = :
(iv) Disputed dues - Others = 5 : = :
‘Trade payables as at March 31 2020
Particulars ‘Outstanding for following periods from due date of payment
Less 13 23 More than 3
than 1 years years Total
years
year
(MSME 343 5 : = 343)
(ijOthers 13.16 O07 : = 13.17
(ii) Disputed dues — MSME = zi : = 5
(iv) Disputed dues - Others = zi : = :
‘Trade payables as at March 31 2019
Particulars ‘Outstanding for following periods from due date of payment
Less 43 23 More than 3
than 1 years years Total
years
year
(MSME = zi : = :
(ijomers 1.62 5 : = 1.62)
(ii) Disputed dues — MSME - 5 : = -
(iv) Disputed dues - Others = 5 : = 5
Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies appearing in]
Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56.
(Rs in Million)
1g RESTATED CONSOLIDATED SUMMARY STATEMENT OF LEASE ASAT ASAT ASAT ASAT
LIABILITIES AUGUST 31, 2021__ MARCH 31, 2021__MARGH 31, 2020 _ MARCH 31, 2019
(@ Non Current

226,92

 

a7aa C328

165.06

226.92

 

 
 

JANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

ICIN : U67120MH1995PL.C086696
|ANNEXURE V
INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

@)— Current
Lease Liabilities

 

55,69 78.10 100.74 93.52
55.69 78.10 100.74 93.52

 

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies appearing in]
Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56,

(Rs in Million)
RESTATED CONSOLIDATED SUMMARY STATEMENT OF OTHER ASAT ASAT ASAT ASAT

Es) FINANCIAL LIABILITIES: AUGUST 31, 2021__ MARCH 31, 2021__ MARCH 31, 2020 __ MARCH 31, 2019

 

Option Premium 3 -

 

- 119.09
Employee Benefit Payable 81.97 5.13 1.33 62.29
Provision for Expenses 33.65 30.97 2.06 26.15
Advance from Customers 191.14 20.24 886.33 -
306.76 56.34 909.72 207.53

 

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies appearing in]
Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56,

(Rs in Million)

 

 

 

 

21 RESTATED CONSOLIDATED SUMMARY STATEMENT OF OTHER ASAT ASAT ASAT ASAT
CURRENT LIABILITIES AUGUST 31,2021 __ MARCH 31, 2021 _ MARCH 31, 2020__ MARCH 31, 2019
Statutory Dues 56.59 100.45 59.71 3461
Book Overdraft = * 1.01 9.25
Advance from Customers 22.65 21.88 20.69 21.73
79.24 122.33 o1.41 65.59

 

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies appearing in]
Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56,

(Rs in Million)

 

 

 

 

22. RESTATED CONSOLIDATED SUMMARY STATEMENT OF PROVISIONS “eee acer ae aT ae Ae
AUGUST 31, 2021 MARCH 31,2021 MARGH 31,2020 MARCH 31, 2019
@ Provisions - Non Current
Employee Benefit Liabilities - Non Current
Gratuity Provision (Refer Note 25) 5.80 11.64 21.62 10.97
5.80 11.64 21.62 10.97

 

(ii) Provisions - Current

  

 

Employee Benefit Liabilities
Gratuity Provision (Refer Note 254) 0.05 0.04 0.09 0.08
Leave Provision 46.21 36.51 32.02 18.70
Incentive Provision 184.97 160.95 365.00 312.64
Provision for Income Tax
Provision for Income Tax (Net of Advance Tax) 0.38 0.18 - -
ZL 197.68 397.11 sa1az

 

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies appearing in]
Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56,

 

 

259
[ANAND RATHI WEALTH LIMITED

(Previously Known as Anand Rathi Wealth Services Limited)

CIN : U67120MH1995PL.C086696

IANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

 

 

 

23 RESTATED CONSOLIDATED SUMMARY STATEMENT OF For the Period Ended For the Year Ended For the Year Ended For the Year Ended

 

 

 

REVENUE FROM OPERATION August 31, 2021 March 31, 2021 March 31, 2020 March 31, 2019
Mutual Fund Distribution Income 555.63 902.34 996.00 1,040.00
Income from Distribution & Sale of Financial Product 1,094.09 1,701.32 2,276.73, 1,689.94
IT Enabled Services 19.54 45.44 45.54 35.93
Referral Fees - 4.20 - -
1,669.26 2,653.30 3,318.27 2,765.87

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies
appearing in Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56.

 

 

4 RESTATED CONSOLIDATED SUMMARY STATEMENT OF For the Period Ended For the Year Ended For the Year Ended For the Year Ended

 

 

 

OTHER INCOME August 31, 2021 March 31, 2021 March 31, 2020 March 31, 2019
Interest Income 14,35 51.20 14.16 12.77
Gain on sale of Investment 1.59 26.50 23.03 24.66
Dividend Received 0.04 0.06 0.07 -
Miscellaneous and Other Income 3.80 21.80 8.61 38.57
Web branding and Training Services - 39.62 - :
19.77 139.18 45.87 76.00

 

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies
appearing in Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56.

(Rs in Million)

25 RESTATED CONSOLIDATED SUMMARY STATEMENT OF For the Period Ended For the Year Ended For the Year Ended For the Year Ended

 

 

 

EMPLOYEE BENEFIT EXPENSES August 31, 2021 March 31, 2021 March 31, 2020 March 31, 2019
Salaries, Incentive & Allowances 692.91 1,354.16 1,570.00 1,247.61
Contribution to Provident and Other Funds 36.31 82.57 82.89 63.20
Share based Payments to Employees (Refer Annexure V - 34) 11.15 64.79 0.27 0.21
Staff Welfare Expenses 3.28 6.04 12.57 10.71
743.65 1,507.56 1,665.73 1,321.73

 

 

260
[ANAND RATHI WEALTH LIMITED

(Previously Known as Anand Rathi Wealth Services Limited)

CIN : U67120MH1995PL.C086696

IANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

  
  
    

 

‘The Group is recognizing and accruing the retirement benefits as per Indian Accounting Standard (Ind AS) 19 on “Employee Benefits”. The details are as enunciated below as|
certified by an independent Actuary

A. Defined Benefit Plans
Gratuity:
The gratuity payable to employees is based on the employee’s service and last drawn salary at the time of leaving the services of the Group and is in accordance with the Rules|
of the Group for payment of gratuity.

Inherent Risk

‘The plan is defined benefit in nature which is sponsored by the Group and hence it underwrites all the risks pertaining to the plan, In particular, this exposes the Group to]
actuarial risk such as adverse salary growth, change in demographic experience, inadequate return on underlying plan assets. This may result in an increase in cost off
providing these benefits to employee in future. Since the benefits are lump sum in nature the plan is not subject to any longevity risks.

(Rs in Million)

Particulars For the Period Ended For the Year Ended For the Year Ended For the Year Ended
August 31, 2021 March 31, 2021 March 31, 2020 March 31, 2019

 

Amounts recognized in the Balance Sheet in respect of gratuity
(funded by the holding company):
Present value of the funded defined benefit obligation at the end of the

year 76.66 72.16 6138 4399
Fair value of plan assets 70.77 60.48 39.67 32.95]
Net Liability/(Asset) 5.88 11.68 21.71 11.04]

Amounts recognized in Salary, Wages and Employee Benefits in the
Statement of Profit and Loss in respect of gratuity (funded by the

holding company):

Current Service cost 4.96 10.22 7.99

Interest on Defined Benefit Obligations 1.99 3.91 3.34

Expected return on plan assets (1.75) (2.62) (2.49) (1.81)

Past Service Cost — Vested Benefit recognised during the period/year
Net Gratuity Cost 5.20 11.51 8.84 7.09

 

Amount recognized in Other Comprehensive Income (OCI)

Amount recognized in OCI in beginning of the period/year 11.24 14.21 3.54
Remeasurement due to:

Effect of Change in financial assumptions (1.37) 2.40 2.72
Effect of Change in demographic assumptions 0.00 0.00 0.15
Effect of experience adjustments 2.86 2.63 5.75
Actuarial (Gains)/Losses 1.49 5.03 8.32
Return on plan assets (excluding interest) 2.93 8.00 (2.35)
Total remeasurement recognized in OCI (1.44) (2.97) 10.67
Amount recognized in OCI, End of period/year 9.80 11.24 14.21

Actual Return on Plan Assets :

Expected Return on Plan Assets 175 2.62 2.49
Actuarial gain/(loss) on Plan Assets 2.93 8.00 2.35
Actual Return on Plan Assets 4.69 10.62 0.14

 

261
[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

CIN : U67120MH1995PL.C086696

IANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

Reconciliation of present value of the obligation and the fair value of the plan assets:
Change in present value of obligation:

 

 

Opening Defined Benefit Obligation 72.16 61.38 43.99 34.29
Current Service Cost 4.96 10.22 7.99 6.39
Interest Cost 1.99 391 3.34 251
Actuarial (Gain)/loss 1.49 5.08 8.32 3.10
Benefits Paid / Reversals (3.95) (8.38) (2.25) (2.30)
Acquisition/Business Combination/Divestiture 0.00 0.00 0.00 0.00
Past Service Cost 0.00 0.00 0.00 0.00
Closing Defined Benefit Obligation 76.6 72.16 61.38 43.99

Change in fair value plan assets:

Opening Fair Value of the plan assets 60.48 39.67 32.95 23.54
Expected retum on plan assets 175 2.62 2.49 1.81
Actuarial Gain/(loss) 2.93 8.00 2.35 0.87
Contributions by the Employer 9.55 18.57 873 9.02
Benefits Paid (3.95) (8.38) (2.15) (2.30)
Closing Fair value of the plan assets 70.77 60.48 39.67 32.95

Investment details of plan assets
Government of India Securities : z 2 zs
Corporate Bonds > 7 zs 7
Special Deposit Scheme - - - :

 

Insurer Managed Fund 100% 100% 100% 100%
Others = . = .

Total 100% 100% 100% 100%
Experience Adjustment

Defined Benefit Obligation 76.6 72.16 61.38 43.99]
Plan Assets 70.77 60.48 39.67 32.95
Surplus/(deficit) 5.88 11.68 2u71 11.04}
Actuarial (Gains)/Losses on Obligations - Due to Experience 1.49 5.03 8.32 3.10

Actuarial Gains/(Losses) on Plan Assets - Due to Experience 2.93 8.00 (2.35) 0.87}

‘The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and|
demand in the employment market. The above information is certified by the actuary.

‘There are no amounts included in the fair value of plan assets for:
i) Group's own financial instrument
ii) Property occupied by or other assets used by the Group

Discount Rate:

Discount Rate for this valuation is based on Yield to Maturity(YTM) available on Government bonds having similar term to decrement-adjusted estimated term of liabilities.
For valuation as at August 31, 2021 the estimated term of liabilities is 14.21 years, corresponding to which YTM on government bonds is 7.05%, after rounding to nearest
0.05%.

Expected rate of return on assets:
It is the average long term rate of return expected on investments of the Trust Fund.

Salary Escalation Rate:

Salary escalation assumption is based on estimates of over all long-term salary growth rates after taking in to consideration expected earnings inflation as well as performance
and seniority related increases.

 

 

262
[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)
CIN : U67120MH1995PL.C086696

IANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

 

Withdrawal Rate:

Assumptions regarding withdrawal rates is based on the estimates of expected long term employee turnover within the organization.

Mortality Rate

Itis based on Indian Assured Lives Mortality (2012-14) Ult. As issued by Institute of Actuaries of India for the actuarial valuation

General Description fair value of the plan:
‘The Holding company has insurer Managed Fund.

Principal Actuarial Assumptions:
Discount rate

Salary Escalation Rate
Attrition Rate

Retirement Age

Sensitivity Analysis

 

7.05% 6.90% 6.60% 7.55%

5.00% 5.00% 3.50% 5.00%

For Service 4 yrs. & — For Service 4 yrs. & For Service 4 yrs. & For Service 4 yrs. &
Below 20.00 % p.a. & Below 20.00 % p.a. & Below 20.00 % p.a. & Below 20.00 % p.a. &

service 4yrs.and service 4yrs.and service 4yrs.and —_ service 4 yrs. and
above 2.00% p.a. above 2.00% p.a. above 2.00% p.a. —_above 2.00 % p.a.
60 years 60 years 60 years 60 years

The sensitivity analyses have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the year and may not be|

representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sen:

 

ity to the|

assumption, the same method used to calculate the liability recognized in the Balance Sheet has been applied. The methods and types of assumptions used in preparing the

sensitivity analysis did not change compared with the previous year.

Defined Benefit Obligation (Base)
Discount Rate
Increase by 50 bps

Impact of increase by 50 bps in Percentage

Decrease by 50 bps
Impact of decrease by 50 bps in Percentage

Salary Growth Rate
Increase by 50 bps

Impact of increase by 50 bps in Percentage

Decrease by 50 bps

Impact of decrease by 50 bps in Percentage

Expected contribution of Holding Company for the next financial
year

Weighted Average duration of Holding Company

Maturity profile of defined benefit obligation

76.66 72.16 61.38 43.99]

72.34 68.14 58.02 41.70]

5.62% 5.57% 5.48% 5.20%

81.36 76.55 65.05 46.48]

6.14% 6.08% 5.98% 5.67%

78.23 73.66 62.76 44.79)

2.06% 2.09% 2.25% 1.82%

73.10 70.75 60.05 43.10]
-2.03% -1.95% -2.16% -2.03%|

6.77 6.99 4.10 3.56]

1.42 14.26 12.95 12.61)

 

Within next 12 months
Between 1 and 5 Years
Between 5 and 10 Years

6.81 7.03 4.19 3.63]
13.28 11.95 13.84 12.06
22.90 24.46 16.78 11.99

 

 

263

 
[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

CIN : U67120MH1995PL.C086696

IANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

    
 

 

 

26

Asset Liability Matching Strategy

  
    
   
  
   
   
 
 
    
 

‘The Holding Company has funded its gratuity liability. The money contributed by the Holding Company to the Gratuity fund to finance the liabilities of the plan has to be|
invested.

"The trustees of the plan have outsourced the investment management of the fund to an Insurance Company. The Insurance Company in turn manages these funds as per the
mandate provided to them by the trustees and the asset allocation which is within the permissible limits prescribed in the insurance regulations. Due to the restrictions in the
type of investments that can be held by the fund, it is not possible to explicitly follow an asset liability matching strategy.

 

‘There is no compulsion on the part of the Group to fully prefund the liability of the Plan, The Group’s philosophy is to fund these benefits based on its own liquidity and the|
level of underfunding of the plan.

Defined Contribution Plans

Amount recognized as an expense under the head Contribution to Provident and other Funds in Annexure V - 25 Employee Benefit Expenses of Statement of Profit and Loss|
towards Group's Contribution to Provident Fund is Rs 30.97 Million (FY20-21 70.65 Million, FY19-20 73.71 Million, and FY 18-19 53.41 Million)

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies
appearing in Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56.

 

(Rs in Million)

 

 

RESTATED CONSOLIDATED SUMMARY STATEMENT OF _ For the Period Ended For the Year Ended For the Year Ended For the Year Ended
FINANCE COSTS August 31, 2021 March 31, 2021 March 31, 2020 March 31, 2019

       

 

 

Interest Expenses

 

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies
appearing in Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56.

 

 

264
 

[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

CIN : U67120MH1995PL.C086696

IANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

 

 

 

 

 

 

(Rs in Million)
97 RESTATED CONSOLIDATED SUMMARY STATEMENT OF For the Period Ended For the Year Ended For the Year Ended For the Year Ended

OTHER EXPENSES August 31, 2021 March 31, 2021 March 31, 2020 March 31, 2019
Business Support Charges 36.36 96.43 86.52 52.62
Manpower Outsource Expenses 26.47 65.05 65.63 31.76
Legal & Professional Charges 24.13 15.14 23.40 40.48
Director Sitting Fees 0.53 0.98 0.78 0.90
Electricity Expenses 3.07 6.54 791 661
Communication Expenses 6.43 15.43 7.41 7.46
Printing and Stationery 5.71 11.42 18.14 12.55
Postage and Telegram 1.19 2.06 4.37 291
Rent, Rates and Taxes 9.53 8.90 9.21 857
Repairs and Maintenance 277 9.01 10.59 13.14
Recruitment & Training 8.02 9.80 7.68 3.70
Business Promotion and Marketing Expenses 21.85 52.86 167.38 161.27
Computer & Software Maintenance Charges 2.81 8.77 371 3.98
Client Claim 3.50 9.65 S71 6.99
‘Travelling & Conveyance Expenses 5.75 13.60 59.88 59.30
Insurance Charges 2.30 7.27 6.02 3.49
Office Expenses 4.89 13.20 18.44 8.72
Brand Charges 8.00 12.69 16.21 3.56

Auditors Remuneration

Audit Fees 0.92 137 1.69 0.97
Tax Audit fees - 0.03 0.07 0.05
Other Services/ Certification 0.10 0.19 0.16 4.47
Donation 0.40 10.59 22.07 8.27
Corporate Social Responsibility Expenses (Refer Annexure V - 35) 1.82 17.88 11.40 3.00
‘Transaction Charges - 15.74 1.49 6.86
Data Processing Charges - 2.42 3.55 3.47
Networking expenses 0.67 4.24 6.94 2.58
Membership & subscriptions charges 0.08 0.66 0.81 1.21

SEBI Settlement Charges - - 1.46 -

Bad Debts written off - 6.03 - -
Miscellaneous & General Expenses 10.97 29.14 16.73 6.47
188.27 447.10 585.36 465.36

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies
appearing in Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56.

 

265
[ANAND RATHI WEALTH LIMITED

(Previously Known as Anand Rathi Wealth Services Limited)
CIN : U67120MH1995PL.C086696

IANNEXURE V

 

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

 

(Rs in Million)

yg RESTATED CONSOLIDATED SUMMARY STATEMENT OF For the Period Ended For the Year Ended For the Year Ended For the Year Ended
INCOME TAX EXPENSE August 31, 2021 March 31, 2021 March 31, 2020 March 31, 2019

@ Current Tax
Current tax on profit for the period/year 171.29 178.75 258.13 343,70
Total Current tax expenses 171.29 178.75 258.13 343,70

(ii) Deferred Tax
Decrease / (Increase) in deferred tax assets (0.90) (9.55) (16.20) (40.85)
(Decrease) / Increase in deferred tax liabilities 214 15.61 11.50 (79.78)
MAT credit - 0.08 0.04 23,59
Total deferred tax expenses / benefit 124 614 (4.66) (97.04)
Total Income Tax Expenses charged Statement of Profit & Loss 172.53 184.89 253.47 246.6
Effective Tax Rate Reconciliation
Particulars August 31, 2021 March 31, 2021 March 31, 2020 March 31, 2019]
Applicable Tax Rate (%) 25.17 28.17 25.17 29.12
Profit before tax 683.41 635.84 869.61 830.99
‘Tax Expenses as per above rate 172.00 160.09 245.89 251.43
Expenses Disallowed 0.59 72 9.29 12.96
Exempt Income (0.88) (0.86) (0.01)
Restatement Adjustments - 0.48 (1.40)
Net impact on adoption of new tax rate (net) - - 3.85 -
Deductions u/s 806 (0.05) (1.33) (2.78) (1.20)
tems (offered)/not offered for tax in earlier years (0.04) 0.15 0.25 1.28
Deferred Tax Asset on c/f losses of earlier years/(not created) = 7 2
On Account of Previous Year Adjustments - 19.27 : .
Others oat (0.13) (2.65) (0.67)
Total Tax Expense Recognised 172.53 184.89 253.47 246.66
Effective Tax Rate 25.25% 29.08% 29.15% 29.68%

For the current period, FY 2020-21 and FY 2019-20 tax is charged @ 25.17% (i.e. 22% Basic Tax, 10% Surcharge on Basic Tax and 4% Cess on Basic Tax and Surcharge).

 

 

 

 

 

 

 

 

 

For FY 2018-19 applicable tax rate was 29.12% (i.e. 25% Basic Tax, 12% Surcharge on Basic Tax and 4% Cess on Basic Tax and Surcharge).

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accout

appearing in Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56.

266

 

policies

 
 

 

[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

ICIN : U67120MH11995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

 

29

30

31

RESTATED SUMMARY STATEMENT OF BASIS OF CONSOLIDATION

‘The Consolidated Financial Statements are comprised of the financial statements of the members of the Group as under:

 

 

 

 

 

 

5 Effective Percentage Shareholding

Namkof tit sobeldiany- Companies ‘As at 31.08.2021 As at 31.03.2021 ‘As at 31.03.2020 ‘As at 31.03.2019,
i) AR Digital Wealth Private Limited (ARDWPL) (Formerly known as AR Wealth Management
Private Limited) 75.51% 75.51% 75.51% 75.51%
i) Freedom Wealth Solutions Private Limited (FWSPL) 95.00% 95.00% 95.00% 95.00%
iii) Freedom Intermediary Infrastructure Private Limited (FIINFRA) —_ 10.00%) 10.00%) 75516

 

 

 

 

 

 

 

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies appearing in Annexure V -1 & 2|
and information appearing from Annexure V - 3 to Annexure V - 56,

RESTATED CONSOLIDATED SUMMARY STATEMENT OF OPERATING SEGMENTS.

   

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (“CODM”) of the company. The CODM, who is responsible for
allocating resources and assessing performance of operating segments, has been identified as Managing Director of the Group. The Group operates only in one business segment i.e. Services for

distributions and sale of financial products within India, hence does not have any reportable segment as per Indian A

 

‘ounting Standard 108 “operating segments"

 

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies appearing in Annexure V -1 & 2|
and information appearing from Annexure V - 3 to Annexure V - 56.

RESTATED SUMMARY STATEMENT OF LEASE

‘The Group adopted Ind AS 116 and applied the standard to lease contracts. The Group adopted retrospective method for application of Ind AS 116 and accordingly initial application of Ind AS 116 is
done on April 01, 2016. Consequently, the Group recorded the lease liability at the present value of the lease payments discounted at the incremental borrowing rate and the righ
‘amount equal to lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease

‘of-use asset at an|

 

(On the date of initial application, the adoption of the new standard resulted in recognition of

 

ght of Use” asset (premises) of Rs. 3.48 Million and a lease liability of Rs. 3.40 Million,
‘The incremental borrowing rate applied to lease liabilities is 9.5%

‘The following is the summary of practical expedients elected

a) Applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end date.
b) Excluded the in
©) Applied the practical expedient to grandfather the assessment of which transactions are leases. Accordingly, Ind AS 116 is applied only to contracts that were previously identified as leases under
Ind AS 17.

 

ial direct costs from the measurement of the right to use asset at the date of initial application.

‘The effect of implementing the standard is as under :
(Rs in Million)|

 

 

‘AS AT AUGUST AS AT MARCH ASATMARCH | ASATMARCH
[Particulars 31, 2021 31, 2021 31, 2020 31, 2019
ight-of-use Asset

|Opening Balance 122.55 251.43 312.83 119.40
|Add : Additions - - 47.24 287.05
Less :Deletions - 28.47 - -
Less : Depreciation 35.48 100.40 108.64 93.62
[Closing Balance 87.07 122.55 251.43 312.83

 

‘The following is the movement in lease liability :
{Rs in Million}

 

 

 

‘AS AT AUGUST. AS AT MARCH ASATMARCH | ASATMARCH
lParticulars 31, 2021 31, 2021 31, 2019 31, 2018
[Lease Liability

[Opening Balance 141.34 265.80 320.44 119.10
|Add : Additions - - 42.36 278.61
|Add : Finance Cost 4.75 18.99 26.58 2767
Less : Payment of Lease Liability 42.96 117.85 123.58 104.94
Less : Reversal of Lease Liability - 25.60 - -
[Closing Balance 103.13 141.34 265.80 320.44

 

 

 

 

 

 

267
 

 

[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

ICIN : U67120MH11995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

 
   
  
 
 
  

(Rs in Million)|

 

 

 

 

 

 

 

 

 

 

 

FORTHE PERIOD | FORTHEYEAR | FORTHE YEAR | FORTHE YEAR

ENDED AUGUST 31, | ENDED MARCH 31, |ENDED MARCH 31, ENDED
[Particulars 2021 2021 2020 MARCH 31, 2019
[Expense relating to short term leases accounted in profit & loss 7 = 1.66) 6.04
‘Maturity Analysis of Lease Liabilities (on an undiscounted basis) :

(Rs in Million)|
‘AS AT AUGUST AS AT MARCH ASATMARCH | ASATMARCH

[Due 31, 2021 31, 2021 31, 2020 31, 2019
INot later than 1 year 81.80 87.15 120.66 119.17
Later than 1 year and not later than 5 years 144.41 68.89 183.12 257.16
Later than 5 years 54.66 : - 0.31
[Total 280.87 156.04 303.78 376.64

 

 

and information appearing from Annexure V - 3 to Annexure V - 56.

32 RESTATED SUMMARY STATEMENT OF RELATED PARTY DISCLOSURE,

(@) List of Related Parties
(Entity of which the Company is an Associate
Anand Rathi Financial Services Limited

(i) Key Managerial Persons

Amit Rathi, Director (Managing Director upto 16-07-2021)
Rakesh Rawal, Director & CEO

Rajesh Bhutara, CFO (w.e-f 10-7-2018)

‘Amol Jayawant Bhabal, CFO (Upto 10-07-2018)

Ashish Chauhan, Company Secretary (w.e.f 02-12-2019)

Hardik Chauhan, Company Secretary (w.e.f 30-11-2018 and upto 28-11-2019)
Dilip Balakrishnan, Company Secretary (Upto 30-11-2018)

(ii) Other Related Parties with whom there were transactions during reporting period:

Anand Rathi Global Finance Limited
(Subsidiary of Anand Rathi Financial Services Limited)
Anand Rathi Advisors Limited

(Subsidiary of Anand Rathi Global Finance Limited)
Anand Rathi Share and Stock Brokers Limited
(Subsidiary of Anand Rathi Financial Services Limited)
Anand Rathi Insurance Brokers Limited

(Subsidiary of Anand Rathi Financial Services Limited)
Anand Rathi IT Private Limited

Anand Rathi International Ventures (IFSC) Private Limited
(Subsidiary of Anand Rathi Share and Stock Brokers Limited)
AnandRathi Housing Finance Limited

(Subsidiary of Anand Rathi Global Finance Limited)

Anand Rathi Commodities Limited

(Subsidiary of Anand Rathi Financial Services Limited)

Nature of Transaction/Relationship

(Loan Given
Entity of which the Company is an Associate
Anand Rathi Financial Services Ltd

Other Related Parties
Anand Rathi Advisors Ltd
Anand Rathi Global Finance Ltd
Anand Rathi Shares & Stock Brokers Lid

 

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Bas

(iv) Other Related Parties with whom there were no transactions during reporting period:

  

FOR THE PERIOD
ENDED AUGUST 31,
2021

383.40

FOR THE YEAR
ENDED MARCH 31,
2021

404.86

13,950.80

s of preparation and significant accounting policies appearing in Annexure V -1 & 2

(b) The following transactions were carried out with the related parties in the ordinary course of business (Other than transaction within the Group):

FOR THE YEAR
ENDED MARCH 31,
2020

139.00

507.50
1,916.40

(Rs in Million)|

FOR THE YEAR
ENDED

MARCH 31, 2019

38.00

2,929.61
154.56

 

 

268
 

[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

ICIN : U67120MH11995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

 

 

(i) Loan Repayment Received
Entity of which the Company is an Associate
‘Anand Rathi Financial Services Ltd - 543.87 - 38.00

 

Other Related Parties

Anand Rathi Advisors Ltd a 14,458.43, z %
Anand Rathi Global Finance Ltd * 2 1,916.40 3,079.61
Anand Rathi Shares & Stock Brokers Lid 115.50 & z 154.56

(ii) Loan Taken
Entity of which the Company is an Associate
Anand Rathi Financial Services Ltd 3,158.00 14,446.70 7,334.50 1,352.00

 

Other Related Parties

Anand Rathi Advisors Ltd 1,116.70 1,787.00 z as
Anand Rathi Global Finance Ltd : 14.25 17,574.50 6,614.30
Anand Rathi Shares & Stock Brokers Lid * = > 16,588.42

(iv) Loan Repaid
Entity of which the Company is an Associate
‘Anand Rathi Financial Services Ltd 3,158.00 14,446.70 7,334.50 1,352.00

 

Other Related Parties

Anand Rathi Advisors Ltd 1,116.70 1,787.00 . =
Anand Rathi Global Finance Ltd # 14.25 17,574.50 6,614.30
Anand Rathi Shares & Stock Brokers Lid 2 : : 16,588.42

() Purchase of Debentures
Other Related Parties
Anand Rathi Global Finance Ltd 10,224.90 27,036.56 26,211.78 17,326.73

(vi) Purchase of Fresh Equity
Other Related Parties
Anand Rathi Global Finance Ltd - - 1,012.50 -

(vii) Support Service Given
Other Related Parties

‘Anand Rathi Advisors Ltd 5 * 34.22
Anand Rathi Global Finance Ltd 1.94 6.68 : <
Anand Rathi Shares & Stock Brokers Lid 1.69 3.03 8.38 2.07

(viii) Support Service Taken
Entity of which the Company is an Associate
Anand Rathi Financial Services Ltd 41.42 80.43 76.88 59.88

Other Related Parties

Anand Rathi Advisors Ltd 0.61 Ls4 0.65 as
Anand Rathi Global Finance Ltd 3.87 12.92 5.34 %

Anand Rathi IT Private Lid * = * 31.76
Anand Rathi Shares & Stock Brokers Lid 14.04 37.73 46.21 30.62

(ix) Brokerage Expenses
Other Related Parties
‘Anand Rathi Shares & Stock Brokers Ltd - 1.56 0.10 077

(x) Interest Income
Entity of which the Company is an Associate
‘Anand Rathi Financial Services Ltd - 16.83 0.04 -

 

Other Related Parties

Anand Rathi Advisors Ltd a 22.11 os 3
Anand Rathi Global Finance Ltd * = > 8.39
Anand Rathi Shares & Stock Brokers Lid 10.81 2.29 : <

(xi) Interest Expense
Entity of which the Company is an Associate
‘Anand Rathi Financial Services Ltd 2.56 5.93 1.40 0.46

 

Other Related Parties
Anand Rathi Advisors Ltd 119 2.00 : <
Anand Rathi Global Finance Ltd 3 & 1.45 as
Anand Rathi Shares & Stock Brokers Lid a 3 : 31.95

 

269
 

[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)
ICIN : U67120MH11995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

(sil) Rent Expenses
Entity of which the Company is an Associate
‘Anand Rathi Financial Services Ltd

 

Other Related Parties
Anand Rathi Global Finance Ltd

(xiii) Brand Charges
Entity of which the Company is an Associate
‘Anand Rathi Financial Services Ltd

 

(xiv) Demat Charges
Other Related Parties
‘Anand Rathi Shares & Stock Brokers Ltd

(xv) Rent Income
Other Related Parties
Anand Rathi Insurance Brokers Limited

(xvi) Commission Income
Other Related Parties
Anand Rathi Global Finance Ltd

(xvii) Referral fees
Other Related Parties
Anand Rathi Advisors Ltd
‘Anand Rathi Shares & Stock Brokers Ltd

(xviii) Remuneration paid to KMP

Amit Rathi
Amol Bhabhal

Ashish Chauhan

Dilip Balakrishnan
Hardik Chauhan
Rajesh Bhutra

Rakesh Rawal

Share Based Payments

 

o
@

i)

iy

(iv)

w)

 

~* The value of post employment benefit for all the employees is determined collectively by the appointed actuary and therefore not separately identifiable.

Outstanding Balances (Other than of transaction between the Group)
Loan
Entity of which the Company is an Associate

‘Anand Rathi Financial Services Ltd

Other Related Parties
Anand Rathi Shares & Stock Brokers Lid
Anand Rathi Advisors Ltd

Other Receivable
Other Related Parties
Anand Rathi Shares & Stock Brokers Lid

Interest Receivable
Entity of which the Company is an Associate
‘Anand Rathi Financial Services Ltd

 

Other Related Parties
Anand Rathi Advisors Ltd

Advance Received
Other Related Parties
Anand Rathi Insurance Brokers Ltd

Other Payables
Entity of which the Company is an Associate
‘Anand Rathi Financial Services Ltd

  
 

0.60 144 1.44 144
0.13 0.30 0.24 0.04
8.00 12.69 16.21 3.56
- 2.12 - -
0.03 0.06 0.06 0.06
- - - 107.38
20.87 40.59
8.26 -
5.81 20.00 20.00 10.20
- - - 1.26
0.80 1.58 0.49 -
- - - 5.08
- - 115, 0.53
3.70 8.49 723 4.66
16.46 43.38 45.65 33.76
- - 0.00 -
(Rs in Million)
ASAT ASAT ASAT ASAT
AUGUST 31,2021 MARCH31,2021. = MARCH31, 2020» MARCH 31, 2019
- - 139.00 -
267.90 - -
507.50
2 0.44 2 %
: - 0.04 -
0.13
: - 0.00 -
3.39 - - -

 

270
 

[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

ICIN : U67120MH11995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

 

 

@

0

®

(ai)

(dy)

w)

 

‘The following related party transactions were carried out within the group in the ordinary course of business which are eliminated in restated consolidated financial information :

Loan Give
By Anand Rathi Wealth Limited :

 

to AR Digital Wealth Private Ltd - 14.20 113.40
to Ffreedom Intermediary Infrastructure Pvt Ltd Z 76.96

By AR Digital Wealth Private Ltd :

to Ffreedom Intermediary Infrastructure Pvt Ltd - - -
to Freedom Wealth Solutions Pvt Ltd _ - -

By Freedom Wealth Solutions Pvt Ltd

to AR Digital Wealth Private Lid : * -
to Flreedom Intermediary Infrastructure Pvt Ld - - 9.67

 

Loan Takes

By AR Digital Wealth Private Ltd :
from Anand Rathi Wealth Limited . 14.20 113.40
from Freedom Wealth Solutions Pvt Ltd “ s -

By Ffreedom Intermediary Infrastructure Pvt Ltd
from Anand Rathi Wealth Limited : : 76.96
from Freedom Wealth Solutions Pvt Ltd - - 9.67
from AR Digital Wealth Private Ltd - - -

By Freedom Wealth Solutions Pvt Ltd
from AR Digital Wealth Private Lid - - -

Loan Repayment Received:

By Anand Rathi Wealth Limited :
from AR Digital Wealth Private Ltd : 14.20 159.04
from Ffreedom Intermediary Infrastructure Pvt Ltd - - 97.20

By AR Digital Wealth Private Ltd :
from Ffreedom Intermediary Infrastructure Pvt Ltd s <
from Freedom Wealth Solutions Pvt Ltd = 2 s

By Freedom Wealth Solutions Pvt Ltd
from AR Digital Wealth Private Ltd - - -
from Ffreedom Intermediary Infrastructure Pvt Ltd - - 35.85
Loan Repayment :

By AR Digital Wealth Private Ltd :

to Anand Rathi Wealth Limited : 1420 159.04

to Freedom Wealth Solutions Pvt Ltd - z s

By Freedom Wealth Solutions Pvt Lid
to AR Digital Wealth Private Lid : * -

By Ffreedom Intermediary Infrastructure Pvt Ltd

to Anand Rathi Wealth Limited “ “ 97.20
to AR Digital Wealth Private Ltd - - -
to Freedom Wealth Solutions Pvt Ltd - - 35.85

‘Support Service Given:
By Anand Rathi Wealth Limited :

to Freedom Wealth Solutions Pvt Ltd 3 2 5

 

to AR Digital Wealth Private Ltd - 134
By AR Digital Wealth Private Ltd :

to Flreedom Intermediary Infrastructure Pvt Ltd - - 0.22
to Anand Rathi Wealth Limited 0.55 3.82 155

271

28.90
1.40

21.90
41.55

285.25

21.90

68.05
41.55
28.90

1.40

464.41

176.70

28.90
1.40

21.90

15.38

464.41

21.90

1.40

176.70
28.90
15.38

20.28
 

[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

ICIN : U67120MH11995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

 

By Ffreedom Intermediary Infrastructure Pvt Ltd
to AR Digital Wealth Private Ltd : - 17.39 -
(vi) Support service Taken:
By Anand Rathi Wealth Limited :

from AR Digital Wealth Private Ltd 0.55 3.82 155 253

By AR Digital Wealth Private Ltd
from Anand Rathi Wealth Limited - 0.78 1.34 -
from Ffreedom Intermediary Infrastructure Pvt Ltd - - 17.39 -

By Freedom Wealth Solutions Pvt Ltd
from Anand Rathi Wealth Limited - - - 20.28

By Ffreedom Intermediary Infrastructure Pvt Ltd
from A R Digital Wealth Private Limited - - 0.22 -

(vii) Interest Expense

By AR Digital Wealth Private Ltd :

to Anand Rathi Wealth Limited 7 - 621 29.54
to Freedom Wealth Solutions Pvt Ltd 3 : = 0.17

By Ffreedom Intermediary Infrastructure Pvt Ltd

to Anand Rathi Wealth Limited - - 3.94 635
to AR Digital Wealth Private Lid - - - 0.23
to Freedom Wealth Solutions Pvt Ltd : : 2.86 -

(viii) Interest Income

to Anand Rathi Wealth Limited

from AR Digital Wealth Private Ltd - - 621 29.54
from Ffreedom Intermediary Infrastructure Pvt Ltd - - 3.94 635
to AR Digital Wealth Private Ltd
from Ffreedom Intermediary Infrastructure Pvt Ltd - - - 0.23

to Freedom Wealth Solutions Pvt Ltd
from AR Digital Wealth Private Ltd - - - 0.17
from Ffreedom Intermediary Infrastructure Pvt Ltd - - 2.86 -

(és) Reimbursement of Expenses incurred :
By Freedom Wealth Solutions Pvt Ltd
for Ffreedom Intermediary Infrastructure Pvt Ltd - - 0.28 0.09

By Ffreedom Intermediary Infrastructure Pvt Ltd

for Freedom Wealth Solutions Pvt Lid 6 0.05 x a

(%) Payment of Reimbursement of Expenses
‘To Freedom Wealth Solutions Pvt Lid

By Ffreedom Intermediary Infrastructure Pvt Ltd - 0.05 0.28 23.69

(xi) Referral Fees Expense :
of Freedom Wealth Solutions Pvt Ltd

from Anand Rathi Wealth Limited 7 6.02 10.02 =

of Anand Rathi Wealth Limited:
from AR Digital Wealth Private Limited 33 - - -

(xii) Referral Fees Income:
of Anand Rathi Wealth Ltd
from Freedom Wealth Solutions Pvt Ltd . 6.02 10.02 “

of AR Digital Wealth Private Limited:
from Anand Rathi Wealth Limited 33 - - -

 

 

272
 

[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

ICIN : U67120MH11995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

 

 

Gail

(xiv)

ow)

(xvi)

(vii)

©

0

w

(i)

(iv)

Purchase of Shares
By Anand Rathi Wealth Limited :

from AR Digital Wealth Private Ltd
Sale of Shares

By AR Digital Wealth Private Ltd
from Anand Rathi Wealth Limited

Fresh Equity issued by :
By Ffreedom Intermediary Infrastructure Private Limited

to Anand Rathi Wealth Limited
to AR Digital Wealth Private Limited

By AR Digital Wealth Private Limited
to Anand Rathi Wealth Limited
Purchase of Debentures :

By AR Digital Wealth Private Limited
from Anand Rathi Wealth Limited

 

Sale of Debentures :
By Anand Rathi Wealth Limited
from AR Digital Wealth Private Limited

Outstanding Balances of transaction within the Group:

Loan Receivable
By Anand Rathi Wealth Limited :

from AR Digital Wealth Private Ltd
from Ffreedom Intermediary Infrastructure Pvt Ltd

By Freedom Wealth Solutions Pvt Ltd
from Ffreedom Intermediary Infrastructure Pvt Ltd
Loan Payable

By Ffreedom Intermediary Infrastructure Pvt Ltd
to Anand Rathi Wealth Limited
to Freedom Wealth Solutions Pvt Ltd

 

By AR Digital Wealth Private Limited
to Anand Rathi Wealth Limited

Other Payable :
By Anand Rathi Wealth Limited =
two AR Digital Wealth Private Lid

Other Receivable
By AR Digital Wealth Private Ltd
from Anand Rathi Wealth Limited

Note 1: Terms of Loan Given to related parties

Loan given to related parties atthe interest rate in the range of 10% to 12% and itis receivable on demand,
Note 2: There are no provision for doubtful debts/advances or amount written off or written back for debts due from / due to related parties,

Note 3: Related party relationships have been identified by the Management and relied upon by the Auditors.

Note 4: The transactions entered into with related party are at arm's length prices.

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Bas

and information appearing from Annexure V - 3 to Annexure V - 56.

343

33

  

41.40

41.40

259.90

259.90

100.00

0.16

0.16

150.00

400.00

45.64
20.24

26.18

20.24
26.18

s of preparation and significant accounting policies appearing in Annexure V -1 & 2

 

273
 

 

[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

ICIN : U67120MH11995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

 

33 FORTHE PERIOD FORTHE YEAR FORTHE YEAR FOR THE YEAR
RESTATED CONSOLIDATED SUMMARY STATEMENT OF EARNINGS PER ENDED AUGUSTSi;: “ENDED MARGH Sis: ENDED MARGH'S ENDED.
SHAREAND ACCOUNTING RATIOS: 2021 2021* 2020* MARCH 31, 2019 *
Restated Ind AS Consolidated Net Profit after tax attributable to owners of the company 510.67 450.74 613.83 592.05
Restated Ind AS Consolidated Net Worth at the end of the year 2,867.93 2,412.84 1,855.23 1,239.37
(Networth = Equity Share Capital + Other Equity)

Restated Ind AS Consolidated Depreciation and Amortisation 65.11 172.92 210.48 162.69

Restated Ind AS Consolidated Finance Cost 8.59 29.06 32.96 61.10

Restated Ind AS Consolidated Tax Expense 172.53 184,89 253.47 246.66

Number of equity shares as at the end of the year 41,616,227 41,270,340 40,541,160 40,362,900}
Face Value Per Share (in Rs) 5 5 5 5
‘Weighted Average number of equity shares outstanding at the end of the period / year 41,503,971 41,035,613 40,509,903 40,354,817}
Diluted Weighted Average number of equity shares outstanding at the end the period /year 41,677,913 1,537,775 41,066,853 41,113,383}
Diluted Number of equity shares outstanding at the end of the period / year 41,790,169 41,772,502 41,098,110 41,121,465}
Earnings Per Share (in Rs)**

~ Basic 12.30 10.98 15.15 1467

— Diluted 12.25 10.85 14.95 14.40

Return on Net Worth % 17.81% 18.68% 33.09% 47.77%
‘Net Asset Value Per Share (Based on No. of Equity shares at year end) 68.91 58.46 45.76 30.71

Net Asset Value Per Share (Based on Diluted No. of Equity shares at year end) 68.63 57.76 45.14 30.14

EBITDA 756.90 837.61 1,110.74 1,062.50

* Adjusted for the effect of bonus shares issued in FY 2021-22.
** EPS is not annualised for the period ended August 2021.

1. The Ratios have been computed as follows:

 

a) Earning per share (Basic) Restated Ind AS Consolidated Net Profit after tax attributable to owners of the company

‘Weighted Average number of equity shares outstanding during the period/year

 

) Earning per share (Diluted) = Restated Ind AS Consolidated Net Profit after tax attributable to owners of the company
Diluted Weighted Average number of equity shares outstanding during the period/year

 

©) Return on Net Worth (%) = Restated Ind AS Consolidated Net Profit after tax attributable to owners of the company
Restated Ind AS Consolidated Net Worth at the end of the period/year

 

4d) Net Asset Value Per Share (Based on No. of Equity shares at year end

 

= Restated Ind AS Consolidated Net Worth at the end of the period/year
Number of equity shares as at the end of the period/year

 

€) Net Asset Value Per Share (Based on Diluted No. of Equity shares at year end) = Restated Ind AS Consolidated Net Worth at the end of the period/year
Diluted Number of equity shares outstanding at the end of the period/year

 

Restated Ind AS Consolidated Net Profit after tax + Restated Ind AS Consolidated Depreciation and|
) EBITDA = Amontisation + Restated Ind AS Consolidated Finance Cost + Restated Ind AS Consolidated Tax|
Expense

2. In accordance with the SEBI Regulations, net worth means “the aggregate value of the paid-up share capital, share premium account, reserves and surplus (excluding revaluation reserve) as reduced|
by the aggregate value of miscellaneous expenditure (to the extent not adjusted or written off) and the debit balance of the profit and loss account.

3, Weighted average number of shares is the number of equity shares outstanding at the beginning of the year adjusted by the number of equity shares issued during the period/year. The time weighting
factor is the number of days for which the specific shares are outstanding as a proportion of total number of days during the period/year.

4, The Group does not have any revaluation reserves or extra-ordinary items.
5, Eamings per share calculations are in accordance with Ind AS 33 - "Earnings per share”.
6. The figures disclosed above are based on the Restated Ind AS Consolidated Financial Information of the Group.

7. The face value of equity shares of the Holding Company had been sub divided from Rs. 10 per equity share to Rs. 5 per equity share vide the approval of shareholders in extraordinary general
‘meeting held on 14 August 2018.

8. Ind AS 33 "Earnings per Share”, requires an adjustment in the calculation of basic and diluted earning per share for all the periods presented if the number of equity or potential equity shares
outstanding change as a result of share sub-division. The weighted average number of shares and consequently the basic and diluted earnings per share have accordingly been adjusted in the Ind AS|
consolidated financial information,

  

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant
and information appearing from Annexure V - 3 to Annexure V - 56.

ccounting policies appearing in Annexure V -1 & 2

 

274
    
     
 
   

 

[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

ICIN : U67120MH11995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

34 RESTATED SUMMARY STATEMENT OF SHARE BASED PAYMENTS
Employees Share Option Plans

‘The Employee Stock Option Scheme (‘the Scheme’) provides for grant of share options to the eligible employees andor directors (“the Employees”) of the Company andior its subsidiaries. The Share
Options are granted at an exercise price, which is either equal to the fair market price, or at a premium, or at a discount to market price as may be determined by the Nomination and Remuneration]
Committee, Each Share Option converts into two equity shares of the Holding Company.

During the financial year 2016-17, the Board had approved the Policy and the no. of options to be granted to the Employees that will vest in a graded manner and which can be exercised within af
specified period. The Board had approved 3,20,000 Options at an exercise price of 10/- per option to the Employees.

‘The details of options are as under:
FORTHE PERIOD FORTHEYEAR  FORTHEYEAR — FOR THE YEAR

 

ENDED ENDED ENDED ENDED
AUGUST 31,2021 MARCH31, 2021. = MARCH31, 2020 MARCH 31, 2019
(Nos.) (Nos.) (Nos.) (Nos.)
Outstanding at the beginning of the period/year 91,350 187,860 56,000 267,260
‘Add: Granted during the period/year - - - -
Less: Exercised and shares allotted during the period/year 89,280 87,000 59,420 11,260

Less: Exercised but pending allotment 3 2 - -
Less: Forfeited/cancelled during the period/year 3 3 2 s

Less: Lapsed during the period/year 2,070 9,510 8,720 -
Outstanding at the end of the period/year - 91,350 187,860 256,000
Exercisable at the end of the period/year - - - 64,000

Fair Value of Options granted

‘The estimated fair value of each stock option granted is 2.82 as on 1 January, 2017, The fair value has been calculated by applying Black-Scholes-Merton model as valued by an independent valuer.
‘The model inputs the share price at respective grant dates, exercise price of Rs 10 per option, Standard Deviation of 52.44%, life of option being 6 months from date of grant, and a risk-free interest
rate of 6.51%,

Standard deviation has been derived based on the one year historical numbers of the peer group companies adjusted with appropriate illiquidity discount.

‘The options granted on January 1, 2017 under ESOP 2017 have an exercise price of Rs. 10 per option and would vest over the period as under:

Options Granted (in Nos.) ‘Vesting Date
52,740 31.12.2017
11,260 31.03.2018
64,000 31.12.2018
96,000 31.12.2019
96,000 31.12.2020

ESOP Scheme 2018
During the financial year 2018-19, the Board had approved the Policy and the no. of options to be granted to the Employees that will vest in a graded manner and which can be exercised within af
specified period. The Board has approved 2,60,100 options at an exercise price of Rs 5/- per option to the employees. During the meeting held on June 14, 2021, the Board has approved 20,000]
‘options at an exercise price of Rs 5 per option to the employees,

‘The details of options are as under:
FORTHE PERIOD FORTHEYEAR FORTHEYEAR FOR THE YEAR

 

ENDED ENDED ENDED ENDED
AUGUST 31, 2021 MARCH 31,2021. = MARCH31,2020 = MARCH 31, 2019
(Nos.) (Nos. (Nos.) (Nos.)
Outstanding at the beginning of the period/year 208,080 260,100 - -
Add: Granted during the period/year 20,000 - - -
Less: Exercised and shares allotted during the period/year 52,020 52,020 - -

Less: Exercised but pending allotment 2 a ~
Less: Forfeited/cancelled during the period/year 3 2 %
Less: Lapsed during the period/year - - -
Outstanding at the end of the period/year 176,060 208,080 7 =
Exercisable at the end of the period/year : 2 =

Fair Value of Options granted

‘The estimated fair value of each stock option granted is 407 as on 11th March 2019. The fair value has been calculated by applying Black-Scholes-Merton model as valued by an independent valuer.
‘The model inputs the share price at respective grant dates, exercise price of 5/- per option , Standard Deviation of 51.15%, life of option being 3 months from the date of grant, and a risk-free interest
rate of 7.35%.

 

 

 

275
 

[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

ICIN : U67120MH11995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

 

 

35,

36

‘The options were approved by the Board on March 11, 2019 under ESOP 2018 and were communicated to employees on 1st April 2020. ESOP 2018 has an exercise price of RS 5 per option, and|
would vest over the period as under:

Options Granted (in Nos.) Vesting Date

52,020 01.04.2020

52,020 01.04.2021

72,020 01.04.2022

52,020 01.04.2023

52,020 01.04.2024
Details of the commitments arising from the Share based payments were as follows: (Rs in Million)

ASAT ASAT ASAT ASAT

Particulars AUGUST 31,2021 MARCH31,2021. = MARCH31, 2020. © MARCH 31, 2021
Total Carrying Amount 33.87 43.93 0.34 0.25
Amount debited Statement of Profit & Loss 11.15 64.79 027 o2i

RESTATED SUMMARY STATEMENT OF CORPORATE SOCIAL RESPONSIBILITY (CSR)

As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years
‘on corporate social responsibility (CSR) activites.

A CSR committee has been formed by the Holding Company as per the Act. The funds were primarily allocated to a corpus and utilized through the year on these activities which are specified in]
Schedule VI of the Companies Act, 2013:

4) Gross amount required to be spent by the Company during the year is 19.18 Million,

>) Amount spent during the year on:

(Rs in Million)
AS AT AUGUST AS AT MARCH ASATMARCH — ASAT MARCH
31, 2021 31, 2021 31, 2020 31, 2019

Details of corporate social responsibility expenditure
(a) amount required to be spent by the company during the year/period 19.18 17.80 11.02 2.87
(b) amount of expenditure incurred

() Construction/ acquisition of any asset - % - -

(Gi) On purposes other than (i) above 1.82 17.88 11.40 3.00
(0) shortfall at the end of the yeariperiod 17.36 2 - -
(@) total of previous years shortfall - -

will be complied with, by NA NA NA
(©) reason for shortfall during the year/period ended year end

(0 nature of CSR activities

‘The Company has primarily spent the CSR expenditure for the purpose of promoting education and Medical. The expenditure incurred during the year has been approved by the board of directors

RESTATED SUMMARY STATEMENT OF CAPITAL MANAGEMENT
For the purpose of the Group's capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to equity holders of the Group. The Group manages|
its capital to ensure that it continues as @ going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance.
‘The Group monitors capital using a gearing ratio. Capital gearing ratio of the Group is as follows

(Rs in Million except the ratio)

ASAT ASAT ASAT ASAT
AUGUST 31, 2021 MARCH 31,2021. = MARCH31,2020 — MARCH 31, 2019
Equity 208.08 137.57 135.14 134.54]
Other Equity 2,659.85 2,275.27 1,720.09 1,104.82]
Non Controlling Interest 116.39 116.21 115.85 125.38]
Total Equity (A) 2,984.32 2,529.05 1,971.08 1,364.74]
Borrowings 312.26 333.60 417.30 5.96
Total Debt (B) 312.26 333.60 417.30 5.96
Total Debt and Equity (C=A+B) 3,296.58 2,862.64 2,388.38 1,370.70
Capital Gearing Ratio (B/C) (times) 0.095 0.117 0.175 0.004)

 

276
 

 

[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

ICIN : U67120MH11995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

 

37

38

 

RESTATED SUMMARY STATEMENT OF CAPITALISATION
(Rs in Million except the r

PRE-ISSUE ASAT — ADJUSTED FOR
AUGUST 31, 2021 ISSUE

Debt

Total Borrowings 312.26

Current borrowings -

‘Non-current borrowings (including current maturity) (A) 312.26 .

Total equity

Equity Share Capital 208.08 .

Other Equity 2,659.85 .

Non Controlling Interest 116.39

Total Equity (B) 2,984.32 .

Non-current borrowings Total equity (A/B) (times) 0.10 :

Note 1 : The corresponding Post IPO Capitalisation data in the above table is not determinable at this stage pending the completion of book building process and hence the same has not been provided|
in the above statement.

Note: The above statement should be read with Notes to Restated Ind AS
and information appearing from Annexure V - 3 to Annexure V - 56.

 

mnsolidated Financial Information - Basis of preparation and significant accounting policies appearing in Annexure V -1 & 2

RESTATED SUMMARY STATEMENT OF BUSINESS COMBINATIONS

‘The Holding Company had acquired following equity shares at fair value during the year and in earlier year(s). Purchase consideration for acquisition of shares in below mentioned entities was paid by}
‘mode of cash only. The acquisitions were made to enhance the presence in Wealth Management space. The other disclosures with respect to acquisition are as under:

AR Digital Wealth Private Limited (ARDWPL) is engaged in the business of Digital Wealth Management. The consideration paid for shares of ARDWPL in July 2016 is Rs. 25.20 Million, in March]
2018 is Rs. 69.03 Million and in Financial Year 2018-2019 is Rs. 420.49 Million. The fair value per share for the aforesaid acquisitions is Rs. 10, Rs. 256 and Rs. 332(Average price of 3 lots
purchased during the year) respectively.

Freedom Wealth Solutions Private Limited (FWSPL) is engaged in the business of Wealth Management. The consideration paid for shares of FWSPL in September 2017 is Rs, 23.72 Million. The fait
value per share for the aforesaid acquisitions is Rs. 10.

Ffreedom Intermediary Infrastructure Private Limited (FIINFRA) is engaged in the business of providing IT
359,90 Million. The fair value per share for the aforesaid acquisitions is Rs. 434,

2,99,419 shares purchased on February 13, 2020 and 299418 shares purchased on March 31, 2020 are acquired from AR Digital Wealth Private Limited and 2,30,415 shares purchased on March 31,
2020 are acquired in a Right issue by Ffreedom Intermediary Infrastructure Private Limited.

 

bled services, The consideration paid for shares of FIINFRA in FY 2019-20 is Rs.

Details of Share acquired/(sold) is tabulated as below-

‘Name of Company No.of Shares % of Shares Acquired]

AR Digital Wealth Private Limited

July 13, 2016 2,520,000 60.30%|
March 14, 2018 5,574 0.1394
March 16, 2018 170,246 4.0794
March 16, 2018 51,074 1.22%
March 16, 2018 39,157 0.944
March 22, 2018 5,574 0.1394
May 3, 2018, 58,361 1.40%}
February 5, 2019 1,194,029 7.07%]
March 27, 2019 13,044 0.2494

Freedom Wealth Solutions Private Limited*
September 25, 2017 2,371,625 95.01%6|

Ffreedom Intermediary Infrastructure Private Limited**

February 13, 2020 299,419 50,0094
March 31, 2020 299,418 36.1194
March 31, 2020 230,415 13.89%

 

277
 

 

[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

ICIN : U67120MH11995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

 
   
  
 

 

39

40

41

a2

a3

 

   
   
 
   
    
    
 
 
   
  
 
   
   

* The shares of Freedom Wealth Solutions Private Limited prior to the acquisition by holding company were acquired by AR Digital Wealth Private Limited during the period December 2016 to]
February 2017 for Rs. 8.08 million based on which the Goodwill is calculated as per below table. The shares were then acquired by the Holding Company in September 2017 at Rs. 23.72 million.

** The shares of Freedom Intermediary Infrastructure Private Limited prior to the acquisition by holding company were acquired by AR Digital Wealth Private Limited in November 2017 for Rs. 2.5]
million based on which the Capital Reserve is calculated as per below table. The shares were then acquired by the Holding Company during the period January 2020 to March 2020 at Rs. 259.90]
million. Further, the Holding Company made an investment in fresh equity shares of Ffreedom Intermediary Infrastructure Private Limited of Rs. 100 million,

At the time of acquisition of business, investment made in equity shares of acquiree over and above net assets of acquiree company is treated as Goodwill and net assets acquired in excess of thef
consideration paid to the acquiree is treated as Capital Reserve. Details of Goodwill and Capital Reserve is as below

(Rs in Million)}

ARDWPL FIINFRA Total]

Consideration Paid 25.20 2.50 27.70

Less: Net Assets Acquired 24.95 (26.26) aay

Goodwill

Net Assets Acquired
Less : Consideration Paid
Capital Reserve

Total Profit after tax in Restated Ind AS Consolidated financial information is Rs. 510.88 Million (FY 2020-21 Rs 450.95 Million, FY 2019-20 616.14 Million and FY 2018-29 584.33 Million)
which includes profit of subsidiaries also, i.e. Rs. 0.66 Million (FY 2020-21 Rs 0.50 Million, FY 2019-20 29.67 Million and FY 2018-19 (10.72) Million) of AR Digital Wealth Private Limited, Rs.
1.09 Million (FY 2020-21 Rs 1.74 Million, FY 2019-20 (0.83) Million and FY 2018-29 0,59 Million) of Freedom Wealth Solutions Private Limited and Rs. 3.21 Million (FY 2020-21 Rs 2.54
Million, FY 2019-20 (21.76) Million and FY 2018-19 (20.95) Million) of Ffreedom Intermediary Infrastructure Private Limited,

RESTATED CONSOLIDATED SUMMARY STATEMENT OF CONTINGENT LIABILITY
Contingent liability in respect of Income Tax Demand of one of the subsidiary ~ Freedom Wealth Solution Private Limited is as under:
(Rs in Million)|

 

  
  

 

 

   
 
 
  

ae ASAT ASAT ASAT ‘AS AT
AUGUST 31, 2021_|_MARCH31,2021_| MARCH31,2020_| MARCH 31, 2019

Tiabilties disputed - appeals filed with respect to

income Tax demand for Assessment Year 2013-14* : 47] 47] 4.7]

Income Tax demand for Assessment Year 2013-14 (Penalty order under sec 271(1)(c)) 4.62 4.62 A104) O00)

income Tax demand for Assessment Year 2015-16* : 11.44| 11.44] 144

Hrotal 4.62] 20.23 15.61 15.61]

 

 

 

 

 

   
 
 
 
 
 
 
  
  
   
  
    
 

* Addition on account of difference in consideration which is received more in comparison to fair market value of shares issued w/s 56(2)(vii)(b)
‘The Group does not have any other pending litigation which would impact its financial position.
‘The Group, as a process, reviews and ensures to make adequate provisions for material foreseeable losses, if any, on all long-term contracts. As on the reporting date there is no material foreseeable|

loss on any long-term contract.

‘The Group has re-measured the derivative contracts to their fair value at the reporting date, as such there are no material foreseeable losses on derivative contracts

RESTATED IND AS CONSOLIDATED SUMMARY STATEMENT OF CAPITAL COMMITMENTS (Rs in Million)
a ASAT ASAT ASAT ASAT
ence AUGUST 31,2021 MARCH31,2021. = MARCH31, 2020» MARCH 31, 2019

Estimated amount of contracts remaining to be executed on capital account
and not provided for
- Capital Commitment for Purchase of Property (Net of Advances)

278
 

[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

ICIN : U67120MH11995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

 

44 RESTATED CONSOLIDATED SUMMARY STATEMENT OF DUES TO MICRO, SMALL AND MEDIUM ENTERPRISES

‘The Ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated August 26, 2008 which recommends that the Micro and Small Enterprises should mention in their
correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in accordance with the ‘Micro, Small and Medium Enterprises Development
Act, 2006” (‘the Act’), Accordingly, the disclosure in respect of the amounts payable to such enterprises as at August 31, 2021, March 31, 2021, March 31, 2020 and March 31, 2019 has been made inf
the financial statements based on information received and available with the Group. Further in view of the Management there is no interest payable in accordance with the provisions of the Act

(Rs in Million)|

 

Particulars
ASAT ASAT ASAT ASAT

AUGUST 31,2021 = MARCH31,2021 = MARCH31,2020.- MARCH 31, 2019

 

“The principal amount remaining unpaid to any supplier at the end of each accounting year, _ _ -_ :

‘The interest due thereon remaining unpaid to any supplier at the end of each accounting year;

‘The amount of interest paid by the buyer in terms of section 16 of the Micro, Small and
Medium Enterprises Development Act, 2006 (27 of 2006), along with the amount of the
payment made to the supplier beyond the appointed day during each accounting year;

‘The amount of interest due and payable for the year of delay in making payment (which has
been paid but beyond the appointed day during the year) but without adding the interest
specified under the Micro, Small and Medium Enterprises Development Act, 2006;

‘The amount of interest accrued and remaining unpaid at the end of each accounting year; and

‘The amount of further interest remaining due and payable even in the succeeding years, until
such date when the interest dues above are actually paid to the small enterprise, for the purpose
of disallowance of a deductible expenditure under section 23 of the Micro, Small and Medium
Enterprises Development Act, 2006

 

~ 0.82 3.43 ~

 

 

 

279
ANAND RATHI WEALTH LIMITED

(Previously Known as Anand Rathi Wealth Services Limited)

ICIN : U67120MH1995PLC086696,
|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

45 RESTATED IND AS CONSOLIDATED SUMMARY STATEMENT OF FINANCIAL INSTRUMENT - FAIR VALUES

Accounting classification and fair values

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the|

fair value hierarchy.

(Rs in Million)

 

Fair value

 

August 31, 2021

Financial assets
(i) Mutual Fund

(ii) Investment in PMS

(iii) Unquoted Debentures

(iv) Option Premium

(v) Equity Shares of Other Companies

Amortised Cost
(i) Loans

(ii) Security Deposit

(iii) Trade receivables

Carrying
Amount

0.23
(1.62)

(750.85)

27.81

(25.16)
(18.32)

301.80

(83.62)
(248.15)
(103.40)

(40.92)

1,018.15
(1,018.15)
(1,013.18)

267.90
(648.64)
(1.97)

71.00
(31.96)
(49.94)
(38.74)

129.23
(108.65)

(91.14)
(110.14)

280

Quoted prices
in active
markets
(Level 1)

0.23
(1.62)

(750.85)

17.45

(15.61)
(10.93)

Significant
observable
inputs
(Level 2)

Significant
unobservable
inputs
(Level 3)

10.36

(9.56)
(7.39)

301.80

(83.62)
(248.15)
(103.40)

(40.92) #

1,018.15

(1,018.15)
(1,013.18)

Total

(40.92)

1,018.15

(1,018.15)
(1,013.18)

 
ANAND RATHI WEALTH LIMITED

(Previously Known as Anand Rathi Wealth Services Limited)

ICIN : U67120MH1995PLC086696,
|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

(iv) Cash and cash equivalents

(v) Bank balances other than above

(vi) Other Financial Assets

Total as at August 31, 2021
Total as at March 31, 2021
Total as at March 31, 2020
Total as at March 31, 2019

573.24
(653.18)
(282.54)
(114.12)

0.48
(0.47)
(0.43)
(0.41)

172.79
(64.34)

(46.06)
(20.57)

 

2,562.63

17.68

1,330.31 1,347.99

 

(1,987.15)

(17.23)

(1,111.33) _ (1,128.56)

 

(2,439.32)

(10.93)

(1,268.72) _ (1,320.57)

 

(4,140.20)

(750.85)

(103.40) (854.25)

 

 

Fair value

 

August 31, 2021

FVTPL
(i) Option Premium

Amortised Cost
(i) Borrowings

(ii) Trade payables

(iii) Other Financial Liabilities

(iv) Lease Liabilities

Carrying
Amount

(119.09)

312.26
(333.60)
(417.30)

(5.96)

0.12
(2.03)
(16.60)
(1.62)

306.76
(56.34)
(909.72)
(88.45)

103.13
(141.34)
(265.80)
(320.44)

281

Quoted prices
in active
markets
(Level 1)

(108.45)

Significant Significant
observable unobservable
inputs inputs
(Level 2) (Level 3)

(10.64)

 
[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

CIN : U67120MH1995PLC086696

IANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

 

Total as at August 31, 2021 722.27
Total as at March 31, 2021 (533.31)
Total as at March 31, 2020 (4,609.42)
Total as at March 31, 2019 (535.56) (108.45) (10.64)

 

 

 

 

Note 1 - Figures in brackets in the above table represent numbers of FY 2021-21, 2019-20 and FY 2018-19 respectively.

Valuation techniques used to determine the fair values:
a. Listed equity instruments and mutual funds which are fair valued using quoted prices and closing NAV in the market.

b. Discounted cash flow method has been used to determine the fair value of unquoted equity shares of other companies. The discount]
rate is used based on management estimates.

c. The Group has made necessary adjustments to the observable and unobservable inputs used for the purpose of valuation

d. The fair value of the quoted instruments are based on market price at the reporting date. In case of unquoted instruments, the|
valuation is done based on the observable market inputs. The valuation of unquoted index options is done through Black and Scholes|
model and for unquoted debentures & PMS valuation is done on basis of cash flow analysis.

Fair value measurements using significant unobservable inputs (level 3)
The following table presents the changes in level 3 items for the period ended August 31, 2021 and year ended March 31, 2021, March]
31, 2020 and March 31, 2019

(Rs in Million)

 

Particulars
Unquoted Equity Shares in

Debentures Other Companies

Opening Balance as on April 01, 2021 83.62 1,018.15
Acquisitions 21,750.38
Gains / (Losses) recognized 1,083.24
Realisations 22,615.44
Closing Balance as on August 31, 2021 301.80 1,018.15
(Rs in Million)

 

Particul:
articulars Unquoted Equity Shares in

Debentures Other Companies

Opening Balance as on April 01, 2020 248.15 1,013.18
Acquisitions 45,775.31 S
Gains / (Losses) recognized 2,127.49 4.97
Realisations 48,067.33 -
Closing Balance as on March 31, 2021 83.62 1,018.15

 

282
[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

CIN : U67120MH1995PLC086696

IANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

(Rs in Million)

 

Particul:
articulars Unquoted Equity Shares in

Debentures Other Companies

Opening Balance as on April 01, 2019 103.40 ~
Acquisitions 34,480.50 1,012.50
Gains / (Losses) recognized 2,181.08 0.68
Realisations 36,516.83 -
Closing Balance as on March 31, 2020 248.15 1,013.18
(Rs in Million)

 

Particul:
articulars Unquoted Equity Shares in

Debentures Other Companies

Opening Balance as on April 01, 2018 58.85
Acquisitions 26,917.50
Gains / (Losses) recognized 1,259.89
Realisations 28,132.84
Closing Balance as on March 31, 2019 103.40

The fair value of the financial assets and liabilities are included at the amount at which the instrument can be exchanged in the current
transaction between willing parties, other than in a forced or liquidation sale.

Financial instruments carried at amortised cost such as cash and margin money deposits, trade and other receivables, trade payables,|
borrowings and other current financial instruments approximate their fair values largely due to short term maturities of these|
instruments.

The fair value of the quoted instruments are based on market price at the reporting date. In case of unquoted instruments, the valuation|
is done based on the observable market inputs. The valuation of unquoted index options is done through Black and Scholes model.

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and|
significant accounting policies appearing in Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56.

 

283
[ANAND RATHI WEALTH LIMITED

(Previously Known as Anand Rathi Wealth Services Limited)

CIN : U67120MH1995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

46 RESTATED IND AS CONSOLIDATED SUMMARY STATEMENT OF FINANCIAL INSTRUMENT — RISK MANAGEMENT

‘isk management framework

‘The Group’s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The Group’s primary risk|
management focus is to minimize potential adverse effects on revenue. The Group’s risk management assessment and policies and processes
are established to identify and analyze the risks faced by the Group, to set appropriate risk limits and controls, and to monitor such risks and
compliance with the same, Risk assessment and management policies and processes are reviewed regularly to reflect changes in market}
conditions and the Group’s activities. The Board of Directors and the Audit Committee is responsible for overseeing the Group’s risk|
assessment and management policies and processes.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they become due. The cash flows, funding]
requirements and liquidity of Group is regularly monitored by the Management of the Group. ‘The objective is to optimize the efficiency and
effectiveness of the Group's capital resources.

Exposure to liquidity risk
‘The table below analyses the Group's financial liabilities into relevant maturity groupings based on their contractual maturities for all financial]
liabilities

 

Contractual cash flows (Rs in Million)
August 31, 2021 Carrying ‘OnDemand Lessthan3 3-12 months 1-5 years
amount months
Borrowings 312.26 2 20.93 52.82 228.50
Lease Liabilities 2 3.13 x 47.44
Trade Payables 0.12 .12 3
Other Financial Liabilities 306.76 306.76 -

 

Contractual cash flows (Rs in Million)
March 31, 2021 Carrying Total OnDemand Less than3 3-12 months 1-5 years
amount months
Borrowings 333.60 333.60 20.96 63.00 249.64
Lease Liabilities 141.34 141.34 22.75 55.35 63.24
‘Trade Payables 2.03 2.03 2.03 - -
Other Financial Liabilities 56.34 56.34 56.34 - -

Contractual cash flows (Rs in Million)
March 31, 2020 Carrying Total OnDemand Less than3 3-12 months 1-5 years
amount months
Borrowings 417.30 417.30 20.92 62.78 333.60
Lease Liabilities 5 265.80 2 72.96 165.05,
‘Trade Payables 5 16.60 5 - -
Other Financial Liabilities 909.72 909,72 909.72 - -

Contractual cash flows (Rs in Million)
March 31, 2019 Carrying Total OnDemand Less than3 3-12 months 1-5 years
amount months
Borrowings 5.96 5.96 0.55 1.73 3.68
Lease Liabilities 320.44 320.44 22.45 71.07 226.92
‘Trade Payables 4 1.62 - 1.62 - -
Other Financial Liabilities i 207.53 119.09 88.45 - -

 

284
[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

CIN : U67120MH1995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Group’s receivables from customers, security deposits, capital advances and investment securities.

Customer credit risk is managed by the Group as per its policy, procedures and control relating to customer credit risk. Credit quality of a
customer credit risk is assessed based on an extensive credit rating scoreboard and individual credit limits are defined in accordance with this|
assessment. Outstanding customer receivables are regularly monitored and all possible steps taken to timely realise them.

‘The credit risk on Fixed Deposits with Banks, Bank Balances, Investments in Mutual Fund and Derivative Financial Instruments is limited|
because the counterparties are Banks, Exchanges and Mutual Fund houses who are structured market players.

As on reporting date credit risk exposure are as on following: (Rs in Million)
‘August March March March
31, 2021 31, 2021 31, 2020 31, 2019

Loans 267.90 648.64

Security Deposit 71.00 49.94

‘Trade Receivables 129.23 91.14

Stock in Trade of Debentures 301.80 . 248.15,

Investment in Mutual Funds 0.23 z -

Investment in PMS 27.81 25.16 18.32

Option Premium - 40.92

Fixed Deposits with Banks 126.80 589.20 25.40

Bank Balances in Current Account 569.67 118.99 281.13

Bank Balances other than above 0.48 0.47 0.43

Other Financial Assets 45.03 4.44 20.28

Accrued Interest 4.05 4.70 0.88

 

(Rs in Million)
AS AT AS AT ASAT AS AT
(i) AGE OF TRADE RECEIVABLES AUGUST MARCH MARCH MARCH
31, 2021 31, 2021 31, 2020 31, 2019

Within the credit period 104.79
1-30 days Past Dues 2.42
31-60 days Past Dues 0.55
61-90 days Past Dues 0.13
More than 91 days past dues 0.76

91.14 110.14

(Rs in Million)
AS AT AS AT ASAT ASAT
(ii) MOVEMENT IN THE EXPECTED CREDIT LOSS ALLOWANCE AUGUST MARCH MARCH MARCH
31, 2021 31, 2021 31, 2020 31, 2019
Balance at beginning of the year
Movement in the expected credit loss allowance on trade receivables
calculated at lifetime expected credit loss
Balance at end of the year

‘There is no expected credit loss as per past trend and hence no ageing in terms of percentage loss is available.

 

285
[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

CIN : U67120MH1995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices.

Market Risk comprises three types of risk: a.) Interest Rate Risk, b.) Currency Risk and c.) Other Price Risk such as equity price risk etc.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest}
rates. The Holding Company’s exposure to changes in interest rates relates primarily to the Company’s outstanding floating rate debt included
in borrowings.

Sensitivity Analysis:

 

As at 31st

Particulars August 2021

Floating Rate Liability
A hypothetical 1% shift in underlying benchmark rates will have the below impact :
Impact on Profit and Loss

Increase of 1%

Decrease of 1%

Price Risk
‘The Group's Board of Directors reviews and approves all equity investment decisions. Reports on the equity portfolio are submitted to the|
Group's senior management on a regular basis.

(Rs in Million)

Increase by Decrease by
1% 1%

Investment in Mutual Fund 0.00 0.00

Investment in PMS 0.28 -0.28

Investment in Other Entities 10.18 -10.18

 

Impact on Profit and Loss

At the reporting date, the exposure to equity securities of other entities is as under: (Rs in Million)

 

August 31, March 31, — March 31,
2021 2020 2019
Investment in Mutual Fund 0.23 1.62
Investment in PMS 27.80 25.16 18.32
Investment in Other Entities 1,018.15 1,018.15 1,013.18

Currency Risk

Currency risk is not there, as the Group's primary business activities are within India and does not have significant exposure in foreign
currency.

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and
significant accounting policies appearing in Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56.

 

286
[ANAND RATHI WEALTH LIMITED

(Previously Known as Anand Rathi Wealth Services Limited)

CIN : U67120MH1995PLC086696

|ANNEXURE V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

47 Cost Sharing

Anand Rathi Financial Services Ltd, Anand Rathi Global Finance Ltd, Anand Rathi Share & Stock Brokers Ltd and Anand Rathi Advisors|
Ltd incurs expenditure in the nature of Business support costs, etc. which is for the benefit of the company. The cost so expended is|
reimbursed by the company on the basis of number of employees, time spent by employees, actual billings, etc. Accordingly, the expenditure|
noted under the head ‘Business Support charges’ in note 27 are inclusive of the reimbursements.

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and
significant accounting policies appearing in Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56.

48 Estimation of uncertainties relating to the healthpandemic from COVID-19

‘The Company has considered the possible effects that may result from the pandemic relating to COVID-19 in the preparation of these restated|
Ind AS consolidated financial statements including the recoverability of carrying amounts of financial and non-financial assets. In developing]
the assumptions relating to the possible future uncertainties because of this pandemic, the Company has, at the date of approval of these|
financial statements, used internal and external sources of information and economic forecasts and expects that the carrying amount of these|
assets will be recovered.

‘The impact of COVID-19 on the Company’s financial statements may differ from that estimated as at the date of approval of these restated|
Ind AS consolidated financial statements.

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and
significant accounting policies appearing in Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56.

 

287
[ANAND RATHI WEALTH LIMITED

(Previously Known as Anand Rathi Wealth Services Limited)

CIN : U67120MH1995PLC086696

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

49 Financial Ratios
Particulars August 31, 2021 March 31, 2021 March 31, 2020 March 31, 2019 Remarks for variation of more than 25%

1. Current Ratio 1.95 1.74 0.94 1.60 1. As on March 31, 2020 the Company had advances}
from customers of Rs 886.33 million compared to NI]
balance as on March 31, 2019 due to which the Current
Liabilities increased on March 31, 2020. As on March 31,
2021 the advances from customers reduced to Rs 20.24|
million,

2. Also, there has been a decrease in current assets due to
reduction in loan from Rs 648.44 million as on March 31,
2020 to Nil on March 31, 2021,

Thus the current ratio was down on March 31, 2020.

2. Debt Equity Ratio ott 0.14 0.22 0.00 1, During the year ended March 31, 2020 company has|
taken loan against propoerty of Rs 416.50 million for|
which the balance outstanding on March 31, 2020 was|
Rs. 413.62. Due to this the ratio was higher on March 31,}
2020.

2. As on March 31, 2021 the total equity has increased]
and also there has been reduction in the property loan on|
account of EMI repayments.

3. Debt Service Coverage Ratio 7.67 2.78 757 8.12 1. During the year ended March 31, 2021 there was|
increase in borrowing obligations on account of property|
loan availed in year ended March 31, 2020 and also there|
has been decrease in Earning before tax on account of]
Covid-19.

4, Return on Equity Ratio 19.35 21.13 39.82 57.77 1. During the year ended March 31, 2020 there has been
increase in average equity from Rs 1011.51 million to Rs|
1547.30 million
2. During the year ended March 31, 2021 there has been
increase in average equity from Rs 1547.30 million to Rs|
2134.03 million and Profit after Tax has reduced from Rs|
616.14 million to Rs 450.95 million on account of Covid-
16.

5, Net capital turnover ratio 2:32 662 - 35.61 656 1, During the year ended March 31, 2020 there has been}
decrease in net working capital on account of increase in|
current liabilites because of increased in Advance from]
Customers of Rs 886.33 million
2. During the year ended March 31, 2021 there has been
increase in net working capital on account of decrease in|
current liabilites due to reduction in Advance from|
Customers to Rs 20.24 million.

6. Profit ratio 0.31 0.17 0.19 0.21 The cost control measures has resulted in higher profit.

7, Return on Capital Employed 0.24 0.28 0.48 0.78 1, During the year ended March 31, 2020 company has|
taken loan against propoerty of Rs 416.50 million]
resulting in increased capital employed.

2. During the year ended March 31, 2021 there has been|
decrease in Earnings on account of Covid-19.

Explanations to items included in computing the above ratios
1. Current Ratio: Current Asset over Current Liabilities

2. Debt-Equity Ratio: Debt (includes Current & Non-Current Borrowings excluding lease liabilities) over total share holders equity (Includes average of opening|
and closing equity capital and other equity)

 

3, Debt Service Coverage Ratio: Earnings available for debt service (includes profit after tax, depreciation and finance cost) over debt service (includes interest on]
borrowings - car loan and property loan, principal repayment made and lease payments)

4, Return on Equity Ratio: Profit After Tax over Equity (includes average of opening and closing equity capital and other equity)

5, Net capital turnover ratio: Revenue from operations over average working capital (current assets net of current liabilities)

6. Net profit ratio: Profit After Tax over Revenue from operations

7. Return on Capital employed: Earnings Before Interest & Tax over Capital Employed (which includes tangible net worth and total debt)

  

Not
a. The aforesaid ratios have not been annualised for August 31, 2021 hence not comparable.
b. Considering the nature of business activites, only ratios applicable to the group are provided.

 

 

‘The Non-GAAP measures presented may not be comparable to similarly titled measures reported by other companies.

 

 

288
 

[ANAND RATHI WEALTH LIMITED:
(Previously Known as Anand Rathi Wealth Services Limited)
CIN : U67120MH1995PL.C086695

|ANNEXURE V

NOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30 RESTATED IND AS CONSOLIDATED SUMMARY STATEMENT OF ADDITIONAL NOTES FOR CONSOLIDATED FINANCIAL STATEMENT
sin Mion
ia aga OT
Siarein Other Sarin Foal
wattle” Shweinpatoriae Conpeinvetacone _Canprieie come
Sr.No. Name of the entity in the group (och) (ren,
As ot ‘Asvof Amount AS%of Amount ——As%éof Amount,
container AMOUNES orsoidaied sin comolidated “(Rain comolidated Rain
assets profvios. Millon) OCT_Millon) TCI filion)
Om
Anand Rath Wealth Limited 745% 231130 990% 50593 ws —ASS_————HOGN SOTA
(ii) Subsidiaries
(©) Ar Dig! Wealth Private Limited a ee 1) oom = oar
(0) Freedom Wel Solitons Pate Limited Le aszl 0% 103 : oa0% 103
(©) Freedom inemediay Infasrucure rat Limited Saou 1599583 0.08 osim 323
(i) Non Contralingimeres in Subsidies
(@) AR Dig! Wealth Private Limited same 1a 00% 6 oy oma = ona
(0) _ Freedom Weal Solitons Pate Limited oom 231% OS : corm 005
{©)_Feedom inemediayInfasrucute rat Limied 00% 00% : doom
Taal 10.00% IE 00.00% S10 Ton. 00% Tt Too. 00% 517
naa
Siarein Other Siaretn Foal
iNet Assets es tutal arse: Share in profit or loss ‘Comprehensive Income Comprehensive Income
Pim tal ai a =
Sr.No. Name of the entity in the group coc (ren)
As of ‘Assiof Amount As%of_ Amount —-As%of Amount,
consisted net AMMUNUCRS coretidaed (Rein comaliated Rein comoidated (Rs
assets in Million) “‘profitioss Million) ocr Million) TCI Million)
ote
‘Anand Rath Wealth Limited 735% 196090 89% HET TAH. BH aera
(ii) Subsidiaries
(©) ARDigitl Wea Private Linited rass% 032 aoem gs oav% oa
(0) Fredom Wealth Solitons Private Limited L580 ts me o3e% 165
(©) Freedom intemediny Infasmicre rat Lined sige sess HABE aI zk ome 373
(i) Non Contraling imeres in Subsidies
(@) AR Digit! Wealth Private Limited 449% 1B sek 016 06% 028
(0) Freedom Wel Solitons Pate Limited dom 238s doe 008
(©) Freedom needy nasi ovate Lined 0% ooo% oom doom
Taal io0.00% 259805 tuna. 035 ton a0% 298 “0.00% BST
nia
: Siarein wher Srarein Foal
NevAscesle wialasies ge inprofitorloss Comprehensive Income Comprebenive income
Sr.No. [Name of the entity in the group soy (rch)
As of ‘Asveof Amount AS%of Amount ——As%éof Amount,
consolidated net ey consolidated (Rsin consolidated (Rs in —consolidated_—(Rs in
asset profits: Millon) OCI_Millon) TCI Mion)
Te
‘Anand Rath Wealth Limited 640% 130055 RASH GSN HSB) =H ——sdRAT
(ii) Subsidiaries
(©) Aig! Wealth PivateLinited 179% 34a 36H HD tH md 37% aa
0B) Freedom Weal Solitons Pate Limited 2s 85) KT) DK a% 079)
(©) Freedom nemediay Infasrucure vat Limited 776% 15288 35% ITS) LIN) 36% QA)
(i) Non Controingimeres in Subsidies
(©) AR Dig! Wealth Private Limited 5 mast 1pm 006% 001 129% 728
(8) Freedom Weal Solitons Pate Limited oi 229%) OMK 0% — 09
(©) Freedom inemediny namie ovate Limited 0% 00% 00% 00%
Total To0.00% 97k ——Taoan% 61614 Tana aos] ——T.00%

 

 

 

 

289

 
 

[ANAND RATHI WEALTH LIMITED:
(Previously Known as Anand Rathi Wealth Services Limited)
CIN : U67120MH1995PL.C086695

|ANNEXURE V

NOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

 

 

 

 

 

 

 

2018-19
Share in Other Share in Total
Ni pele Weim  ecccicceatiraid) Clincher bad © Ciipesinbe td
St.No. [Name of the entity in the group ocn cn
AS % of ‘As%of Amount AS % of Amount. —AS% of Amount,
consolidated net ey consolidated (Rsin consolidated (Rs in —consolidated_—(Rs in
assets profivloss Million) oct Million) Ter Million)
© Parent
‘Anand Rathi Wealth Limited 593% 810.26 105.32% 615.41 05.01% 34) 105.32% 61307
(i) Subsidiaries
(@) AR Digital Wealth Private Limited 23.96% 327.05, 1.39% (6.09) 5.15% OL “137% (798)
(©) Freedom Wealth Solutions Private Limited 325% 44331 0.0% = 056 0.00% : 0.10% 056
(© Fireedom Intermediary Infrastructure Private Limited 413% 56.42 271% (15.82) 137% (0.03) (15.85)
(ii) Non Controlling interest in Subsidiaries
(@) AR Digital Wealth Private Limited 777% 106.07 045% 263) 1.68% 0,04 048% 2.59)
(©) Freedom Wealth Solutions Private Limited 0.17% 233 001% = 0.03 0.00% : 0.01% 0.03
(6) _Flreedom Intermediary infrastructure Private Limited 134% 18.30 088% 6.13) 0.44% (0.01) 098% G14)
Total 100% 1,364.74 100% 584.33 100% 2.23) 100% 582.10

 

 

'Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies appearing in Annexure

‘V1 & 2 and information appeating from Annexure V - 3 to Annexure V - 56,

 

 

290
 

[ANAND RATHI WEALTH LIMITED
(Previously Known as Anand Rathi Wealth Services Limited)

CIN : U67120MH1995PL.C086696

|Annexure V

INOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

51 RESTATED IND AS CONSOLIDATED SUMMARY STATEMENT OF MATERIAL ADJUSTMENTS

‘Summarised below are the restatement adjustments made to the audited consolidated financial statements for the period ended August 31, 2021 and year ended March 31, 2021, March 31,

2020 and March 31, 2019 and their impact on the profit and equity of the Group :

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Rs in Million)
Particulars August 31,2021 [March 31, 2021_[ March 31, 2020 | March 31, 2019
Profit after tax (as per Audited Consolidated Financial Statements) (i) 508.63 445.50 613.93 590.91
Restatement Adjustments:
(i Tax Adjustments of previous year - (0.12) 0.42 0.18
(ii) Adoption of Ind AS 116
(a) Finance cost on lease liability 0.82 (0.08) (0.12) (27.66)
(b) Depreciation on Right-of-use Asset 1.74 4.38 5.56 (93.62)
(©) Lease rentals accounted in accordance to erstwhile Ind AS 17, now reversed (0.00) Lal (0.35) 106.81
(@) Interest income on Financial Portion of Security Deposits 0.07 0.01 (0.09) 2.77
(e) Deferred prepaid rent on security deposit as per Ind AS 109, now reversed is 2 0.04 2.07
(8) Interest income on security deposit accounted as per Ind AS 109, now reversed s 2 (0.05) (2.93)
(g) Deferred Tax on above items (0.54) (1.46) (1.74) 4.80
(iii) Restatement of Prior year expenses 0.16 131 (1.46) 0.00
|Total Impact of Restatement Adjustment (ii) 2.25 5.45 221 (6.58)
Profit after tax (As Restated) (iii)=(i)+(ii) 510.88 450.95 616.14 584.33
(Rs in Million)
[Particulars August 31,2021 [March 31, 2021_[ March 31, 2020 | March 31, 2019
[Equity (as per Audited Consolidated Financial Statements) (i) * 2984.76 2531.75 1979.24 1375.12
Restatement Adjustments:
(@ Tax Adjustments of previous year (0.00) (0.00) 0.12 (0.30)}
(ii) Adoption of Ind AS 116
(a) Finance cost on lease liability (35.42) (36.24) (36.16) (36.05)
(b) Depreciation on Right-of-use Asset (114.07) (115.83) (120.20) (125.77)
(©) Lease rentals accounted in accordance to erstwhile Ind AS 17, now reversed 141.70 141,70 140.29 140.64
(@) Interest income on Financial Portion of Security Deposits 4.15 4.07 4.06 4.16
(e) Deferred prepaid rent on security deposit as per Ind AS 109, now reversed 3.19 3.19 3.19 3.15
(f) Interest income on security deposit accounted as per Ind AS 109, now reversed (2.96) (2.96) (2.96) (2.92)
(g) Deferred Tax on above items 2.99 3.53 4.96 671
(iii) Earlier year adjustments 0.00 (0.16) (1.46) 0.00
|Total Impact of Restatement Adjustment (ii) (0.44) (2.70) (8.17) (10.38)
lEquity (As Restated) (iii)=(i)+(ii) 2984.32 2529.05 1971.08 1364.74
* Equity (as per Audited Consolidated Financial Statements) includes following
(Rs in Million)

 

 

[Particulars

‘August 31, 2021

‘March 31, 2021

‘March 31, 2020

March 31, 2019

 

(a) Equity Share Capital
(b) Other Equit
(Capital Reserve
Other Reserves
(©) Non Controlling Interest

 

 

[Total

 

 

208.08 137.57 135.14 134.54
24,95, 24.95 24.95 24,95
2635.55, 2253.23, 1703.40 1090.35
116.18 116.00 115.75 125.28
2984.76 2531.75 1979.24 1375.12

 

 

 

 

291

 

 
[ANAND RATHI WEALTH LIMITED

(Previously Known as Anand Rathi Wealth Services Limited)

CIN : U67120MH1995PL.C086696

|Annexure V

NOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION

 

 

Opening Reserve Reconciliation

 

 

[Particulars ‘Amount in Millions
[Retained Earnings as at April 1, 2018 (as per Audited Consolidated Financial Statements) -
a 461.92
| Adjustment on account of Restatements:~
(i) Tax Expenses of earlier years (0.22)
(ii) Adoption of Ind AS 116 (357)
|Total Impact of Restatement Adjustment - (ii) (3.79)

[Retained Earnings as at April 1, 2018 (As Restated) (

 

458.13

 

 

 

 

Note: Tax adjustment for prior years -
During the period ended August 31, 2021 and year ended March 31, 2021, March 31, 2020 and March 31, 2019 the Group had recorded certain tax expenses of prior years in the statement}
of profit and loss. These have been adjusted in the years to which it relates.

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies appearing in|
Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56.

52 a indi
All amounts have been rounded off to the nearest million with two decimals, unless otherwise indicated,

‘The Restated Ind AS Consolidated Financial Information have been prepared so as to contain information disclosures and incorporating adjustments set out below in accordance with the}
SEBI ICDR Regulations:

+ there were no audit adjustments on these Restated Ind AS Consolidated Financial Information except as mentioned in Annexure V- 49,

+ there were no changes in accounting policies under Previous GAAP during the years of these Restated Ind AS Consolidated Financial Statements,

+ material amounts relating to adjustments for previous years in arriving at profit/loss of the years to which they relate, have been appropriately adjusted, refer Annexure V- 49,

+ adjustments for reclassification of the corresponding items of income, expenses, assets and liabilities, in order to bring them in line with the groupings as per the audited Financial]
Statements of the Group as at and for the period ended August 31, 2021 and year ended March 31, 2021, March 31, 2020 and March 31, 2019 prepared under Ind AS and the requirements}
of the ICDR Regulations, and

+ the resultant tax impact on above adjustments has been appropriately adjusted in deferred taxes in the respective years to which they relate.

 

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies appearing in|
Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56.

Following matters included in Annexure to the Independent auditors’ report issued on Internal Financial control with reference to financial statements, as applicable, on the financial
statements for the years ended March 31, 2021, March 31, 2020 and March 31, 2019 which do not require any corrective adjustment in the Restated Ind AS Summary Statements.

FY 2020-21

‘The Company is required to be registered under Section 451A of the Reserve Bank of India Act, 1934 considering that the Company's Financial Assets and Financial income constitute
more than 50 percent of the total assets and gross income. However, the Management is of the view that the Company is actively engaged in Wealth Management business and the
investments in the subsidiaries, which are considered in the nature of financial assets are primarily for the purpose of infrastructure and software and should not be considered as Financial
Assets. In the opinion of the management, the said investments in subsidiaries should not be considered as financial assets for computation of 50 percent test and thus the Company may not
require to register as NBFC. The Company has also submitted request to RBI explaining this position and seeking guidance on captioned matter.

 

FY 2019-20

‘The Company is required to be registered under Section 451A of the Reserve Bank of India Act, 1934 considering that the Company's Financial Assets and Financial income constitute
more than 50 percent of the total assets and gross income. The Company has not obtained the registration as the Management is of the view that the financial assets constituting more than.
50 percent of the total assets is temporary in nature and there is no intention of the company to act as NBEC.

 

 

 

292
[ANAND RATHI WEALTH LIMITED

(Previously Known as Anand Rathi Wealth Services Limited)

CIN : U67120MH1995PL.C086696

|Annexure V

NOTES TO RESTATED IND AS CONSOLIDATED FINANCIAL INFORMATION
FY 2020-21 & FY 2019-20

 

‘The Company has an internal financial controls system with reference to Standalone Ind AS financial statements which are operating effectively, design whereof needs to be enhanced to
make it comprehensive. Based on verification of process control matrixes, made available to us for the financial year under report and thereafter, in our opinion considering the internal
control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note, appropriate documentation thereof|
needs to be strengthened to make the same commensurate with the size of the Company and nature of its business.

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies appearing in|
Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56.

54 RESTATED IND AS CONSOLIDATED SUMMARY STATEMENT OF SUBSEQUENT EVENTS
‘There were no subsequent event after balance sheet date which requires to be disclosed.

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies appearing in|
Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56.

55 Revised Schedule III disclosure

‘The Group has considered the amendments to Schedule III of the Companies Act 2013 notified by Ministry of Corporate Affairs (“MCA”) via notification dated 24 March 2021 in the
Restated Ind AS Consolidated Financial Information disclosures, wherever applicable..

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies appearing in|
Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56.

56 The figures of the previous years have been regrouped / rearranged wherever necessary.

Note: The above statement should be read with Notes to Restated Ind AS Consolidated Financial Information - Basis of preparation and significant accounting policies appearing in|
Annexure V -1 & 2 and information appearing from Annexure V - 3 to Annexure V - 56.

 

As per our attached report of even date. For and on Behalf of Board of Directors

For and on Behalf of

 

Khimji Kunverji & Co LLP

Chartered Accountants Amit Rathi Rakesh Rawal

Registration No.:105146W/W 100621 Director Director & Chief Executive Officer
DIN : 00029791 DIN : 02839168

 

Gautam V Shah

 

Partner
Membership No: 117348 Ashish Chauhan Rajesh Bhutara
Mumbai Company Secretary Chief Financial Officer

 

Date: November 17, 2021

 

 

293
OTHER FINANCIAL INFORMATION

Accounting ratios

The accounting ratios derived from Restated Consolidated Financial Statements required to be disclosed under
the SEBI ICDR Regulations are set forth below:

‘in % million, except otherwise stated)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at As at As at As at
Particulars August 31, | March 31, March 31, March 31,
2021 2021 2020 2019
A. | Net worth attributable to equity shareholders 2867.93 2,412.84 1,855.23 1,239.37
B. | Profit attributable to the equity shareholders 510.67 450.74 613.83 592.05
C. | Weighted average number of equity shares 41,503,971 | 41,035,613 40,509,903 40,354,817
outstanding during the year (in no’s)
D. | Weighted average number of dilutive potential 41,677,913 | 41,537,775 41,066,853 41,113,383
equity shares outstanding during the year (in no’s)
E. | Number of equity shares outstanding at the year 41,616,227 | 41,270,340 40,541,160 40,362,900
end (in no’s)
F. | Accounting Ratios
Basic Earnings per share (B/C) 12.30 10.98 15.15 14.67
Diluted Earnings per share (B/D) 12.25 10.85 14.95 14.40
Return on Net worth for Equity shareholders (B/A) 17.81% 18.68% 33.09% 47.77%
Net Asset value per share (A/E) 68.91 58.46 45.76 30.71
G. | EBITDA
EBITDA 756.90 837.61 1,110.74 1,062.50
EBITDA Margin 44.81% 30.00% 33.02% 37.39%
Notes:
1. The above statement should be read with the notes on restated consolidated statement of assets and liabilities, restated consolidated
statement of profit and loss and restated consolidated statement of cash flows.
2. The ratios have been computed as follows:

fw

Earnings per share (Basic) = Restated consolidated profit for the period/vear available for equity shareholders
Weighted average number of equity shares outstanding during the year

 

Earnings per share (Diluted) = Restated consolidated profit for period/the year available for equity shareholders
Weighted average number of diluted potential equity shares outstanding
during the year

 

Return on net worth(%) = Restated consolidated profit for the period/vear available for equity shareholders
Restated consolidated net worth at the end of the year

 

Net asset value per share (2) = Net worth attributable to equity shareholders
‘Number of equity shares outstanding at the year end

Net worth for ratios mentioned in note D above is= Equity share capital + Other equity

Earnings per share calculations are in accordance with Ind AS 33 ~ Earning Per Share

EBITDA: Aggregate of restated profit/(loss) after tax, tax expense, finance cost and depreciation and amortisation less the other income for
the year/ period

EBITDA Margin = EBITDA/ Total Revenue

294
Other financial statements

In accordance with the SEBI ICDR Regulations, the audited standalone financial statements of our Company
and Material Subsidiary as at and for the five-month period ended August 31, 2021, and Fiscals 2021, 2020 and
2019 (collectively, the “Audited Financial Statements”) are available on our website at

https://rathi.com/wealth/Investorrelations.php.

Our Company is providing a link to this website solely to comply with the requirements specified in the SEBI
ICDR Regulations. The Audited Financial Statements do not constitute (i) a part of the Red Herring Prospectus;
or (ii) this prospectus, a statement in lieu of this prospectus, an offering circular, an offering memorandum, an
advertisement, an offer or a solicitation of any offer or an offer document to purchase or sell any securities
under the Companies Act, the SEBI ICDR Regulations, or any other applicable law in India or elsewhere. The
Audited Financial Statements should not be considered as part of information that any investor should consider
subscribing for or purchase any securities of our Company or any entity in which our Shareholders have
significant influence (collectively, the “Group”) and should not be relied upon or used as a basis for any
investment decision. None of the Group or any of its advisors, nor BRLMs or the Selling Shareholders, nor any
of their respective employees, directors, affiliates, agents or representatives accept any liability whatsoever for
any loss, direct or indirect, arising from any information presented or contained in the Audited Financial
Statements, or the opinions expressed therein.

Related party transactions

For details of the related party transactions, as per the requirements under applicable Accounting Standards, i.e.,
Ind AS 24 — ‘Related Party Disclosures’ as at and for the five-month period ended August 31, 2021, the years
ended March 31, 2021, March 31, 2020, and March 31, 2019 and as reported in the Restated Consolidated
Financial Statements, see “Financial Information — Note 32 — Restated Summary Statement of Related Party
Disclosure” on page 268.

295
CAPITALISATION STATEMENT

The following table sets forth our Company’s capitalization as on August 31, 2021, on the basis of our Restated
Consolidated Financial Information, and as adjusted for the proposed Offer. This table should be read in
conjunction with the sections “Management's Discussion and Analysis of Financial Condition and Results of

Operations”, “Financial Information” and “Risk Factors” on pages 297, 225 and 26, respectively.

 

 

(@ in million, except ratios)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Particulars Pre-Offer as at ‘As adjusted for the proposed
August 31, 2021 Offer
Total Borrowings
Current borrowings - -
Non-current borrowings (including current maturities) 312.26
Total Borrowings (A) 312.26 312.26
Total Equity
Equity share capital 208.08 208.08
Other Equity 2,659.85 2,659.85,
Non-controlling interest 116.39 116.39
Total Equity (B) 2,984.32 2,984.32
Ratio: Non-Current Borrowings/Total Equity 0.10 0.10
Ratio: Total Borrowings/ Total Equity 0.10 0.10
Note:

1, The above has been derived from the Restated Consolidated Financial Information.

296
MANAGEMENT?’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

You should read the following discussion in conjunction with our Restated Consolidated Financial Information
as of, and for, the years ended March 31, 2021, 2020 and 2019 and the five months period ended August 31,
2021. Our Restated Consolidated Financial Information for Fiscals 2021, 2020 and 2019 and the five months
period ended August 31, 2021, have been prepared under Indian Accounting Standards (“Ind AS”), the
Companies Act and the SEBI ICDR Regulations. For further details, please see “Financial Information” on
page 225 of this Prospectus.

You should read the following discussion and analysis of our financial condition and results of operations
together with such Restated Financial Information, including the significant accounting policies, notes thereto
and reports thereon, which have been prepared in accordance with Companies Act and SEBI ICDR
Regulations. The Restated Financial Information has been prepared on a basis that differs in certain material
respects from generally accepted accounting principles in other jurisdictions, including US GAAP and IFRS.
For further details, see “Risk Factors — External Risk Factors — Differences exist between Ind-AS and other
accounting principles, such as US GAAP and IFRS, which may be material to investors’ assessments of our
financial condition. Additionally, the financial measures and statistical information in the Restated Financial
Information may vary from any standard methodology that is applicable across the financial services industry,
and therefore may not be comparable with financial or statistical information of similar nomenclature computed
and presented by other financial services companies.” On page 52 of this Prospectus.

Our fiscal year ends on March 31 of each year, so all references to a particular fiscal year are to the twelve-
month period ended March 31 of that year.

The following discussion and analysis contains forward-looking statements that involve risks and uncertainties.
Our actual results may differ from those anticipated in these forward-looking statements as a result of any
number of factors, including those set forth in the sections “Forward-Looking Statements” and “Risk Factors”
on pages 18 and 26 of this Prospectus, respectively.

Overview

We are one of the leading non-bank wealth solutions firms in India and have been ranked amongst one of the
three largest non-bank mutual fund distributors in India by gross commission earned in Fiscal 2019, 2020 and
2021 (Source — CARE Advisory Research, Page 46 and 47. The CARE Advisory Research is available on the
website of our Company at https://rathi.com/Wealth/Investorrelations. php). We serve a wide spectrum of clients
through a mix of wealth solutions, financial product distribution and technology solutions. We provide services
primarily through our flagship Private Wealth (“PW”) vertical where we manage % 294.72 billion in AuM as on
August 31, 2021. Our Company: (a) acts as a mutual fund distributor, registered with the Association of Mutual
Funds in India. It distributes mutual fund schemes managed by asset management companies and earns
distribution commissions on a trail basis from asset management companies; (b) purchases non-convertible
market linked debentures (“MLDs”) and offers them to its clients and earns income from these sales. Therefore,
the AUM of our Company comprises mutual fund schemes and other financial products such as bonds, MLDs
and other securities held by clients in their own demat accounts. Further, our Company does not include demat
holdings of the clients in the AUM unless the client has also used the distribution service of ARWL or have
bought MLDs through ARWL. As per the industry practice, all such assets kept in the demat account of the
clients belong to the respective clients and indicate the value of their assets. Such assets are shown as the AUM.
of our Company. All decisions regarding purchase and sale of mutual funds and other securities are taken by the
clients. Our Company is not engaged in any portfolio management of its clients. Our Clients or active client
families include client families/groups with at least 5 million in cumulative AuM. Each ‘client family’ or
‘Client’ may have one or more sub-accounts or family member accounts through which they invest.

We believe we have achieved a dominant position in the distribution of financial products, with a focus on the
growing HNI segment through an uncomplicated, holistic and standardised offering, delivered through an
entrepreneurial team of private wealth professionals, known as Relationship Managers (“RMs”).

We commenced activities in Fiscal 2002 as an AMFI registered mutual fund distributor and have evolved into
providing, well researched solutions to our Clients by facilitating investments in financial instruments through
an objective driven process. As of August 31, 2021, PW vertical caters to 6,564 active client families, serviced
by a team of 233 RMs (including 8 RMs working on contractual basis). As on August 31, 2021, 54.69% of our

297
Clients have been associated with us for over 3 years, representing 73.55% of our total PW AuM, which shows
our strength in vintage of both clients and their AuM in our business. We are currently present across 11 cities in
India, namely, Mumbai, Bengaluru, Delhi, Gurugram, Hyderabad, Kolkata, Chennai, Pune, Chandigarh,
Jodhpur and Noida and we have a representative office in Dubai.

We believe, the HNI segment of clients (i.e., individuals with net worth between = 50 — 500 million), is an
attractive and underserved segment in terms of quality of service and creating a platform to serve this segment is
often time consuming and difficult to build. In our experience, Clients belonging to the HNI segment are less.
price sensitive and appreciate the quality of personalized services we offer. Our client families have consistently
grown with new family additions of 965, 863, 988 and 455 in Fiscal 2019, Fiscal 2020, Fiscal 2021 and for the
period ended August 31, 2021 respectively. Correspondingly, our PW AuM has also grown at a CAGR of
22.47% from % 180.37 billion as of 31*' March, 2019 to = 294.72 billion on August 31, 2021. Our growth in the
PW vertical is driven by our experienced management team with decades of experience in financial services led
by Rakesh Rawal, our Chief Executive Officer and Feroze Azeez, our Deputy Chief Executive Officer. Our
business strategies are implemented by a team of experienced professionals, with relevant functional and
product expertise. We have been ranked in top 50 in India’s Great Mid-Size Workplaces 2017, 2018 and 2020
by Great Place to Work Institute India.

Our process driven approach, aims to achieve consistent Client outcomes through a standardised investment
strategy, augmenting our RM capability. With regards to mutual fund distribution, we have devised in-house
methodologies that consider a defined set of parameters for mutual fund selection. Non-Convertible Market
Linked Debentures (MLDs) form an integral part of our model portfolios enabling predictable returns, with
lower risk as compared to equity investment over a medium to long term period. Our product mix of mutual
funds and MLDs, further positions us well to capture our target clientele.

As part of our holistic approach to clients, we also facilitate estate planning, succession planning and create
wills as part of our core objectives, without charging any cost to our Clients. As of the date of this Prospectus,
we have a dedicated in-house team of 4 specialists who are qualified lawyers and servicing clients across all
locations to advise and create wills or designing and creation of private family trust.

We have standardised our operational process, including opening of an account, client approvals and investment
transactions and on-boarding process. This has led to cost efficiencies and making execution less cumbersome,
more transparent and contributed to the growth of our Company. Our Client engagement and marketing efforts
have also significantly converted to digital with a move to a virtual process of meeting clients during the
pandemic and conducting official meetings and training with multiple stakeholders. Moving to paperless
documentation and operational process coupled with work from home model had fundamentally reduced our
operating cost relating to stationery and printing costs, travel, business development and rental expenses.

In addition to PW vertical, we have two other new age technology led business verticals, i.e., Digital Wealth
(“DW”) and Omni Financial Advisors (“OFA”). We believe that technology is the key to keeping our business
future proof. Our DW and OFA verticals are examples of our tireless efforts to create a technology platform to
acquire new clients at lower cost as well as service and retain our existing clients. These in-house developed
technologies, including mobile application for clients and partners provides us a ready platform to integrate with
our PW vertical in future as and when required reducing our time to market for a digital solution.

Our DW vertical is a fin-tech extension of our proposition and addresses the large mass affluent segment (i.e.
group of individuals with financial assets between % 1 million to 50 million) of the market with a wealth
solution delivered through a ‘phygital channel’ i.e. a combination of human interface empowered with
technology. Starting September, 2016, our DW vertical has seen encouraging results in its attempt to build a
‘Partner’ led distribution model. As of August 31, 2021, the AuM for our DW vertical was 2 7.37 billion with
3,491 clients and 195 client engagement partners.

Our OFA vertical is another strategic extension for capturing the wealth management landscape through which
we provide a technology platform for Independent Financial Advisors (“IFAs”) to service their clients and grow
their business. Within a short period of over five years since its launch in September, 2016, it has become
India’s leading technology platforms for IFAs in terms of subscribers with over 5,000 subscribers as of March
31, 2021 (Source — CARE Advisory Research, Page 45. The CARE Advisory Research is available on the
website of our Company at https://rathi.com/Wealth/Investorrelations.php). As of August 31, 2021, 5,062 IFAs
had subscribed to our IFA platform. These IFAs handle around 1.63 million clients.

298
Our AuM comprises mutual fund schemes and other financial products such as bonds, non-convertible market
linked debentures other securities held by clients in their own demat accounts. The detailed break-up of our
AUM for the Fiscal 2019, 2020, 2021 and for the five months ended August 2021 is as under:

Break-up of AuM: PWM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity Mutual Fund 78.38 43.45% 58.17 32.38% 94.95 36.44% 123.12 41.77%
Debt Mutual Fund 46.75 25.92% 49.07 27.31% 45.31 17.39% 44.11 14.97%
Total MF - A 125.13 | 69.37% 107.24 59.69% 140.26 53.83% 167.23 56.74%
Stucuret Broducts! 39.59 21.95% 57.52 32.02% 93.28 35.80% 92.93 31.53%
Total -B 164.72 | 91.32% 164.76 91.71% 233.54 89.63% 260.16 88.27%
Bee Eoulty and 15.65 8.68% 14.90 8.29% 27.03 10.37% 34.56 11.73%
Total - (A+B) 180.37 | 100.0% 179.66 | 10.00% 260.57 | 100.00% 294.72 | 10.00%

 

 

Break-up of AuM: DWM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity Mutual Fund 260] 73.03% 245 | 62.83% 430] 70.26% 547] 74.22%
Debt Mutual Fund 88 | 24.72% 0.99 | 25.38% 1.03 | 16.83% 105] 14.25%
Total MF — A 3.48 | 97.75% 3.44] 88.21% 5.33 | 87.09% 652] 88.47%
Suctored Products, 0.08 2.25% 046} 11.79% 0.79} 12.91% 0.85 11.53%
Total —B 3.56 | 10.00% 3.90 | 10.00% 6.12 | 10.00% 737] 100.0%
Direct Equity and 2 0.00% s 0.00% “ 0.00% : 0.00%
Others

Total — (A+B) 3.56 | 10.00% 3.90 | 10.00% 6.12 | 10.00% 737] 100.0%

 

 

Break-up of AuM: PWM and DWM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity Mutual Fund 80.98 | 44.03% 60.62} 33.03% 99.25 | 37.21% 128.58 | 42.56%
Debt Mutual Fund 47.64| 25.90% 50.06] 27.27% 46.34 | 17.38% 45.16 | 14.95%
Total MF — A 128.62 | 69.93% 110.68 | 60.30% 145.59 | 54.59% 173.74| 57.51%
Sane Y-o-¥ (%) NA -13.95% 31.54% 19.34%

Airucrored Products) 39.66 | 21.56% 5797} 31.58% 94.08 | 35.28% 93.79 | 31.05%
Total —B 168.28 | 91.49% 168.65 | 91.88% 239.67 | 89.87% 267.54 | 88.56%
Beau ‘and. 15.65 8.51% 14.90 8.12% 27.03 10.13% 34.56 11.44%
Total - (A+B) 183.93 | 10.00% 183.55 | 100.0% 266.70 | 10.00% 302.09 | 100.0%

 

299
Factors Affecting Our Results of Operations

Our results of operations have been, and will continue to be, affected by a number of events and actions, some
of which are beyond our control. However, there are some specific items that we believe have impacted our
results of operations and, in some cases, will continue to impact our results on a consolidated and standalone
basis. We believe that the following factors, amongst others, have, or could have, an impact on these results, the
manner in which we generate income and incur the expenses associated with generating this income. For further
details of such factors, please see the sections titled “Our Business” and “Risk Factors” on pages 160 and 26 of
this Prospectus.

Developments in relation to the COVID-19 pandemic

The COVID-19 pandemic and the preventative or protective actions that governments around the world have
taken to counter the effects of the pandemic have resulted in an extended period of business disruption and a
decrease in economic activity in several countries, including in India. In order to contain the spread of the
COVID-19 pandemic, the Government of India along with State Governments declared a lockdown of the
country in March 2020, including severe travel and transport restriction and a directive to all citizens to shelter
in place. The lockdown has since been extended several times with gradual relaxations of the restrictions
conducted through phases. As a result, the current COVID-19 pandemic has adversely affected workforces,
consumer sentiment, economies and financial markets around the world and has led to uncertainty in the global
economy and significant volatility in global financial markets.

Our overall revenue from operations increased from % 2,765.87 million for Fiscal 2019 to 2 3,318.27 million for
Fiscal 2020 representing an increase of 19.97%. During the same period, our profit before tax for the year
increased from % 830.99 million to = 869.61 million and our profit after tax increased from % 584.33 million to =
616.14 million, representing an increase of 4.65% and 5.44% respectively. Following the outbreak of the
COVID-19 pandemic, our revenue from operations decreased from % 3,318.27 million for Fiscal 2020 to =
2,653.30 million for Fiscal 2021, representing a 20.04% decrease, and our profit before tax for the year
decreased from % 869.61 million to = 635.84 million and our profit after tax decreased from = 616.14 million to
% 450.95 million during the same period, representing decrease of 26.88% and 26.81% in our profit before tax
and profit after tax respectively. Such decline in our revenue from operations and profits was primarily due to
the adverse effect of the COVID-19 pandemic, extended period of business disruptions, stock market volatility
and decrease in investor’s sentiments for new investment in the initial phase of the COVID-19 pandemic. The
nature of our business requires personal meetings and face-to-face discussions with clients, which could not take
place effectively during the initial phase of the pandemic. However, our robust and readily available
technological solutions enabled our customers and employees to continue to function and interact seamlessly
despite the unprecedented complex environment created by the COVID-19 pandemic, which we believe, has
given us a competitive advantage during this period. For the five months period ended August 31, 2021, our
overall revenue from operations was 2 1,669.26 million, our profit before tax was 2 683.41 million and our
profit after tax was = 510.88 million.

In response to the outbreak of the COVID-19 pandemic, we promptly undertook a number of initiatives to
safeguard our employees, ensure business continuity and reduce our operating costs, including a rapid transition
to remote working, a reduction in discretionary spending and implementation of workforce-based savings. Our
employee benefit expense, which comprises the largest share of our total expenses, increased to 2 1,665.73
million for Fiscal 2020 as compared to 2 1,321.73 million for Fiscal 2019. This increase in employee benefit
expenses was due to the significant increase in number of RMs recruited during the year, which increased from
238 as of March 31, 2019 to 282 as of March 31, 2020. However, in anticipation of the adverse impact of the
COVID-19 pandemic from March 2020 onwards, we decided to rationalize employee expenses. As a result,
some of the RMs who were less productive were reduced and the number of RMs decreased from 282 as of
March 31, 2020 to 233 as of March 31, 2021. Apart from rationalizing employee benefit expenses, we also
rationalized other costs and as a result, our other expenses significantly decreased from 2 585.36 million for
Fiscal 2020 to = 447.10 million in Fiscal 2021. For the five months period ended August 31, 2021, our employee
benefit expenses was 2 743.65 million and other expenses was 2 188.27 million.

We successfully implemented a digital outreach strategy to reach out to service our existing clients as well as
potential clients digitally. This strategy involved: (i) adoption of a virtual mode of conducting meetings with
clients and other stakeholders on digital platforms such as Zoom, Microsoft Teams and Google Meet, during the
COVID-19 pandemic, which enabled continuity and seamlessness in our client engagement, paving the way for
quicker decision-making and overall higher productivity; (b) digitization of operational processes, which

300
facilitated ease and transparency in our account opening, client approvals, transactions and onboarding
processes and contributed to the growth of our Company; and (c) digital training, which enabled conduct of
frequent training sessions to answer data-related and other queries, to engage in discussions on exhaustive case
studies and to improve the knowledge and conviction of the RMs.

While the long-term impact of the COVID-19 outbreak and economic slowdown on our business, client
sentiment and investment behaviour are yet to be known, our Company has continued to engage with clients and
employees through extensive business continuity planning and robust technology platform(s), with minimal
disruption on business activities during the lockdowns. Further, our Company has assessed that it would be able
to navigate the uncertain economic conditions which are currently prevailing based on its business model,
profile of assets and liabilities, availability of liquidity and capital at its disposal.

Events beyond our control may unfold in the future, which makes it difficult for us to predict the extent to which
the COVID-19 pandemic will impact our Company’s operations and results. We continue to closely monitor the
effect that COVID-19 may have on our business and results of operations.

Attraction and retention of Assets under Management (AuM)
Our ability to attract and retain AuM has a significant impact on our financial results. Our results of operations

are driven by our consolidated AuM. Set forth below is a table showing our consolidated AuM and sale of
structured products, for such periods.

 

 

 

 

 

As at Total AuM (in & billion)
March 31, 2019 183.93
March 31, 2020 183.55
March 31, 2021 266.70
August 31, 2021 302.09

 

 

Set forth below is a table showing the break-up of our mutual fund AuM for such periods.

 

 

 

 

 

 

As at Mutual Fund AuM (% billion)
Equity Mutual Fund AuM Debt Mutual Fund AuM
March 31, 2019 80.98 47.64
March 31, 2020 60.62 50.06
March 31, 2021 99.25 46.34
August 31, 2021 128.58 45.16

 

 

The gross mobilization of our structured products is set out below.

 

 

 

 

 

 

For Gross mobilization of structured products (in = billion)
Fiscal 2019 18.66
Fiscal 2020 29.73
Fiscal 2021 28.71
Five months period ended 11.57

 

August 31, 2021

 

There was a decline of 26.03% in NIFTY for Fiscal 2020. The market sentiment remained cautious due to
market volatility and continued to do so during the early part of Fiscal 2021. However, as compared to the
decline in NIFTY, our total AuM decreased marginally by 0.21% from = 183.93 billion as of March 31, 2019 to
2 183.55 billion as of March 31, 2020.

We believe that our AuM had minimal impact due to our objective-driven, well researched and standardized
process which provides liquidity along with high degree of capital preservation to clients in the medium term.

During Fiscal 2020, the sales of structured products grew by 59.32% to 2 29.73 billion for Fiscal 2020 as:

compared to 2 18.66 billion for Fiscal 2019. During the same period, our total mutual fund AuM decreased by
13.95% from 2128.62 billion as of March 31, 2019 to = 110.68 billion as of March 31, 2020.

301

 
Our total AuM increased by 45.30% to = 266.70 billion as of March 31, 2021 as compared to 2 183.55 billion as
of March 31, 2020.

Further, as of March 31, 2021, our total mutual fund AuM increased by 31.54% to = 145.59 billion for Fiscal
2021 as compared to = 110.68 billion as of March 31, 2020. Further, the sale of structured products remained
flat at = 28.71 billion for Fiscal 2021 as compared to 2 29.73 billion for Fiscal 2020.

Our total AuM increased by 13.27% to % 302.09 billion as of August 31, 2021 as compared to % 266.70 billion
as of March 31, 2021. Further, our total mutual fund AuM increased by 19.34% to = 173.74 billion as of August
31, 2021, as compared to % 145.59 billion as on March 31, 2021. There was an increase of 16.62% in NIFTY for
the five months period ended August 31, 2021. For the five months period ended August 31, 2021, Income from
Distribution & Sale of Financial Products comprised of 65.54% which primarily consists of income from sale of
MLDs. Gross mobilization of MLDs was 2 11.57 billion for the five months period ended August 31, 2021 as
compared to 2 28.71 billion for the Fiscal 2021.

The details of break-up of our AuM are as under:

Break-up of AuM: PWM

 

PWM AuM 2018-19 2019-20 2020-21 2021-22 (Aug-21)

 

im pilien) Amount | % | Amount| % | Amount| % Amount %

 

Equity Monral Fund 78.38 | 43.45% 58.17 |_ 32.38% 94.95 | 36.44% 123.12 | 41.77%

 

Debt Mutual Fund

 

 

46.75 | 25.92% | 49.07 | 27.31% | 45.31 | 17.39% 44.11 | 14.97%
‘Total ME =A. 125.13 | 69.37% | 107.24 | 59.69% | 140.26 | 53.83% | 167.23 | 56.74%
Stuietured Products MLDS 39.59 | 21.95% | 57.52 | 32.02% | _93.28 |_ 35.80% 92.93 | 31.53%

 

Tosles 164.72 | 91.32% 164.76 | 91.71% 233.54 | 89.63% 260.16 | 88.27%

 

Direct Equity and Others

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15.65 | 8.68% | 14.90 | 8.29% | _27.03 | 10.37% 34.56 | 11.73%
100.00 100.00 100.00 100.00
Total = (A+B) 180.37 % | 179.66 % | 260.57 % 294.72 %
Break-up of AuM: DWM
Wn Aum 2018-19 2019-20 2020-21 2021-22 (Aug-21)
ont isn) Amount | % | Amount| % | Amount| % Amount %
Equity Monval. Fund 2.60 | 73.03% 2.45 | 62.83% 4.30 | 70.26% 5.47 | 74.22%
Debt Mutual Fund 0.88 | 24.72% 0.99 | 25.38% 1.03 |_ 16.83% 1.05 | 14.25%
Total MEAs 3.48 | 97.75% 3.44 | 88.21% 5.33 | 87.09% 6.52 | 88.47%
Shuchned Broducts, MLDS 0.08 | 2.25% 0.46 |_ 11.79% 0.79 |_ 12.91% 0.85 |_ 11.53%
Total B 100.00 100.00 100.00 100.00
3.56 % 3.90 % 6.12 % 7.37 %
Direct Equity and Others - |__ 0.00% - | 0.00% =| 0.00% - | 0.00%
100.00 100.00 100.00 100.00
Total (A+B) 3.56 % 3.90 % 6.12 % 7.37 %

 

Break-up of AuM: PWM and DWM

 

PWM & DWM AuM 2018-19 2019-20 2020-21 2021-22 (Aug-21)

 

in Dillon) Amount | % | Amount| % | Amount| % Amount %

 

 

Equity Mutual Fund 80.98 | 44.03% | 60.62 | 33.03% | 99.25 | _ 37.21% 128.58 | 42.56%

 

 

 

 

 

 

 

 

 

302

 
 

 

 

 

 

 

 

 

Debt Mutual Fund 47.64 | 25.90% | 50.06 | 27.27% | _46.34 | 17.38% 45.16 | 14.95%

Total MFA 128.62 | 69.93% | 110.68 | 60.30% | 145.59 | 54.59% | 173.74 | 57.51%

Change Y-o-Y (%) MF NA -13.95% 31.54% 19.34%

Stnichined PrbdlictsMEDS 39.66 | 21.56% | 57.97 | 31.58% | 94.08 | 35.28% 93.79 | 31.05%

Total-B 168.28 | 91.49% | 168.65 | 91.88% | 239.67 | 89.87% | _267.53 | 88.56%

Direct Equity and Others 15.65 | 8.51% | 14.90 | 8.12% | __27.03 |_ 10.13% 34.56 | 11.44%
100.00 100.00 100.00 100.00

Total~ (A+B) 183.93 % | 183.55 % | 266.70 % | 302.09 %

Change Y-o-Y (%) Total

AuM NA -0.21% 45.30% 13.27%

 

 

 

 

 

 

 

 

 

We have been ranked amongst the top three non-bank mutual fund distributors in India by gross commission
earned in Fiscal 2021 (Source CARE Advisory Research, Page 46. The CARE Advisory Research is available
on the website of our Company at www.rathi.com/Wealth/Investorrelations.php).

Our AuM is the key factor driving our income. The level of our AuM is determined by asset inflows and
outflows and asset appreciation and depreciation. In order to increase our AuM and grow our business, we must
attract new clients and retain and expand our relationships with existing clients. Among other things, this will
depend on the success of our RMs in new AuM acquisition and retention of existing clients as well as
acquisition of new clients, and client experience, sentiment and confidence.

Ability to attract and retain Relationship Managers

We are a high client engagement business which thrives on relations forged by RMs over long periods of time.
The RMs are engaged in acquiring and servicing clients and delivering value addition, due to which their
relationship with clients is strong. A loss of a RM therefore may lead to loss of clients who may choose to
continue their relationship with the RM depending on the strength of their relationship.

Our RM count was 238 as on March 31, 2019 as compared to 233 RMs as on August 31, 2021. The RMs who
have spent more than five years in the relationship management role within our Company have an average AUM
of % 2.26 billion as of August 31, 2021. We expanded our team primarily through hiring RMs referred by our
existing RMs and promotion of our trained Account Managers (“Ams”) to RMs.

As on August 31, 2021, our RM vintage is set out below.

 

 

 

 

Vintage <1 Year 1to2 Years | 2to3 Years | 3 to5 Years >5 Years
Number of RMs 25 24 30 68 86
% of RM revenue 0.73 3.00 5.32 21.18 69.77

 

 

 

 

 

 

As is evident from the table above, 90.95% of the total RM revenue is procured by the RMs with vintage of
more than three years in our Company. We have an attractive RM incentive policy which is transparent and
formula based giving complete clarity on the incentive payout based on the RMs’ performance. Our policy of
keeping the formula consistent in the last three years has helped us in attracting, retaining and motivating our
RMs which is evident from our low attrition rates given above.

We believe that RMs are critical to our success, and any inability to attract and retain RMs or train Ams to grow
into RMs may have an adverse impact on our business and future financial performance. If such personnel were
to leave, they may seek to solicit our customers after termination of their employment, and, therefore, the loss of
these personnel could also cause us to lose certain of our AuM referrals.

Macroeconomic environment and fluctuation in underlying markets

We operate in the segment of distribution of financial products in India. As a result, our business, financial
condition, results of operations and prospects are significantly affected by macroeconomic conditions in India,

303

 

 
where we conduct most of our business and as the performance of the investment products distributed by us
depends largely on the overall performance of the Indian economy. In addition, our AuM is valued on a mark-
to-market basis. Consequently, when general market conditions improve or deteriorate, our AuM generally will
increase or decrease accordingly.

Fluctuation in the performance of financial products has an impact on the perception of such products as
investment options and can affect the demand for the financial products distributed by us. While our business.
tends to benefit from increased consumer confidence in the overall economy and financial markets, for the
financial services sector in particular, adverse macroeconomic conditions in India may reduce the demand for,
or returns on the products distributed by us, and otherwise adversely affect our results of operations. Other key
factors affecting the performance of the growing wealth management industry in India include changes in the
political and social conditions in India, and changes in governmental policies with respect to laws and
regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of
taxation, among other things.

Adverse macroeconomic conditions and fluctuations in underlying markets may also impact the value of
derivative positions we may be holding as a principal and impact our results of operations.

However, our PW vertical focuses on the HNI segment in India, growth in which is expected to be led by a
strong growth in millionaires from 698,000 in 2020 to 1,269,000 by 2025 (Source -CARE Advisory Research,
Page 17. The CARE Advisory Research is available on the website of our Company at
www.rathi.com/Wealth/Investorrelations.php), which is a CAGR of 12.70%, providing us significant potential
for growth. The growth of financial assets from % 262,912 billion during 2020 to 2 512,157 billion in 2025
(Source — CARE Advisory Research, Page 50. The CARE Advisory Research is available on the website of our
Company at www.rathi.com/Wealth/Investorrelations.php), which is a CAGR of 15.26%, is also expected to
fuel the growth of our business.

Changes in the regulatory environment

Our business operations, which are conducted almost entirely in India, are regulated. The regulatory and policy
environment in which we operate is evolving and remains subject to changes which may be beyond our control.
Such changes may adversely affect our business, financial condition, results of operations and prospects, to the
extent that we are unable to suitably respond to and comply with such changes in applicable regulations and
policies. Our efforts to comply with changes in regulations may also lead to increased operating and
administrative expenses.

We are subject to a variety of financial services regulation in the jurisdictions where we operate, including, the
SEBI Act, the Intermediaries Regulations, the SEBI (Investment Advisers) Regulations, 2013, circulars issued
by AMFI from time to time to its members on various aspects relating to distribution of mutual fund schemes by
distributors, etc. The laws and regulations governing advisory and distribution services relating to financial
products have become increasingly complex and cover a wide variety of issues, including registration,
disclosures, conflicts, insider trading, etc. SEBI has recently amended the SEBI (Investment Advisers)
Regulations, 2013, wherein it has introduced client level segregation of advisory and distribution activities
which prescribes that an individual investment adviser shall not provide distribution services and a non-
individual investment adviser shall maintain an arm’s length relationship between its activities as investment
adviser and distributor by providing advisory services through a separately identifiable department or division.
Furthermore, the same client cannot be offered both advisory and distribution services within the group of the
non-individual entity and a client can either be an advisory client where no distributor consideration is received
at the group level or distribution services client where no advisory fee is collected from the client at the group
level. Future changes to mutual fund regulations could adversely affect our results of operations.

The application of various Indian tax laws, rules and regulations to our business, currently or in the future, is
subject to interpretation by the applicable taxation authorities. If such tax laws, rules and regulations are
amended, new adverse laws, rules or regulations are adopted or current laws are interpreted adversely to our
interests, the results could increase our tax payments (prospectively or retrospectively) and/or subject us to
penalties. As a result, any such changes or interpretations could have an adverse effect on our business and
financial performance. Our results of operations may also be affected by macroeconomic regulatory changes,
such as the introduction of a comprehensive unified GST regime by the Government of India from July 1, 2017
onwards, under which financial products attract GST instead of service tax.

304
See “Key Regulations and Policies in India”, “Risk Factors — Changing laws, rules and regulations and legal
uncertainties, including adverse application of tax laws and regulations, may adversely affect our business and
financial performance.” And “Risk Factors — We operate in a highly regulated environment, which is subject to
change, and existing and new laws, regulations and government policies affecting the sectors in which we
operate could adversely affect our business, financial condition and results of operations.” On pages 177, 50
and 31, of this Prospectus, respectively.

Competition

We face competition in all our main business lines. Some of our key competitors are part of diversified financial
institutions and may have greater resources and offer a broader range of services than ours. We also compete
with many well-established international wealth managers for opportunities to manage assets. Further, emerging
competition from digital wealth advisors or robo-advisors may also affect our ability to retain or grow our
market share. See “Risk Factors— Competition from existing and new market participants in our industry may
affect our market share, or results of operations.” On page 37 of this Prospectus.

We believe our objective-driven, uncomplicated, well researched and standardised process, which provides
liquidity along with high degree of capital preservation in the medium term to the HNI category, helps us
differentiates ourselves from the competition. This is evident from the growth in our AuM from 2 183.93 billion
in Fiscal 2019 to 2 302.09 billion as of August 31, 2021. We have been ranked amongst the top three non-bank
mutual fund distributors in India by gross commission earned in Fiscal 2021 (Source — CARE Advisory
Research, Page 46. The CARE Advisory Research is available on the website of our Company at
www.rathi.com/Wealth/Investorrelations. php).

Ability to grow our business while controlling costs and improving productivity

Our ability to grow business largely depends upon growth in our AuM, and increment in AuM occurs through
getting a larger share of wallet from our existing clients, and new client additions.

As of August 31, 2021, our RMs count was 233, as compared to number of RMs as on March 31, 2021. The
RMs play a key role in both acquisition as well as increasing the wallet share from existing clients. The number
of RMs decreased to 233 as on March 31, 2021 from 238 as at March 31, 2019. During Fiscal 2021, 65 RMs left
the services of our Company as a result of our strong cost control measures. There was no change in the number
of RMs in August 31, 2021, as compared to March 31, 2021. Our business, measured in terms of AuM, which
was % 302.09 billion as of August 31, 2021 has grown consistently in the recent past at a CAGR 22.74% since
March 31, 2019.

Set out below is a summary of the net number of client additions made during the last three Fiscals:

 

 

 

Year Fiscal 2019 Fiscal 2020 Fiscal 2021 Five months
period ended
August 31,
2021

No. of active client families 965 863 988 455

added

 

 

 

 

 

Controlling costs is imperative to improving productivity while increasing our AuM. In our experience, the RMs
turn profitable between two and three years in their role as an RM. 90.95% of our total RM revenue is
contributed by RMs with a vintage of more than three years. Currently 33.91% of the total RMs are in the band
of vintage between zero and three years. The increase in number of RMs of vintage with more than three years
is expected to drive the revenue growth and significant improvement in productivity in terms of cost per RM.

Owing to the increasing prevalence of the work-from-home model due to the COVID-19 pandemic outbreak, we
had a significant cost advantage as travel expenses reduced drastically. The need to travel domestically and
internationally to meet clients and conduct product and review meetings at different locations was minimized,
owing to the shift to meeting in a virtual office. Adoption of paperless documentation and operational process
coupled with the work-from-home model decreased stationery and printing costs. Although we intend to adopt
this model going forward with a roster system for the office-going employees, we have already renegotiated
rental cost across specific locations to incorporate this initiative. We believe that this will help us reduce the cost
of office space substantially in the future. Our on-ground client events have been digitalized which has increased

305

 
the reach with the number of customers and decreased the cost significantly. Going forward, we plan to conduct
such on-ground events, however, the majority of the interactions will remain on digital platforms. We believe
that many of these cost reductions will be permanent in nature and will help our operating margins.

Significant Accounting Policies

A.

(i) Statement of Compliance

The Restated Ind AS Consolidated Summary Statement of Assets and Liabilities of the Group as at
August 31, 2021, March 31,2021, March 31, 2020, March 31, 2019, Restated Ind AS Consolidated
Summary Statement of Profit and Loss including Other Comprehensive Income, Restated Ind AS
Consolidated Summary Statement of Changes in Equity, Restated Ind AS Consolidated Summary
Statement of Cash Flows and Notes to Restated Ind AS Consolidated Financial Information for the
period ended August 31,2021 and year ended March 31,2021, March 31, 2020, March 31, 2019
(hereinafter collectively referred to as “Restated Ind AS Consolidated Financial Information”) have
been prepared in accordance with the Indian Accounting Standards (“Ind AS”) as per the Companies
(Indian Accounting Standards) Rules, 2015 notified under Section 133 of the Companies Act, 2013
(“the Act’’), amendments thereto and other relevant provisions of the Act.

The Restated Ind AS Consolidated Financial Information have been prepared by management for
inclusion in the Red Herring Prospectus (“RHP”) and this Prospectus (collectively referred to as the
“Offer Documents”) to be filed by the Holding Company with the Securities and Exchange Board of
India (the “SEBI”) in connection with the proposed listing of equity shares of the Holding Company
and an offer for sale by certain of its shareholders.

The Restated Ind AS Consolidated Financial Information have been prepared to comply in all material
respects with the requirements of :

a) Section 26 of Part I of Chapter III of the Companies Act, 2013 (“the Act”) as amended;

b) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2018, as amended (the SEBI ICDR “Regulations”) issued by the Securities and Exchange
Board of India (‘SEBI’) on 11 September 2018 as amended from time to time in pursuance of the
Securities and Exchange Board of India Act, 1992.

c) Guidance Note on Report in Company Prospectus (Revised 2019) issued by the ICAI (referred to as
the Guidance Note).

This Restated Ind AS Consolidated Financial Information were authorised for issue by the Company’s
Board of Directors on November 17, 2021.

(ii) The Restated Ind AS Consolidated Financial Information have been compiled from:

The Restated Ind AS Consolidated Financial Information has been prepared by combining on a line by
line basis the Restated Ind AS Financial Information of the Holding Company and it’s Subsidiaries for
the period ended August 31, 2021 and years ended March 31, 2021, March 31, 2020 and March 31,
2019 by adding together like items of assets, liabilities, equity, incomes, expenses and cash flows, after
fully eliminating intra-group balances and intra-group transactions.

The Restated Ind AS Summary Statement of Assets and Liabilities as at August 31, 2021, March 31,
2021, March 31, 2020 and March 31, 2019, Restated Ind AS Consolidated Summary Statement of
Profit and Loss including Other Comprehensive Income, Restated Ind AS Consolidated Summary
Statement of changes in equity, Restated Ind AS Consolidated Summary Statement of Cash Flows and
Notes to restated Ind AS Consolidated Financial Information for the period ended August 31,2021 and
years ended March 31,2021, March 31, 2020 and March 31, 2019 of the Holding Company and its
subsidiaries have been prepared in accordance with the Indian Accounting Standards (“Ind AS”) as per
the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of the
Companies Act, 2013 (“the Act’’), amendments thereto and other relevant provisions of the Act.

The Group has considered the amendments to Schedule III of the Companies Act, 2013 notified by the
Ministry of Corporate Affairs via its notification dated March 24, 2021, in the Restated Ind AS
Consolidated Financial Information disclosures, wherever applicable.

(iii)Basis of Measurement of Restated Financial Information

306
Cc.

These Restated Consolidated Financial Information have been prepared on historical cost basis, except
for certain financial instruments, which are measured at fair values at the end of each reporting period,
as explained in the accounting policies below.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and
services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date, regardless of whether that price is
directly observable or estimated using another valuation technique. The accounting policies adopted in
the preparation of the Restated Consolidation Financial Information are consistent with those followed
in the previous year by the Group.

(iv)Functional and Presentation Currency

The Restated Consolidated Financial Information are presented in Indian Rupees, which is the
functional currency of the Group and the currency of the primary economic environment in which the
Group operates.

(v) Fair Value Measurement

In addition, for financial reporting purpose, fair value measurements are categorised into Level 1, 2 or
3 based on the degree to which the inputs to the fair value measurements are observable and the
significance of the inputs to the fair value measurements in its entirety, which are described as follows:

- Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the entity can
access at the measurement date;

- Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the
asset or liability, either directly or indirectly; and

- Level 3 inputs are unobservable inputs for the assets or liability.

Principles of Consolidation

The Restated Ind AS Consolidated Financial Information incorporates the financial statements of the
Group. Control is achieved when the Group :

- has power over the investee;
- is exposed, or has rights, to variable returns from it’s involvement with the investee; and
- has the ability to use it’s power to affect it’s returns.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. Group
reassesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control listed above. Subsidiaries are deconsolidated
from the date the control ceases.

The financial statements of the Group are combined on a line by line basis by adding together like
items of assets, liabilities, equity, incomes, expenses and cash flows, after fully eliminating intra-group
balances and intra-group transactions. Profits or losses resulting from intra-group transactions that are
recognized in assets, such as Property, Plant and Equipment, are eliminated in full. The Restated Ind
AS Consolidated Financial Information have been prepared using uniform accounting policies.

Goodwill represents the difference between the Holding Company’s share in the net worth of
subsidiaries and the cost of acquisition at each point of time of making the investment in the
subsidiaries.

Non-Controlling Interest’s share of profit / loss of consolidated subsidiaries for the year is identified
and adjusted against the income of the Group in order to arrive at the net income attributable to
shareholders of the Company. Non-Controlling Interest’s share of net assets of consolidated
subsidiaries is identified and presented in the Consolidated Balance Sheet.

Critical Accounting Judgements and key Sources of Estimation Uncertainty

307
The preparation of the Group’s Ind AS Consolidated Restated Financial Information requires the
Group’s Management to make judgement, estimates and assumptions that affect the reported amount of
revenue, expenses, assets and liabilities and the accompanying disclosures. Uncertainty about these
assumptions and estimates could result in outcomes that require a material adjustment to the carrying
amount of assets or liabilities affected in next financial years.

Estimates and underlying assumptions are reviewed on an on going basis. Revisions to accounting
estimates are recognised in the period in which the estimates are revised and future periods are
affected.

@ Amortisation of Customer relationship cost: During the year 2016-17, the Holding
company had acquired Private Wealth Management business from Religare Wealth
Management Limited, for which the Holding Company had made payment which was
capitalised as Customer Relationship Cost. The Holding Company expects that it will get
future economic benefit of it over the period of 3 years.

(ii) Depreciation / Amortisation and useful lives of property, plant and equipment: The
Group depreciates its tangible assets over the useful life of an Asset as prescribed under Part C
of Schedule II of Companies Act, 2013. The Group remeasures remaining useful life of an
asset at the end of each reporting date.

(iii) Fair value measurement: Fair Value is a price of orderly transaction between market
participants at the measurement date under current market conditions. The Group determines
Fair Value of Quoted Instruments from available market price. When the fair values of
financial assets and financial liabilities recorded in the balance sheet cannot be measured
based on quoted prices in active markets, their fair value is measured using appropriate
valuation techniques. The inputs to these models are taken from observable markets where
possible, but where this is not feasible, a degree of judgement is required in establishing fair
values. Judgements include considerations of inputs such as liquidity risk, credit risk and
volatility.

(iv) Provisions: Provisions are recognized when there is a present obligation (legal or
constructive) as a result of past event; and it is probable that an outflow of resources will be
required to settle the obligation. The Management estimates it by using its best judgement of
future cash outflow.

(v) Taxes: The Group periodically assesses its liabilities and contingencies related to income
taxes for all years open to scrutiny based on latest information available. For matters where it
is probable that an adjustment will be made, the Group records its best estimates of the tax
liability in the current tax provision. The Management believes that it has adequately provided
for the probable outcome of these matters. Deferred tax assets are recognised for unused tax
losses to the extent that it is probable that taxable profit will be available against which the
losses can be utilised. Significant management judgement is required to determine the amount
of deferred tax assets that can be recognised, based upon the likely timing and the level of
future taxable profits.

(vi) Recognition and measurement of defined benefit obligations
The obligation arising from defined benefit plan is determined on the basis of actuarial
assumptions. Key actuarial assumptions include discount rate, trends in salary escalation and
attrition rate. The discount rate is determined by reference to market yields at the end of the
reporting period on government securities.

D. Current and Non-Current Classification

An asset shall be classified as current when it satisfies any of the following criteria: —

(a) it is expected to be realised in, or is intended for sale or consumption in, the Group’s
normal operating cycle;

(b) it is held primarily for the purpose of being traded;

(c) it is expected to be realised within twelve months after the reporting date; or

308
(d) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a
liability for at least twelve months after the reporting date.

All other assets shall be classified as non-current.

A liability shall be classified as current when it satisfies any of the following criteria:—

(a) it is expected to be settled in the Group’s normal operating cycle;

(b) it is held primarily for the purpose of being traded;

(c) it is due to be settled within twelve months after the reporting date; or

(d) the Group does not have an unconditional right to defer settlement of the liability for at
least twelve months after the reporting date.

Terms of a liability that could, at the option of the counterparty, result in its settlement by the
issue of equity instruments do not affect its classification.

All other liabilities shall be classified as non-current.

E. Property, Plant and Equipment & Intangible Assets and Depreciation & Amortisation

Property, Plant and Equipment

Property, plant and equipment are stated at cost, less accumulated depreciation and
impairment, if any. Direct costs in relation to the fixed assets are capitalized until such assets
are ready for use.

@

(ii)
(iii)

Tangible Assets: Depreciation on tangible assets is provided on the straight-line
method over the useful lives of assets estimated by the Management. Depreciation
for assets purchased during a period is proportionately charged. The Management
estimates the useful lives and residual values of the fixed assets as prescribed under
Part C of Schedule II of the Companies Act 2013 as follows.

Fixed Assets Useful Life
Office Equipments 5 years
Computer Equipments

a. Server 6 years

b. Other Computer Equipments 3 years
Vehicles 8 years
Furniture and Fixtures 10 years

Improvements on leased premised are depreciated over the lease period.
Intangible Assets: Intangible assets are recorded at the consideration paid for the
acquisition of such assets and are carried at cost less accumulated amortisation and
impairment, if any.

Customer Relationship cost is amortised over the period of 3 years on the straight-
line method.

Software of Holding Company is amortized over a period of 3 Years on the straight-
line method.

Software (OFA Plus) of a subsidiary i.e. Ffreedom Intermediary Infrastructure
Private Limited had been amortized over a period of 5 Years till FY 2018-19 and 7
years in FY 2019-20 and in the FY 2020-21 the same has been amortised for the
period of 10 years. The estimation of amortisation period for software had been
reviewed by Management during the current financial year and the amortisation
period has been revised to 10 years on the straight line method.

Software of a subsidiary A R Digital Wealth Private Limited is amortized over a
period of 7 Years on the straight-line method till FY 2019-20. The estimation of
amortisation period for software had been reviewed by Management during the

309
current financial year and the amortisation period has been revised to 10 years on the
straight line method.

Trade mark of one of the subsidiary i.e. Ffreedom Intermediary Infrastructure Private
Limited is amortized over a period of 10 Years on the straight-line method.

(iv) Intangible Assets under Development: Intangible assets not ready for the intended
use as on the date of the Balance Sheet are disclosed under ‘Intangible Assets under
Development’.

(vy) Capital work-in-progress: Capital work-in-progress comprises cost of property,

plant and equipment that are not yet ready for their intended use as at the year end.
F. Financial Instruments
Financial assets and financial liabilities are recognised when a Group becomes a party to the
contractual provisions of the instruments.
Initial Recognition :
Financial assets and financial liabilities are initially measured at fair value. Transaction costs
that are directly attributable to the acquisition or issue of financial assets and financial
liabilities (other than financial assets and financial liabilities at fair value through profit or loss
and ancillary costs related to borrowings) are added to or deducted from the fair value of the
financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs
directly attributable to the acquisition of financial assets or financial liabilities at fair value
through profit or loss are recognised immediately in Statement of Profit and Loss.
Financial assets with embedded derivatives are considered in their entirety when determining
whether their cash flows are solely payment of principal and interest.
@ Classification & Subsequent Measurement of Financial Assets
Financial assets are classified as ‘Amortised Cost’, ‘Fair Value through Profit and
Loss’ (FVTPL) and ‘Fair Value through Other Comprehensive Income’ (FVTOCI)
on the basis of following:
+ the entity’s business model for managing the financial assets and
+ the contractual cash flow characteristics of the financial asset.
Financial assets are classified in the following categories
Debt Instruments at amortised cost: Debt instruments that meet the following
conditions are subsequently measured at amortised cost (except for those designated
at FVTPL on initial recognition)
* the asset is held within a business model whose objective is to hold asset to collect
contractual cash flows; and
+ the contractual terms of the instrument give rise on specified dates to cash flows
that are solely payments of principal and interest on the principal amount outstanding
Debt Instruments at FVTOCI: Debt instruments that meet the following conditions
are subsequently measured at FVTOCI (except for those designated at FVTPL on
initial recognition)
* the asset is held within a business model whose objective is achieved both by
collecting contractual cash flows and selling financial assets; and
+ the contractual terms of the instrument give rise on specified dates to cash flows
that are solely payments of principal and interest on the principal amount outstanding
Debt Instruments at FVTPL: Any debt instrument which is either initially
designated at FVTPL or which does not meets the criteria for amortised cost or
FVTOCI is measured at FVTPL.
Effective Interest Rate Method: Interest income from security deposits and debt
instruments is recognised using the effective interest rate method. The effective
interest rate is the rate that exactly discounts estimated future cash receipts through
the expected life of the financial asset. When calculating the effective interest rate,
the Group estimates the expected cash flows by considering all the contractual terms
of the financial instrument (for example, prepayment, extension, call and similar
options) but does not consider the expected credit losses.
Equity Instruments at FVTOCI: On initial recognition, the Group can make an
irrevocable election (on an instrument by instrument basis) to present the subsequent
changes in fair value in other comprehensive income pertaining to investments in
equity instruments. This election is not permitted if the instrument is held for trading.
The cumulative gain or loss is not reclassified to the Statement of Profit and Loss on
disposal of the investment.

310
Financial Assets at FVTPL: Investments in equity instruments are classified at
FVTPL, unless they were irrevocably elected on initial recognition as FVOCI.
Financial Assets at FVTPL are measured at Fair Value at the end of each reporting
period, with any gains or losses arising on remeasurement recognised in the
Statement of Profit and Loss.

Dividends are recognised in profit or loss only when the right to receive payment is
established, it is probable that the economic benefits associated with the dividend
will flow to the Group, and the amount of the dividend can be measured reliably.

(ii) Impairment of financial assets
The Group assesses on a forward looking basis the expected credit losses associated
with its assets carried at amortised cost, FVOCI debt instruments, and other financial
assets. The impairment methodology applied depends on whether there has been a
significant increase in credit risk. Annexure V — 45 details how the Group determines
whether there has been a significant increase in credit risk.

For trade receivables only, the Group applies the simplified approach permitted by
Ind AS 109 Financial Instruments, which requires expected lifetime losses to be
recognised from initial recognition of the receivables.

(iii) Derecognition of financial assets
A financial asset is derecognised only when :

+ The Group has transferred the rights to receive cash flows from the financial asset
or

* retains the contractual rights to receive the cash flows of the financial asset, but
assumes a contractual obligation to pay the cash flows to one or more recipients.
Where the entity has transferred an asset, the group evaluates whether it has
transferred substantially all risks and rewards of ownership of the financial asset. In
such cases, the financial asset is derecognised. Where the entity has not transferred
substantially all risks and rewards of ownership of the financial asset, the financial
asset is not derecognised.

Where the entity has neither transferred a financial asset nor retains substantially all
risks and rewards of ownership of the financial asset, the financial asset is
derecognised if the Group has not retained control of the financial asset. Where the
Group retains control of the financial asset, the asset is continued to be recognised to
the extent of continuing involvement in the financial asset.

(iv) Financial Liabi

Financial liabilities which are held for trading or are designated at FVTPL are
measured at fair value with changes being recognised in the Statement of Profit and
Loss.
Financial liabilities that are not held for trading and are not designated as at FVTPL,
are measured at amortised cost. The carrying amounts of financial liabilities that are
subsequently measured at amortised cost are determined based on the effective
interest method.

(v) Derecognition of financial liabilitie:

The Group derecognises financial liabilities when, and only when, the Group’s
obligations are discharged, cancelled or have expired. A substantial modification in
the terms of an existing financial liability is accounted as a discharge of original
financial liability and recognition of new financial liability. The difference between
the carrying amount of the financial liability derecognised and the consideration paid
and payable is recognised as profit or loss.

(vi) Offsetting financial assets and liabilities
Financial assets and liabilities are offset and the net amount presented in the
statement of financial position when, and only when, the Group has a legal right and
ability to offset the amounts and intends either to settle on a net basis or to realize the
asset and settle the liability simultaneously.

 

G. Derivatives financial instruments

Derivatives are initially recognised at fair value on the date a derivative contract is entered
into and are subsequently re-measured to their fair value at the end of each reporting period.
The resulting gain or loss is recognised in the Statement of Profit and Loss.

H. Impairment of Assets

311
Property, plant or equipment and intangible assets with finite life are evaluated for
recoverability whenever there is any indication that their carrying amount may not be
recoverable. If any such indication exists, the recoverable amount (i.e. higher of the fair value
less cost to sell and the value in use) is determined on an individual asset basis unless the asset
does not generate cash flows that are largely independent to those from other assets.

The Carrying Amount of Assets is reviewed at each Balance Sheet date if there is any
indication of impairment based on internal/external factors. An asset is treated as impaired
when the carrying cost of assets exceeds its recoverable value. An impairment loss, if any, is
charged to Statement of Profit and Loss in the year in which an asset is identified as impaired.
Reversal of impairment losses recognized in prior years is recorded when there is an
indication that the impairment losses recognized for the assets no longer exists or have
decreased.

I. Cash and cash equivalents

J. Borrowing Cost and Finance Charges

K. Leases

(ji) Cash and cash equivalents in the balance sheet comprise cash at bank and on hand
and short-term deposit with original maturity upto three months, which are subject to
insignificant risk of changes in value.

(ii) For the purpose of presentation in the statement of cash flows, cash and cash
equivalents consists of cash and short-term deposit, as defined above, net of
outstanding bank overdraft as they are considered as an integral part of the Group’s
cash management.

 

Borrowing cost attributable to acquisition and construction of qualifying assets are capitalized
as a part of the cost of such assets up to the date when such assets are ready for its intended
use. Other borrowing cost are charged to the statement of profit and loss in the period in which
they are incurred. Borrowing costs consist of interest and other costs that an entity incurs in
connection with the borrowing of funds and is measured with reference to the effective
interest rate applicable to the respective borrowings.

The Group assesses whether a contract contains a lease, at inception of a contract. A contract
is, or contains, a lease if the contract conveys the right to control the use of an identified asset
for a period of time in exchange for consideration. To assess whether a contract conveys the
right to control the use of an identified asset, the Group assesses whether: (i) the contract
involves the use of an identified asset (ii) the Group has substantially all of the economic
benefits from use of the asset through the period of the lease and (iii) the Group has the right
to direct the use of the asset.

At the date of commencement of the lease, the Group recognizes a right-of-use asset and a
corresponding lease liability for all lease arrangements in which it is a lessee, except for leases
with a term of twelve months or less (short-term leases) and low value leases. For these short-
term and low value leases, the Group recognizes the lease payments as an operating expense
on a straight-line basis over the term of the lease.

Certain lease arrangements includes the options to extend or terminate the lease before the end
of the lease term. ROU assets and lease liabilities includes these options when it is reasonably
certain that they will be exercised.

The right-of-use assets are initially recognized at cost, which comprises the initial amount of
the lease liability adjusted for any lease payments made at or prior to the commencement date
of the lease plus any initial direct costs less any lease incentives. They are subsequently
measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated on a straight-line basis over the lease term. Right of use
assets are evaluated for recoverability whenever events or changes in circumstances indicate
that their carrying amounts may not be recoverable. For the purpose of impairment testing, the
recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is
determined on an individual asset basis unless the asset does not generate cash flows that are
largely independent of those from other assets.

312
The lease liability is initially measured at amortized cost at the present value of the future
lease payments. The lease payments are discounted using the interest rate implicit in the lease
or, if not readily determinable, using the incremental borrowing rates in the country of
domicile of these leases. Lease liabilities are remeasured with a corresponding adjustment to
the related right of use asset if the Group changes its assessment if whether it will exercise an
extension or a termination option.

Lease liability and ROU asset have been separately presented in the Balance Sheet and lease
payments have been classified as financing cash flows.

L. Goodwill

Goodwill arising out of Consolidation of financial information of subsidiaries is tested for
impairment at each reporting date.

M. Business Combination:
The Group applies the acquisition method in accounting for business combinations. The
consideration transferred by the Group to obtain control of a business is calculated as the sum
of the fair values of assets transferred, liabilities incurred and the equity interests issued by the
Group as at the acquisition date i.e. date on which it obtains control of the acquiree which
includes the fair value of any asset or liability arising from a contingent consideration
arrangement. Acquisition-related costs are recognised in the Statement of Profit and Loss as
incurred, except to the extent related to the issue of debt or equity securities.
Identifiable assets acquired and liabilities assumed in a business combination are measured
initially at their fair values on acquisition-date.
Intangible Assets acquired in a Business Combination and recognised separately from
Goodwill are initially recognised at their fair value at the acquisition date (which is regarded
as their cost). Subsequent to initial recognition, intangible assets acquired in a Business
Combination are reported at cost less accumulated amortisation and accumulated impairment
losses, on the same basis as intangible assets that are acquired separately.
Goodwill is measured as the excess of the aggregate of the consideration transferred and the
amount recognised for non-controlling interests, and any previous interest held, over the net
identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired
is in excess of the aggregate consideration transferred, the excess is termed as Gain on Bargain
Purchase/Capital reserve.

N. Employee Benefits

Defined Contribution plan — Retirement benefit in the form of Provident Fund is a defined
contribution scheme. The Group is statutorily required to contribute a specified portion of the
basic salary of an employee to a provident fund as a part of retirement benefits to its
employees. The contributions during the period are charged to Statement of Profit and Loss.
The Group recognizes contribution payable to the Provident Fund scheme as an expenditure
when an employee renders related service.

Defined Benefit Plan — Gratuity, which is in the nature of Defined Benefit Schemes, are
payable only to employees and accounted for on accrual basis. The Cost of providing benefits
is determined using the projected unit credit method, with actuarial valuations being carried
out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and
losses are recognised in other comprehensive income in the period in which they occur and are
not reclassified to the Statement of Profit and Loss.

The Holding Company has funded its Gratuity liability under group scheme with an Insurer.
The retirement benefit obligation recognised in the balance sheet represents the present value
of the defined benefit obligations reduced by the fair value of the scheme assets. Any asset
resulting from this calculation is limited to the present value of any economic benefits
available in the form of refunds from the plans or reductions in future contributions to the
scheme.

Short Term Employee Benefits —- The undiscounted amount of short-term employee benefits
expected to be paid in exchange for the services rendered by employees are recognized during
the year when the employees render the service. These benefits include incentive and Annual
Leave which are expected to occur within twelve months after the end of the period in which
the employee renders the related service.

313
 

O. Revenue Recognition
Ind AS 115 — Revenue from contracts with customers became effective from the year under
report. Accordingly, the Group assesses the nature, timing and extent of revenue based on
performance obligations in its contracts/understanding/trade customs with customers &
clients.

Revenue is recognised to the extent that is probable that the economic benefits will flow to the
Group and the amount can be reliably measured. Revenue is measured at the fair value of
consideration received or receivable taking into account the amount of discounts.

1. Income related with Distribution and sale of Financial product including Distribution
income on Mutual Fund, Portfolio Management Service (PMS), Advisory activities, Referral
fees, Gain/Loss on sale of Investment (Structured Product), Consultancy, Commission
Income, Software license & Subscription fees and Marketing Support charges is accounted on
accrual basis.

2. In respect of financial planning fees since entire work is done at the initial stage entire
revenue is recognized at the time of contract

3. Dividend income is accounted for when the right to receive the income is established.

4. Difference between the sale price and the carrying value of investment is recognised as
profit or loss on sale/ redemption on investment on trade date of transaction. Carrying value of
investments is determined based on weighted average cost of investments sold.

5. Interest income is recognised on a time basis using the effective interest method.

P. Taxes on Income
Current Tax: Provision for Income Tax is determined in accordance with the provisions of
the Income Tax Act, 1961. Provision for Minimum Alternative Tax (MAT) is in accordance
with the provisions of Section 115JB of the Income Tax Act, 1961.

Deferred Tax: Deferred tax is provided, on all temporary differences at the reporting date
between the tax base of assets and liabilities and their carrying amounts for financial reporting
purposes. Deferred tax assets and liabilities are measured at the tax rates that are expected to
be applied to the temporary differences when they reverse, based on the laws that have been
enacted or substantively enacted at the reporting date. Tax relating to items recognised directly
in equity or OCI is recognised in equity or OCI and not in the Statement of Profit and Loss.

 

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset
current tax liabilities and assets, and they relate to income taxes levied by the same tax
authority, but they intend to settle current tax liabilities and assets on a net basis or their tax
assets and liabilities will be realized simultaneously

A deferred tax asset is recognized to the extent that it is probable that future taxable profits
will be available against which the temporary difference can be utilised. Deferred tax assets
are reviewed at each reporting date and are reduced to the extent that it is no longer probable.

Q. Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognized when there is a present obligation (legal or constructive) as a result
of past event; and it is probable that an outflow of resources will be required to settle the
obligation, in respect of which a reliable estimate can be made.
Provisions (excluding retirement benefits) are not discounted to its present value and are
determined based on best estimate required to settle the obligation at the Balance Sheet date,
taking into account the risks and uncertainties surrounding the obligation.
Contingent Liabilities are possible but not probable obligations as on the Balance Sheet date,
based on the available evidence. Contingent Liabilities are not recognised in the financial
information.
Contingent Assets are neither recognized nor disclosed.

R. Earning per share

314
Basic earnings per share are calculated by dividing the net profit or loss for the period
attributable to equity shareholders of the Holding company by the weighted average number
of equity shares outstanding during the year.

Diluted earnings per share are computed using the weighted average number of equity shares
and dilutive potential equity shares outstanding during the period/year. For the purpose of
calculating diluted earnings per share, the net profit or loss for the year attributable to equity
shareholders and the weighted average number of shares outstanding during the year are
adjusted for the effects of all dilutive potential equity shares.

S. Foreign Currency transactions

Transactions in currencies other than the Group’s functional currency (i.e. foreign currencies)
are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of
each reporting period, monetary items denominated in foreign currencies are translated at the
rates prevailing at that date. Non-monetary items carried at fair value that are denominated in
foreign currencies are translated at the rates prevailing at the date when the fair value was
determined. Non-monetary items that are measured in terms of historical cost in a foreign
currency are translated using the exchange rate as at the date of initial transactions.
Exchange differences on monetary items are recognised in the Statement of Profit and Loss in
the period in which they arise except for:
- exchange differences on foreign currency borrowings relating to assets under construction
for future productive use, which are included in the cost of those assets when they are
regarded as an adjustment to interest costs on those foreign currency borrowings.

- exchange differences relating to qualifying effective cash flow hedges and qualifying net
investment hedges in foreign operations which are recognised in OCI.

T. Cash Flow Statement
Cash flow statement is prepared using the indirect method, whereby profit before tax is
adjusted for the effects of transactions of a non-cash nature item of income or expenses
associated with investing or financing cash flows. The cash flows from operating, investing
and financing activities of the Group are segregated.

U. Share Based payment Arrangements
Equity settled share based payments to employees and others are measured at the fair value of
equity instruments at the grant date. The fair value determined at the grant date of the equity
settled share based payments is expensed on a straight line basis over the vesting period, based
on the Holding Company’s estimate of equity instrument that will eventually vest, with a
corresponding increase in equity.

V. Rounding of amounts
All amounts disclosed in the restated Ind AS Consolidated financial information and notes
have been rounded off to the nearest million as per the requirement of Schedule III, unless
otherwise stated.

315
SUMMARY OF OUR RESULTS OF OPERATIONS

The following table sets forth selected financial data from our restated statement of profit and loss account for
the five months period ended August 31, 2021, Fiscals 2021, Fiscal 2020 and Fiscal 2019:

 

 

 

 

 

 

 

 

 

 

 

 

 

Particulars For the Asa%
five omrpte! For the pean For the pea For the eee
Revenue of Total of Total of Total
months year year year
‘ for the Revenue Revenue Revenue
period five oe for the suid for the Gra for the
ended th: March March March
August | TOPS | 31,2021 | Yer | 31,2020 | Year | 31,2019 | Year
period ss ended : ended ; ended
31, 2021 (@in (in (@in
(in ended million) ae million) nee million) pce
million) | August 31, 2021 31, 2020 31, 2019
31, 2021
1 Coan From | 1,669.26 | 98.83% | 2,653.30 | 95.02% | 3,318.27] 98.64% | 2,765.87] 97.33%
1 | Other Income 19.77| 1.17% | 139.18 | 4.98% 45.87 | 1.36% 76.00 | 2.67%
Total Revenue 1,689.03 | 100.00% | 2,792.48 | 100.00% | 3,364.14 | 100.00% | 2,841.87 | 100.00%
Il | Expenses:
ieee Benen 743.65 | 44.03% | 1,507.56] 53.99% | 1,665.73} 49.51% | 1,321.73] 46.51%
Finance Costs 8.59] 0.51% 29.06} 1.04% 32.96 | 0.98% 61.10] 2.15%
Depreciation and
Amortisation 65.11 3.85% | 172.92 6.19% | 210.48 6.26% | 162.69 5.72%
Expenses
Other Expenses 188.27 | 11.15% | 447.10 | 16.01% | 585.36 | 17.40% | 465.36 | 16.38%
1,005.62 | 59.54% | 2,156.64 | 77.23% | 2,494.53 | 74.15% | 2,010.88 | 70.76%
- Profit ose) Before 683.41 | 40.46% | 635.84] 22.77%] 869.61} 25.85% | 830.99] 29.24%
V_| Tax Expenses:
1. Current Tax 171.29] 10.14%] 178.75) 6.40%] 258.13] 7.67% | 343.70} 12.09%
2. Deferred Tax 1.24 0.07% 6.14 0.22% (4.66) -0.14% (97.04) -3.41%
Total Tax Expenses 172.53 | 10.21% | 184.89) 6.62% | 253.47| 7.53% | 246.66} 8.68%
ps
vi 2 rofiti-ass) forthe 510.88 | 30.25% | 450.95 | 16.15% | 616.14] 18.31% | 584.33] 20.56%
Coes 0.22) 0.01% 0.21) 0.01% 231 | 0.07% | aq] -0.27%
Profit/ (Loss)
Attributable te | 510.67 | 30.23% | 450.74] 16.14% | 613.83 | 18.25% | 592.05 | 20.83%
Company
VI | Other Comprehensive
I Income/(Loss)
(A) (i) Items that
will not be
reclassified to profit 0.09% 0.11% | (10.67) | -0.32% | (2.23) | -0.08%
or loss 1.44 2.98
(ii) Less : Income tax
relating on that -| 0.00% -| 0.00% -| 0.00% -| 0.00%
reclassified to profit

 

 

 

 

316

 

 

 

 

 

 
 

 

 

 

 

 

attributable to the
owners of the

 

 

Company

 

 

 

 

 

 

 

Particulars For the Asa %
five Gy For the eee For the esa For the Asa
Revenue of Total of Total of Total
months fe year year year
.. for the Revenue Revenue Revenue
Devic’ five med for the ae for the ane for the
ended months March ear March ear March ear
August od | 32.2021 | Yee, | 31,2020 | Yiu, | 31,2019 | Yee
31,2021 | Perio @in ones @in ene in a
@in Saas million) are million) ere million) pare
million) August 31, 2021 31, 2020 31, 2019
31, 2021
or loss
(B) (i) Items that will
be reclassified to = 0.00% ss 0.00% - 0.00% = 0.00%
profit or loss
(ii) Income tax
relating, to. items: that =| 0.00% -| 0.00% - | 0.00% - | 0.00%
will be reclassified to
profit or loss
Total Other
comprehensive 0.09% 0.11% (10.67) -0.32% (2.23) -0.08%
income/(loss) 1.44 2.98
Share of — Non- 0.00% 0.01% 0.00% 0.00%
Controlling Interest (0.04) 0.15 (0.02) 0.03
Other
Comprehensive
Nome te hos) 1.48 | 0.09% 2.83 | 0.10% | (10.65) | -0.32% | (2.26) | -0.08%
owners of the
Company
Total
comprehensive
income / (loss) for
the year 512.15 | 30.32% 453.57 16.24% 603.18 17.93% 589.80 | 20.75%

 

Components of Income and Expenditure

Income

Our income comprises of revenue from operations and other income. We generate majority of our income from
distribution of mutual funds and distribution and sale of financial products.

Revenue from Operations

Revenue from operations comprises of (i) income from distribution of mutual funds, (ii) distribution and sale of

financial products and (iii) IT enabled services.

The following table sets out the break-up of revenue from operations and as a percentage of revenue from
operations for the periods indicated:

317

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Particulars % of
% of total total % of % of
For the Revenue For the Revenu For the oa For the coca
es from e from Revenue Revenue
pono Operatio Meee Operati year from oe from
ended P ended Ps ended ; ended :
ns For ons For Operatio Operatio
August the March the March ns For March ns For
31, 2021 A 31, 2021 31, 2020 31, 2019
; Period 7 year 7 the year 5 the year
(Zin (Zin (in (Zin
million) ened million) ended million) enges million) enced
August March March March
31, 2021 31, 31, 2020 31, 2019
2021
Mutual Fund
Distribution 555.63 33.29% 902.34 | 34.01% 996.00 30.02% 1,040.00 37.60%
Income
Income from
Distribution &
Sale of 1,094.09 65.54% | 1,705.52 | 64.28% | 2,276.73 68.61% 1,689.94 61.10%
Financial
Product
TEEnabled, 19.54 1.17% | 45.44] 1.71% | 45.54] 1.37% 35.93 | 1.30%
Services
Total
Revenues from | 1,669.26 100% | 2,653.30 100% | 3,318.27 100% 2,765.87 100%
operations
Other Income

Other income comprises of (i) interest income, (ii) gain on sale of investments, (iii) miscellaneous income and
(iv) dividend.

Expenditure

Our expenses comprise of (i) employee benefit expenses, (ii) other expenses, (iii) depreciation and amoritsation
expenses, and (iv) finance costs.

Employee Benefit expenses

Employee benefit expenses comprises of (i) salaries, incentives and allowances, (ii) contribution to provident
and other funds, (iii) share based payments to employees and (iv) staff welfare expenses.

Other expenses

Other expenses comprises of (i) business support charges, (ii) manpower outsource expenses, (iii) legal &
professional charges, (iv) director sitting fees, (v) electricity expenses, (vi) communication expenses, (vii)
printing and stationery, (viii) postage and telegram, (ix) rent, rates and taxes, (x) repairs and maintenance, (xi)
recruitment & training, (xii) business promotion and marketing expenses, (xiii) computer & software main.
Charges, (xiv) client claim, (xv) travelling & conveyance expenses, (xvi) insurance charges, (xvii) office
expenses, (xviii) brand charges, (xix) auditors remuneration, (xx) audit fees, (xxi) tax audit fees, (xxii) other
services/ certification, (xxiii) donation, (xxiv) CSR expenses, (xxv) transaction charges, (xxvi) data processing
charges, (xxvii) networking expenses, (xxviii) membership & subscriptions charges, (xxix) SEBI settlement
charges, (xxx) bad debts written off and (xxxi) miscellaneous and general expenses.

Depreciation and Amortization expenses
Depreciation and amortization expenses primarily include depreciation expenses on our office equipment,

furniture and fixtures, vehicles, computer equipment and amortization expenses on our intangibles and right of
use assets.

318

 
Finance Costs

Finance cost includes interest expenses.
Fiscal 2020 compared to Fiscal 2019
Revenue from operations:

Our overall revenue from operations increased to = 3,318.27 million for Fiscal 2020 from 2 2,765.87 million for
Fiscal 2019, representing an increase of 19.97%, driven by an increase in our revenue from sale of financial
products and increase in our total number of clients by 20.27% from 4,258 in Fiscal 2019 to 5,121 in Fiscal
2020.

Further, our Mutual Fund Distribution Income decreased by 4.23% from 2 1,040.00 million in Fiscal 2019 as
compared to = 996.00 million in Fiscal 2020, due to a decline in equity mutual fund yield during the first quarter
of Fiscal 2020, owing to a reduction in TER for Mutual Fund AMCs. Further, there was a sharp fall in Equity
Mutual Fund AuM in March, 2020.

This increase in our revenue from operations was primarily because of an increase in income from Distribution
and Sale of Financial Product by = 586.79 million, which primarily consists of income from distribution of
structured products.

Other income:

Other income decreased by % 30.13 million to = 45.87 million for Fiscal 2020 from 2 76.00 million for Fiscal
2019, representing a decrease of 39.64%. This decrease in other income was primarily due to decrease in
miscellaneous and other income, which mainly comprises of business support charges.

Expenditure

Employee benefit expenses:

Employee benefit expenses increased by = 344.00 million to = 1,665.73 million for Fiscal 2020 from & 1,321.73
million for Fiscal 2019, representing an increase of 26.03%. This increase was primarily due to an increase in
total employees, on account of opening offices in new locations being Noida and Chandigarh, new RMs in
existing locations, increase in the strength of Ams and hiring of specialized technology team.

Other expenses:

Other expenses increased by 2 120.00 million to % 585.36 million for Fiscal 2020 from % 465.36 million for
Fiscal 2019, representing an increase of 25.79%, commensurate with the increase in scale of our operations.
Business support charges and manpower outsource expenses increased by 2 67.77 million and donation and
CSR expenses increased by % 22.20 million. Brand charges increased by 2 12.65 million in Fiscal 2020 as we
initiated this line of expense effective only from the fourth quarter of Fiscal 2019.

Finance costs:

Finance costs decreased by % 28.14 million to = 32.96 million for Fiscal 2020 from 2 61.10 million for Fiscal
2019. This change was primarily due to decreased short term fund requirements.

Depreciation and Amortisation Expenses:

Depreciation and amortisation expenses increased by % 47.79 million to = 210.48 million for Fiscal 2020 from =
162.69 million for Fiscal 2019, representing an increase of 29.38% primarily due to amortisation of intangible
assets in our Subsidiaries.

Profit/ (loss) before Tax:

For the reasons discussed above, profit before tax was 869.61 million in Fiscal 2020 compared to 2 830.99
million in Fiscal 2019.

319
Tax expenses:

Our total tax expenses increased by 2 6.81 million to = 253.47 million for Fiscal 2020 from 2 246.66 million for
Fiscal 2019. Our current tax decreased by = 85.57 million to % 258.13 million for Fiscal 2020 from = 343.70
million for Fiscal 2019 on account of improved profit before tax as set off for MAT credit availed during the
fiscal. Our deferred tax expenses increased by = 92.38 million to % (4.66) million for Fiscal 2020 from 2 (97.04)
million for Fiscal 2019 mainly due to fair valuation of financial instruments.

 

Profit for the year:

Primarily due to the reasons discussed above, our profit for the year increased by = 31.81 million to = 616.14
million for Fiscal 2020 from % 584.33 million for Fiscal 2019.

Total comprehensive income attributable to the owners of the Company for the year:

Our total comprehensive income attributable to the owners of the Company for the year was = 603.18 million in
Fiscal 2020 as compared to % 589.80 million in Fiscal 2019.

Fiscal 2021 compared to Fiscal 2020

In Fiscal 2021, our operations were adversely affected by the outbreak of the COVID-19 pandemic, as strict
lockdowns were imposed across India during the first quarter of Fiscal 2021. As our business is largely
conducted through face-to-face and personal meetings and discussions with clients, there was a temporary
disruption in our operations during the initial phase of the pandemic. However, we reshaped our business fairly
quickly, through the use of technological solutions to effectively engage with our clients. Our client interactions
improved significantly, as we were able to connect with them on a frequent basis, which also enabled faster
decision making and improvement in our overall productivity. For details on the number of clients added and
the number of events / webinars conducted in Fiscal 2021, see “Our Business —Marketing initiatives” on page
174 of this Prospectus.

While our revenue was slightly affected in the first half of Fiscal 2021, there was a significant improvement in
our financial performance during the fiscal, resulting in the performance of the last quarter i.e., January to
March 2021 being almost comparable to the revenues of the same quarter in Fiscal 2020.

Income

Revenue from operations:

Our overall revenue from operations decreased to = 2,653.30 million for Fiscal 2021 from % 3,318.27 million for
Fiscal 2020, representing a decrease of 20.04%. This decrease in our revenue from operations can be attributed
to the following reasons:

Our trail income from distribution of debt mutual funds reduced sharply in Fiscal 2021, as, from the month of
March 2020 until May 2020, our clients shifted from debt mutual funds to overnight / liquid funds owing to the
fear of a crisis in bond markets started to rise.

Further, income from Distribution and Sale of Financial Product, which primarily consists of income from
distribution of structured products, decreased from % 2,276.73 million in Fiscal 2020 to % 1,705.52 million in

Fiscal 2021 by = 571.21 million owing to the negative sentiment in the financial markets.

Other income:

Other income increased by % 93.31 million to = 139.18 million for Fiscal 2021 from % 45.87 million for Fiscal
2020, representing an increase of 203.40%. This increase in other income was primarily due to increase in
interest income, gain on sale of investment and other miscellaneous income, which mainly comprises of
business support charges and rent waiver income.

Expenditure

Employee benefit expenses:

320
Employee benefit expenses decreased by 2 158.17 million to 2 1,507.56 million for Fiscal 2021 from 2 1,665.73
million for Fiscal 2020, representing decrease of 9.50%, despite an increase of = 64.52 million in share-based
payments relating to expenses incurred in connection with our employee stock option plan. In anticipation of the
adverse impact of the outbreak of the COVID-19 pandemic in March 2020, we introduced significant cost
control measures. As a result, 65 RMs left during the year. Primarily, this resulted in a decrease in our salary,
incentive and allowance expenses by 2 215.84 million from % 1,570.00 million in Fiscal 2020 to 2 1,354.16
million in Fiscal 2021.

Other expenses:

Other expenses decreased by % 138.26 million to % 447.10 million for Fiscal 2021 from 2 585.36 million for
Fiscal 2020, representing a decrease of 23.62%, mainly from the cost control measures introduced owing to the
COVID-19 pandemic. The lockdown measures in place during the COVID-19 pandemic, resulted in: (i) decline
in business promotion and marketing expenses by 2 114.52 million on account of lower expenses incurred in
connection with on-ground promotional and client acquisition events, and (ii) decreased travelling and
conveyance expenses resulted in a reduction of % 46.28 million over Fiscal 2020.

Finance costs:

Finance costs decreased by 2 3.90 million to % 29.06 million for Fiscal 2021 from % 32.96 million for Fiscal
2020. This decrease in our finance costs was primarily due to fulfilment of short term fund requirements through
internal accruals.

Depreciation and Amortisation Expenses:

Depreciation and amortisation expenses decreased by % 37.56 million to = 172.92 million for Fiscal 2021 from =
210.48 million for Fiscal 2020, representing a decrease of 17.84%, primarily on account of decrease in
amortization of customer relationship cost to = 0.29 million for Fiscal 2021 from 2 25.21 million for Fiscal 2020
and change in estimation of amortisation period for intangible assets from seven years to ten years in our
Subsidiaries.

Profit/ (loss) before Tax

For the reasons discussed above, profit before tax was 2 635.84 million in Fiscal 2021 compared to 2 869.61
million in Fiscal 2020.

Tax expenses:

Our total tax expenses decreased by 2 68.58 million to 2 184.89 million for Fiscal 2021 from % 253.47 million
for Fiscal 2020. Our current tax decreased by = 79.38 million to = 178.75 million for Fiscal 2021 from = 258.13
million for Fiscal 2020. Our deferred tax expenses increased by = 10.80 million to % 6.14 million for Fiscal 2021
from % (4.66) million for Fiscal 2020 mainly due to fair valuation of financial instruments.

Profit for the year:

Primarily due to the reasons discussed above, our profit for the year decreased by 2 165.19 million to = 450.95
million for Fiscal 2021 from % 616.14 million for Fiscal 2020.

Total comprehensive income attributable to the owners of the Company for the year:

Our total comprehensive income attributable to the owners of the Company for the year was = 453.57 million in
Fiscal 2021 as compared to % 603.18 million in Fiscal 2020.

Five months period ended August 31, 2021
Income

Revenue from operations:

321
Our overall revenue from operations for the five months period ended August 31, 2021 was 2 1,669.26 million,
which primarily comprised %555.63 million from mutual fund distribution income and 2 1,094.09 million from
income from distribution and sale of financial product. For the five months period ended August 31, 2021, our
mutual fund distribution income comprised 33.29% of our total revenue from operations for such period. For the
five months period ended August 31, 2021, our income from distribution and sale of financial products
comprised 65.54% of our total revenue from operations for such period, and primarily consists of income from
sale of MLDs. Our gross mobilization of MLDs was % 11.57 billion for the five months period ended August 31,
2021.

Other income:

Other income for the five months period ended August 31, 2021 was = 19.77 million, which primarily
comprised interest income of = 14.35 million, miscellaneous and other income of % 3.80 million, gain on sale of
investments of % 1.59 million and dividend receipt of = 0.04 million. Our interest income comprises interest
income earned on fixed deposits with banks and, interest earned from ICDs given by our Subsidiaries.
Miscellaneous and other income primarily includes business support charges.

Expenditure

Employee benefit expenses:

For the five months period ended August 31, 2021, our employee benefit expenses was = 743.65 million which
was 73.95% of total expense for the five month period ended August 31, 2021. Further, our total employee
strength increased to 742 as of August 31, 2021 as compared to 723 as of March 31, 2021.

Other expenses:

For the five months period ended August 31, 2021, our other expenses was 2 188.27 million which was 18.72%
of our total expense. Business support charges comprised 19.31% of other expenses, Manpower outsource
expenses comprised 14.06% of other expense. Further, our business promotion and marketing expenses
comprised 11.61% of other expenses.

Finance costs:

Our finance costs for the five months period ended August 31, 2021 was % 8.59 million which mainly consists of
interest paid on short term fund requirements through internal accruals and IND AS 116 adjustment.

Depreciation and Amortisation Expenses:

Depreciation and amortisation expenses for the five months period ended August 31, 2021 was % 65.11 million,
which contributed 6.47% of total expense for the five months period ended August 31, 2021.

Profit/ (loss) before Tax

Profit before tax was 2 683.41 million for the five months period ended August 31, 2021, which contributed
40.46% of total revenue for the five months period ended August 31, 2021.

Tax expenses:

Our total tax expenses was 2 172.53 million for the five months period ended August 31, 2021. Deferred tax
was % 1.24 million for the five months period ended August 31, 2021.

Profit for the five month period ended August 31, 2021
Our profit for the five month period ended August 31, 2021 was 2 510.88 million.
Total comprehensive income attributable to the owners of the Company for the year:

Our total comprehensive income attributable to the owners of the Company for the five months period ended
August 31, 2021 was % 512.15 million.

322
Liquidity and Capital Resources

As of August 31, 2021, our consolidated cash and cash equivalents were = 573.24 million.

We fund our operations and capital requirements primarily through cash flows from operations. We expect that
cash flow from operations will continue to be our principal sources of cash in the long term. Further, our
business is asset light in nature and requires lesser amount of capital expenditure on a yearly basis. We evaluate
our funding requirements periodically in light of our net cash flow from operating activities.

The following table sets forth our cash flows on a consolidated basis for the periods indicated:

% in million)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the five

months period Fiscal Fiscal 7

ended Tae 2021 2020 _ | Fiscal 2019
Particulars 31, 2021
Operating profit before working capital
changes 746.26 832.11 1,105.57 1,017.92
Working Capital Changes -107.48 -803.21 496.50 0.86
Direct Taxes Paid (Net) -291.08 -239.03 -199.01 -347.86
Net cash flow from operating activities 347.70 -210.13 |__ 1,403.05 670.92
Net cash from investing activities -291.29 747.54 | -1,516.59 -423.32
Net cash from financing activities -136.35 -166.77 281.96 -139.14
Net increase / (decrease) in cash and cash
equivalents -79.94 370.64 168.42 108.44
Cash and cash equivalents — Opening Balance 653.18 282.54 114.12 5.68
Cash and cash equivalents — Closing Balance 573.24 653.18 282.54 114.12

 

Net cash flow from operating activities
Fiscal 2019

Net cash generated from operating activities was % 670.92 million for Fiscal 2019. While our net profit before
tax and extraordinary items was = 830.99 million for Fiscal 2019, our operating profit before working capital
changes stood at 2 1,017.92 million, primarily due to adjustments owing to (i) non-operating income/ expenses
including interest expenses for %61.10 million, gain on sale of investment for % 24.66 million and interest
income for = 12.77 million, and (ii) adjustment of non-cash expenses including = 162.69 million for depreciation
and amortization, impact of fair value of financial instruments to the extent of = (10.67) million, for gratuity of @
7.09 million, leave expenses of % 3.94 million and ESOP expenses of % 0.21 million. Changes in working capital
for Fiscal 2019 primarily consisted of adjustment of trade payables of 2 0.59 million, other current liabilities of
% (0.97) million, other financial liabilities of = (227.92) million, provisions of = 74.57 million, trade receivables
of % 12.59 million, and other financial assets of = 123.40 million and other current assets of = 18.60 million.
This was further adjusted for direct taxes paid (net) for = (347.86) million.

Fiscal 2020

Net cash generated from operating activities was = 1,403.05 million for Fiscal 2020, While our net profit before
tax and extraordinary items was = 869.61 million for Fiscal 2020, our operating profit before working capital
changes stood at = 1,105.57 million, primarily due to adjustments owing to (i) non-operating income/ expenses
including interest expenses for = 32.96 million, gain on sale of investment of % (23.03) million, interest income
for = (14.16) million, dividend received of = (0.07) million, gain on investment in PMS of 2 (0.02) million and
loss on sale of property, plant and equipment for 2 0.14 million and (ii) adjustment of non-cash expenses
including = 210.48 million for depreciation and amortization, impact of fair value of financial instruments to the
extent of % 6.28 million, for gratuity of 2 8.84 million, leave expenses of = 13.26 million, bad debts written off
of 2 1.01 million and ESOP expenses of % 0.27 million. Changes in working capital for Fiscal 2020 primarily

323

 
consisted of adjustment of trade payables of % 14.98 million, other current liabilities of = 25.82 million, other
financial liabilities of = 702.20 million, provisions of = 43.56 million, trade receivables of = 17.99 million, other
financial assets of = (200.32) million and other current assets of (107.74) million. This was further adjusted for
direct taxes paid (net) for = (199.01) million. The increase in other financial liabilities was due to increase in the
advances received from our clients from nil in Fiscal 2019 to = 886.33 million in Fiscal 2020 on account of sale
of financial products

Fiscal 2021

Net cash used from operating activities was % (210.13) million for Fiscal 2021. While our net profit before tax
and extraordinary items was % 635.84 million for Fiscal 2021, our operating profit before working capital
changes stood at % 832.11 million, in spite of the impact on our operations. This was primarily due to
adjustments owing to: non-operating income/ expenses including interest expenses for 29.06 million, gain on
sale of investment of = (26.50) million, interest income for %(51.20) million, dividend received of 2 (0.06)
million, gain on sale of Property, Plant and Equipment of 2 (0.02) and adjustment of non-cash expenses
including = 172.92 million for depreciation and amortization, impact of fair value of financial instruments to the
extent of 2 (14.77) million, for gratuity of = 11.51 million, leave expenses of = 4.51 million, bad debts written
off of % 6.03 and ESOP expenses of % 64.79 million. Changes in working capital for Fiscal 2021 primarily
consisted of adjustment of trade payables of = (14.56) million, other current liabilities of = 30.92 million, other
financial liabilities of = (883.69) million, provisions of = (222.49) million, trade receivables of = (23.55) million,
other financial assets of = 193.83 million and other current assets of = 116.33 million. Further, this was adjusted
by direct taxes paid (net) for = (239.03) million. The major shift in other financial liabilities, from 2 1,175.52
million as of March 31, 2020 to = 197.68 as of March 31, 2021, was primarily due to decrease in the advance
from our clients for sale of financial products.

Five months period ended August 31, 2021

Net cash generated from operating activities was = 347.70 million for the five months period ended August 31,
2021. While our net profit before tax and extraordinary items was = 683.41 million for the five months period
ended August 31, 2021, our operating profit before working capital changes stood at = 746.26 million, primarily
due to adjustments owing to non-operating income/ expenses including interest income of 2 (14.35) million,
interest expense of = 8.59 million, gain on sale of investment of 2 (1.59) million, loss on sale of property, plant
and equipment for 2 0.20 million and adjustment of non-cash expenses including 2 65.11 million for
depreciation and amortization, impact of fair value of financial instruments to the extent of 2 (21.31) million, for
ESOP expenses % 11.15 million, for gratuity of = 5.20 million and leave expenses of = 9.69 million. Changes in
working capital for the five months period ended August 31, 2021 primarily consisted of adjustment of trade
payables of %(1.91) million, other current liabilities of = (43.09) million, other financial liabilities of = 250.42
million, provisions of = 14.48 million, trade receivables of = (20.57) million, and other financial assets of =
(308.55) million and other current assets of = 1.74 million. This was further adjusted for direct taxes paid (net)
for = (291.08) million.

Net cash flow used in Investing Activities
Fiscal 2019

Net cash used in investing activities was = 423.32 million in Fiscal 2019, which consisted of purchase of other
investments worth % 224.54 million, acquisition of intangible assets worth % 2.18 million, investment into
intangible assets under development of % 82.03 million, dilution of NCI worth % 20.48 million, purchase of
property, plant and equipment (net off sale) of = 39.13 million, investments in fixed deposits of 2 2.52 million,
advance for purchase of property of = 189 million and security deposit given of = 21.47 million. These were
offset in part by interest income of = 10.00 million and loans taken of % 148.03 million.

 

 

Fiscal 2020

Net cash used in investing activities was = 1,516.59 million in Fiscal 2020, which consisted of purchase of other
investments worth 2 259.10 million, loans given for % 646.65 million, acquisition of intangible assets worth 2
7.93 million, investment into technology of % 52.37 million, purchase of property, plant and equipment (net off
sale) of = 498.09 million, investments in fixed deposits of = 14.92 million, advance for purchase of property of =
34.93 million and security deposit given of = 12.50 million. These were offset in part by interest income of 2
9.83 million and dividend of % 0.07 million.

324
Fiscal 2021

Net cash generated from investing activities was = 747.54 million in Fiscal 2021, which consisted of sale of
other investments worth 2 21.27 million, receipt of loans given for = 652.70 million, advance for purchase of
property of % 21.43 million, security deposit given of = 17.99 million, interest income of % 47.38 million and
dividend of 2 0.06 million. These were offset in part by purchase of property, plant and equipment (net off sale)
of = 12.96 million and investments in fixed deposits of = 0.33 million.

Five months period ended August 31, 2021

Net cash generated from investing activities was = (291.29) million in the five months period ended August 31,
2021, which consisted of sale of other investments worth = 2.63 million, loans given of = (267.90) million,
advance for purchase of property of = 13.50 million, security deposit given of 2 (38.30) million, interest income
of = 13.97 million and dividend of 2 0.04 million. These were offset in part by purchase of property, plant and
equipment (net off sale) of = 15.52 million and investments in fixed deposits of 2 0.29 million.

Net cash flow used in Financing Activities

Fiscal 2019

Net cash used in financing activities in Fiscal 2019 was 2139.14 million, which was due to lease payments of &
104.95 million, interest expenses of % 33.43 million and loan repayment of 2 0.88 million which was offset
partially by issue of shares worth 2 0.11 million.

Fiscal 2020

Net cash inflow from financing activities in Fiscal 2020 was = 281.96 million, which was primarily due to loan
taken of = 411.33 million and issue of shares of 2 0.59 million which is partially offset by lease payments of 2
123.58 million and interest expenses of 2 6.38 million.

Fiscal 2021

Net cash used in financing activities in Fiscal 2021 was = 166.77 million, which was primarily due to lease
payments of 2 112.26 million, loan repayment of 2 83.70 million, dividend payout of % 68.78 million, and
interest expenses of 2 10.06 million which is partially offset by issue of shares of = 108.03 million.

Five months period ended August 31, 2021

Net cash used in financing activities for the five months period ended August 31, 2021, was = 136.35 million,
which was primarily due to lease payments of % 42.96 million, loan repayment of 2 21.34 million, dividend
payment of % 69.36 million, and interest expenses of % 3.84 million which is partially offset by issue of shares of
= 1.15 million.

Contractual Obligations

The following table sets forth a maturity profile of our contractual obligations and commercial commitments as
of August 31, 2021:

 

Contractual cash flows (in million)

 

 

 

 

 

 

Particulars Carrying Total On | Lessthan | 3-12 1-5 years
amount Deman | 3 months | months
d
Borrowings 312.26 312.26 - 20.93 62.83 228.50
Lease Liabilities 103.13 103.13 - 22.64 33.05 47.44
Trade Payables 0.12 0.12 - 0.12 - é
Other Financial Liabilities 306.76 306.76 - 306.76 - =

 

 

 

 

 

 

 

325

 
Provisions and Contingent Liabilities
Provisions

Provisions are accounted for in respect of present obligations arising out of past events where it is probable that
an outflow of resources will be required to settle the obligation and the amounts of which can be reliably
estimated. Provisions are determined on the basis of best estimate of the outflow of economic benefits required
to settle the obligation as at the date of the relevant balance sheet. Where no reliable estimate can be made, a
disclosure is made as contingent liability.

 

Contingent liabilities

The following table sets out our contingent liability as on August31, 2021 on a consolidated basis:
(@ in million)

 

Particulars As of August 31, 2021

 

Liabilities disputed — appeals filed with respect to Income Tax demand for 4.62
Assessment Year 2013-14
(Penalty order under sec 271(1)©)

 

 

 

 

Off-Balance Sheet Transactions

There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect
on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital
resources that we believe are material to investors.

Related Party Transactions

We have engaged in the past, and may engage in the future, in transactions with related parties, including with
our affiliates and certain key management members on an arm‘s lengths basis. Such transactions could be for
provision of services, intercompany loans, lease or purchase of assets or property, sale or purchase of equity
shares or entail incurrence of indebtedness. For details of our related party transactions, see the section,
“Financial Information — Related Party Transactions” on page 295 of this Prospectus.

Quantitative and Qualitative Disclosures

Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
changes in market prices. Market risk comprises three types of risks: interest rate risk, currency risk and other
price risk, including equity price risk.

Interest risk

Interest risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates, Our exposure to changes in interest rates relates primarily to our outstanding
floating debt rate included in borrowings.

Price risk

Our Board reviews and approves all equity investment decisions. Reports on the equity portfolio are submitted
to our senior management on a regular basis.

Currency risk

Our business activities are within India and we do not have significant exposure in foreign currency.

Competitive Conditions

326
The Indian wealth management sector is highly competitive and sees intense competition between bank and
non-bank wealth management companies. We compete against domestic and international players for market
share. For details, see “Our Business — Competition” on page 174 of this Prospectus.

Seasonality

We are not subject to seasonal fluctuations in results of operations and cash flow.

Unusual or Infrequent Events or Transactions

Our business has been subject, and we expect it to continue to be subject, to significant economic changes
arising from the trends identified above in “~ Factors Affecting our Results of Operations” and the uncertainties

described in “Risk Factors”, on pages 300 and 26, respectively, of this Prospectus.

Except as described in this Prospectus, there have been no events or transactions to our knowledge which, in our
judgment, would be considered “unusual” or “infrequent”.

Changes in accounting policies

Except as disclosed under “Financial Information — Restated Consolidated Financial Information- Annexure V.
— Note 52” on page 292 of this Prospectus, there are no changes in the accounting policies in the last three
Fiscals.

Known Trends or Uncertainties

Except as disclosed in this Prospectus, to our knowledge there are no known trends or uncertainties that have or
had or are expected to have a material adverse impact on the revenues or income of our Company from
continuing operations.

Significant regulatory changes

Except as disclosed in “Key Regulations and Policies in India” on page 177 of this Prospectus, there have been
no regulatory changes that have materially affected our business.

Significant economic and regulatory changes

Other than as disclosed in “~ Factors affecting our Results of Operations”, “Risk Factors” and “Key Regulations
and Policies in India” on pages 300, 26 and 177, respectively, of this Prospectus, there are no other significant
economic changes that materially affect or are likely to affect income from continuing operations, to our
knowledge.

New Product or Business Segments

Other than as described in this Prospectus, there are no new products or business segments in which we operate.

Future Relationships Between Costs and Income

Except as disclosed in this Prospectus, to our knowledge there are no known factors which will have a material
adverse impact on our business prospects, results of operations and financial condition.

Significant Economic Changes that materially affected or are likely to affect Income from Continuing
Operations

Indian rules and regulations as well as the overall growth of the Indian economy have a significant bearing on
our operations. Major changes in these factors can significantly impact income from continuing operations.

Except as disclosed in “Risk Factors” on page 26 and under “- Factors affecting our Results of Operations —
Developments in relation to the COVID-19 pandemic” on page 300 of this Prospectus, there are no significant
economic changes that have materially affected our Company’s operations or are likely to affect income from
continuing operations.

327
Total turnover of each major industry segment in which the Company operates
For details of the total turnover, see the section titled “Financial Information” on page 225 of this Prospectus.

The extent to which material increases in net sales or revenue are due to increased sales volume,
introduction of new products or services or increased sales prices

Changes in income from operations during the last three Fiscals are as explained in this section titled “- Factors
affecting our Results of Operations” on page 300 of this Prospectus.

Significant dependence on single or few suppliers or customers

For details of risk of significant dependence on few suppliers, see the section titled “Risk Factors- Our
distribution arrangement with AMCs can be terminated without notice, or due to failure on our part to comply/
perform ” and “Risk Factors - Our Company is dependent on Anand Rathi Global Finance Limited (“ARGFL”),
one of our Group Companies, for the business relating to the structured products. Any change in the regulatory
environment of non-banking financial services may have an adverse impact on the business and operations of
the Company” on pages 30 and 33 of this Prospectus.

Reservations, qualifications or adverse remarks by Auditors

Except as disclosed in “Risk Factors — Our Company may have been operating as a NBFC without
authorization from RBI as observed by the Statutory Auditors in the Fiscal 2021 and 2020 reports. As part of
the consequences for operating as an unregistered entity, our Company may be subject to penalty as determined
by RBI. Further, we may be required to be registered as a NBFC in the future, but RBI may decide not to grant
registration to our Company as a NBFC. This may impact the business of the Company and its subsidiaries ” on
page 32 of this Prospectus, there have been no reservations/ qualifications/ adverse remarks/ matters of
emphasis highlighted by our statutory auditors in their auditor’s reports on the audited financial statements as of
and for the five-month period ended August 31, 2021 and the years ended March 31, 2019, 2020 and 2021.

Significant Developments after August 31, 2021

Except as disclosed in this Prospectus, there are no significant developments or circumstances that have arisen
since August 31, 2021, the date of the last financial statements included in this Prospectus:

Further, except as disclosed in this Prospectus, there are no circumstances that have arisen since August 31,
2021, the date of the last financial statements included in this Prospectus, which materially and adversely affect
or is likely to affect our operations or profitability, or the value of our assets or our ability to pay our material
liabilities within the next twelve months.

328
FINANCIAL INDEBTEDNESS
Our Company has availed loans in the ordinary course of business for our business requirements. Our Company
has obtained the necessary consents required under the relevant loan documentation for undertaking activities,
including change in our capital structure and change in our Articles of Association and Memorandum of
Association.

The details of aggregate indebtedness of our Company as on September 30, 2021, is provided below:

Facilities availed directly by our Company

 

 

 

 

 

 

(in € million)
Category of borrowing* Sanctioned amount’ Outstanding amount
as of September 30, 20214
Secured loans
Term loan 416.50 291.55
Overdraft facility 100.45 Nil
Total 516.95 291.55

 

 

 

* Tn addition, our Company has also availed vehicle loans amounting to @ 5.30 million wherein the outstanding amount as of September 30,
2021 is 1.34 million.

‘\As certified by R Kabra & Co. LLP, Chartered Accountants, pursuant to their certificate dated November 25, 2021.

Principal terms of our borrowings:

. Interest: The interest rates for the facilities availed by our Company varies. (i) In terms of the term loan facility,
the interest rate payable with respect to the facility will be stipulated by the lender at the time of disbursement of
each drawal, which is linked to marginal cost of fund based lending rate and spread per annum; and (ii) In terms
of the overdraft facility, the interest rate will be mutually agreed by the lender and our Company.

. Prepayment: Our Company may prepay the outstanding principal amounts of the facility availed under the term
loan agreement, in full or in part. However, such prepayment requires the prior approval of the lender, which
approval may also entail payment of prepayment premium of 2% on the principal amount. In terms of the
overdraft facility, the foreclosure charges will be mutually agreed by the lender and our Company

. Additional interest: The terms of the term loan facility prescribes penalties for, amongst others, default in the
repayment obligations and non-compliance of sanction terms. The additional interest is typically 2% per annum.
over and above the applicable interest rate on the amount outstanding. The penal interest for the overdraft
facility is 2% per annum over and above the normal interest rate.

Tenor: The tenor of the term loan availed by our Company is five years and the tenor of the overdraft facility is
one year.

. Repayment: The term loan availed is repayable as per the maturity profile agreed with lender within five years.

. Key Covenants: The financing arrangement in relation to the term loan and / or the overdraft facility contains
restrictive covenants and conditions restricting certain corporate actions, and our Company is required to take
the prior approval of the lender before carrying out such actions, including:

(a) effecting any change in our capital structure or constitutional documents in any manner;
(b) enter into any management contract or similar arrangement whereby its business or operations are

managed by any other person;

(c) undertaking or permitting any merger, de-merger, consolidation, reorganization, scheme of

329

 
arrangement or compromise with creditors or shareholders or effect any scheme of amalgamation or
reconstruction including creation of any subsidiary or permitting any company to become a subsidiary;

(d) change in the normal course of business which will have material financial implications;

(e) incur or cause to incur, any indebtedness in any manner whatsoever;

(f) effect any change in the shareholding pattern and management control in our Company;

(g) undertaking any capital expenditure except being funded by company own resources;

(h) investing in / extending any advances or loans to any group companies, associates, subsidiaries or any
other third party; and

(i) change its financial year-end from the date it has currently adopted or change the accounting methods
or policies currently followed by our Company unless expressly required by law.

7. Events of Default: In terms of the term loan facility, the occurrence of any of the following, among others,
constitute an event of default:
(a) Default in the payment of principal sums;

(

Default in the payment of interest on the facility or any other money payable in terms of the term loan
facility;

(c) If our Company ceases or threatens to cease to carry on any its business, or gives notice of its intention
to do so, or if all or any part of the assets of our Company required or essential for its business or
operations are damaged or destroyed;

(d

Any person acting singularly or with any other person (either directly or indirectly) acquires control of
our Company or of any other person who controls our Company, without the approval of the lender;

(e) Change in ownership, management, constitution and/or control without prior written consent of the
lender;

(f) Occurrence of any cross-default with respect to any of our Company’s indebtedness; and

3

Any obligation under the facility agreement or loan documentation in respect of the term loan, is not or
ceases to be valid, legal and / or binding obligation of any person / party to it or becomes void, illegal,
unenforceable or is repudiated by such person.

8. Material breaches in the covenants in the past three years:
There have been no material breaches in the covenants in the past three Fiscals and during the five-month period
ended August 31, 2021. Further there are no restrictive covenants apart from what has been disclosed in the

Prospectus.

There are no other covenants that are prejudicial or adverse to the interest of the public shareholders. Further the
Company has obtained all required consents from all its lenders to undertake the Offer.

330
SECTION VI: LEGAL AND OTHER INFORMATION

OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS

The details of the outstanding litigation or proceedings involving our Company, Subsidiaries, Directors and
Promoters (‘Relevant Parties”) are described in this section in the manner as detailed below.

Except as stated in this section, as of the date of this Prospectus, there are no (i) outstanding criminal
proceedings involving the Relevant Parties; (ii) outstanding actions taken by statutory or regulatory authorities
against the Relevant Parties; (iii) outstanding claims involving the Relevant Parties for any direct and indirect
tax liabilities; (iv) other pending litigation involving the Relevant Parties (other than proceedings covered
under (i) to (iii) above) which has been determined to be material pursuant to the Materiality Policy (as
disclosed herein below); or (v) pending litigation involving our Group Companies which may have a material
impact on our Company.

In terms of the Materiality Policy, other than outstanding criminal proceedings, statutory or regulatory actions
including outstanding actions, disciplinary action including penalty imposed by SEBI or stock exchanges
against the Promoters in the last five financial years and claims for any direct or indirect tax liabilities
disclosed in point (i) to (iii) above, all other pending litigations involving the Relevant Parties, where the
aggregate monetary claim made by, or against, the Relevant Parties (individually or in aggregate), in any such
pending litigation proceeding exceeds the lower of (i) 1% of our Company’s total consolidated revenue
(calculated on a restated and consolidated basis); or (ii) 5% of our Company’s profit after tax (calculated on a
restated and consolidated basis), in the most recently completed Fiscal, as per the Restated Consolidated
Financial Information shall be considered “material” and, accordingly, have been disclosed in this Prospectus.

Our Company’s consolidated profit after tax for Fiscal 2021 as per the Restated Consolidated Financial
Information was % 451.10 million. Accordingly, we have disclosed all such outstanding litigation proceedings
where the aggregate monetary claim made by or against the Relevant Parties (individually or in aggregate), in
any such pending litigation is equal to or in excess of 22.56 million (being 5% of our profit after tax in Fiscal
2021) as per the Restated Consolidated Financial Information.

For the avoidance of doubt, it is clarified that the Materiality Policy shall be without prejudice to any disclosure
requirements prescribed under the Companies Act, 2013 and the rules thereunder with respect to disclosure of
litigation, notices, disputes and other proceedings in the Offer Documents, or that may be prescribed by SEBI
and/or such other applicable authority with respect to listed companies, or disclosure requirements, as may be
prescribed by S/EBI through its observations on the Offer Documents, or disclosures that may arise from any
investor or other complaints, and that this Policy is solely adopted from the perspective of disclosure
requirements prescribed under the SEBI ICDR Regulations with respect to the Offer Documents and should not
be applied towards any other purpose.

Further, creditors of our Company to whom dues owed by our Company exceed 5 % of our Company's total
dues owed to creditors as of the latest completed financial year, as per the Restated Consolidated Financial
Information, would be considered as material creditors. The trade payables of our Company on a consolidated
basis as on March 31, 2021 was % 2.03 million. Accordingly, a creditor has been considered ‘material’ if the
amount due to such creditor exceeds = 0.10 million as on August 31, 2021.

Unless stated to the contrary, the information provided below is as of the date of this Prospectus.

Certain of our Subsidiaries and Group Companies are regulated entities, namely, Freedom Wealth Solutions
Private Limited, Anand Rathi Share and Stock Brokers Limited and Anand Rathi Advisors Limited are regulated
by SEBI, Anand Rathi Global Finance Limited is regulated by RBI and Anand Rathi Insurance Brokers Limited
is regulated by IRDA. In the normal course of business, these entities are subjected to regulatory oversight and
inspection. During the course of such inspection, certain entities are in receipt of observations/ letters of
deficiency/ advisories from their respective regulators mandating corrective actions be taken by them in this
regard. Such matters are dealt with by the respective entities, as appropriate, including by taking corrective
actions and/ or bringing it to the notice of their respective boards of directors. Further, our Company,
Subsidiaries and Group Companies, in the regular course of their respective businesses receive correspondence
from regulatory authorities to facilitate them in relation to ongoing investigation against their clients.
Accordingly, such correspondences are not included in this Prospectus.

A. Litigation involving our Company

331
I

Litigation proceedings involving our Company

(a)

(b)

(9)

Criminal proceedings

As on the date of this Prospectus, there are no outstanding criminal proceedings involving our
Company.

Statutory or regulatory proceedings

As on the date of this Prospectus, except as disclosed below, there are no other outstanding
statutory or regulatory proceedings involving our Company:

Compounding applications filed by our Company

@ Our Company has, on September 20, 2018, filed three compounding applications
with the RoC under the Companies Act, seeking compounding of certain non-
compliances under the Companies Act, 2013 by our Company and its officers in
default in relation to: (a) a delay in appointment of requisite number of independent
directors for a period of eight months; (b) a delay in the constitution of the audit
committee for a period of 11 months; and (c) a delay in the constitution of the
nomination and remuneration committee for a period of 11 months. These matters are
currently pending before the RoC.

(ii) Our Company has, on February 7, 2020, filed an application for adjudication of
penalties with the RoC (“Adjudication Application”), with respect to (a) two rights
issues of 4,371,000 Equity Shares and 2,169,834 Equity Shares undertaken by our
Company on September 19, 2016 and October 25, 2016, respectively, which were
incorrectly recorded by the Company as private placements, and, subsequently,
entailed suo moto post-facto rectifications to the Company’s corporate records and
consequent revised filings with the RoC on November 1, 2019, with due references
to the original erroneous documentation and correctly recording these allotments as
rights issues; and (b) two private placements of 34,000 Equity Shares and 50,000
Equity Shares on January 9, 2017 and January 19, 2017, respectively, for failure to
comply with the requirements of opening and maintaining a separate bank account
for receipt of application monies. The RoC passed two orders with respect to the
Adjudication Application, both dated March 30, 2021, and imposed penalties of =
0.34 million and 2 0.50 million with respect to the two private placements of 34,000
Equity Shares and 50,000 Equity Shares, respectively, and noted the submissions of
the Company with respect to the Rights Issues. We have paid the penalties
aggregating to = 0.84 million imposed by way of the above-mentioned orders on
April 21, 2021.

Other pending proceedings

As on the date of this Prospectus, except as disclosed below, there is no outstanding civil
litigation involving our Company, which has been considered material by our Company in
accordance with the Materiality Policy, or the outcome of which, irrespective of the monetary
amount involved, could nonetheless have a material adverse effect on our financial position,
business, operations, prospects or reputation:

@ Certain minority shareholders of ARDWPL (formerly AR Wealth Management
Private Limited) (collectively, the “Petitioners”), one of the Company’s
Subsidiaries, collectively holding, 428,490 equity shares (7.97%) of face value of =
10 each of ARDWPL filed a petition dated November 18, 2020 (“Petition”) before
the National Company Law Tribunal, Mumbai Bench (“NCLT Mumbai”), under
Sections 241(1)(a) and (b), and Section 242, read with Section 244 of the Companies
Act, 2013, against the Company, its Subsidiaries (ie. ARDWPL, FWSPL and
FIINFRA), Mr. Anand Rathi, Mr. Amit Rathi, Mr. Rakesh Rawal and others

332
(collectively, the “Respondents”), alleging oppression and mismanagement. The
Petition alleged that pursuant to discussions with the Company, the Petitioners who
were promoters of FWSPL — which incorporated FIINFRA as a wholly owned
subsidiary in 2013 — entered into a shareholders’ agreement and share purchase
agreement in 2016, whereby FWSPL’s shareholders, including the Petitioners
(collectively, “FWSPL’s Shareholders”), transferred their shares to the Company
and in return were allotted shares in ARDWPL. Pursuant to the aforesaid
arrangement, FWSPL became a 100% subsidiary of ARDWPL and FIINFRA
became a step-down subsidiary of ARDWPL. It was, amongst other things, alleged
that: (a) the Respondents, without informing the Petitioners, transferred the
investments held by ARDWPL, in favour of our Company, which is a related party of
ARDWPL and wherein the Petitioners are not shareholders, and thus acted against
the interest of the Petitioners; (b) no valuation report was made available along with
notice of EGM dated January 15, 2020 with respect to transfer of FIINFRA from
ARDWPL to the Company; (c) the Petitioners have been kept away from the affairs
of ARDWPL; © the affairs of ARDWPL are being conducted as a sole
proprietorship; (f) justification provided for sale/transfer of shares held by ARDWPL
in FIINFRA was unreasonable; and (g) the Respondents have failed to meet
legitimate expectation of the Petitioners that the Respondents would perform its
obligations and manage, operate and run ARDWPL as a going concern. The
Petitioners have sought various reliefs from the NCLT in the Petition, including,
amongst other things, passing an ad interim ex parte order, directing Respondents to
maintain status quo in the board and shareholding of ARDWPL, restraining
Respondents from transferring investments/assets of ARDWPL, FWSPL, FIINFRA
and the Company, to declare the resolution passed in ARDWPL’s EGM on January
15, 2020 null and void, directing SEBI (which has been impleaded as a respondent in
the proceedings by the Petitioners) to not consider the offer documents of our
Company with respect to its initial public offering and to stay such offering, to
appoint a receiver to regulate the affairs of ARDWPL, to declare the Respondents
guilty of oppression and mismanagement and to provide the Petitioners with exit on
mutually agreeable terms and to investigate into the affairs of the Company.

Mr. Amit Rathi, one of our Directors, filed an interlocutory application dated January
18, 2021 (“Interlocutory Application”) before the NCLT Mumbai, challenging the
maintainability of the Petition, to which the Petitioners filed a reply dated March 1,
2021 praying for dismissal of the Interlocutory Application.

Further, Mr. Amit Rathi also filed an affidavit dated February 6, 2021 (the “Reply”)
on behalf of our Company and ARDWPL, before the NCLT Mumbai, denying the
allegations in the Petition. Supriya Rathi, one of the Respondents, has also filed a
miscellaneous application dated March 3, 2021, praying for dismissal of the Petition
and that the NCLT refer the disputes arising from the Petition to arbitration.

Further, SEBI filed its affidavit-in-reply dated July 20, 2021 praying that no interim
relief be granted against and that it does not regulate on merits or approve an offer
document such as DRHP but only mandates true, fair and adequate disclosures by
issuing a letter of observation(s) specifying changes about disclosures and
accordingly, the offer document is required to be modified.

NCLT by way of its order dated October 18, 2021 (“October 2021 Order”), while
rejecting the Petitioners’ prayer for grant of interim relief, observed that the rights of
the shareholders qua the Company in the Petition alleging the oppression and
mismanagement are squarely covered under the SHA/SPA dated August 8, 2016 and
hence are bound by the terms and conditions thereof. The Anand Rathi Group being
the majority shareholders and in control of the management of the Company have
acted in the best interest of the Company due to the notification of MCA and the
Petitioners have waived their rights to object to impugn the transfers being made by
acquiescence. Further, the action has been brought about with reference to the
holding of meeting of EGM at a belated stage and hence there is no balance of
convenience and irreparable loss would be cause to the Petitioner. Also, by way of

333
October 2021 Order, NCLT while allowing the miscellaneous application dated
March 3, 2021 directed the parties to refer the dispute to arbitration. The Petitioners
have challenged the October 2021 Order by way of an appeal before the National
Company Law Appellate Tribunal, New Delhi.

(d) Tax proceedings

As on the date of this Prospectus, there are no outstanding tax proceedings involving our
Company.

B. Litigation involving our Subsidiaries

(a) Criminal proceedings

As on the date of this Prospectus, there are no outstanding criminal proceedings involving our
Subsidiaries.

(b) Statutory or regulatory proceedings

As on the date of this Prospectus, there are no outstanding statutory or regulatory proceedings
involving our Subsidiaries.

(©) Other pending proceedings
Please refer to the civil litigation involving certain minority shareholders of ARDWPL
disclosed under ‘Outstanding Litigation and Material Developments — Litigation proceedings
involving our Company — Other pending proceedings’ — Paragraph (A)(1)(c)(i)’ on page 332

of this Prospectus.

(d) Tax proceedings (consolidated)

 

 

 

 

Nature of case Number of cases Amount involved, to the extent
quantifiable (in million)
Direct Tax 1 4.62
Indirect Tax Nil Nil

 

 

 

C. Litigation involving our Directors

I

1.

2.

Criminal proceedings involving our Directors
Criminal proceedings by our Directors
There are no criminal proceedings by our Directors that are outstanding as of the date of this Prospectus.

Criminal proceedings against our Directors

(a) Mr. Anand Rathi

(i) A client of one of our Group Companies, ARSSBL, has filed a criminal complaint bearing no.

772/2013 in the Court of Judicial Magistrate, Farrukhabad, Uttar Pradesh (“Trial Court”) against the
franchisee owner of ARSSBL and others including Mr. Anand Rathi alleging criminal breach of trust
and cheating to the tune of 2 0.26 million. The Trial Court by way of its order dated May 7, 2012
summoned Mr. Anand Rathi along with other persons under Sections 406, 420, 418, 120B of IPC.
Pursuant to receipt of summons from the trial court, Mr. Anand Rathi filed a criminal miscellaneous
petition bearing no. 2243/2014 under Section 482 of Cr.P.C. before the Allahabad High Court for
quashing of the criminal complaint. While disposing off the aforesaid quashing petition, the Allahabad
High Court, by way of its order dated January 27, 2014 observed that there is no direct evidence against
Mr. Anand Rathi and as such no offence is made out against him. However, the Allahabad High Court
held that if objection / discharge application is filed on behalf of Mr. Anand Rathi within 30 days
through counsel, the court concerned will consider and decide the same expeditiously, at appropriate

334

 
(i)

stage, in accordance with the law. As per the observation made by the Allahabad High Court, an
application for discharge was moved by Mr. Anand Rathi before the Trial Court. The Trial Court by its
order dated August 27, 2014, rejected the application for discharge. A criminal revision petition
bearing no. 235/2014 was filed by Mr. Anand Rathi before the Additional Sessions Judge, Farrukhabad
which was also dismissed by way of its order dated April 18, 2015. Mr. Anand Rathi has challenged
the aforesaid order of Additional Sessions Judge, Farrukhabad, and has filed a criminal miscellaneous
writ petition bearing no. 12988/2015 before the Allahabad High Court. The Allahabad High Court by
way of its interim order dated May 26, 2015, has, among other things, held that till the next date of
listing, no coercive action shall be taken against Mr. Anand Rathi in relation to the criminal case no.
772/2013. The matter in the Allahabad High Court is currently pending.

A Dehradun based client of one of our Group Companies, ARSSBL, has lodged an FIR no. 135/09
dated March 13, 2009 before the Kotwali Police Station, Dehradun, against amongst other including
Mr. Anand Rathi and Mr. Pradeep Gupta for offences under Sections 420, 406 and 506 of the IPC.
Pursuant to investigation conducted, the Kotwali Police Station, Dehradun filed a final report dated
August 28, 2009, observing that the matter is of civil nature and in the absence of any evidence no
offence is made out against the concerned persons. Aggrieved by the aforementioned final report, the
client filed a protest petition no. 3844/2011 (which was subsequently /re-numbered as 3990/2012)
before the Court of Chief Judicial Magistrate, Dehradun (“CJM Dehradun”) praying to reject the final
report and take cognizance of the matter. The CJM Dehradun, pursuant to its order dated July 16, 2011
issued summons against Mr. Anand Rathi, Mr. Pradeep Gupta and others for offence under Sections
406 and 467 of IPC.

The client thereafter lodged another FIR no. 436/2010 dated October 14, 2010 before the Kotwali
Police Station, Dehradun against amongst others including Mr. Anand Rathi and Mr. Pradeep Gupta for
offences under Sections 406 and 420/34 of the IPC. Pursuant to an investigation conducted, the
Kotwali Police Station, Dehradun, filed a charge sheet dated May 17, 2011 under Section 406/34 of the
IPC against amongst others including Mr. Anand Rathi and Mr. Pradeep Gupta which was filed before
the Court of Additional Chief Judicial Magistrate (“ACJM, Dehradun”) as case no. 1152/2011 (which
was subsequently re-numbered as 3985/2012).

Pursuant to an application dated July 13, 2012, made by the concerned persons (through advocate)
ACJM, Dehradun, by way of its order dated August 13, 2013 clubbed the abovementioned two cases
being case nos. 3990/2012 and 3985/2012 (“Criminal Proceedings”).

Mr. Anand Rathi and Mr. Pradeep Gupta filed a discharge application dated September 30, 2013 before
the ACJM, Dehradun praying for being discharged from the Criminal Proceedings, which was rejected
by the AJM Dehradun pursuant to its order dated August 2, 2014. A criminal revision petition bearing
no. 317/2014 was filed by Mr. Anand Rathi and Mr. Pradeep Gupta before IV Additional Sessions
Judge, Dehradun praying to set aside the abovementioned order dated August 2, 2014, which was
decided by way of an order dated May 16, 2015 directing the ACJM, Dehradun to decide the discharge
application on merits. The ACJM-II, Dehradun pursuant to its order dated October 13, 2015 allowed
the abovementioned discharge application and discharged Mr. Anand Rathi and Mr. Pradeep Gupta
from the abovementioned offences.

A criminal revision petition bearing no. 11/2016 was filed by Government of Uttarakhand through
Government Advocate before the Additional Sessions Judge, Dehradun challenging the
abovementioned order dated October 13, 2015. The Additional Sessions Judge, Dehradun, pursuant to
its order dated December 7, 2016, confirmed the order dated October 13, 2015. The client has
challenged this order dated December 7, 2016 before the Uttarakhand High Court, at Nainital in a
criminal miscellaneous application under Section 482 of Cr.P.C. The matter is currently pending.

(iii) A Bengaluru based client of ARSSBL who had also availed Loan Against Shares (LAS facility) from

ARGEL has lodged an FIR bearing no. 0032/2017 dated January 28, 2017 before Banashankari police
station, Bengaluru for offences under Sections 120B, 418, 403, 409, 406, 420, 468, 471 and 410 of the
IPC against amongst others including Mr. Anand Rathi, Mr. Pradeep Gupta and Mr. Amit Rathi
alleging loss of % 92 million. While the matter is currently under investigation with the Crime
Investigation Department, Bengaluru (“CIDB”), our Directors, Mr. Anand Rathi, Mr. Pradeep Gupta
and Mr. Amit Rathi including others had filed an application for anticipatory bail bearing criminal

335
petition no. 6329/2017 before the Karnataka High Court (“Court”), which was allowed by way of the
order dated May 29, 2018, subject to certain conditions. Pursuant to investigation, the CIDB filed “B
report” before the Court. However, the Investigation Officer made a request to accord permission to
investigate the matter further under Section 173(8) of Cr P.C. Accordingly, the Court has allowed the
same and the matter is currently pending further investigation.

(b) Mr. Amit Rathi

@

(i)

(iii)

(iv)

(vy)

Pursuant to a complaint lodged by an investor against directors and key management persons of
National Spot Exchange Limited (“NSEL”), Financial Technologies India Limited, certain
borrowers/trading members of NSEL, certain brokers and others for payment default and other
wrongdoing at NSEL platform, the Economic Offence Wing of Mumbai Police (“EOW”) registered
FIR bearing no. 89/2013 dated September 30, 2013. Pursuant to investigation, EOW filed charge sheets
against NSEL, its officials, defaulting borrowers and brokers including ARCL and Mr. Amit Rathi
(former director of ARCL) before the Sessions Judge, Special Court under The Maharashtra Protection
of Interest of Depositors (In Financial Establishments) Act, 1999 (“MPID Act”) for offences under
Section 120-B read with Sections 409, 420, 465, 467, 468, 471, 474, 477-A of the IPC and section 3 of
MPID Act. By way of an order dated March 4, 2019, the Sessions Judge, Special Court under MPID
Act issued process/summons to Mr. Amit Rathi and ARCL for attendance and to answer to a charge of
commission of offense mentioned in the charge sheet. Mr. Amit Rathi and ARCL has challenged the
aforesaid order dated March 4, 2019 in criminal writ petition bearing no. 555/2020 dated January 27,
2020 before the Bombay High Court. The matter is currently pending.

ARGEFL initiated cheque bounce proceedings on February 1, 2018 and June 27, 2018 against a Kota,
Rajasthan, based client before the 33" Metropolitan Court, Ballard Pier, Mumbai for dishonour of
cheque issued against repayment of outstanding loan amount amounting to % 2.5 million and 26.63
million respectively. Pending the aforesaid cheque bounce proceedings, the client has registered FIR
No. 456/2019 on September 20, 2019 at Police Station Anantpur, Kota, Rajasthan against Mr. Amit
Anand Rathi, Mr. Pradeep Gupta and other officials alleging, amongst other things, cheating and
fabrication of documents under Sections 420, 467, 468, 471 and 120B of IPC. The matter is currently
under investigation.

ARGEFL initiated cheque bounce proceedings on February 1, 2018 and June 27, 2018 against a Kota,
Rajasthan based client before the 33" Metropolitan Court, Ballard Pier, Mumbai for dishonour of
cheque issued against repayment of outstanding loan amount amounting to 22.5 million and %3.98
million respectively. Pending the aforesaid cheque bounce proceedings, the client has registered FIR
No. 457/2019 on September 20, 2019 at Police Station Anantpur, Kota, Rajasthan against Mr. Amit
Anand Rathi, Mr. Pradeep Gupta and other officials alleging, amongst other things, cheating and
fabrication of documents under Sections 420, 467, 468, 471 and 120B of IPC. The matter is currently
under investigation.

A Mumbai based client having invested in Odyssey Convertible Bond Opportunities Fund Limited
filed a miscellaneous case bearing no. 1300425/2019 in the Court of Additional Chief Metropolitan
Magistrate at Dadar, Mumbai against Mr. Amit Rathi and ARFSL, amongst others, alleging
commission of offences under Sections 406, 417, 418 and 420 read with Sections 34 and 120B of IPC.
The complainant has prayed for directions under Section 156(3) of the Code of Criminal Procedure to
the concerned police station for investigation and report.

Please refer to the criminal litigation involving the Bengaluru based client of ARSSBL and ARGFL
disclosed under ‘Outstanding Litigation and Material Developments — Litigation involving our
Directors — Criminal proceedings involving our Directors — Criminal proceedings against our
Directors — Mr. Anand Rathi — Paragraph ©(1)(2)(a)(iii)’ on page 335 of this Prospectus.

(c) Mr. Pradeep Gupta

336
(a) Please refer to the criminal litigation involving the Dehradun based client of ARSSBL disclosed under
‘Outstanding Litigation and Material Developments — Litigation involving our Directors — Criminal
proceedings involving our Directors — Criminal proceedings against our Directors — Mr. Anand Rathi
~ Paragraph (C)(1)(2)(a)(ii)’ on page 335 of this Prospectus.

(b) Please refer to the criminal litigation involving the Bengaluru based client of ARSSBL and ARGFL
disclosed under ‘Outstanding Litigation and Material Developments — Litigation involving our
Directors — Criminal proceedings involving our Directors — Criminal proceedings against our
Directors — Mr. Anand Rathi — Paragraph (C)()(2)(a)(iii)’ on page 335 of this Prospectus.

  

(co) Please refer to the criminal litigation involving the Kota, Rajasthan based two clients of ARGFL
disclosed under ‘Outstanding Litigation and Material Developments — Litigation involving our
Directors — Criminal proceedings involving our Directors — Criminal proceedings against our
Directors — Mr. Amit Rathi — Paragraphs ©(D(2)(b)(ii) and (C)()(2)(b)(iii)’ on page 336 of this
Prospectus.

II. Other pending proceedings involving our Directors

As on the date of this Prospectus, except as disclosed below, there are no other pending proceedings involving
our Directors:

1. Pending proceedings by our Directors

There are no civil proceedings by our Directors that are outstanding as of the date of this Prospectus.

2. Pending proceedings against our Directors

(a) Mr. Anand Rathi, Mr. Amit Rathi and Mr. Pradeep Gupta
A client having traded at NSEL platform through ARCL has filed a commercial suit bearing no.
COMS/57/2016 dated August 12, 2016 against ARFSL, Anand Rathi Commodities Limited, Mr.
Anand Rathi, Mr. Amit Rathi, Mr. Pradeep Gupta and others, before the Commercial Division of
Bombay High Court, praying for an aggregate sum of % 73.15 million with interest thereon against its
unsettled trades on NSEL, brokerage/C&F charges and damages. The said matter is currently pending.

(b) Mr. Anand Rathi, Mr. Amit Rathi and Mr. Rakesh Rawal:
Please refer to the civil litigation involving minority shareholders of ARDWPL disclosed under
‘Outstanding Litigation and Material Developments — Litigation proceedings involving our Company —
Other pending proceedings — Paragraph (A)(I) (c)(i)’ on page 332 of this Prospectus.

III. Other Litigation

(a) Mr. Pradeep Gupta
Mr. Pradeep Gupta has received summons from the Economic Office Wing, Mumbai, dated January
13, 2021 and February 19, 2021 for personal appearance along with requisite documents in connection

with an ongoing investigation in EOW CR No. 89/13.

IV. Taxation proceedings (consolidated)

 

 

 

 

 

Nature of case Number of cases Amount involved, to the extent
quantifiable (in 2 million)
‘Mr. Pradeep Gupta
Direct Tax 1 3.63
Indirect Tax Nil Nil

 

 

 

 

D. Litigation involving our Promoters

337
iii.

Outstanding criminal litigation involving Mr. Anand Rathi or Mr. Pradeep Gupta
Criminal proceedings by Mr. Anand Rathi or Mr. Pradeep Gupta

There are no criminal proceedings by Mr. Anand Rathi and Mr. Pradeep Gupta that are outstanding as of
the date of this Prospectus.

Criminal proceedings against Mr. Anand Rathi or Mr. Pradeep Gupta

Except as disclosed under ‘Outstanding Litigation and Material Developments — Litigation involving our
Directors — Criminal proceedings involving our Directors — Criminal proceedings against our Directors —
Paragraphs ©(2)(a) and (C)(2)(c)’ on pages 334 and 336, respectively, of this Prospectus, there are no
criminal proceedings against Mr. Anand Rathi or Mr. Pradeep Gupta that are outstanding as of the date of
this Prospectus.

Other pending proceedings involving Mr. Anand Rathi or Mr. Pradeep Gupta

1. Other pending proceedings by Mr. Anand Rathi or Mr. Pradeep Gupta

There are no civil proceedings by Mr. Anand Rathi and Mr. Pradeep Gupta that are outstanding as of the
date of this Prospectus.

2. Other pending proceedings against Mr. Anand Rathi or Mr. Pradeep Gupta

Except as disclosed under ‘Outstanding Litigation and Material Developments — Litigation involving our
Directors — Other pending proceedings involving our Directors — Pending proceedings against our
Directors — Paragraph ©(I1)(1)’ on page 337 of this Prospectus, there are no civil proceedings against Mr.
Anand Rathi or Mr. Pradeep Gupta that are outstanding as of the date of this Prospectus.

Statutory or regulatory proceedings against Mr. Anand Rathi or Mr. Pradeep Gupta

Please refer to the disclosures under ‘Outstanding Litigation and Material Developments — Litigation
involving our Directors — Paragraph ©(III)(a)’ on page 337 of this Prospectus. For details of the matter
initiated by SEBI against Mr. Anand Rathi, one of our Promoters, please refer to the matter disclosed under
‘Outstanding Litigation and Material Developments — Orders passed by SEBI against the Group
Companies, Our Promoters and Directors — Mr. Anand Rathi, Anand Rathi Share and Stock Brokers
Limited — Paragraph a — i’ on page 340 of this Prospectus.

Tax proceedings involving Mr. Pradeep Gupta

Please refer to the disclosures under ‘Outstanding Litigation and Material Developments — Litigation
involving our Directors — Taxation proceedings — Paragraph ©(IV)’ on page 337 of this Prospectus.

Litigation involving ARFSL

Outstanding criminal litigation involving ARFSL

Criminal proceedings by ARFSL

There are no criminal proceedings by ARFSL that are outstanding as of the date of this Prospectus.

Criminal proceedings against ARFSL

Please refer to the criminal litigation involving a Mumbai based client and Mr. Amit Rathi disclosed under
‘Outstanding Litigation and Material Developments — Litigation involving our Directors — Criminal
proceedings involving our Directors — Criminal proceedings against our Directors — Mr. Amit Rathi- .

Paragraph ©(1)(2)(b)’ on page 336 of this Prospectus.

Other pending proceedings involving ARFSL

338
1.

iii.

Other pending proceedings by ARFSL
There are no civil proceedings by ARFSL that are outstanding as of the date of this Prospectus.
Other pending proceedings against ARFSL

ji A civil suit bearing no. CS (COMM) no. 1397/2016 has been filed by a client before the Delhi
High Court against, amongst others including ARFSL, ARGFL and ARAL claiming a total sum of
% 34.35 million towards the principal amount, interest and damages thereon for alleged losses
suffered by them as a consequence of the tortuous negligence and/ or fraudulent misrepresentation
in advise rendered by ARFSL, ARGFL and ARAL on the basis of which they had advanced
monies to Arankari Risk Management Services Private Limited. The matter is currently pending.

(ii) A company appeal bearing no. 8/2021 under section 59 and 213 of the Companies Act, 2013 has
been filed by a shareholder and Director of a company named Ravindranath GE Medical
Association Private Limited (“RGMAPL”) before National Company Law Tribunal, Chennai
against ARFSL, amongst others (“Respondents”). It is the contention of the Petitioner that ARFSL
is a beneficiary of 6,08,10,000 Compulsory Convertible Preference Shares allotted on March 26,
2013 which has been subsequently transferred on December 01, 2015 to another Respondent. The
Petitioner while making allegations against his father has contended that that his shareholding of
10,25,000 equity shares in RGMAPL has been illegally transferred and his name as a shareholder
of RGMAPL has been removed from list of shareholders. Accordingly, amongst other reliefs, the
Petitioner has prayed to (a) rectify register of members and reinstate his name as shareholder
holding 10,25,000 equity shares; (b) direct Registrar or Regional Director to investigate into the
affairs of RGMAPL; (c) direct RoC to initiate action against his father for filing fraudulent
documents with RoC. No relief has been sought against ARFSL.

(iii) Please refer to the civil litigation involving ARCL client (Suit bearing no. COMS/57/2016)
disclosed under ‘Outstanding Litigation and Material Developments — Litigation involving our
Directors — Other pending proceedings against our Directors — Mr. Anand Rathi, Mr. Amit Rathi
and Mr. Pradeep Gupta— Paragraphs ©(II)(2)(a)&(b)’ on page 337 of this Prospectus.

Statutory or regulatory proceedings

There are no statutory or regulatory proceedings involving ARFSL that are outstanding as of the date of this
Prospectus.

Tax proceedings involving ARFSL
There are no tax proceedings involving ARFSL that are outstanding as of the date of this Prospectus.

Disciplinary action including penalty imposed by SEBI or stock exchanges involving our Promoters in
the last five financial years including outstanding action

Except as disclosed below, no disciplinary action including penalty has been imposed by SEBI or stock
exchanges involving our Promoters in the last five Fiscals preceding the date of this Prospectus.

For details of the matter initiated by SEBI against ARFSL, one of our Promoters, please refer to the matter
disclosed under ‘Outstanding Litigation and Material Developments — Orders passed by SEBI against the
Group Companies, our Promoters and Directors’ on page 340, of this Prospectus.

Any pending litigation involving the Group Companies which has a material impact on our Company
Please refer to the criminal litigation involving ARSSBL and ARGFL disclosed under ‘Outstanding
Litigation and Material Developments — Litigation involving our Directors — Criminal proceedings — Mr.

Anand Rathi’ and ‘Outstanding Litigation and Material Developments — Litigation involving our Directors
— Criminal proceedings — Mr. Amit Rathi — Paragraphs ©(1)(2)((b)’ on page 336 of this Prospectus.

339
Please refer to the civil proceeding involving ARFSL, ARGFL and ARAL disclosed under ‘Outstanding
Litigation and Material Developments — Litigation involving our Promoters — Litigation involving ARFSL
~ Other pending proceedings involving ARFSL — Other Pending Proceedings against ARFSL — Paragraph
(D)(2)(ii)’ on page 338 of this Prospectus.

For details of matters initiated by SEBI against Anand Rathi Securities Private Limited (broking business
was subsequently merged with Anand Rathi Share and Stock Brokers Limited), please refer to the matters
disclosed under ‘Outstanding Litigation and Material Developments — Orders passed by SEBI against the
Group Companies, our Promoters and Directors ° on page 340 of this Prospectus.

For details of matters initiated by SEBI against ARAL, please refer to the matters disclosed under
‘Outstanding Litigation and Material Developments — Orders passed by SEBI against the Group
Companies, our Promoters and Directors ° on page 340 of this Prospectus.

During the course of a regular monitoring and surveillance of trading in the F&O segment, NSE
purportedly observed certain non-genuine trades, declaring that ARSSBL, one of our Group Companies, is
the trading member common on both sides of the reversal trades which were executed in a synchronized
manner, and that multiple sets of reversal transactions and the frequency and pattern of such transactions
during a definitive period indicated that the transactions were intentionally synchronised matched. Further,
it was observed by NSE that the transactions involved were executed with the same companies (namely,
Anand Rathi Global Finance Limited, one of our Group Companies, and our Company) under common
management. Accordingly, NSE, by way of its order dated April 9, 2021 (“April 9 Order”), imposed a
penalty amounting to = 82.92 million on ARSSBL in terms of NSE Circular No. NSE/INVG/39647 dated
December 13, 2018, Circular No. NSE/INVG/2019/40175 dated February 7, 2019 and Circular No.
NSE/INVG/2020/43435 dated February 4, 2020. ARSSBL has appealed the April 9 Order before the
Securities Appellate Tribunal, Mumbai (“SAT”). The matter is currently pending. However, in compliance
with the interim order dated May 20, 2021, passed by the SAT, ARSSBL deposited the penalty amount of
% 82.92 million with NSE on May 27, 2021, subject to the result of the appeal.

Orders passed by SEBI against the Group Companies, our Promoters and Directors:
a. Mr. Anand Rathi, Anand Rathi Share and Stock Brokers Limited:

Pursuant to investigation regarding drop in sensex by 176 points after 2001 Union Budget, SEBI
carried out investigation and allegedly came to know that Mr. Anand Rathi, the then President of the
BSE, had sought some information in respect of the position of some brokers/FIIS in certain scrips
from the Surveillance Department of BSE. As an emergent measure, SEBI on March 2, 2001 passed an
ex parte Interim Order, restraining Mr. Anand Rathi from acting as director-member of BSE and also
directed Mr. Rathi and his four associate entities (viz. Anand Rathi Securities Private Limited, Rathi
Global Finance Limited, Rathi Capital & Securities Private Limited and Navaratan Capital Securities
Limited) not to undertake any fresh business as brokers till further orders. Subsequently, upon
completion of enquiry in the matter, SEBI by way of its order dated November 9, 2001 (“2001 Order”)
came to the conclusion that Mr. Anand Rathi had collected price sensitive information from the
Surveillance Department of BSE in breach of the governing norms and considered him as “not a fit and
proper person” to be associated with the management of the exchange etc. Also, SEBI confirmed
suspension of registration of two associate entities namely Anand Rathi Securities Private Limited
(whose name got changed to ARFSL and subsequently BSE Broking Business of ARFSL stand
transferred to and vested in ARSSBL as per the Scheme of Arrangement sanctioned by the Hon’ble
Bombay High Court in Company Petition No. 420/2009, 421/2009 and 422/2009) and Anand Rathi
Capital Advisors Private Limited (formerly Anand Rathi Direct (India) Private Limited) for nine
months.

The 2001 Order was challenged by Mr. Anand Rathi, Anand Rathi Securities Private Limited and
Anand Rathi Direct (India) Private Limited (collectively “the Appellant”) in 3 separate appeals before
SAT. Although the suspension period of nine months was already over and the suspension order was
no more in operation, since the stink still remain as the finding of guilt continues, the Appellant chose
to pursue the appeal.

340
ii.

iii.

SAT by way of judgment dated February 28, 2002 while observing that the Investigating Officer did
not find adequate evidence of misuse of the information by these entities/associates, discharged Anand
Rathi Securities Private Limited and Anand Rathi Direct (India) Private Limited and held that they are
not liable for any penalty of suspension under Regulation 26 of SEBI (Stockbroker and Sub broker)
Regulations, 1992. Also, SAT observed that SEBI has not put any restraint on Mr. Anand Rathi
directly dealing in shares as a stockbroker or acting as Chief Executive of any broking entity, meaning
thereby that he is free to do stock broking business. He was disqualified only from holding directorship
or trusteeship of any capital market related entity, which can be even a private limited broking
company and there is no bar on Mr. Anand Rathi setting up a large broking firm and managing the
same. It is thus clear that Mr. Anand Rathi was not found to be unfit to carry on stock broking business
and handle investors’ scrips /funds. If Mr. Anand Rathi is a fit and proper person to do business,
following the same yardstick the entities owned and controlled by him also should be eligible to carry
on business.

Anand Rathi Share and Stock Brokers Limited and Anand Rathi Financial Services Limited:

During the period August 2000 to March 2001, severe fluctuation in the price of the scrip of M/s.
Amara Raja Batteries Ltd (“ARBL”) was observed and certain complaints were received by SEBI
regarding market manipulation /irregularities in the scrip. SEBI conducted a detailed investigation into
the trading in the scrip of ARBL and it was revealed that Mr. Harinarayan Bajaj and Mr. Rahul Bajaj
were the predominant traders in the scrip of ARBL during the period August 2000 to March 2001 and
were responsible for creating a false market in the scrip of ARBL. Investigations further revealed that
various members of NSE and BSE aided and abetted Mr. Harinarayan Bajaj and Mr. Rahul Bajaj in
creating a false market in the scrip of ARBL. In the course of investigation, it was also purportedly
observed that M/s Bid Securities Private Limited, (“BSPL”), a sub-broker of Anand Rathi Securities
Private Limited (“ARSPL”) (whose name got changed to ARFSL and subsequently BSE Broking
Business of ARFSL stand transferred to and vested in ARSSBL as per the Scheme of Arrangement
sanctioned by the Hon’ble Bombay High Court in Company Petition No. 420/2009, 421/2009 and
422/2009), had traded in the scrip of ARBL on behalf of Mr. Harinarayan Bajaj.

SEBI appointed an Enquiry Officer to enquire into the dealing by ARSPL and its sub-brokers as per the
provisions of Regulation 28 of the SEBI (Stock Broker & Sub Broker) Regulations, 1992 and after the
said Regulations were amended w.e.f. 27.9.2002 by the SEBI (Procedure for holding Enquiry by
Enquiry Officer and imposing penalty) Regulations, 2003 ( “Enquiry Regulations”). In the enquiry
report, the Enquiry Officer has found that it could not be held that ARSPL had aided and abetted Mr.
Harinarayan Bajaj and his family in creating a false market in the scrip of ARBL and that it could not
be held that ARSPL had failed to exercise due skill and care in its dealing through its sub-broker and
therefore found that it was not a fit case for imposition of penalty on ARSPL, however, in view of the
findings with regard to the dealings of its sub-broker, BSPL, the Enquiry Officer recommended that
ARSPL may be directed to be more cautious in future. Pursuant to the submission of report by Enquiry
Officer, Show Cause Notice (“SCN”) was issued to ARSPL and ARSPL submitted reply to the SCN.

After considering the material on record, Chairman, SEBI by way of its order dated August 14, 2003
held that ARSPL was not indulged in or aided and abetted the creation of a false market in the scrip of
ARBL. However, ARSPL was directed to be more cautious in dealing with sub-brokers in future.

SEBI carried out inspection of the books of accounts, documents and other records maintained by
Anand Rathi Securities Private Limited (“ARSPL”) (whose name got changed to ARFSL and
subsequently BSE Broking Business of ARFSL stand transferred to and vested in ARSSBL as per the
Scheme of Arrangement sanctioned by the Hon’ble Bombay High Court in Company Petition No.
420/2009, 421/2009 and 422/2009) during the period February 2002 to March 2003. Based on certain
violations purportedly observed during the inspection, and pursuant to ARSPL’s reply an Adjudicating
Officer was appointed to enquire into and adjudge the alleged violations committed by ARSPL.

Pursuant to issuance of Show Cause Notice (“SCN”) and after considering the reply submitted by
ARSPL, the Adjudicating Office concluded that ARSPL amongst other things, did not collect upfront
margins from HNIs before executing their transactions and did not frame code of internal procedures
and conduct for prevention of insider trading. Accordingly, by way of order dated November 3, 2004
the Adjudicating Officer imposed a monetary penalty of % 0.10 million on ARSPL. ARSPL has paid
the penalty amount.

341
vi.

vii.

SEBI carried out an inspection of the books of accounts, documents and other records maintained by
Anand Rathi Share and Stock Brokers Limited (“ARSSBL”) during the period April, 2006 till the date
of the said inspection. After checking of the books of accounts and records of ARSSBL, certain
deficiencies were observed in the functioning of ARSSBL. An Adjudicating Officer was appointed to
enquire into and adjudge the alleged violations committed by ARSSBL. Pursuant to issuance of Show
Cause Notice (“SCN”) and after considering the reply submitted by ARSSBL, the Adjudicating Office
concluded that ARSSBL, (a) mentioned different name/s of sub-brokers in the tripartite agreement; (b)
committed deficiencies in broker client agreement and failed to capture bank account and other details;
(c) allowed an entity controlled by one of its directors and his family, to act as its sub-broker; (d)
entered wrong bank details, failed to sign the agreement and failed to capture the signature of the client;
and (e) levied custody charges. Accordingly, by way of order dated May 4, 2009, the Adjudicating
Officer imposed a monetary penalty of % 0.10 million. ARSSBL has paid the penalty amount.

Pursuant to complaint received by SEBI regarding illegal trading in securities allegedly carried out by
Arihant Investment (Proprietor: Mr. Bhadresh Sanghvi) (sub-broker of ARSSBL) from an unauthorized
trading location located at Ahmedabad, BSE and NSE jointly conducted a joint inspection on October
20, 2009 on direction of SEBI and submitted their reports to SEBI by way of their letters dated
November 30, 2009 and December 03, 2009 respectively. An Adjudicating Officer was appointed to
enquire into and adjudge the alleged violations committed by ARSSBL. Pursuant to issuance of Show
Cause Notice (“SCN”) and after considering the reply submitted by ARSSBL, the Adjudicating Office
concluded that ARSSBL amongst other things had, (a) kept its trading terminal at an unauthorized
location and allowed its sub-broker to trade from such location; (b) allowed and assisted the sub-broker
to act as unregistered sub-broker; and (c) helped and assisted the sub-broker in carrying out illegal
trades from the aforesaid unauthorized location. Accordingly, by way of order dated February 07, 2011,
the Adjudicating Officer imposed a monetary penalty of 2 0.60 million. ARSSBL has paid the penalty
amount.

SEBI conducted an inspection of books and records of M/s. Anand Rathi Financial Services Limited
(“ARFSL”) (BSE Broking Business of ARFSL stand transferred to and vested in ARSSBL as per the
Scheme of Arrangement sanctioned by the Hon’ble Bombay High Court in Company Petition No.
420/2009, 421/2009 and 422/2009), member, BSE, NSE and CDSL for the period April 01, 2007 to
March 31, 2009. The inspection team observed certain deficiencies in the functioning of ARFSL
including (a) non delivery of contract notes to the clients in respect of bounce ECNs, (b) not having the
adequate system in place to check receipt of third party cheques, (c) not followed account opening
process properly and discrepancies in KYC account opening form, (d) discrepancies in processing of
Delivery Instructions Slips and (e) delay in dispatch of physical documents to Issuer/Registrar and
Transfer Agent and rejection of demat requests due to ARFSL’s mistake. Accordingly, SEBI appointed
Adjudicating Officer under section 151 of the SEBI Act read with rule 3 of SEBI (Procedure for
Holding Inquiry and Imposing Penalty by Adjudicating Officer) Rules, 1995 and 19H of Depositories
Act read with rule (3) of Depositories (Procedure for Holding Inquiry and Imposing Penalties by
Adjudicating Officer) Rules, 2005 to inquire into and adjudge the alleged violations of provisions of
Brokers Regulations, DP Regulations and certain SEBI Circulars committed by ARFSL. The
Adjudicating Officer by way of its order dated November 30, 2011 held that ARFSL has violated the
provisions of Brokers Regulations, DP Regulations and certain SEBI Circulars and imposed a
monetary penalty of = 0.50 million on ARFSL. The penalty amount has been paid by ARFSL.

SEBI conducted an investigation into the trading in the scrip of Winsome Textile Industries Limited on
BSE during the period January 1, 2009 to August 31, 2009. It was noted from the findings of the
investigation report that the scrip opened at 23.80 on January 01, 2009, reached a period high of 2
60/- on August 11, 2009, period low of 2% 17.70 on January 01, 2009 and closed at = 55.80 on August
31, 2009. The average daily volume during the period was 42,249 shares. SEBI appointed Adjudicating
Officer to inquire into and adjudge under Section 15HB of the SEBI Act the violation of Clause A (2)
of Code of Conduct for Stock Brokers as specified under Regulation 7 of SEBI (Stock Brokers and Sub
Brokers) Regulations, 1992 alleged to have been committed by Anand Rathi Share & Stock Brokers
Limited (“ARSSBL”). However, the Adjudicating Officer, by way of its order dated November 21,
2013 while concluding that there is no evidence available on record to suggest that ARSSBL was in
any manner involved with its clients in executing the synchronised trades, held that it is difficult to

342
viii.

conclude that the ARSSBL has violated Clause A (2) of Code of Conduct for Stock Brokers as
specified under Regulation 7 of SEBI (Stock Brokers and Sub Brokers) Regulations, 1992.

SEBI conducted investigation into the alleged irregularities in the scrip of Kwality Ltd. For the possible
violation of the provisions of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices)
Regulations, 2003, SEBI (Stock Brokers and Sub Brokers) Regulations, 1992 by Madura Biotech
Private Limited (“MBPL”) and Anand Rathi Financial Services Limited (““ARFSL”) (BSE Broking
Business of ARFSL stand transferred to and vested in ARSSBL as per the Scheme of Arrangement
sanctioned by the Hon’ble Bombay High Court in Company Petition No. 420/2009, 421/2009 and
422/2009).

The Adjudicating Officer (“AO”) was appointed to inquire and adjudge under Section 15 HA of the
SEBI Act, the alleged violation of Regulations 3(a) to (d), 4(1), 4(2)(a) and (g) of PFUTP Regulations
by MBPL and under Section 15HB of the SEBI Act, the alleged violation of and Clause A(2) of Code
of Conduct for Stock Brokers as specified under Schedule II read with Regulation 7 of Stock Brokers
Regulations by ARFSL. AO by way of its order dated January 30, 2018 concluded that the violation of
Regulations 3(a) to (d), 4(1), 4(2)(a) and (g) of the PFUTP Regulations against MBPL does not stand
established on the basis of the material placed before it in this proceeding. Further, since, the
manipulation, malpractices or violation of aforesaid provisions of PFUTP Regulations are not
established, the alleged violation of Clause A(2) of the Code of Conduct of Stock Brokers as specified
under Schedule II read with Regulation 7 of the Stock Brokers Regulations which are consequential to
establishment of manipulative/ fraudulent exercise, are also not established against ARFSL.

SEBI conducted investigation into trading in the scrip of Nature Hue Chem Limited (“NHCL”) for the
period October 01, 2009 to March 31, 2010. The shares of NHCL were listed at BSE, Ahmedabad
Stock Exchange (“ASE”), Madhya Pradesh Stock Exchange Limited at Indore (“MPSE”) and Jaipur
Stock Exchange (JSE). However the shares were traded only at BSE. During the period of
investigation, BSE Sensex moved from 15,404.94 to 17,711.35 registering an increase of 2306.41
points (14.97%). During the same period, price of the scrip in BSE moved from % 15.45 to = 50.2
registering an increase of % 34.75 (224.92%). The scrip closed at % 3.37 in BSE on February 04, 2015.
Investigation observed that a group of connected/ related clients entered into transactions with each
other and executed synchronized trades, reversal of trades and self-trades leading to creation of false
and misleading appearance of trading and hence fraudulently contributed to positive Last Traded Price
(LTP), New High Price (NHP) leading to artificial price rise in the scrip of NHCL.

Adjudicating Officer (“AO”) was appointed under section under Section 19 read with section 15-I of
the SEBI Act and Rule 3 of SEBI (Procedure for Holding Inquiry and Imposing Penalties by
Adjudicating Officer) Rule, 1995 (Rules), to inquire into under Sections 15HA in respect of certain
individuals/HUF the alleged violations of the provisions of SEBI Act,1992, SEBI (Prohibition of
fraudulent and Unfair Trade Practices relating to the Securities Market) Regulation, 2003 (PFUTP
Regulation) and under section 15HB of the SEBI Act, 1992 in respect of Anand Rathi Financial
Services Limited (“ARFSL”) (BSE Broking Business of ARFSL stand transferred to and vested in
ARSSBL as per the Scheme of Arrangement sanctioned by the Hon’ble Bombay High Court in
Company Petition No. 420/2009, 421/2009 and 422/2009) the alleged non-compliance of Clause A (2)
of the Code of Conduct for Stock Brokers as specified under Schedule II read with Regulation 9(f) of
SEBI (Stock Brokers and Sub Brokers) Regulations, 1992 (SBSB Regulation, 1992) in the matter. AO
by way of its order dated May 30, 2018, while accepting the submission made by ARFSL held that
ARFSL had taken steps immediately when the self-trades were executed through their terminal and
hence it can be concluded that ARFL acted with due skill care and diligence in the conduct of his
business. Accordingly, the AO did not held ARFSL liable to penalty under section 15 HB of SEBI Act.

SEBI conducted a special purpose inspection of books and records of ARSSBL during January 23 and
24, 2014 covering the period from April 2012 till the date of inspection to examine whether ARSSBL
has complied with the provisions of SEBI Circulars dated November 18, 1993 and August 27, 2003
with respect to segregation of funds and securities of clients. On October 31, 2015, SEBI issued Show
Cause Notice (“SCN”) to show cause as to why an inquiry should not be initiated against it and penalty
be not imposed for the alleged violations. After considering ARSSBL response to SCN and personal
hearing, the Adjudicating Officer by way of its order dated December 31, 2015 observed that there has

343
xi.

xii.

been transfer of funds between commodities and securities broking companies on a frequent and
regular basis. Accordingly, by way of the said order, the Adjudicating Officer imposed a monetary
penalty of % 3.00 million. The aforesaid order was challenged by ARSSBL in appeal and the Securities
Appellate Tribunal (“SAT”) by way of its order dated November 06, 2019 reduced the penalty to &
0.50 million. ARSSBL has paid the penalty amount.

SEBI, National Stock Exchange (“NSE”) and BSE Limited (“BSE”) carried out inspection on October
13, 2014, October 14, 2014 and November 5, 2014 to verify compliance by ARSSBL with Circulars,
Acts, Rules, Regulations, Bye Laws of SEBI, NSE and BSE. A Show Cause Notice (“SCN”) dated
October 5, 2018 was issued to ARSSBL under Rule 4 of SEBI (Procedure for Holding Inquiry and
imposing penalties by Adjudicating Officer) Rules, 1995 to show cause as to why an inquiry be not
held and penalty be not imposed under Section 15 HB of the SEBI Act 1992 for the violations alleged
in the SCN. After considering ARSSBL response to SCN and personal hearing, the Adjudicating
Officer by way of its order dated November 27, 2018 has observed that Anand Rathi Share and Stock
Brokers Limited mixed-up client’s funds with its own funds and vice-versa and also that the said
transfer of funds from the Client’s account to own account has taken place on several occasions during
the inspection period. Accordingly, the Adjudicating Officer has imposed a monetary penalty of = 0.10
million. ARSSBL has paid the penalty amount.

Anand Rathi Advisors Limited:

SEBI had initiated adjudication proceedings under Section 15-I of the Securities and Exchange Board
of India Act, 1992 read with Rule 5 of SEBI (Procedure for Holding Enquiry and Imposing Penalty by
Adjudicating Officer) Rules, 1995 against ARAL in the matter of Dr. Datsons Labs Ltd., (Formerly
Anjaneya Lifecare Ltd.,) inter alia alleging that ARAL has not carried out proper due diligence in
ascertaining the accuracy of the disclosures made in the offer documents wherein ARAL acted as a
Merchant Banker. The Adjudicating Officer by way of its order dated July 31, 2018 imposed monetary
penalty of % 0.50 million under Section 15HB of SEBI Act against ARAL for violation of the
provisions of Regulation 64(1) of SEBI (ICDR) Regulations, 2009 and Regulation 13 read with
Clauses 1, 2, 3, 4, 6, 7 and 21 of the Code of Conduct for Merchant Bankers specified under Schedule
III of SEBI (Merchant Bankers) Regulations, 1992. ARAL has paid the penalty amount.

Outstanding dues to creditors

In accordance with the Materiality Policy, our Company considers such creditors ‘material’ to whom
the amount due exceeds 5% of the total dues owed to the creditors as of the latest completed financial
year, as per the Restated Consolidated Financial Information. Accordingly, a creditor has been
considered ‘material’ if the amount due to such creditor exceeds 2 0.10 million as on August 31, 2021.
(“Material Creditors”)

As on August 31, 2021, the total outstanding dues (trade payables) owed to micro, small and medium
enterprises were NIL.

 

 

 

 

 

 

 

 

 

Particulars Number of Amount involved (2 in million)
creditors
Outstanding dues to micro, small and medium Nil Nil
enterprises
Dues to Material Creditors 0 0.00
Outstanding dues to other creditors 3 0.12
Total Outstanding Dues 3 0.12

 

344
GOVERNMENT AND OTHER APPROVALS

We have set out below an indicative list of approvals obtained by our Company and our Material Subsidiary
which are considered material and necessary for the purpose of undertaking its business activities. Our
Company and its Material Subsidiary have obtained all material consents, licenses, permissions, registrations
and approvals, from various governmental statutory and regulatory authorities, which are necessary for
undertaking our current business activities and operations. Except as disclosed below, no further material
approvals are required for carrying on the present business activities and operations of our Company and its
Material Subsidiary. In the event any of the approvals and licenses that are required for our business operations
expires in the ordinary course, we make applications for their renewal from time to time. Unless otherwise
stated, these approvals are valid as on the date of this Prospectus.

For details in connection with the regulatory and legal framework in India within which our Company operates,
please see “Key Regulations and Policies in India” on page 177 of this Prospectus.

I. Approvals relating to the Offer

For the approvals and authorizations obtained by our Company in relation to the Offer, please see “Other
Regulatory and Statutory Disclosures” on page 347 of this Prospectus and for incorporation details of
our Company, see “History and Certain Corporate Matters” on page 182.

Il. Incorporation details

1. Certificate of incorporation dated March 22, 1995 issued by the RoC to our Company in its former name
being “Hitkari Finvest Private Limited’.

2. Fresh certificate of incorporation dated April 6, 2005 issued by the RoC to our Company consequent
upon change in name to ‘AR Venture Funds Management Private Limited’.

3. Fresh certificate of incorporation dated March 8, 2007 issued by the RoC to our Company consequent
upon conversion of our Company from a private limited company to a public limited company under the
Companies Act, 1956, with a change in name to ‘AR Venture Funds Management Limited’.

4. Fresh certificate of incorporation dated July 7, 2015 issued by the RoC to our Company consequent
upon conversion to a private limited company with the name ‘AR Venture Funds Management Private
Limited’.

5. Fresh certificate of incorporation dated April 3, 2017 issued by the RoC to our Company consequent
upon conversion of our Company from a private limited company to a public limited company under the
Companies Act, 2013, with a change in name to ‘AR Venture Funds Management Limited’.

6. Fresh certificate of incorporation dated July 6, 2017 issued by the RoC to our Company, consequent
upon change in our name from ‘AR Venture Funds Management Limited’ to ‘Anand Rathi Wealth
Services Limited’.

7. Fresh certificate of incorporation dated January 7, 2021 issued by the RoC to our Company, pursuant to
change in name of our Company to ‘Anand Rathi Wealth Limited’.

8. For incorporation details of our Material Subsidiary, ARDWPL, see “Our Subsidiaries — Details
regarding our Subsidiaries — AR Digital Wealth Private Limited” on page 188.

Ill. Material approvals relating to our Company’s business and operations

345
Iv.

VI.

VIL.

VII.

Ix.

Certificate of registration granted by AMFI to our Company bearing registration number ARN-111569
for distribution of mutual fund products.

For details of approvals and registrations obtained by our Company in relation to its intellectual
property, please see “Our Business — Intellectual Property” on page 174. For details of our applications
for trademark registration which are currently pending, please see “—Material approvals for which
applications have been made but are currently pending grant” on page 346.

Approvals from taxation authorities

Permanent Account Number AAACH8136P.

Tax Deduction Account Number MUMH05095G, issued by the Income Tax Department, Government of

India.

GST registrations have been obtained by our Company for each state where our Company makes a
taxable supply. As on the date of this Prospectus, our Company has operations in nine states. Our
Company has obtained GST registrations for the states of New Delhi, Haryana, Karnataka, West Bengal,
Maharashtra, Rajasthan, Uttar Pradesh, Tamil Nadu and Telangana.

Professional tax registration(s)under the applicable state specific laws obtained by our Company.

Labour law related approvals

We have obtained registrations in the ordinary course of business across various states in India under
labour laws including the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 and the
Employees’ State Insurance Act, 1948. Further, we have obtained registrations under the shops and
establishments acts of applicable state specific laws where we operate.

Material approvals relating to our Material Subsidiary

AR Digital Wealth Private Limited (CIN: U65923MH1996PTC097270)

Certificate of registration granted to ARDWPL by AMFI bearing registration number ARN — 100284 for
distribution of mutual fund products.

Permanent Account Number AABCV2843G.

GST registration number 27AABCV2843G1ZD for the state of Maharashtra.

Material approvals for which applications have been made but are currently pending grant
Nil

Material approvals which have expired for which renewal applications have been made
Nil

Material approvals which have expired for which renewal applications are yet to be made
Nil

Material approvals required for which no application has been made

Nil

346
OTHER REGULATORY AND STATUTORY DISCLOSURES

Our Board has, by way of its resolution dated July 16, 2021, approved the Offer. Further, our Board and the IPO
Committee have approved the Draft Red Herring Prospectus pursuant to their resolutions dated July 16, 2021
and July 19, 2021, respectively.

The Selling Shareholders have confirmed and approved their respective participation in the Offer for Sale in
relation to their respective portion of the Offered Shares. For details, see “The Offer” on page 67.

Our Company has received in-principle approvals from BSE and NSE for listing of the Equity Shares pursuant
to letters dated August 10, 2021 and September 6, 2021, respectively.

The Selling Shareholders confirm that the Equity Shares being offered by them as a part of the Offer for Sale
have been held by them in compliance with Regulation 8 of the SEBI ICDR Regulations.

Our Board has approved the Red Herring Prospectus pursuant to its resolution dated November 26, 2021 and
this Prospectus pursuant to resolution passed by the Board dated December 7, 2021.

Prohibition by SEBI or governmental authorities

Our Company, our Promoters, our Directors, the Promoter Group, the Selling Shareholders or persons in control
of our Company or ARFSL, one of our Promoters, have not been prohibited from accessing the capital markets
and have not been debarred from buying, selling or dealing in securities under any order or direction passed by
SEBI or any securities market regulator in any jurisdiction or any other authority/court.

Directors associated with the Securities Market

Other than Mr. Pradeep Gupta, Mr. Rakesh Rawal, Mr. K.G. Somani and Mr. Mohan Tanksale, none of our
Directors are, in any manner, associated with the securities market and there is no outstanding action initiated by
SEBI against any of our Directors in the five years preceding the date of this Prospectus.

Compliance with the Companies (Significant Beneficial Ownership) Rules, 2018

Our Company, our Promoters, the Selling Shareholders and the members of the Promoter Group are in
compliance with the Companies (Significant Beneficial Ownership) Rules, 2018, to the extent in force and
applicable.

Eligibility for the Offer

Our Company is eligible for the Offer in accordance with the Regulation 6(1) of the SEBI ICDR Regulations,
and is in compliance with the conditions specified therein in the following manner:

¢ Our Company has had net tangible assets of at least 2 30 million, calculated on a restated and
consolidated basis, in each of the preceding three full years (of 12 months each), of which not more
than 50 % are held in monetary assets;

¢ Our Company has an average operating profit of at least = 150 million, calculated on a restated and
consolidated basis, during the preceding three years (of 12 months each), with operating profit in each
of these preceding three years;

© Our Company has a net worth of at least = 10 million in each of the preceding three full years (of 12
months each), calculated on a restated and consolidated basis; and

¢ Our Company changed its name from ‘Anand Rathi Wealth Services Limited’ to ‘Anand Rathi Wealth
Limited’ and we received a fresh certificate of incorporation from the RoC on January 7, 2021. This
change in the name of our Company was undertaken pursuant to the amendment in Regulation 3(3) of
the SEBI (Investment Advisers) Regulations, 2013, which stipulates that no person, while dealing in
distribution of securities, can use the nomenclature “Independent Financial Adviser or IFA or Wealth

347
Adviser or any other similar name” unless registered with SEBI as an Investment Adviser.
Accordingly, AMFI had advised the mutual fund distributors (MFDs), inter alia, not to use the words
“Wealth Services” as part of their names and also to get their registered name changed, where the name
coincides with the list of 52 names, as identified by AMFI, which included “Wealth Services” being
used by the Company. Accordingly, our Company changed its name to comply with this requirement
and no change in business activity is indicated by our present name.

Our Company’s net tangible assets, monetary assets, monetary assets as a percentage of the net tangible assets,
operating profits and net worth, derived from the Restated Consolidated Financial Information included in this
Prospectus as at, and for the last three Fiscals ended March 31, 2021, 2020 and 2019 are set forth below:

 

 

 

 

 

 

 

 

 

Particulars Consolidated

Fiscal 2021 Fiscal 2020 Fiscal 2019
Net tangible assets! (A) (@ in million) 2,010.64 1,266.20 580.84
Pre-tax operating profit? (@ in million) 525.72 856.70 816.08
Net worth? (2 in million) 2,562.51 2,051.32 1,436.73
Monetary assets’ (B) (2 in million) 653.95 282.98 114.53
Monetary assets as a percentage of net tangible assets (B) / (A) (in o252 22.35 19.72
%)

 

 

 

 

T Net tangible assets means the sum of all the net assets of our Company excluding intangible assets and right of use assets reduced by total
liabilities excluding deferred tax liability (Net) of the Company.

? Monetary assets means cash and cash equivalents and bank balances (other than cash and cash equivalents) excluding bank balance kept
under lien.

? Restated pre tax operating profit_means restated profit before tax excluding other income and finance expense.

“ Net worth” means the aggregate value of the paid-up share capital and all reserves created out of the profits and securities premium
account and debit or credit balance of profit and loss account, after deducting the aggregate value of the accumulated losses, deferred
expenditure and miscellaneous expenditure not written off, as per the audited balance sheet, but does not include reserves created out of
revaluation of assets, write-back of depreciation and amalgamation.

Our Company had operating profits in each of Fiscal 2021, 2020 and 2019 in terms of our Restated
Consolidated Financial Information.

Our Company confirms that it is in compliance with the conditions specified in Regulation 7(1) of the SEBI
ICDR Regulations, to the extent applicable, and will ensure compliance with the conditions specified in
Regulation 7(2) of the SEBI ICDR Regulations, to the extent applicable.

Further, our Company confirms that it is not ineligible to make the Offer in terms of Regulation 5 of the SEBI
ICDR Regulations, to the extent applicable. The details of our compliance with Regulation 5 of the SEBI ICDR
Regulations are as follows:

(a) None of our Company, our Promoters, the Selling Shareholders, members of our Promoter Group or
our Directors are debarred from accessing the capital markets by the SEBI.

(b) None of our Promoters or Directors are promoters or directors of companies which are debarred from
accessing the capital markets by the SEBI.

(3) None of our Company, our Promoters or Directors has been categorized as a wilful defaulter by any
bank or financial institution (as defined under the Companies Act, 2013) or consortium thereof, in
accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India.

(d) None of our Company, our Promoters or Directors have been declared as ‘fraudulent borrowers’ by the
lending banks or financial institution or consortium, in terms of the RBI master circular dated July 1,
2016.

(e) None of our Directors has been declared a fugitive economic offender (in accordance with Section 12

of the Fugitive Economic Offenders Act, 2018).

() Except employee stock options granted pursuant to the ESOP 2017 and ESOP 2018, there are no
outstanding warrants, options or rights to convert debentures, loans or other instruments convertible
into, or which would entitle any person any option to receive Equity Shares, as on the date of this
Prospectus.

348
Disclaimer Clause of SEBI

IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF THE DRAFT RED HERRING
PROSPECTUS TO SEBI SHOULD NOT, IN ANY WAY, BE DEEMED OR CONSTRUED THAT THE
SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY
RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE
PROJECT FOR WHICH THE OFFER IS PROPOSED TO BE MADE OR FOR THE CORRECTNESS
OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE DRAFT RED HERRING
PROSPECTUS. THE BRLMS HAVE CERTIFIED THAT THE DISCLOSURES MADE IN THE
DRAFT RED HERRING PROSPECTUS ARE GENERALLY ADEQUATE AND ARE _ IN
CONFORMITY WITH THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF
CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2018. THIS REQUIREMENT IS
TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR MAKING AN
INVESTMENT IN THE PROPOSED OFFER.

IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE COMPANY IS PRIMARILY
RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT
INFORMATION IN THE DRAFT RED HERRING PROSPECTUS, THE BRLMS ARE EXPECTED
TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY AND THE SELLING
SHAREHOLDERS DISCHARGE THEIR RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND
TOWARDS THIS PURPOSE, THE BRLMS HAVE FURNISHED TO SEBI, A DUE DILIGENCE
CERTIFICATE DATED JULY 19, 2021 IN THE FORMAT PRESCRIBED UNDER SCHEDULE V(A)
OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND
DISCLOSURE REQUIREMENTS) REGULATIONS, 2018.

THE FILING OF THE DRAFT RED HERRING PROSPECTUS DOES NOT, HOWEVER, ABSOLVE
THE COMPANY FROM ANY LIABILITIES UNDER THE COMPANIES ACT, 2013 OR FROM THE
REQUIREMENT OF OBTAINING SUCH STATUTORY AND/OR OTHER CLEARANCES AS MAY
BE REQUIRED FOR THE PURPOSE OF THE OFFER. SEBI FURTHER RESERVES THE RIGHT
TO TAKE UP, AT ANY POINT OF TIME, WITH THE BRLMS, ANY IRREGULARITIES OR
LAPSES IN THE DRAFT RED HERRING PROSPECTUS.

Disclaimer from our Company, the Selling Shareholders, our Directors, and the BRLMs

Our Company, the Selling Shareholders, our Directors and the BRLMs accept no responsibility for statements
made otherwise than those contained in the Draft Red Herring Prospectus or the Red Herring Prospectus or this
Prospectus or in any advertisements or any other material issued by or at our Company’s instance. Anyone
placing reliance on any other source of information, including our Company’s website,
https://rathi.com/Wealth/index.php, or the website of any of our Promoter Group and Group Companies or of
any affiliate or associate of our Company, would be doing so at his or her own risk.

The BRLMs accept no responsibility, save to the limited extent as provided in the Offer Agreement and the
Underwriting Agreement to be entered into between the Underwriters, our Company and the Selling
Shareholders.

All information shall be made available by our Company, Selling Shareholders and the BRLMs to the public
and investors at large and no selective or additional information will be made available for a section of investors
in any manner whatsoever including at road show presentations, in research or sales reports, at bidding centres
or elsewhere.

Neither our Company, the Selling Shareholders nor any member of the Syndicate shall be liable for any failure
in uploading the Bids due to faults in any software/hardware system or otherwise.

Bidders were required to confirm and deemed to have represented to our Company, the Selling Shareholders
and the Underwriters and their respective directors, officers, agents, affiliates and representatives that they are
eligible under all applicable laws, rules, regulations, guidelines and approvals to acquire the Equity Shares and
that they shall not issue, sell, pledge or transfer the Equity Shares to any person who is not eligible under
applicable laws, rules, regulations, guidelines and approvals to acquire the Equity Shares. Our Company, the
Selling Shareholders, the Underwriters and their respective directors, officers, agents, affiliates and

349
representatives accept no responsibility or liability for advising any investor on whether such investor is eligible
to acquire Equity Shares.

Each of the BRLMs and their respective affiliates and associates may engage in transactions with, and perform
services for, our Company and its Group Companies or affiliates or third parties or the Selling Shareholders and
their respective affiliates or associates or group companies or third parties in the ordinary course of business and
have engaged, or may in the future engage, in transactions including underwriting, commercial banking and
investment banking transactions with our Company and its Group Companies or affiliates or third parties or the
Selling Shareholders and its respective affiliates or associates or group companies or third parties, for which
they have received, and may in the future receive, compensation.

Disclaimer in respect of jurisdiction

The Offer is being made in India to persons resident in India (including Indian nationals resident in India who
are competent to contract under the Indian Contract Act, 1872, HUFs, companies, corporate bodies and societies
registered under the applicable laws in India and authorised to invest in shares, Indian Mutual Funds registered
with the SEBI, Indian financial institutions, commercial banks, regional rural banks, co-operative banks (subject
to RBI permission), or trusts under applicable trust law and who are authorized under their constitution to hold
and invest in shares, permitted insurance companies and pension funds, insurance funds set up and managed by
the army and navy and insurance funds set up and managed by the Department of Posts, India) and permitted
Non-Residents including FPIs and Eligible NRIs, AIFs and other eligible foreign investors, if any, provided that
they are eligible under all applicable laws and regulations to purchase the Equity Shares.

Exclusive jurisdiction for the purpose of the Offer is with the competent courts/authorities in Mumbai, India.

The Red Herring Prospectus and this Prospectus do not constitute an invitation to subscribe to or purchase the
Equity Shares in the Offer in any jurisdiction, including India. Invitations to subscribe to or purchase the Equity
Shares in the Offer will be made only pursuant to the Red Herring Prospectus if the recipient is in India or the
preliminary offering memorandum for the Offer, which comprises the Red Herring Prospectus and the
preliminary international wrap for the Offer, if the recipient is outside India. No person outside India was
eligible to bid for Equity Shares in the Offer unless that person has received the preliminary offering
memorandum for the Offer, which contained the selling restrictions for the Offer outside India.

Eligibility and selling restrictions

The Equity Shares have not been registered, listed or otherwise qualified in any other jurisdiction outside
India and may not be offered or sold, and Bids may not be made by persons in any such jurisdiction,
except in compliance with the applicable laws of such jurisdiction.

The Equity Shares have not been registered under the Securities Act, and may not be offered or sold
within the United States except pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and applicable state securities laws. Accordingly, the
Equity Shares are being offered and sold outside the United States in “offshore transactions”, as defined
in, and in reliance on Regulation S.

The Equity Shares have not been registered, listed or otherwise qualified in any other jurisdiction outside
India and may not be offered or sold, and Bids may not be made by persons in any such jurisdiction,
except in compliance with the applicable laws of such jurisdiction.

Bidders were advised to ensure that any Bid from them does not exceed investment limits or maximum
number of Equity Shares that can be held by them under applicable law.

Disclaimer Clause of NSE

As required, a copy of the Draft Red Herring Prospectus has been submitted to the NSE. The disclaimer clause
as intimated by the NSE to us, post scrutiny of the Draft Red Herring Prospectus is as set out below:

“As required, a copy of this Offer Document has been submitted to National Stock Exchange of India Limited

(hereinafter referred to as NSE). NSE has given vide its letter Ref.: NSE/LIST/1111 dated September 06, 2021
permission to the Issuer to use the Exchange's name in this Offer Document as one of the Stock Exchanges on

350
which this Issuer's securities are proposed to be listed. The Exchange has scrutinized this draft offer document
for its limited internal purpose of deciding on the matter of granting the aforesaid permission to this Issuer. It is
to be distinctly understood that the aforesaid permission given by NSE should not in any way be deemed or
construed that the offer document has been cleared or approved by NSE; nor does it in any manner warrant,
certify or endorse the correctness or completeness of any of the contents of this offer document; nor does it
warrant that this Issuer’s securities will be listed or will continue to be listed on the Exchange; nor does it take
any responsibility for the financial or other soundness of this Issuer, its promoters, its management or any
scheme or project of this Issuer.

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 the Exchange 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 Clause of BSE

As required, a copy of the Draft Red Herring Prospectus has been submitted to the BSE. The disclaimer clause
as intimated by the BSE to us, post scrutiny of the Draft Red Herring Prospectus is set out below:

“BSE Limited (“the Exchange”) has given vide its letter dated August 10, 2021 permission to this Company to
use the Exchange’s name in this offer document as one of the stock exchanges on which this company’s
securities are proposed to be listed. The Exchange has scrutinized this offer document for its limited internal
purpose of deciding on the matter of granting the aforesaid permission to this Company. The Exchange does not
in any manner: -

a) warrant, certify or endorse the correctness or completeness of any of the contents of this offer document; or
b) warrant that this Company's securities will be listed or will continue to be listed on the Exchange; or

c) take any responsibility for the financial or other soundness of this Company, its promoters, its management
or any scheme or project of this Company;

and it should not for any reason be deemed or construed that this offer document has been cleared or approved
by the Exchange. Every person who desires to apply for or otherwise acquires any securities of this Company
may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the
Exchange 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 for any other reason whatsoever”

Filing

A copy of the Draft Red Herring Prospectus had been filed with SEBI at Corporation Finance Department,
Division of Issues and Listing, SEBI Bhavan, Plot No. C4 A, ‘G’ Block, Bandra Kurla Complex, Bandra (East),
Mumbai 400 051 and simultaneously through the SEBI Intermediary Portal at https://siportal.sebi.gov.in, in
accordance with SEBI circular bearing reference SEBI/HO/CFD/DIL1/CIR/P/2018/011 dated January 19, 2018.

A copy of the Red Herring Prospectus, along with the material contracts and documents required to be filed, was
filed with the RoC in accordance with Section 32 of the Companies Act, 2013, and a copy of this Prospectus
required to be filed under Section 26 of the Companies Act, 2013 will be delivered for filing to the RoC situated
at the address mentioned below.

Registrar of Companies, Maharashtra at Mumbai
100, Everest, Marine Drive
Mumbai 400 002.

Listing
The Equity Shares issued through the Red Herring Prospectus and this Prospectus are proposed to be listed on
the BSE and the NSE. BSE will be the Designated Stock Exchange with which the Basis of Allotment will be

authorised. Applications have been made to the BSE and NSE for permission to deal in and for an official
quotation of the Equity Shares.

351
Our Company has received in-principle approvals from the BSE and the NSE for the listing of the Equity Shares
pursuant to letters dated August 10, 2021 and September 6, 2021, respectively.

Consents

Consents in writing of the Selling Shareholders, the Directors, the Company Secretary and Compliance Officer,
Chief Financial Officer, the Bankers to the Company, the BRLMs and Syndicate Members, Escrow Collection
Bank(s), Public Offer Account Banks, Refund Bank(s), Sponsor Bank(s), Registrar to the Offer, legal counsel to
our Company as to Indian Law, legal counsel to the BRLMs as to Indian Law, International Legal Counsel to
the Book Running Lead Managers, to act in their respective capacities, have been obtained and have been filed
along with a copy of the Red Herring Prospectus with the RoC, as required under the Companies Act, 2013 and
such consents have not been withdrawn as on the date of this Prospectus for filing with the RoC.

Our Company has received written consent from the Statutory Auditor namely, Khimji Kunverji & Co LLP,
Chartered Accountants, to include their name as required under the Companies Act, 2013 in the Draft Red
Herring Prospectus, the Red Herring Prospectus and this Prospectus, and such consent has not been withdrawn
as on the date of this Prospectus.

Expert to the Offer
Except as stated below, our Company has not obtained any expert opinions:

Our Company has received written consent from the Statutory Auditor namely, Khimji Kunverji & Co LLP,
Chartered Accountants, to include their name as required under the Companies Act, 2013 in the Draft Red
Herring Prospectus, the Red Herring Prospectus and this Prospectus, and such consent has not been withdrawn
as on the date of this Prospectus as an “expert” (as described under the provisions of Section 2(38) and Section
26 of the Companies Act, 2013, as amended)and in their capacity as a Statutory Auditor and in respect of their
(i) examination report, dated November 17, 2021 on our Restated Consolidated Financial Information; and (ii)
their report dated November 25, 2021 on the Statement of Special Tax Benefits, included in the Red Herring
Prospectus and this Prospectus and such consent has not been withdrawn as on the date of this Prospectus.

Previous public or rights issues during the last five years

Except as disclosed in “Capital Structure” on page 79 of this Prospectus, our Company has not made any
previous rights issues during the last five years preceding the date of this Prospectus. Further, our Company has
not made any previous public issue issues during the last five years preceding the date of this Prospectus.

Commission or brokerage paid on previous issues of the Equity Shares in the last five years

No sum has been paid or has been payable as commission or brokerage for subscribing to or procuring or
agreeing to procure subscription for any of the Equity Shares in the last five years.

Capital issuances made during the last three years by our Company and other listed Group Companies
and/or Subsidiaries

Except as disclosed in “Capital Structure” on page 79 of this Prospectus, our Company has not made any
capital issues during the three years preceding the date of this Prospectus.

None of the securities of our Group Companies or Subsidiaries are listed on any stock exchange.

Performance vis-a-vis objects —Public/rights issue of our Company and/or listed Promoter, Subsidiaries
Except as disclosed in “Capital Structure” on page 79 of this Prospectus, our Company has not made any
previous rights issues during the last five years preceding the date of this Prospectus. Further, our Company has
not made any previous public issue issues during the last five years preceding the date of this Prospectus. None

of the securities of our corporate Promoter or our Subsidiaries are listed on any stock exchanges.

Outstanding debentures or bond issues or preference shares or other instruments

352
Our Company does not have any outstanding debentures or bonds or preference shares (including redeemable
preference shares), or other instruments as of the date of this Prospectus excluding ESOPs.

Price information of past issues handled by the BRLMs

The price information of past issues handled by the BRLMs is as follows:

A. Equirus Capital Private Limited

1. Price information of past issued handled by Equirus Capital Private Limited (during the current Fiscal and
two Fiscals preceding the current Fiscal)

 

 

 

 

 

 

Sr. ] IssueName | IssueSize ] Issue Listing Date | Opening | +/-% change | +/-% change | +/- % change
No. in Price Priceon | in closing in closing in closing
million) ® Listing | price*,[+/-% | price*,[+/-% | price, [+/- %
Date change in change in change in
closing closing closing
benchmark]- | benchmark]- | benchmark]
30" calendar | 90" calendar | 180" calendar
days from days from days from
listing listing listing
1. | Antony Waste -10.27% -23.21% 2.14%
Handling Cell | 2,999.85 | 315.00 | January 01,2021 | 436.10
Limited [-2.74%] [+4.80%] (12.34%)
2 [GR 9,623.34 | 837.00" | July 19, 2021 1,715.85 90.82% 138.85% NA.
Infrastructure
Limited [5.47%] [16.42%]
a. , 7,310.00 [| 900.00 | August 9, 2021 250.00 22.28% 31.50% NA.
Rolex Rings
Hants [6.79%] [10.20%]
4. | Krsnaa 12,133.35 | 954.00* | August 16,2021 | 1,005.55 9.42% -27.73% NA.
Diagnostics
Limited [4.93%] [9.30%]

 

 

 

 

 

 

 

 

 

¥A discount of € 42 per Equity Share was offered to Eligible Employees bidding in the Employee Reservation Portion
* A discount of ® 93 per Equity Share was offered to Eligible Employees bidding in the Employee Reservation Portion
Source: www.nseindia.com for price information and prospectus for issue details

Notes:

i, The S&P CNX NIFTY is considered as the Benchmark Index.
ii, Price on NSE is considered for all of the above calculations.
iti.In the event any day falls on a holiday, the price/index of the immediately preceding working day has been considered.

iv.N.A. (Not Applicable) — Period not completed.

2. Summary statement of price information of past issues handled by Equirus Capital Private Limited

 

 

 

 

 

 

No. of IPOs trading at | No. of IPOs trading at | No. of IPOs trading at | No. of IPOs trading at
discount — 30" premium — 30" discount — 180" premium — 180"
‘rota | Total | calendar days from | calendar days from | calendar days from | calendar days from
2 ” listin; listin; listin; listin;
| 1No. | Funds
Financial Les Les Les Les
Year eel | Ge s_ | Ove s | Ove s | Ove s
1P0 | @in Betwee Betwee Betwee Betwee
a r tha | r tha |r tha |r tha
s million) n25- n25- n25- n25-
50 | fom 12 | 50 | som [2 | 50 |sor | | 59 | soe a
% 2 | % 25 | % 25 | % 25
% % % %
2021- 3 29,066.6 | - - 1 1 - 1 - - - - - -
2022* 9
2020 - 7
i 1 2,999.85 | - - 1 - - - - - - - - 1
2019 -
2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* The information is as on the date of this Prospectus.
The information for each of the financial years is based on issues listed during such financial year.

353

 

 
B. BNP Paribas

There are no past issues handled by BNP Paribas in the current Fiscal and the two Fiscals preceding the
current Fiscal.

C. IIFL Securities Limited

1. Price information of past issued handled by IIFL Securities Limited (during the current Fiscal and two
Fiscals preceding the current Fiscal)

 

 

 

 

 

 

 

 

 

 

 

Sr. | Issue Name | Issue Issue | Listing Opening +1 % +/- % change Te %
No. Size(@ | Price Date Price on change in in closing change in
in ®@ Listing Date closing price*, [+/- closing
million) price*, [+/- | % change in | price*, [+/-
% change closing % change
in closing benchmark]- | in closing
benchmark | 90% calendar | benchmark
}-30% days from }- 180%
calendar listing calendar
days from days from
listing listing
1 Shyam 9,085.50 | 306.000 | June 24, 380.00 +40.95%,[+ | +22.65%,[+11 NA.
Metalics ) 2021 0.42%] 22%]
and Energy
Ltd
2 Krishna 21,437.4 | 825.002 | June 28, 1,009.00 +48.10%[- | +48.35%,[+12 NA.
Institute of 4 ) 2021 0.43%] 89%]
Medical
Sciences
Limited
3 Windlas 4,015.35 | 460.00 August 437.00 - - N.A.
Biotech 16, 2021 18.04%,[+4. | 34.46%,[+9.3
Limited 93%] 0%]
4 Krsnaa 12,133.3 | 954.00% | August 1,005.55 - - N.A.
Diagnostics 5 ) 16, 2021 9.42% [+4.9 | 27.73%, [+9.3
Limited 3%] 0%]
5 Chemplast 38,500.0 | 541.00 August 550.00 +2.06%,[+5. | +12.94%,[+6. N.A.
Sanmar 0 24, 2021 55%] 86%]
Limited
6 Sansera 12825.2 | 744.00“ | Septemb 811.50 +0.35%,[+1. N.A. NA.
Engineering 0 ) er 24, 47%]
Limited 2021
7 Aditya Birla | 27,682.5 | 712.00 October 715.00 7 NA. NA.
Sun Life 6 11, 2021 11.36%,[+0.
AMC Ltd 55%]
8 PB Fintech 57,097.1 | 980.00 | Novemb 1,150.00 NA. NA. NA.
Ltd. 5 er 15,
2021
9 SJS 8,000.00 | 542.00 | Novemb 542.00 NA. NA. NA.
Enterprises er 15,

 

 

 

 

 

 

 

 

 

 

354
 

Ltd. 2021

 

 

10 | Sapphire 20,732.5 | 1,180.00 | Novemb | 1,350.00 | N.A. NAL NA.
Foods India 3 er 18,
Limited 2021

 

 

 

 

 

 

 

 

 

 

Source: www.nseindia.com

(1) A discount of INR 15 per Equity Share was offered to the Eligible Employees Bidding in the Employee Reservation
Portion

(2) A discount of INR 40 per Equity Share was offered to Eligible Employees Bidding in the Employee Reservation
Portion

(3) A discount of INR 93per equity share to eligible employees bidding in the employee reservation portion

(4) A discount of INR 36 per equity share was offered to eligible employees bidding in the employee reservation
portion

Note: Benchmark Index taken as CNX NIFTY. Price on NSE is considered for all of the above calculations. The 30", 90" and 180" calendar
day from listed day have been taken as listing day plus 29, 89 and 179 calendar days, except wherever 30" /90" / 180" calendar day from
listing day is a holiday, the closing data of the previous trading day has been considered. % change taken against the Issue Price in case of
the Issuer. The Nifty 50 index is considered as the benchmark index. NA means Not Applicable. The above past price information is only
restricted to past 10 initial public offers.

2. Summary statement of price information of past issues handled by IIFL

 

 

 

 

 

 

 

No. of IPOs trading | No. of IPOs trading | No. of IPOs trading | No. of IPOs trading
at discount — 30" at premium — 30" | at discount— 180" | at premium — 180"
ot |)rree calendar days from | calendar days from | calendar days from | calendar days from
" al ° listing listing listing listing
Financ Funds
: No. Les Les Les Les
ial of | Raised | gy a a ae
Year @in Betwe | > Y | Betwe | © Y | Betwe | > Betwe | ©
wo |“ er tha | er tha | er tha | er tha
. million) en 25- en 25- en 25- en 25-
s 50 | eo |B | 50 |cooe | 2 | 50 Jeo 12 | 59 | soe | 2
% © 125 | % ° 125 | % 25 | % © 1 25
% % % %
2019-20) 5 - - 2 - 1 2 1 1 1 - - 2
1
2020-21} 8 47,017.6 - - 4 2 1 1 - 1 - 3 3 1
5
2021-2212 | 2,41,037 | - = 3 = 3 3 z = 2 2 3 3
82

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

‘Source: www.nseindia.com

Note: Data for number of IPOs trading at premium/discount taken at closing price on NSE on the respective date. In case any of the days
falls on a non-trading day, the closing price on the previous trading day has been considered, NA means Not Applicable.

NA means Not Applicable.

D. Anand Rathi Advisors Limited

3. Price information of past issued handled by Anand Rathi Advisors Limited (during the current Fiscal
and two Fiscals preceding the current Fiscal)

355,

 
 

 

 

 

 

 

 

 

 

 

 

 

 

Sr. | IssueName | Issue | Issu | ListingDate | Openin | +/-% changein | +/-% 7%
No Size(in | e gPrice | closing price*, | changein | change in
. Rs. | Pric on | [+/- % change in | closing closing
Mn) e Listing | closing price*, [+/- | price*, [+/-
(Rs.) Date | benchmark]- 30" | % change | % change
calendar days inclosing | in closing
from listing benchmark | benchmark
}- 90" }- 180%
calendar calendar
days from | days from
listing listing
1 | Paras 1,707.7 | 175 | October 01, 469.00 | +429.89%[+0.80 NA NA
Defence 8 2021 %]
and Space
Technologie
s Limited
‘Source: www.nseindia.com
Note:
1. Price on NSE is considered for all of the above calculations.
2. NAmeans Not Applicable, Period not completed.
3. Opening price information as disclosed on the website of NSE.
4, Change in closing price over the closing price as on the listing date for benchmark index viz. NIFTY 50.
5. Incase of reporting dates falling on a trading holiday, values for the trading day immediately preceding the trading holiday have
been considered.
6. % change taken against the Issue Price in case of the Issuer
7. 30" calendar day has been taken as listing date plus 29 calendar days.

8. Summary statement of price information of past issues handled by Anand Rathi Advisors Limited.

 

 

 

 

 

 

 

 

 

 

 

 

No. of IPOs trading | No. of IPOs trading | No. of IPOs trading | No. of IPOs trading
at discount — 30 at premium — 30" at discount — 180" at premium — 180"
Total | calendar days from | calendar days from | calendar days from | calendar days from
Tota a — saa oa
INo, | Funds | listin; listing listin; listin;
Financi | j¢”” | Raise Les Les Les Les
ae Po | Ove | Betwe |S | OV | Betwe |S | OV | Betwe | 8 | Ov | Betwe | §
. (inRs. | r tha | r tha |r tha |r tha
s en 25- en 25- en 25- en 25-
Mn) {50 [ep [a [50 | cho, |m | 50 | ego |B 150 J cgoe |
% © 125 | % © 125 | % ° 125 | % ° | 25
% % % %
2019-20] - - - - - ~ - - - - - - -
2020-21] - - - - - - - - - - - - -
2021-22 1 ‘| 1,707. NA 1 = - NA NA
78

 

 

 

 

 

 

 

 

 

Source: www.nseindia.com

Note: NA means Not Applicable

Track record of past issues handled by the BRLMs

For details regarding the track record of the BRLMs, as specified in the circular (CIR/MIRSD/1/2012) dated
January 10, 2012 issued by SEBI, please refer to the websites of the BRLMs, as set forth in the table below:

 

 

 

 

 

 

 

 

 

 

 

Sr. No Name of the BRLMs Website
a Equirus Capital Private Limited www.equirus.com
2. BNP Paribas https://www.bnpparibas.co.in/en/equity-capital-markets/
3. IIFL Securities Limited
4. Anand Rathi Advisors Limited www.rathi.com/investment-banking

 

 

 

Stock market data of the Equity Shares

356

 

 
This being an initial public offering of our Company, the Equity Shares are not listed on any stock exchange.
Redressal of Investor Grievances

SEBI, by way of its circulars dated March 16, 2021 and June 2, 2021 (“Investor Grievance Circulars”), has
identified the need to put in place measures, in order to manage and handle investor issues arising out of the UPI
Mechanism inter alia in relation to delay in receipt of mandates by Bidders for blocking of funds due to
systemic issues faced by Designated Intermediaries/SCSBs and failure to unblock funds in cases of partial
allotment/non allotment within prescribed timelines and procedures. Per the Investor Grievance Circulars, for
initial public offerings opening for subscription on or after May 1, 2021, SEBI has prescribed certain
mechanisms to ensure proper management of investor issues arising out of the UPI Mechanism, including (i)
identification of a nodal officer by SCSBs for the UPI Mechanism; (ii) delivery of SMS alerts by SCSBs for
blocking and unblocking of UPI Mandate Requests; (iii) hosting of a web portal by the Sponsor Bank containing
statistical details of mandate blocks/unblocks; (iv) limiting the facility of reinitiating UPI Bids to Syndicate
Members to once per Bid; and (v) mandating SCSBs to ensure that the unblock process for non-allotted/partially
allotted applications is completed by the closing hours of one Working Day subsequent to the finalisation of the
Basis of Allotment.

Separately, pursuant to the March 2021 Circular, the following compensation mechanism shall be applicable for
investor grievances in relation to Bids made through the UPI Mechanism for public issues opening on or after
May 1, 2021, for which the relevant SCSBs shall be liable to compensate the investor:

 

Scenario Compensation amount Compensation period

 

Delayed unblock for cancelled /
withdrawn / deleted applications

2100 per day or 15% per annum of the | From the date on which the request
Bid Amount, whichever is higher for cancellation / withdrawal /
deletion is placed on the bidding
platform of the Stock Exchanges till
the date of actual unblock

 

Blocking of multiple amounts for the
same Bid made through the UPI
Mechanism

1. Instantly revoke the blocked funds
other than the original application
amount; and

2. 2100 per day or 15% per annum

of the total cumulative blocked
amount except the original Bid
Amount, whichever is higher

From the date on which multiple
amounts were blocked till the date of
actual unblock

 

Blocking more amount than the Bid
Amount

1. Instantly revoke the difference
amount, i.e., the blocked amount less
the Bid Amount; and

From the date on which the funds to
the excess of the Bid Amount were
blocked till the date of actual unblock

2. 3100 per day or 15% per annum
of the difference amount, whichever is
higher

 

 

Delayed unblock for non — Allotted/
partially Allotted applications

2100 per day or 15% per annum of the
Bid Amount, whichever is higher

From the Working Day subsequent to
the finalisation of the Basis of
Allotment till the date of actual
unblock

 

 

 

 

Further, in the event there are any delays in resolving the investor grievance beyond the date of receipt of the
complaint from the investor, for each day delayed, the post-Offer BRLM shall be liable to compensate the
investor 7100 per day or 15% per annum of the Bid Amount, whichever is higher. The compensation shall be
payable for the period ranging from the day on which the investor grievance is received till the date of actual
unblock.

The agreement between the Registrar to the Offer, our Company and the Selling Shareholders provides for
retention of records with the Registrar to the Offer for a period of at least eight years from the date of listing and
commencement of trading of the Equity Shares, to enable the investors to approach the Registrar to the Offer for
redressal of their grievances, subject to the provisions of any other law and commercial arrangements with the
Company for storage of application forms beyond six months.

All grievances in relation to the Bidding process were required to be addressed to the Registrar to the Offer with
a copy to the relevant Designated Intermediary to whom the Bid cum Application Form was submitted. The

357
Bidder were required to give full details such as name of the sole or first Bidder, Bid cum Application Form
number, Bidder DP ID, Client ID, PAN, date of the submission of Bid cum Application Form, address of the
Bidder, number of the Equity Shares applied for and the name and address of the Designated Intermediary
where the Bid cum Application Form was submitted by the Bidder. Anchor Investors were required to address
all grievances in relation to the Offer to the BRLMs.

Further, the Bidder were also required to enclose a copy of the Acknowledgment Slip duly received from the
concerned Designated Intermediary in addition to the information mentioned hereinabove.

The Registrar to the Offer were required to obtain the required information from the SCSBs for addressing any
clarifications or grievances of ASBA Bidders. Our Company, the BRLMs and the Registrar to the Offer accept
no responsibility for errors, omissions, commission or any acts of SCSBs including any defaults in complying
with its obligations under applicable SEBI ICDR Regulations. Investors were required to contact the
Compliance Officer or the Registrar to the Offer in case of any pre-Offer or post-Offer related problems such as
non-receipt of letters of Allotment, non-credit of Allotted Equity Shares in the respective beneficiary account,
non-receipt of refund intimations and non-receipt of funds by electronic mode.

Our Company has obtained authentication on the SCORES and will comply with the SEBI circular
(CIR/OIAE/1/2013) dated April 17, 2013 in relation to redressal of investor grievances through SCORES.

Our Company has also constituted a Stakeholder’s Relationship Committee to review and redress the
shareholders and investor grievances such as transfer of Equity Shares, non-recovery of balance payments,
declared dividends, approve subdivision, consolidation, transfer and issue of duplicate shares. For further details
on the Stakeholders’ Relationship Committee, see “Our Management — Committees of the Board —
Stakeholders’ Relationship Committee” on page 202.

Our Company has also appointed Mr. Ashish Chauhan, Company Secretary of our Company, as the Compliance
Officer for the Offer. For details, see “General Information” beginning on page 69.

Our Company has not received any investor complaint during the three years preceding the date of this
Prospectus. Further, no investor complaint in relation to our Company is pending as on the date of filing of this
Prospectus.

None of the securities of our Group Companies or Subsidiaries are listed on any stock exchange.

Disposal of Investor Grievances by our Company

Our Company estimates that the average time required by our Company or the Registrar to the Offer for the
redressal of routine investor grievances shall not exceed fifteen Working Days from the date of receipt of the

complaint.

There have been no investor grievances received by our Company for the three years preceding the date of filing
this Prospectus.

As on date there are no investor complaints pending.

358
SECTION VII: OFFER INFORMATION
TERMS OF THE OFFER

The Equity Shares issued and offered pursuant to the Offer shall be subject to the provisions of the Companies
Act, the SEBI ICDR Regulations, SCRA read with the SCRR, our Memorandum of Association and Articles of
Association, the terms of the Red Herring Prospectus and this Prospectus, the abridged prospectus, the Bid cum
Application Form, the Revision Form, the CAN, the Allotment Advice and other terms and conditions as may
be incorporated in the Allotment Advice and other documents/certificates that were executed in respect of the
Offer. The Equity Shares shall also be subject to applicable laws, rules, guidelines, notifications and regulations
relating to the issue and transfer of capital and listing and trading of securities issued from time to time by SEBI,
the Gol, the Stock Exchanges, RBI, RoC, and/or other authorities, as in force on the date of the Offer and to the
extent applicable, or such other conditions as may be prescribed by SEBI, RBI and/or any other regulatory
authority while granting its approval for the Offer.

The Offer
The Offer comprised the Offer for Sale.
Offer expenses

The listing fees shall be borne by our Company. Other Offer-related expenses shall be borne by the Selling
Shareholders in proportion of the Equity Shares to be offered by each of the Selling Shareholders.

Provided that all Offer-related expenses shall initially be borne by our Company. Upon successful completion of
the Offer, the Selling Shareholders shall reimburse our Company their proportionate share of the Offer-related
expenses.

Ranking of Equity Shares

The Equity Shares being issued and offered pursuant to the Offer shall be subject to the provisions of our
Memorandum of Association and Articles of Association and the Companies Act and shall rank pari passu in all
respects with the existing Equity Shares of our Company including rights in respect of dividend and voting. The
Allottees, upon Allotment of Equity Shares pursuant to the Offer, will be entitled to dividends and / or any other
corporate benefits, if any, declared by our Company after the date of Allotment. For further details, please see
sections, “Dividend Policy” and “Description of Equity Shares and Terms of the Articles of Association” on
pages 224 and 397, respectively, of this Prospectus.

Mode of Payment of Dividend

Our Company shall pay dividends, if declared, to the shareholders of our Company as per the provisions of the
Companies Act, 2013, our Memorandum of Association and Articles of Association, the Listing Agreement and
any guidelines or directives that may be issued by the Gol in this respect. For further details, please see sections,
“Dividend Policy” and “Description of Equity Shares and Terms of the Articles of Association” on pages 224
and 397 of this Prospectus, respectively.

Face value and Offer Price

The face value of the Equity Shares is = 5. The Floor Price of Equity Shares was = 530 per Equity Share and the
Cap Price was = 550 per Equity Share. The Offer Price and Anchor Investor Offer Price is 550 per Equity
Share. The Price Band, and minimum Bid Lot for the Offer was decided by our Company, in consultation with
the BRLMs, and advertised in all editions of an English national daily newspaper Business Standard, all editions
of a Hindi national daily newspaper Business Standard and Mumbai editions of a Marathi newspaper Navshakti
(each of which are widely circulated English, Hindi and Marathi newspapers, respectively, Marathi being the
regional language of Maharashtra, where our Registered Office is located), each with wide circulation,
respectively, at least two Working Days prior to the Bid/Offer Opening Date and were required to be made
available to the Stock Exchanges for the purpose of uploading on their websites. The Price Band, along with the
relevant financial ratios calculated at the Floor Price and at the Cap Price, was pre-filled in the Bid cum
Application Forms available at the websites of the Stock Exchanges. The Offer Price was determined by our

359
Company and the Selling Shareholders in consultation with the BRLMs, after the Bid/Offer Closing Date, on
the basis of assessment of market demand for the Equity Shares offered by way of Book Building Process.

At any given point of time there shall be only one denomination for the Equity Shares.

Compliance with disclosure and accounting norms

Our Company shall comply with all disclosure and accounting norms as specified by SEBI from time to time.
Rights of the Equity Shareholders

Subject to applicable laws, rules, regulations and guidelines and the provisions of our Articles of Association,
the equity shareholders of our Company shall have the following rights:

e right to receive dividend, if declared;
e — right to attend general meetings and exercise voting powers, unless prohibited by law;

¢ right to vote on a poll either in person or by proxy or e-voting in accordance with the provisions of the
Companies Act;

e right to receive offers for purchasing rights shares and be allotted bonus shares, if announced;

e right to receive surplus on liquidation subject to any statutory and preferential claims being satisfied;

e right of free transferability of Equity Shares, subject to applicable law including any rules and
regulations prescribed by SEBI; and

e such other rights, as may be available to a shareholder of a listed public company under the Companies
Act, 2013, the terms of the Listing Regulations, and our Memorandum of Association and Articles of
Association.

For further details on the main provisions of our Company’s Articles of Association including those dealing
with voting rights, dividend, forfeiture and lien, transfer and transmission and/or consolidation/splitting, please
see “Description of Equity Shares and Terms of the Articles of Association” on page 397 of this Prospectus.

Allotment of Equity Shares in dematerialized form

Pursuant to Section 29 of the Companies Act, 2013, the Equity Shares shall be Allotted and/or transferred only
in dematerialized form. Hence, the Equity Shares offered through the Red Herring Prospectus and this
Prospectus had to be applied for in the dematerialized form only.

Market lot and trading lot

As per the applicable law, the trading of our Equity Shares shall only be in dematerialised form for all investors.
Since trading of our Equity Shares will be in dematerialised form, the tradable lot is one Equity Share.
Allotment in the Offer will be done only in electronic form in multiples of 27 Equity Shares subject to a
minimum Allotment of 27 Equity Shares to successful Bidders.

Nomination facility to Bidders

In accordance with Section 72 of the Companies Act, 2013, read with the Companies (Share Capital and

Debentures) Rules, 2014, the sole or first Bidder, with other joint Bidders, may nominate any one person in
whom, in the event of the death of sole Bidder or in case of joint Bidders, death of all the Bidders, as the case

360
may be, the Equity Shares Allotted, if any, will vest to the exclusion of all other persons, unless the nomination
is varied or cancelled in the prescribed manner. A nominee entitled to the Equity Shares by reason of the death
of the original holder(s), will, in accordance with Section 72 of the Companies Act, 2013, be entitled to the same
benefits to which he or she will be entitled if he or she were the registered holder of the Equity Shares. Where
the nominee is a minor, the holder(s) may make a nomination to appoint, in the prescribed manner, any person
to become entitled to Equity Share(s) in the event of the holder’s death during minority. A nomination shall
stand rescinded upon a sale of Equity Share(s) by the person nominating. A buyer will be entitled to make a
fresh nomination in the manner prescribed. Fresh nomination can be made only on the prescribed form available
on request at our Registered Office or to the Registrar and Share Transfer Agent of our Company.

Further, any person who becomes a nominee by virtue of the provisions of Section 72 of the Companies
Act, 2013, shall upon the production of such evidence as may be required by the Board, elect either:

© to register himself or herself as the holder of the Equity Shares; or

to make such transfer of the Equity Shares, as the deceased holder could have made.

Further, the Board may at any time give notice requiring any nominee to choose either to be registered himself
or herself or to transfer the Equity Shares, and if the notice is not complied with within a period of 90 days, the
Board may thereafter withhold payment of all dividends, bonuses or other monies payable in respect of the
Equity Shares, until the requirements of the notice have been complied with.

Since the Allotment of Equity Shares in the Offer will be made only in dematerialised mode, there is no need to
make a separate nomination with our Company. Nominations registered with the respective depository
participant of the Bidders would prevail. If Bidders require a change in the nomination, they are requested to
inform their respective depository participant.

Period of operation of subscription list
See “Offer Structure — Bid/Offer Programme” beginning on page 375.
Joint Holders

Subject to provisions contained in our Articles, where two or more persons are registered as the holders of any
Equity Share, they shall be deemed to hold such Equity Shares as joint tenants with benefits of survivorship.

Jurisdiction
The courts of Mumbai, India will have exclusive jurisdiction in relation to this Offer.
Withdrawal of the Offer

Our Company, in consultation with the BRLMs, reserves the right not to proceed with the Offer, in whole or any
part thereof, at anytime including after the Bid/Offer Opening Date but before the Allotment. In the event that
our Company in consultation with the BRLMs, decides not to proceed with the Offer at all, our Company shall
issue a public notice in the newspapers in which the pre-Offer advertisements were published, within two days
of the Bid/Offer Closing Date or such other time as may be prescribed by SEBI, providing reasons for such
decision. In such event the BRLMs, through the Registrar to the Offer, shall notify the SCSBs to unblock the
bank accounts of ASBA Bidders (other than Anchor Investors) within one Working Day from the date of receipt
of such notification. Our Company shall also inform the same to the Stock Exchanges on which the Equity
Shares are proposed to be listed.

In the event of withdrawal of the Offer after the Bid/Offer Closing Date and subsequent determination to
proceed with an initial public offering of Equity Shares, our Company shall file a fresh draft red herring
prospectus with SEBI. Notwithstanding the foregoing, the Offer is also subject to obtaining (i) the final listing
and trading approvals of the Stock Exchanges, which our Company shall apply for after Allotment, and (ii) the
final RoC approval of the Prospectus after it is filed with the RoC.

Minimum subscription

361
The requirement of minimum subscription is not applicable to the Offer in accordance with the SEBI ICDR
Regulations. However, if our Company does not receive minimum subscription in the Offer as specified under
Rule 19(2)(b) of the SCRR, including through devolvement of Underwriters, if any, in accordance with
applicable laws, or if the subscription level falls below the thresholds mentioned above after the Bid/Offer
Closing Date, on account of withdrawal of applications or after technical rejections, or if the listing or trading
permission is not obtained from the Stock Exchanges for the Equity Shares being issued or offered under the
Prospectus, our Company and the Selling Shareholders shall forthwith refund the entire subscription amount
received. If there is a delay beyond the prescribed time, our Company and the Selling Shareholders shall pay
interest prescribed under the Companies Act, the SEBI ICDR Regulations and applicable law, provided that,
subject to applicable law, the Selling Shareholders shall not be responsible to pay interest for any delay, unless
such delay has been caused solely by such Selling Shareholder.

Further, our Company shall ensure that the number of prospective Allottees to whom the Equity Shares will be
Allotted shall not be less than 1,000, in compliance with Regulation 49(1) of the SEBI ICDR Regulations.

Any expense incurred by our Company on behalf of the Selling Shareholders with regard to refunds, interest for
delays, etc., for the Equity Shares being offered pursuant to the Offer will be reimbursed by the Selling
Shareholders to our Company in proportion to the respective Equity Shares being offered for sale by the Selling
Shareholders in the Offer.

Arrangements for disposal of odd lots

Since our Equity Shares will be traded in dematerialised form only, the market lot for our Equity Shares will be
one and therefore no arrangements for disposal of odd lots are required.

Restriction on transfer and transmission of Equity Shares

Except for (i) the lock-in of the pre-Offer Equity Shares, (ii) the minimum Promoters’ contribution, (iii) Anchor
Investor lock-in, pursuant to the Offer, and (iv) as provided in “Description of Equity Shares and Terms of the
Articles of Association” on page 397 of this Prospectus, there are no restrictions on transfers of Equity Shares.
Further, there are no restrictions on transmission of shares/ debentures and on their consolidation/ splitting
except as provided in our Articles of Association. For details, please see “Description of Equity Shares and
Terms of the Articles of Association” on page 397 of this Prospectus.

Option to receive Equity Shares in Dematerialised Form

In terms of Section 29 of the Companies Act, 2013, the Allotment of Equity Shares to successful Bidders will
only be in the dematerialized form. Bidders will not have the option of Allotment of the Equity Shares in
physical form. The Equity Shares on Allotment will be traded only in the dematerialized segment of the Stock
Exchanges. In this context, the following agreements have been signed among our Company, the respective
Depositories and the Registrar to the Offer:

« Agreement dated October 20, 2016 entered into between NSDL, our Company and the Registrar to the
Offer; and

« Agreement dated July 14, 2016 entered into between CDSL, our Company and the Registrar to the Offer.

Details of buildup of the shareholding of the selling shareholders at various points of time along with the
price and the weighted average price of acquisition

The details of buildup of the shareholding of the selling shareholders namely Mr. Anand Rathi, Mr. Pradeep
Gupta and Anand Rathi Financial Services Limited (“Promoter Selling Shareholders”), Mr. Amit Rathi, Ms.
Priti Gupta, Ms. Supriya Rathi, Rawal Family Trust, acting through Mr. Rakesh Rawal, Mr. Jugal Mantri and
Mr. Feroze Azeez, (“Other Selling Shareholders”) as follows:

362
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name of the Date of Number of | Face | Issue/ Total Cost | Nature of] Nature of Cumulative | Cumulative
Selling allotment/ | Equity Shares | value | Acquisition ® considera] Transaction | costforthe | number of
Shareholder | _ transfer and allotted/ @__| (Sale Price tion Equity Shares | Equity Shares

when the Equity | transferred per Equity
Shares were Share (@)
made fully paid
up
Mr. Anand | September 26, 1 10 NA. NIL Cash | Transfer of -
Rathi 2006 beneficial interest
by ARFSL
September 19, 1,810,000 10 10 18,100,000 Cash | Right Issue 18,100,000 1,810,000
2016
October 25, 2016 1,117,880 10 10 11,178,800 Cash | Right Issue 29,278,800 7,927,880
January 16, 2017 (65,000) 10 10 (650,000) Cash | Transfer 28,628,800 2,862,880
January 16, 2017 (825,000) 10 10 (3,250,000) Cash | Transfer 25,378,800 2,537,880
November 23, (100,000) 10 800 (80,000,000) Cash | Transfer 24,378,800 2,437,680
2017
January 23, 2018 (300,000) 10 NA. NIL NA. | Transfer by way of | __21,378,800 2,137,880
a gift
March 16, 2018 (1,250) 10 NA. NIL NAA. | Transfer by way of | 21,366,300 2,136,630
a gift
March 16, 2018 (1,250) 10 NA. NIL NAA. | Transfer by way of | 21,353,800 2,135,380
a gift
March 16, 2018 (1,250) 10 NA. NIL NA. | Transfer by way of | __21,341,300 2,134,130
a gift
Tune 25, 2018 (300,000) 10 NA. NIL NA. | Transfer by way of | 18,341,300 1,834,130
a gift
June 25, 2018 (1,250) 10 NA. NIL NA. | Transfer by way of | 18,328,800 1,832,880
a gift
June 25, 2018 (1,250) 10 NA. NIL NA. | Transfer by way of | 18,316,300 1,831,630
a gift
June 25, 2018 (1,250) 10 NA. NIL NA. | Transfer by way of | 18,303,800 1,830,380
a gift
Tuly 9, 2018 @ 10 NA. NIL NA. | Transfer of 18,303,800 1,830,380
beneficial interest
back to ARFSL.
July 12, 2018 (1,250) 10 800 (1,000,000) |" Cash. | Transfer 18,291,300 1,829,130
‘August 14, 2018¢ 1,829,130 5 NIL NIL NAA. | Sub Division of 18,291,300 3,658,260
Shares
Tuly 13, 2021 (69,000) 5 NIL NIL NA. | Transfer by way of | 17,846,300 3,569,260
a gift
Tuly 14, 2021 6,000) 5 NIL NIL NA. | Transfer by way of | __17,821,300 35,64,260
a gift
Tuly 16, 2021 1,782,130 5 NIL NIL NA. | Bonus Issue in the 17,821,300 5,346,390
ratio 1:2
Total (A) 5,346,390 5
‘Average cost per share 3.33
Weighted Average Cost per NA
Equity Share in last one year

 

Each Equity Share with a face value of @ 10 each was sub-divided into two Equity Shares with a face value of ® 5 each, pursuant to a
special resolution passed by shareholders at Extra Ordinary General Meeting dated August 14, 2018

363

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name of the ] Date of Number of Face | Issue/ Total Cost Nature of [Nature of | Cumulative Gost | Cumulative
Selling allotment’ Equity Shares | value | Acquisition/ considera | Transaction | for the Equity number of
Shareholder | transfer and allotted/ @ —‘|SalePrice | (@) tion Shares Equity Shares
when the Equity | transferred per Equity
Shares were Share (2)
made fully paid
up
Mr. Pradeep | September 19, 500,000 10 10 5,000,000 | Cash Right Issue 5,000,000 500,000
Gupta 2016
October 25, 2016 255,254 10 10 2,552,540 | Cash Right Issue 7,552,540 755,254
August 14, 2018 755,254 5 NIL NIL [NA Sub Division 7,552,540 15,10,508
of Shares
July 13, 2021 10,000 5 NIL 50,000 | N.A. Received by 7,602,540 1,520,508
way of a gift
July 16, 2021 760,254 5 NA NIL [NA Bonus Issue 7,602,540 2,80,762
in the ratio 1:2
October 07, 2021 (3,750) 5 NA NIL [NA Transfer by 7,583,790 22,77,012
way of gift
Total (B) 22,77,012 5
‘Average cost per share 3.33
Weighted Average Cost per 5.00
Equity Share in last one year
®Each Equity Share with a face value of @ 10 each was sub-divided into two Equity Shares with a face value of ® 5 each, pursuant to a
special resolution passed by shareholders at Extra Ordinary General Meeting dated August 14, 2018
Name of the Selling |Dateof | Number of | Face | Issue/ Total Cost [Nature of | Nature of ‘Cumulative Cost [Cumulative
Shareholder allotment/| Equity _| value | Acquisition/Sale | (2) consideration | Transaction | for the Equity _| number of
transfer |Shares | (%) _| Price per Shares Equity Shares
and when | allotted/ Equity Share
the transferred ®
Equity
Shares
were
made
fully paid
up
Anand Rathi March 14, 14,000] 10 60 840,000 | Cash Transfer 840,000 14,000
Financial Services | 2003
Limited March 14, 75,700; 10 60] 4,545,000 | Cash Transfer 5,382,000 89,700
2003
April 11, (89,700)| 10 50] (44,850,00) | Cash Transfer -
2005
February 154,702; 10 50] 7,735,100 | Cash Transfer 7,735,100 154,702
27, 2006
September @/ 10 NA. NIL [NA Transfer of 7,735,100 154,702
26, 2006 beneficial
interest to Mr.
Anand Rathi
September @/ 10 NA. NIL | NA. Transfer of 7,735,100 154,702
26, 2006 beneficial
interest to Mr.
Amit Rathi

 

 

 

 

 

 

 

 

 

 

 

364

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name of the Selling ]Dateof | Number of | Face | Issue/ Total Gost [Nature of | Nature of ‘Cumulative Cost | Cumulative
Shareholder allotment/| Equity _| value | Acquisition/Sale | (2) consideration | Transaction | for the Equity _ | number of

transfer |Shares | (%) _| Price per Shares Equity Shares
and when | allotted/ Equity Share
the transferred ®
Equity
Shares
were
made
fully paid
up
September (|) 10 NA. NIL | N.A. Transfer of 7,735,100 154,702
26, 2006 beneficial

interest to Ms.

Pushpalata

Rathi
September @/ 10 NA. NIL [NA Transfer of 7,735,100 154,702
26, 2006 beneficial

interest to Ms.

Supriya Rathi
December 20,000; 10 50] 1,000,000 | Cash Transfer 8,735,100 174,698
28, 2015,
May 11, 20,000/ 10 125| 2,500,000 | Cash Transfer 11,235,100 194,698
2016
August 8, | 6,230,464] 10 NA. NIL [NA Bonus Issue in 11,235,100 6,425,162
2016 the ratio 1:32
March 30, | (825,000)| 10 750 | (243,750,000) | Cash Transfer - 6,100,162
2017
June 30, (14,000)|_ 10 750 | (10,500,000) | Cash Transfer - 6,086,162
2017
July 4, (4,000)|~ 10 750] (3,000,000) | Cash Transfer - 6,082,162
2017
July 7, (4,000)| 10 750] (8,000,000) | Cash Transfer - 6,078,162
2017
‘August (6,700)| 10 750] (5,025,000) | Cash Transfer - 6,071,462
28, 2017
March 12, (4375)| 10 800] (8,500,000) | Cash Transfer - 6,067,087
2018
March 12, 125)| 10 800] (2,500,000) | Cash Transfer - 6,063,962
2018
March 12, @125)| 10 800] (2,500,000) | Cash Transfer - 6,060,837
2018
March 12, (6250)| 10 800] (5,000,000) | Cash Transfer - 6,054,587
2018
April 4, (6875)| 10 800] (5,500,000) | Cash Transfer - 6,047,712
2018
April 4, 125] 10 800] (2,500,000) | Cash Transfer - 6,044,587
2018
June 12, (6300)| 10 800] (5,040,000) | Cash Transfer 6,038,287
2018
June i} 10 NA. NIL [NA Beneficial - 6,038,288
14,2018, interest held

by Mr. Amit

Rathi

transferred

back to

ARESL.

 

 

 

 

 

 

 

 

 

 

365

 
 

Name of the Selling [Date of | Number of | Face | Issue/ Total Cost [Natureof | Nature of Cumulative Cost | Cumulative

 

 

Shareholder allotment/| Equity _| value | Acquisition/Sale | () consideration | Transaction | for the Equity _| number of
transfer | Shares @ | Price per Shares Equity Shares
and when | allotted/ Equity Share
the transferred ®
Equity
Shares
were
made
fully paid
up
July 1 10 N.A. NIL |N.A. Beneficial - 6,038,289
9, 2018 interest held

by Mr Anand

Rathi

transferred

back to

ARESL.
July 10, 1 10 N.A. NIL |N.A. Beneficial - 6,038,290
2018 interest held

by Mrs,

Supriya Rathi
wansferred

 

 

 

 

 

 

 

 

 

 

 

 

 

back to
ARFSL.
July i} 10 NA. NIL [NA Beneficial - 6,038,291
13,2018, imerest held
by Mr.
Navratan Mal
Gupta
transferred
back to
ARFSL.
July (2,500)| 10 800] (2,000,000) | Cash Transfer - 6,035,791
11,2018
July (@250)] 10 800] (1,000,000) | Cash Transfer - 6,034,541
27,2018
August 6,034,541 NIL NIL [NA Sub Division of - 12,069,082
14, 2018¢ Shares
March 28, | (15,000)|_—S 407] (6,105,000) | Cash Transfer - 12,054,082
2019
March 31, | (90,000)|_—S 425 | (38,250,000) | Cash Transfer - 11,964,082
2020
July 16, 5,982,041| 5 NA NIL |N.A Bonus Issue in - 17,946,123
2021 the ratio 1:2
Total © 17,946,123| 5
Average cost per share NIL
Weighted Average Cost per NA

 

 

Equity Share in last one year
®Each Equity Share with a face value of ® 10 each was sub-divided into two Equity Shares with a face value of @ 5 each, pursuant to a
special resolution passed by shareholders at Extra Ordinary General Meeting dated August 14, 2018

 

 

 

 

 

 

 

 

 

 

 

 

Name of the | Date of Number of Face Issue/ Total Cost Nature of | Nature of Cumulative Cost | Cumulative
Selling allotment/ Equity Shares | value | Acquisition/ considera | Transaction | for the Equity _| number of
Shareholder | transfer and allotted/ @® — |SalePrice |(®) tion Shares Equity Shares

when the Equity | transferred per Equity

Shares were Share (@)

made fully paid

up
Mr. Amit January 23, 2018 300,000 10 NA 3,000,000 | NA. Received by 3,000,000 300,000
Rathi way of a gift

June 25, 2018 300,000 10 NA 3,000,000 | NA. Received by 6,000,000 600,000

way ofa gift

 

 

 

 

 

 

 

 

 

 

 

366

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name of the | Date of Number of Face _| Issue/ Total Cost Nature of [Nature of | Cumulative Cost _| Cumulative
Selling allotment/ Equity Shares | value | Acquisition/ considera | Transaction | for the Equity number of
Shareholder | transfer and allotted/ @®_—|SalePrice | (®) tion Shares Equity Shares
when the Equity | transferred per Equity
Shares were Share (@)
made fully paid
up
‘August 14, 2018@ 600,000 5 NIL NIL|NA Sub Division 6,000,000 1,200,000
of Shares
July 16, 2021 600,000 5 NA NIL|NA Bonus Issue 6,000,000 1,800,000
in the ratio 1:2
Total (D) 7,800,000 5
‘Average cost per share 333
Weighted Average Cost per NA
Equity Share in last one year
®Each Equity Share with a face value of ® 10 each was sub-divided into two Equity Shares with a face value of @ 3 each, pursuant to a
special resolution passed by shareholders at Extra Ordinary General Meeting dated August 14, 2018
Name of the | Date of Number of Face | Issue/ Total Cost Nature of [Nature of | Cumulative Cost _| Cumulative
Selling allotment/ Equity Shares | value | Acquisition/ considera | Transaction | for the Equity number of
Shareholder | transfer and allotted/ @_—_|SalePrice | (®) tion Shares Equity Shares
when the Equity | transferred per Equity
Shares were Share (@)
made fully paid
up
Mrs. Priti September 19, 360,000 10 10 3,600,000 | Cash Right Issue 3,600,000 360,000
Pradeep 2016
Gupta
October 25, 2016 140,000 10 10 1,400,000 | Cash Right Issue 5,000,000 500,000
August 14, 2018 500,000 5 NIL NIL|NA Sub Division 5,000,000 1,000,000
of Shares
July 13, 2021 20,000 5 NIL 100,000] N.A Received by 5,100,000 1,020,000
way ofa gift
July 14, 2021 5,000 5 NIL 25,000 [NA Received by 5,125,000 1,025,000
way ofa gift
July 16, 2021 512,500 5 NA NIL|NA Bonus Issue 5,125,000 1,537,500
in the ratio 1:2
Total © 1,537,500 5
‘Average cost per share 333
Weighted Average Cost per 5.00

Equity Share in last one year

 

 

 

 

 

 

 

 

Each Equity Share with a face value of @ 10 each was sub-divided into two Equity Shares with a face value of ® 5 each, pursuant to a

367

special resolution passed by shareholders at Extra Ordinary General Meeting dated August 14, 2018

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  
 

 

 

 

 

 

 

 

 

 

 

Name of the | Date of Number of Face | Issue/ Total Cost Nature ] Nature of Cumulative ‘Cumulative
Selling allotment/ Equity Shares | value | Acquisition/ of Transaction | Cost for the number of
Shareholder | transfer and allotted/ ®@ Sale Price | () consider Equity Shares | Equity Shares
when the Equity | transferred per Equity ation
Shares were Share (2)
made fully paid
up
Mrs. Supriya | September 19, 540,000 10 10 5,400,000] Cash | Right Issue 5,400,000 540,000
Rathi 2016
November 24, 10 800 (40,000,000)| Cash | Transfer 4,900,000 490,000
2017
August 14, 2018 490,000 5 NIL NIL | NA Sub Division 4,900,000 9,80,000
of Shares
July 13, 2021 20,000 5 NIL 100,000 | N-A Received by 5,000,000 1,000,000
way of a gift
July 16, 2021 500,000 5 NA NIL|NA Bonus Issue in 5,000,000 1,500,000
the ratio 1:2
Total (F) 1,500,000 5
‘Average cost per share 3.33
Weighted Average Cost per 5.00
Equity Share in last one year
®Each Equity Share with a face value of @ 10 each was sub-divided into two Equity Shares with a face value of ® 5 each, pursuant to a
special resolution passed by shareholders at Extra Ordinary General Meeting dated August 14, 2018
‘Name of the Date of Number of ]Face | Issue/ Total Cost Nature of [Nature of | Cumulative Cost | Cumulative
Selling allotment/ Equity value | Acquisition/ considera | Transaction | for the Equity number of
Shareholder transfer and —_| Shares ® Sale Price | (@) tion Shares Equity Shares
when the Equity | allotted/ per Equity
Shares were _| transferred Share ()
made fully paid
up
Rawal Family May 07, 2018 570,700 10 NA Nil| NA Received by 5,707,000 570,700
Trust ~ Acting way of a gift
through Mr.
Rakesh Rawal ‘August 14, 570,700 5 NIL NIL|NA Sub Division 5,707,000 1,141,400
2018° of Shares
January 28,2020 | (540,000) 5 NA Nil [NA Transfer by 3,007,000 601,400
way of a gift
July 13, 2021 (8,000) 5 600 (4,800,000) | Cash’ Transfer 2,992,000 598,400
July 13, 2021 (4,000) 5 600 (2,400,000) | Cash Transfer 2,972,000 5,94,400
July 14, 2021 (8,000) 5 600 (1,800,000) | Cash Transfer 2,957,000 591,400
July 16, 2021 295,700 5 NA NIL [NA Bonus Issue 2,957,000 887,100
in the ratio 1:2
Total (G) 887,100 5

 

 

 

 

 

 

 

 

 

368

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name of the Date of Number of [Face | Issue/ Total Cost Nature of [Nature of | Cumulative Cost _| Cumulative
Selling allotment/ Equity value | Acquisition/ considera | Transaction | for the Equity number of
Shareholder transfer and —_| Shares ®@ Sale Price | @) tion Shares Equity Shares
when the Equity | allotted/ per Equity
Shares were _| transferred Share (2)
made fully paid
up
‘Average cost per share 3.33
Weighted Average Cost per Equity NA
Share in last one year
Each Equity Share with a face value of € 10 each was sub-divided into two Equity Shares with a face value of @ 3 each, pursuant to a
special resolution passed by shareholders at Extra Ordinary General Meeting dated August 14, 2018
Name of the Date of Number of |Face | Issue/ Total Cost Nature [Nature of | Cumulative Cost | Cumulative
Selling allotment/ Equity value | Acquisition/ of Transaction | for the Equity number of
Shareholder transfer and _| Shares ®@ Sale Price | ®) consider Shares Equity Shares
when the Equity | allotted/ per Equity ation
Shares were _| transferred Share (®)
made fully paid
up
Mr. Feroze Azeez | September 19, 110,000 10 10 1,100,000 [Cash __| Right Issue 1,100,000 110,000
2016
January 09, 2017 20,000 10 10 200,000/Cash —_| Private 1,300,000 130,000
Placement
January 19, 2017 50,000 10 10 500,000 [Cash __| Private 1,800,000 1,80,000
Placement
May 03, 2017 6,700 10 10 67,000Cash —_| Private 1,867,000 1,86,700
Placement
July 07, 2017 (700) 10 750 (625,000) [Cash Transfer 1,860,000 1,86,000
March 15,2018 26,000 10 750 19,500,000 [Cash | Allotment 21,360,000 212,000
pursuant to
ESOP
August 14, 2,12,000 5 NIL NIL [NA Sub Division 21,360,000 424,000
20188 of Shares
Tuly 06, 2019 52,000 5 407 21,164,000 Cash | Allotment 42,524,000 476,000
pursuant to
ESOP
‘August 05, 2020 78,000 5 a5 33,150,000 [Cash | Allotment 75,674,000 554,000
pursuant to
ESOP
‘August 05, 2020 52,020 5 a5 221,08,500|Cash | Allotment 97,782,500 606,020
pursuant to
ESOP
October 23, 2020 260,100 5 ail 106,901,100 [Cash _| Private 204,683,600 866,120
Placement

 

 

 

 

 

 

 

 

 

 

369

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name of the Date of Number of |Face | Issue/ Total Cost Nature |Natureof | Cumulative Cost | Cumulative
Selling allotment/ Equity value | Acquisition/ of Transaction | for the Equity number of
Shareholder transfer and —_| Shares ® Sale Price | (®) consider Shares Equity Shares
when the Equity | allotted/ per Equity ation
Shares were _| transferred Share (®)
made fully paid
up
June 14, 2021 78,000 5 415.7 32,424,600 {Cash | Allotment 237,108,200 944,120
pursuant to
ESOP
June 14, 2021 52,020 5 415.7 21,624,714| Cash | Allotment 258,732,914 996,140,
pursuant to
ESOP
June 16, 2021 (260,000) 5 NA NIL [NA Transfer by 257,432,914 736,140
way of a gift
July 16, 2021 368,070 5 NA NIL[NA Bonus Issue 257,432,914 1,104,210
in the ratio 1:2
Total (H) 1,104,210 5
‘Average cost per share 233.14
Weighted Average Cost per Equity 415.67
Share in last one year
®Each Equity Share with a face value of ® 10 each was sub-divided into two Equity Shares with a face value of @ 3 each, pursuant to a
special resolution passed by shareholders at Extra Ordinary General Meeting dated August 14, 2018
Name of the _| Date of Number of Face _ | Issue/ Total Cost Nature of [Nature of | Cumulative Cost _ Cumulative
Selling allotment/ Equity Shares | value | Acquisition/ considera | Transaction | for the Equity number of
Shareholder | transfer and _| allotted/ @ — |SalePrice | @) tion Shares Equity
when the Equity | transferred per Equity Shares
Shares were Share (2)
made fully paid
up
Mr. Jugal September 19, 55,000 10 10 550,000 | Cash Right Issue 550,000 55,000
Mantri 2016
January 09, 2017 10,000 10 10 100,000 | Cash Private 650,000 65,000
Placement
August 14, 65,000 5 NIL NIL |NA Sub Division 650,000 130,000
2018@ of Shares
July 16, 2021 65,000 5 NA NIL|N.A Bonus Issue 650,000] —_1,95,000
in the ratio 1:2
Total (I) 195,000 5
‘Average cost per share 333
Weighted Average Cost per NA
Equity Share in last one year

 

 

 

 

 

 

 

 

 

®Each Equity Share with a face value of % 10 each was sub-divided into two Equity Shares with a face value of @ 5 each, pursuant to a
special resolution passed by shareholders at Extra Ordinary General Meeting dated August 14, 2018

370

 
RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES

Foreign investment in Indian securities is regulated through the Industrial Policy, 1991 of the Government of
India and FEMA. While the Industrial Policy, 1991 prescribes the limits and the conditions subject to which
foreign investment can be made in different sectors of the Indian economy, FEMA regulates the precise manner
in which such investment may be made. The Government has from time to time made policy pronouncements
on foreign direct investment (“FDI”) through press notes and press releases. The DPIIT, issued the Consolidated
FDI Policy Circular of 2020 (“FDI Policy”), which, with effect from October 15, 2020, consolidated and
superseded all previous press notes, press releases, circulars and clarifications on FDI issued by DPIIT that were
in force and effect as on October 15, 2020. The FDI Policy will be valid until the DPIIT issues an updated
circular.

In terms of Press Note 3 of 2020, dated April 17, 2020, issued by the DPIIT, the FDI Policy has been recently
amended to state that all investments under the foreign direct investment route by entities of a country which
shares land border with India or where the beneficial owner of an investment into India is situated in or is a
citizen of any such country will require prior approval of the Government of India. Further, in the event of
transfer of ownership of any existing or future foreign direct investment in an entity in India, directly or
indirectly, resulting in the beneficial ownership falling within the aforesaid restriction/ purview, such subsequent
change in the beneficial ownership will also require approval of the Government of India. Furthermore, on April
22, 2020, the Ministry of Finance, Government of India has also made similar amendment to the FEMA Rules.
Pursuant to the Foreign Exchange Management (Non-debt Instruments) (Fourth Amendment) Rules, 2020
issued on December 8, 2020, a multilateral bank or fund, of which India is a member, shall not be treated as an
entity of a particular country nor shall any country be treated as the beneficial owner of the investments of such
bank of fund in India.

The transfer of shares between an Indian resident and a non-resident does not require the prior approval of the
RBI, provided that (i) the activities of the investee company are under the automatic route under the foreign
direct investment policy and transfer does not attract the provisions of the Takeover Regulations; (ii) the non-
resident shareholding is within the sectoral limits under the FDI policy; and (iii) the pricing is in accordance
with the guidelines prescribed by SEBI/RBI.

As per the existing policy of the Government of India, OCBs cannot participate in this Offer.
For further details, see “Offer Procedure” beginning on page 378 of this Prospectus.

The Equity Shares have not been and will not be registered under the Securities Act, and may not be
offered or sold within the United States except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act and applicable state securities laws.
Accordingly, the Equity Shares are being offered and sold outside the United States in “offshore
transactions”, as defined in, and in reliance on Regulation S.

The above information is given for the benefit of the Bidders. Our Company, the Promoter Selling
Shareholders and the BRLMs are not liable for any amendments, modification, or changes in applicable
laws or regulations, which may occur after the date of this Prospectus. Bidders are advised to make their
independent investigations and ensure that the number of Equity Shares Bid for which they Bid do not
exceed the applicable limits under applicable laws or regulations.

371
OFFER STRUCTURE

The Offer of up to 12,000,000 Equity Shares for cash at a price of = 550 per Equity Share (including a share
premium of % 545 Equity Share), aggregating up to % 6,593.75” million, comprising an Offer for Sale of up to
12,000,000 Offered Shares aggregating up to % 6,593.75” million by the Selling Shareholders.

The Offer comprises of a Net Offer of up to 11,750,000 Equity Shares and Employee Reservation Portion of up
to 250,000 Equity Shares aggregating up to % 131.25" million. The Offer and Net Offer would constitute 28.83
% and 28.23 % of the post- Offer paid-up Equity Share capital of our Company, respectively. The face value of
the Equity Shares is = 5 each.

*Our Company in consultation with the Book Running Lead Managers, offered a discount of % 25 per Equity Share to Eligible Employees
bidding in the Employee Reservation Portion.
Subject to finalization of Basis of Allotment

The Offer was made through Book Building Process.

 

Particulars

Eligible Employees

QBs”

Non-Institutional
Bidders

Retail Individual
Investors

 

Number of Equity
Shares available
for Allotment/
allocation”

Up to 250,000 Equity
Shares

Not more than 5,875,000
Equity Shares

Not less than 1,762,500
Equity Shares available
for allocation or Net
Offer less allocation to
QIB Bidders and Retail
Individual Bidders

Not less than 4,112,500
Equity Shares available
for allocation or Net
Offer less allocation to
QIB Bidders and Non-
Institutional Bidders

 

The Employee
Reservation
Portion shall constitute

up to 2.08 % of the
Offer Size

Not more than 50% of
the Net Offer size was
allocated to = QUB
Bidders.

However, 5% of the Net
QIB Portion (excluding
the Anchor Investor
Portion) was made
available for allocation

proportionately to
Mutual Funds — only.
Mutual Funds

participating in the
Mutual Fund Portion
were also eligible for
allocation in the
remaining balance QIB
Portion. The
unsubscribed portion in
the Mutual Fund portion
was made available for
allocation in the Net
QIB Portion (excluding
the Anchor Investor
Portion).

Not less than 15% of the
Offer, or the Offer less
allocation to QIB
Bidders and __ Retail
Individual Bidders was
available for allocation.

Not less than 35% of the
Offer, or the Net Offer
less allocation to QIB
Bidders and —Non-
Institutional Bidders was
available for allocation.

 

 

Percentage of
Offer Size
available for
Allotment’
allocation

Basis of
Allotment/
allocation if
respective
category is
oversubscribed***

 

Proportionate*; unless.
the Employee
Reservation Portion is
undersubscribed,

the value of allocation to
an Eligible Employee
shall not exceed 2
200,000. In the event of
undersubscription in the
Employee Reservation
Portion, the
unsubscribed portion
may be allocated, on a

 

Proportionate as follows
(excluding the Anchor
Investor Portion):

(1) Up to 117,500
Equity Shares
were made
available for
allocation on a
proportionate
basis to Mutual
Funds only;
and

 

Proportionate

 

Proportionate, subject to
minimum bid lot. The
allotment to each Retail
Individual Bidders shall
not be less than the
minimum Bid Lot,
subject to availability of
Equity Shares in the
Retail Portion and the
remaining —_ available
Equity Shares if any,
shall be allotted on a
proportionate basis. For

 

372

 
 

 

 

Particulars Eligible Employees QIBs* Non-Institutional Retail Individual
Bidders Investors
proportionate basis, to details see, “Offer
Eligible Employees for a (2). 2,350,000 Procedure” on page
value exceeding Equity Shares 378.
200,000, subject to total were made
Allotment to an Eligible available for
Employee not exceeding allocation on a
% 500,000 proportionate
basis to all
QIBs, including
Mutual Funds
receiving
allocation as
per (a) above.
Up to 3,525,000 Equity
Shares were allocated on
a discretionary basis to
Anchor Investors
Mode of Through ASBA process only (other than Anchor Investors). In case of RIBs, ASBA process will
Bidding include the UPI mechanism.

 

Minimum Bid

27 Equity Shares and in
multiples of 27 Equity
Shares thereafter

Such number of Equity
Shares and in multiple
of 27 Equity Shares, that
the Bid Amount exceeds
200,000

Such number of Equity
Shares and in multiple of
27 Equity Shares that the
Bid Amount exceeds
200,000

27 Equity Shares

 

Maximum Bid

Such number of Equity
Shares in multiples of 27
Equity Shares, so that

 

Such number of Equity
Shares and in multiples
of 27 Equity Shares not

 

Such number of Equity
Shares and in multiples
of 27 Equity Shares not

 

Such number of Equity
Shares and in multiples
of 27 Equity Shares so

 

 

 

 

 

 

 

the maximum _ Bid| exceeding the size of the | exceeding the size of the |that the Bid Amount
Amount by|Offer, subject to/Offer (excluding QIB|does not _ exceed
each Eligible Employee | applicable limits portion), subject to | 200,000
in Eligible Employee applicable limits
Portion does not exceed
z 500,000,
less Employee Discount,
if any
Bid Lot 27 Equity Shares and in multiples of 27 Equity Shares thereafter
Mode of Compulsorily in dematerialized form
allotment
Allotment Lot 27 Equity Shares and in multiples of one Equity Share thereafter
Trading Lot One Equity Share
Who can apply” | Eligible Employees | Public financial | Resident Indian | Resident Indian
(such that the Bid | institutions (as specified| individuals, Eligible individuals, _ Eligible
Amount does not exceed |in Section 2(72) of the|NRIs, HUFs (in  the|NRIs and HUFs (in the
% 500,000) Companies Act),/name of the karta), | name of the karta)
scheduled commercial |companies, corporate
banks, Mutual Funds, | bodies, scientific
Eligible FPIs, VCEs,| institutions societies and
AIFs, FVCIs registered | trusts and any
with SEBI, multilateral | individuals, corporate
and bilateral] bodies and _ family
development financial | offices which are
institutions, state | recategorised as.
industrial development] category II FPIs and
corporation, insurance | registered with SEBI
companies registered
with IRDAI, provident
funds (subject to
applicable law) with
minimum corpus of
%250 million, pension

 

 

 

 

373

 
 

Particulars Eligible Employees QIBs* Non-Institutional Retail Individual
Bidders Investors

 

funds with minimum
corpus of 250 million,
National Investment
Fund set up by the
Government of India,
the insurance funds set
up and managed by
army, navy or air force
of the Union of India,
insurance funds set up
and managed by the
Department of Posts,
India and Systemically
Important Non-Banking
Financial Companies.

 

 

 

 

 

Terms of Payment [In case of Anchor Investors: Full Bid Amount was required to be paid by the Anchor Investors at the
time of submission of their Bids"

In case of all other Bidders: Full Bid Amount was required to be blocked by the SCSBs in the bank
account of the ASBA Bidder that is specified in the ASBA Form at the time of submission of the ASBA
Form, or through the UPI mechanism (only for Retail Individual Bidders)

 

 

# Eligible Employees Bidding in the Employee Reservation Portion could Bid up to a Bid Amount of % 500,000 (net of Employee Discount).
However, a Bid by an Eligible Employee in the Employee Reservation Portion was considered for allocation, in the first instance, for a Bid
Amount of % 200,000. In the event of under-subscription in the Employee Reservation Portion the unsubscribed portion was required to be
available for allocation and Allotment, proportionately to all Eligible Employees who had Bid in excess of % 200,000, subject to the
maximum value of Allotment made to such Eligible Employee not exceeding % 500,000. Further, an Eligible Employee Bidding in the
Employee Reservation Portion could also Bid in the Net Offer and such Bids were not be treated as multiple Bids subject to applicable
limits. Further, an Eligible Employee Bidding in the Employee Reservation Portion was added back to the Net Offer. In case of under-
subscription in the Net Offer, spill-over to the extent of such undersubscription was permitted from the Employee Reservation Portion.

Any unsubscribed portion remaining in the Employee Reservation Portion was added to the Net Offer. Allotment to an Eligible Employee in
the Employee Reservation Portion could not exceed 220,000 in value. Only in the event of an undersubscription in the Employee
Reservation Portion, post the initial Allotment, such unsubscribed portion could have been Allotted on a proportionate basis to Eligible
Employees Bidding in the Employee Reservation Portion, subject to the total Allotment to an Eligible Employee not exceeding 500,000 in
value.

* Our Company and the Selling Shareholders, in consultation with the BRLMs, allocated 60% of the QIB Portion to Anchor Investors at the
price at which allocation was made to Anchor Investors, on a discretionary basis, subject to there being (i) a maximum of two Anchor
Investors, where allocation in the Anchor Investor Portion was % 100 million, (ii) minimum of two and maximum of 15 Anchor Investors,
where the allocation under the Anchor Investor Portion was. more than @ 100 million but up to ® 2,500 million under the Anchor Investor
Portion, subject to a minimum Allotment of & 50 million per Anchor Investor, and (iii) in case of allocation above @ 2,500 million under the
Anchor Investor Portion, a minimum of five Anchor Investors and a maximum of 15 Anchor Investors for allocation up to ® 2,500 million,
and an additional 10 Anchor Investors for every additional % 2,500 million or part thereof was permitted, subject to minimum allotment of @
50 million per Anchor Investor. An Anchor Investor was required to make a minimum Bid of such number of Equity Shares, that the Bid
Amount is at least & 100 million. One-third of the Anchor Investor Portion was reserved for domestic Mutual Funds, subject to valid Bids
being received at or above the Anchor Investor Allocation Price.

“* The Offer was made in terms of Rule 19(2)(b) of the SCRR read with Regulation 45 of the SEBI ICDR Regulations. The Offer was made
through the Book Building Process, in compliance with Regulation 6(1) of the SEBI ICDR Regulations, where not more than 50% of the Net
Offer was Allotted on a proportionate basis to QIBs, provided that the Anchor Investor Portion was allocated on a discretionary basis, of
which one-third was reserved for domestic Mutual Funds, subject to valid Bids having been received from domestic Mutual Funds at or
above the Anchor Investor Allocation Price. Further, 5% of the Net QIB Portion (excluding the Anchor Investor Portion) was made
available for allocation on a proportionate basis to Mutual Funds only and the remainder of the QIB Portion was made available for
allocation on a proportionate basis to all QUBs (other than Anchor Investors), including Mutual Funds, subject to valid Bids having been
received at or above the Offer Price. Further, not less than 15% of the Offer was made available for allocation on a proportionate basis to
Non-Institutional Investors and not less than 35% of the Offer was made available for allocation to Retail Individual Bidders, in accordance
with the SEBI ICDR Regulations, subject to valid Bids having been received at or above the Offer Price. Under-subscription, if any, in any
category except the QIB Portion, met with spill-over from any other category or categories, as applicable, at the discretion of our Company
in consultation with the BRLMs and the Designated Stock Exchange, subject to applicable laws. Our Company reserves the right to reject,
in its absolute discretion, all or any multiple Bids in any or all categories in accordance with the SEBI ICDR Regulations.

“In case of joint Bids, the Bid-cum-Application Form was required to contain only the name of the First Bidder whose name should also

appear as the first holder of the depository account held in joint names. The signature of only the First Bidder was required in the Bid-cum-
Application Form and such First Bidder deemed to have signed on behalf of the joint holders. All communications was addressed to such

374

 
first Bidder and dispatched to his or her address as per the Demographic Details received from Depositories.

“Full Bid Amount was payable by the Anchor Investors at the time of submission of the Anchor Investor Application Form, provided that
any difference between the price at which Equity Shares were allocated to the Anchor Investors and the Anchor Investor Offer Price, was
payable by the Anchor Investor pay-in date as mentioned in the CAN.

* The Bids by FPls with certain structures as described under “Offer Procedure ~ Bids by FPIs" on page 383 and having same PAN was
collated and identified as a single bid in the Bidding process. The Equity Shares Allocated and Allotted to such successful Bidders (with
same PAN) was proportionately distributed.

Bidders will be required to confirm and will be deemed to have represented to our Company, the respective Selling Shareholders, the
Underwriters, their respective directors, officers, agents, affiliates and representatives that they are eligible under applicable law, rules,
regulations, guidelines and approvals to acquire the Equity Shares.

Eligible Employees bidding in the Employee Reservation Portion at a price within the Price Band can made
payment based on Bid Amount, at the time of making a Bid. Eligible Employees bidding in the Employee
Reservation Portion at the Cut-Off Price were required to ensure payment at the Cap Price less Employee
Discount, at the time of making a Bid.

Subject to valid Bids being received at or above the Offer Price, under-subscription, if any, in any category
except the QIB Portion, would be allowed to be met with spill over from any other category or combination of
categories at the discretion of our Company and the Selling Shareholders, in consultation with the BRLMs and
the Designated Stock Exchange, on a proportionate basis.

Bidders will be required to confirm and will be deemed to have represented to our Company and the
Underwriters, their respective directors, officers, agents, affiliates and representatives that they are eligible
under applicable law, rules, regulations, guidelines and approvals to acquire the Equity Shares.

 

 

 

Bid/Offer Programme
BID/ OFFER OPENED ON” Thursday, December 2, 2021
BID/ OFFER CLOSED ON Monday, December 6, 2021

 

 

“Our Company and Selling Shareholders, in consultation with the BRLMs , allocated 60% of the QIB Portion to Anchor Investors on a
discretionary basis, in accordance with the SEBI ICDR Regulations. Anchor Investors Bid on the Anchor Investor Bidding Date.

An indicative timetable in respect of the Offer is set out below:

 

 

 

 

 

 

 

Event Indicative Day and Date
Finalisation of Basis of Allotment with the Designated Stock On or about Thursday, December 9, 2021
Exchange
Initiation of refunds (if any, for Anchor Investors) / unblocking On or about Friday, December 10, 2021
of funds from ASBA Account*
Credit of the Equity Shares to depository accounts of Allottees On or about Monday December 13, 2021
Commencement of trading of the Equity Shares on the Stock On or about Tuesday, December 14, 2021
Exchanges

 

“In accordance with SEBI circular dated March 16, 2021, for IPOs opening subsequent to May 1, 2021 (or any other date as prescribed by
SEBI) in case of (i) any delay in unblocking of amounts in the ASBA Accounts (including amounts blocked through the UPI Mechanism) for
cancelled/ withdrawn/deleted ASBA Forms, the Bidder shall be compensated by the SCSB at a uniform rate of 2100 per day or 15% per
annum of the Bid Amount, whichever is higher from the date on which the request for cancellation/ withdrawal/ deletion is placed in the
Stock Exchanges bidding platform until the date on which the amounts are unblocked; (ii) any blocking of multiple amounts for the same
ASBA Form (for amounts blocked through the UPI Mechanism), the Bidder shall be compensated by the SCSB at a uniform rate 2100 per
day or 15% per annum of the total cumulative blocked amount except the original application amount, whichever is higher from the date on
which such multiple amounts were blocked till the date of actual unblock; (iti) any blocking of amounts more than the Bid Amount, the
Bidder shall be compensated by the SCSB at a uniform rate of 2100 per day or 15% per annum of the difference in amount, whichever is
higher from the date on which such excess amounts were blocked till the date of actual unblock; (iv) any delay in unblocking of non-allotted/
partially allotted Bids, exceeding four Working Days from the Bid/Offer Closing Date, the Bidder shall be compensated by the SCSB at a
uniform rate of 2100 per day or 15% per annum of the Bid Amount, whichever is higher for the entire duration of delay exceeding four
Working Days from the Bid/ Offer Closing Date till the date of the actual unblock. The SCSBs shall compensate the Bidder, immediately on
the date of receipt of complaint from the Bidder. From the date of receipt of complaint from the Bidder, in addition to the compensation to
be paid by the SCSBs as above, the post-Offer BRLMs shall be liable for compensating the Bidder at a uniform rate of 2100 per day or 15%
per annum of the Bid Amount, whichever is higher from the date of on which grievance is received by the BRLMs or Registrar until the date
on which the blocked amounts are unblocked.

The above timetable is indicative and does not constitute any obligation on our Company, Selling
Shareholders or the BRLMs.

375

 

 
Whilst our Company shall ensure that all steps for the completion of the necessary formalities for the
listing and the commencement of trading of the Equity Shares on the Stock Exchanges are taken within
six Working Days of the Bid/ Offer Closing Date or such period as may be prescribed, the timetable may
change due to various factors, such as extension of the Bid/ Offer Period by our Company, revision of the
Price Band or any delays in receiving the final listing and trading approval from the Stock Exchanges.
The commencement of trading of the Equity Shares will be entirely at the discretion of the Stock
Exchanges and in accordance with the applicable laws.

In case of any delay in unblocking of amounts in the ASBA Accounts (including amounts blocked through
the UPI Mechanism) exceeding four Working Days from the Bid/Offer Closing Date, the Bidder shall be
compensated at a uniform rate of = 100 per day for the entire duration of delay exceeding four Working
Days from the Bid/Offer Closing Date by the intermediary responsible for causing such delay in
unblocking. The BRLMs shall, in their sole discretion, identify and fix the liability on such intermediary
or entity responsible for such delay in unblocking.

Except in relation to the Bids received from the Anchor Investors, Bids and any revision in Bids were required
to be accepted only between 10.00 a.m. and 5.00 p.m. (Indian Standard Time (“IST”)) during the Bid/Offer
Period (except on the Bid/Offer Closing Date) at the Bidding Centres as mentioned on the Bid cum Application
Form except that:

@ on the QIB Bid/Offer Closing Date, in case of Bids by QIBs under the Net QIB Portion, the Bids and
the revisions in Bids were required to be accepted only between 10.00 a.m. and 3.00 p.m. (Indian
Standard Time) and uploaded until 4.00 p.m. (IST);

(¢) on the Bid/Offer Closing Date: (UPI mandate end time and date shall be at 12:00 pm on Tuesday,
December 7, 2021)

(a) in case of Bids by Non-Institutional Bidders, the Bids and the revisions in Bids were required to
be accepted only between 10.00 a.m. and 3.00 p.m. (IST) and uploaded until 4.00 p.m. (IST); and

(b) in case of Bids by Retail Individual Bidders and Eligible Employees Bidding in the Employee
Reservation Portion, the Bids and the revisions in Bids were required to be accepted only between
10.00 a.m. and 3.00 p.m. (IST) and uploaded until 5.00 p.m. (IST), which could be extended up to
such time as deemed fit by the Stock Exchanges after taking into account the total number of
applications received up to the closure of timings and reported by BRLMs to the Stock
Exchanges.

For the avoidance of doubt, it is clarified that Bids not uploaded on the electronic bidding system or in respect of
which full Bid Amount was not blocked by SCSBs and the Sponsor Bank would be liable to be rejected. The
Registrar to the Offer were required to submit the details of cancelled/withdrawn/deleted applications to the
SCSB’s on daily basis within 60 minutes of the Bid closure time from the Bid/ Offer Opening Date till the Bid/
Offer Closing Date by obtaining the same from the Stock Exchanges. The SCSB’s were required to unblock
such applications by the closing hours of the Working Day.

Due to limitation of the time available for uploading the Bids on the Bid/ Offer Closing Date, the Bidders were
advised to submit their Bids one day prior to the Bid/ Offer Closing Date and, in any case, no later than 1.00
p.m. (Indian Standard Time) on the Bid/ Offer Closing Date. Bidders were cautioned that, in the event a large
number of Bids are received on the Bid/ Offer Closing Date, as is typically experienced in public offerings in
India, it could lead to some Bids not being uploaded due to lack of sufficient time to upload. Such Bids that
could be uploaded on the electronic bidding system were not considered for allocation under this Offer. Bids
were only accepted on Working Days. Investors were required to note that as per letter no. List/smd/sm/2006
dated July 3, 2006 and letter no. NSE/IPO/25101- 6 dated July 6, 2006 issued by BSE and NSE respectively,
Bids and any revision in Bids shall not be accepted on Saturdays and public holidays as declared by the Stock
Exchanges. Bids by ASBA Bidders were uploaded by the SCSBs in the electronic system to be provided by the
Stock Exchanges.

376
None amongst our Company, the selling shareholders or any member of the Syndicate is liable for any failure in
uploading or downloading the Bids due to faults in any software / hardware system or otherwise or the blocking
of Bid Amount in the ASBA Account on receipt of instructions from the Sponsor Bank on account of any errors,
omissions or non-compliance by various parties involved in, or any other fault, malfunctioning or breakdown in,
or otherwise, in the UPI Mechanism.

Our Company, in consultation with the BRLMs and the Selling Shareholders, reserved the right to revise the
Price Band during the Bid/ Offer Period in accordance with the SEBI ICDR Regulations. In such an event, the
Cap Price were required to be not more than 120% of the Floor Price. Subject to compliance with the
immediately preceding sentence, the Floor Price could move up or down to the extent of 20% of the Floor Price,
as advertised at least five Working Days before the Bid/ Offer Opening Date.

In case of any revision in the Price Band, the Bid/Offer Period were required to be extended for at least
three additional Working Days after such revision of the Price Band, subject to the total Bid/Offer
Period not exceeding 10 Working Days. Any revision in the Price Band, and the revised Bid/Offer Period,
if applicable, were required to be widely disseminated by notification to the Stock Exchanges by issuing a
press release and also by indicating the change on the websites of the BRLMs and at the terminals of the
members of the Syndicate and by intimation to the Designated Intermediaries and the Sponsor Bank, as
applicable.

In case of discrepancy in the data entered in the electronic book vis-a-vis the data contained in the physical Bid
cum Application Form for a particular Bidder, the details as per the Bid file received from the Stock Exchanges
may be taken as the final data for the purpose of Allotment.

Withdrawal of the Offer

The Offer shall be withdrawn in the event the requirement of the minimum subscription as prescribed under
Regulation 45 of the SEBI ICDR Regulations is not fulfilled. Our Company, in consultation with the BRLMs,
reserves the right not to proceed with the Offer after the Bid/Offer Opening Date but before the Allotment. In
such an event, our Company would issue a public notice in the newspapers in which the pre-Offer
advertisements were published, within two days of the Bid/Offer Closing Date or such other time as may be
prescribed by SEBI, providing reasons for not proceeding with the Offer. The BRLMs, through the Registrar to
the Offer, shall notify the SCSBs and the Sponsor Bank to unblock the bank accounts of the ASBA/ RIIs
Bidding using the UPI Mechanism within one Working Day from the date of receipt of such notification. Our
Company shall also inform the same to the Stock Exchanges on which the Equity Shares are proposed to be
listed.

If our Company withdraws the Offer at any stage, including after the Bid/ Offer Closing Date and thereafter
determine that they will proceed with public offering of the Equity Shares, our Company shall file a fresh draft
red herring prospectus with SEBI.

Notwithstanding the foregoing, this Offer is also subject to obtaining the final listing and trading approvals of

the Stock Exchanges, which our Company shall apply for after Allotment, and filing of the Prospectus with the
RoC.

377
OFFER PROCEDURE

All Bidders were required to read the General Information Document for Investing in Public Offers prepared
and issued in accordance with the circular no. SEBI/HO/CFD/DIL1/CIR/P/2020/37 dated March 17, 2020 and
the UPI Circulars (the “General Information Document”) which highlights the key rules, processes and
procedures applicable to public issues in general in accordance with the provisions of the Companies Act, the
SCRA, the SCRR and the SEBI ICDR Regulations. The General Information Document is available on the
websites of the Stock Exchanges and the BRLMs. Please refer to the relevant provisions of the General
Information Document which are applicable to the Offer. The Bidders should note that the details and process
provided in the General Information Document should be read along with this section.

Bidders could refer to the General Information Document for information in relation to (i) category of investors
eligible to participate in the Offer; (ii) maximum and minimum Bid size; (iii) price discovery and allocation; (iv)
payment instructions for ASBA Bidders; (v) issuance of Confirmation of Allocation Note (“CAN”) and
Allotment in the Offer; (vi) general instructions (limited to instructions for completing the Bid cum Application
Form); (vii) designated date; ( disposal of applications; (ix) submission of Bid cum Application Form; (x)
other instructions (limited to joint bids in cases of individual, multiple bids and instances when an application
would be rejected on technical grounds); (xi) applicable provisions of Companies Act relating to punishment for
fictitious applications; (xii) mode of making refunds; and (xiii) interest in case of delay in Allotment or refund.

 

SEBI through the Circulars on Streamlining Public Issues has proposed to introduce an alternate payment
mechanism using Unified Payments Interface (“UPI”) and consequent reduction in timelines for listing in a
phased manner. UPI has been introduced in a phased manner as a payment mechanism in addition to ASBA for
applications by RIBs through intermediaries from January 1, 2019. The UPI Mechanism for RIBs applying
through Designated Intermediaries, in phase I, was effective along with the prior process and existing timeline
of T+6 days (“UPI Phase I”), until June 30, 2019. Subsequently, with effect from July 1, 2019, for applications
by RIBs through Designated Intermediaries (other than SCSBs), the existing process of physical movement of
forms from Designated Intermediaries to SCSBs for blocking of funds has been discontinued and only the UPI
Mechanism for such Bids with existing timeline of T+6 days was mandated for a period of three months or
launch of five main board public issues, whichever is later (“UPI Phase II”). Subsequently, however, SEBI vide
its circular no. SEBI/HO/CFD/DIL2/CIR/P/2020/50 dated March 30, 2020 extended the timeline for
implementation of UPI Phase II till further notice. However, given the prevailing uncertainty due to the COVID-
19 pandemic, SEBI vide its circular no. SEBI/HO/CFD/DIL2/CIR/P/2020/50 dated March 30, 2020, has
decided to continue with the UPI Phase II till further notice. The final reduced timeline of T+3 days will be
made effective using the UPI Mechanism for applications by RIBs (“UPI Phase III”), as may be prescribed by
SEBI. The Issue will be undertaken pursuant to the processes and procedures under UPI Phase II, subject to
any circulars, clarification or notification issued by the SEBI from time to time. Further, SEBI by way of its
circular no. SEBI/HO/CFD/DIL2/CIR/P/2021/2480/1/M dated March 16, 2021 (“March 16 Circular”) as
amended pursuant to SEBI circular number SEBI/HO/CFD/DIL2/P/CIR/2021/570 dated June 2, 2021 has
introduced certain additional measures for streamlining the process of initial public offers and redressing
investor grievances. The March 16 Circular shall come into force for initial public offers opening on/or after
May 1, 2021, except as amended pursuant to SEBI circular number SEBI/HO/CFD/DIL2/P/CIR/2021/570 dated
June 2, 2021, and the provisions of these circulars are deemed to form part of this Prospectus.

In case of any delay in unblocking of amounts in the ASBA Accounts (including amounts blocked through the
UPI Mechanism) exceeding four Working Days from the Bid/Offer Closing Date, the Bidder shall be
compensated at a uniform rate of %100 per day for the entire duration of delay exceeding four Working Days
from the Bid/ Offer Closing Date by the intermediary responsible for causing such delay in unblocking. The
BRLMs shall, in their sole discretion, identify and fix the liability on such intermediary or entity responsible for
such delay in unblocking.

Further, our Company, the respective Selling Shareholder and the members of the Syndicate do not accept any
responsibility for the completeness and accuracy of the information stated in this section and the General
Information Document and are not liable for any amendment, modification or change in the applicable law
which have occurred after the date of the Red Herring Prospectus, and which may occur after the date of this
Prospectus. Bidders were advised to make their independent investigations and ensure that their Bids were
submitted in accordance with applicable laws and do not exceed the investment limits or maximum number of
Equity Shares that can be held by them under applicable law or as specified in the Red Herring Prospectus and
this Prospectus.

378
Our Company and the Syndicate are not liable for any adverse occurrences consequent to the implementation of
the UPI Mechanism for application in this Offer.

Book Building Procedure

The Offer has been made through the Book Building Process in accordance with Regulation 6(1) of the SEBI
ICDR Regulations wherein not more than 50% of the Offer were required to be available for allocation to QIBs
on a proportionate basis, provided that our Company in consultation with the BRLMs could have allocated up to
60% of the QIB Portion to Anchor Investors on a discretionary basis in accordance with the SEBI ICDR
Regulations, of which one-third was reserved for domestic Mutual Funds, subject to valid Bids having been
received from them at or above the Anchor Investor Allocation Price. 5% of the Net QIB Portion was made
available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the Net QIB Portion
was available for allocation on a proportionate basis to all QIB Bidders (other than Anchor Investors), including
Mutual Funds, subject to valid Bids having received at or above the Offer Price. Further, not less than 15% of
the Offer was made available for allocation on a proportionate basis to Non-Institutional Bidders and not less
than 35% of the Offer was made available for allocation on a proportionate basis to RIBs in accordance with the
SEBI ICDR Regulations, subject to valid Bids being received at or above the Offer Price. However, the value of
Allotment to any Retail Bidder shall not exceed % 200,000. Furthermore, up to 250,000 Equity Shares,
aggregating to = 131.25 million shall be made available for allocation on a proportionate basis only to Eligible
Employees Bidding in the Employee Reservation Portion, subject to valid Bids being received at or above the
Offer Price, if any.

Further, in the event of an under-subscription in the Employee Reservation Portion, such unsubscribed portion
was Allotted on a proportionate basis to Eligible Employees Bidding in the Employee Reservation Portion, for a
value in excess of % 200,000, subject to the total Allotment to an Eligible Employee not exceeding = 500,000.
The unsubscribed portion, if any, in the Employee Reservation Portion was added to the Net Offer.

The Equity Shares, on Allotment, shall be traded only in the ematerialized segment of the Stock Exchanges.

Bidders should note that the Equity Shares will be Allotted to all successful Bidders only in
dematerialized form. The Bid cum Application Forms which did not have the details of the Bidders’
depository account, including the DP ID and the Client ID and the PAN and UPI ID (for RIBs Bidding
through the UPI Mechanism), were to be treated as incomplete and were rejected. Eligible Employee
Bidding in the Employee Reservation Portion using the UPI Mechanism, shall be treated as incomplete
and will be rejected . Bidders will not have the option of being Allotted Equity Shares in physical form.

Phased implementation of UPI for Bids by Retail Individual Bidders as per the UPI Circular

SEBI has issued the UPI Circular in relation to streamlining the process of public issue of equity shares and
convertibles. Pursuant to the UPI Circular, UPI will be introduced in a phased manner as a payment mechanism
(in addition to mechanism of blocking funds in the account maintained with SCSBs under the ASBA) for
applications by RIBs through intermediaries with the objective to reduce the time duration from public issue
closure to listing from six Working Days to up to three Working Days. Considering the time required for
making necessary changes to the systems and to ensure complete and smooth transition to the UPI Mechanism,
the UPI Circular proposes to introduce and implement the UPI Mechanism in three phases in the following
manner:

a) Phase I: This phase was applicable from January 1, 2019 till June 30, 2019. Under this phase, a Retail
Individual Bidder would also have the option to submit the Bid cum Application Form with any of the
intermediary and use his / her UPI ID for the purpose of blocking of funds. The time duration from public
issue closure to listing would continue to be six Working Days.

b) Phase II: This phase has become applicable from July 1, 2019 and will continue for a period of three
months or floating of five main board public issues, whichever is later. Under this phase, submission of the
Bid cum Application Form by a Retail Individual Bidder through intermediaries to SCSBs for blocking of
funds will be discontinued and will be replaced by the UPI Mechanism. However, the time duration from
public issue closure to listing would continue to be six Working Days during this phase. Further, pursuant
to SEBI circular dated March 30, 2020, this phase has been extended till further notice.

379
c) Phase III: The commencement period of Phase III is yet to be notified. Subsequently, the time duration
from __ public issue closure to listing would be reduced to be three
Working Days.

All SCSBs offering facility of making application in public issues were required to also provide facility to make
application using UPI.
Our Company appointed one of the SCSBs as a sponsor bank to act as a conduit between the Stock Exchanges
and NPCI in order to facilitate collection of requests and / or payment instructions of the Retail Individual
Bidders using the UPI.

The processing fees for applications made by Retail Individual Bidders using the UPI Mechanism was be
released to the remitter banks (SCSBs) only after such banks provided a written confirmation on compliance
with SEBI Circular No: SEBI/HO/CFD/DIL2/P/CIR/2021/570 dated June 02, 2021 read with SEBI Circular No:
SEBI/HO/CFD/DIL2/CIR/P/2021/2480/1/M dated March 16, 2021.

For further details, refer to the General Information Document available on the websites of the Stock Exchanges
and the BRLMs.

Bid cum Application Form

Copies of the Bid cum Application Form (other than for Anchor Investors) and the abridged prospectus were
made available with the Designated Intermediaries at relevant Bidding Centers and at our Registered and
Corporate Office. The Bid cum Application Forms was also made available for download on the websites of the
NSE (www.nseindia.com) and the BSE (www.bseindia.com) at least one day prior to the Bid/Offer Opening
Date.

For Anchor Investors, the Bid cum Application Forms was available at the offices of the BRLMs.

All Bidders (other than Anchor Investors) were required to compulsorily use the ASBA process to participate in
the Offer. Anchor Investors were not permitted to participate in this Offer through the ASBA process.

Bidders (other than Anchor Investors and RIBs Bidding using the UPI Mechanism) were required to provide
bank account details and authorisation by the ASBA account holder to block funds in their respective ASBA
Accounts in the relevant space provided in the Bid cum Application Form and the Bid cum Application Form
that did not contain such details were liable to be rejected.

RIBs submitting their Bid cum Application Form to any Designated Intermediary (other than SCSBs) were
required to Bid using the UPI Mechanism and were required to provide the UPI ID in the relevant space
provided in the Bid cum Application Form. Bids submitted by RIBs with any Designated Intermediary (other
than SCSBs) without mentioning the UPI ID were liable to be rejected. RIBs Bidding using the UPI Mechanism
could also apply through the SCSBs and mobile applications using the UPI handles as provided on the website
of the SEBI.

ASBA Bidders were required to ensure that the Bids are made on ASBA Forms bearing the stamp of the
relevant Designated Intermediary, submitted at the relevant Bidding Centres only (except in case of electronic
ASBA Forms) and the ASBA Forms not bearing such specified stamp were liable to be rejected. Since the Offer
is made under Phase II of the UPI Circulars, ASBA Bidders could submit the ASBA Form in the manner below:

(i) RIBs (other than the RIBs using UPI Mechanism) could submit their ASBA Forms with SCSBs
(physically or online, as applicable), or online using the facility of linked online trading, demat and bank
account (3 in 1 type accounts) provided by certain brokers.

(ii) RIBs using UPI Mechanism, could submit their ASBA Forms with the Syndicate, sub-Syndicate

members, Registered Brokers, RTAs or CDPs or online using the facility of linked online trading, demat
and bank account (3 in 1 type accounts), provided by certain brokers.

380
(iii) QIBs and NIBs could submit their ASBA Forms with SCSBs, Syndicate, sub-Syndicate members,
Registered Brokers, RTAs or CDPs.

ASBA Bidders were also required to ensure that the ASBA Account had sufficient credit balance such that an
amount equivalent to the full Bid Amount can be blocked by the SCSB at the time of submitting the Bid.

The prescribed colour of the Bid cum Application Forms for various categories is as follows:

 

 

 

 

 

 

 

 

 

Category Colour of Bid cum
Application Form*
Resident Indians including resident QIBs, Non-Institutional Investors, RIBs and Eligible White
NRIs applying on a non-repatriation basis
Non-Residents including FPIs, Eligible NRIs applying on a repatriation basis, FVCIs and Blue
registered bilateral and multilateral institutions
Anchor Investors White
Eligible Employee Bidding in the Employee Reservation Portion Green
* Excluding electronic Bid cum Application Forms

Notes:
(1) Electronic Bid cum Application forms were also made available for download on the website of the NSE (www.nseindia.com) and the

BSE (www.bseindia.com).

(2) Bid cum Application Forms for Anchor Investors were made available at the office of the BRLMs.

In case of ASBA Forms, the relevant Designated Intermediaries were required to upload the relevant Bid details
in the electronic bidding system of the Stock Exchanges. Designated Intermediaries (other than SCSBs) were
required to submit/deliver the ASBA Forms (except Bid cum Application Forms submitted by RIBs Bidding
using the UPI Mechanism) to the respective SCSB, where the Bidder has a bank account and was to not submit
it to any non-SCSB bank or any Escrow Collection Bank(s). For RIBs using the UPI Mechanism, the Stock
Exchanges were required to share the Bid details (including UPI ID) with the Sponsor Bank on a continuous
basis to enable the Sponsor Bank to initiate a UPI Mandate Request to such RIBs for blocking of funds. The
Sponsor Bank was required to initiate request for blocking of funds through NPCI to RIIs, who were required to
accept the UPI Mandate Request for blocking of funds on their respective mobile applications associated with
UPI ID linked bank account. The NPCI were required to maintain an audit trail for every Bid entered in the
Stock Exchanges bidding platform, and the liability to compensate RIIs (Bidding through UPI Mechanism) in
case of failed transactions was with the concerned entity (i.e., the Sponsor Bank, NPCI or the issuer bank) at
whose end the lifecycle of the transaction has come to a halt. The NPCI were required to share the audit trail of
all disputed transactions/ investor complaints to the Sponsor Bank and the issuer bank. The Sponsor Bank and
the Bankers to the Offer were required to provide the audit trail to the BRLMs for analysing the same and
fixing liability.

The Sponsor Bank was required to undertake a reconciliation of Bid responses received from Stock Exchanges
and sent to NPCI and was required to also ensure that all the responses received from NPCI are sent to the
Stock Exchanges platform with detailed error code and description, if any. Further, the Sponsor Bank were
required to undertake reconciliation of all Bid requests and responses throughout their lifecycle on daily basis
and share reports with the BRLMs in the format and within the timelines as specified under the UPI Circulars.
Sponsor Bank and issuer banks were required to download UPI settlement files and raw data files from the
NPCI portal after every settlement cycle and do a three way reconciliation with Banks UPI switch data, CBS
data and UPI raw data. NPCI was to coordinate with issuer banks and Sponsor Banks on a continuous basis.

Who can Bid?

In addition to the category of Bidders set forth in the General Information Document, the following persons
were also eligible to invest in the Equity Shares under all applicable laws, regulations and guidelines:

. FPIs eligible under applicable law;

. Scientific and/or industrial research organisations in India, which are authorised to invest in equity
shares; and

. Any other person eligible to Bid in this Offer, under the laws, rules, regulations, guidelines and polices

applicable to them.

The Equity Shares had not been and would not be registered under the Securities Act, and were not to be
offered or sold within the United States except pursuant to an exemption from, or in a transaction not

381
subject to, the registration requirements of the Securities Act and applicable state securities laws.
Accordingly, the Equity Shares were being offered and sold outside the United States in “offshore
transactions”, as defined in, and in reliance on Regulation S.

The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other
jurisdiction outside India and may not be offered or sold, and Bids may not be made by persons in any
such jurisdiction, except in compliance with the applicable laws of such jurisdiction.

Participation by Promoters, Promoter Group, the BRLMs, associates and affiliates of the BRLMs and the
Syndicate Members and the persons related to Promoters, Promoter Group, BRLMs and the Syndicate
Members

The BRLMs and the Syndicate Members were not be allowed to purchase the Equity Shares in any manner,
except towards fulfilling their underwriting obligations. However, the respective associates and affiliates of the
BRLMs and the Syndicate Members could purchase Equity Shares in the Offer, either in the QIB Portion or in
the Non-Institutional Portion as were applicable to such Bidders, where the allocation is on a proportionate basis
and such subscription may be on their own account or on behalf of their clients. All categories of investors,
including respective associates or affiliates of the BRLMs and Syndicate Members, were required to be treated
equally for the purpose of allocation to be made on a proportionate basis.

Except for Mutual Funds, AIFs or FPIs other than individuals, corporate bodies and family offices sponsored by
entities which are associates of the BRLMs or insurance companies promoted by entities which are associates of
the BRLMs, no BRLM or its respective associates could apply in the Offer under the Anchor Investor Portion.

Further, an Anchor Investor was deemed to be an “associate of the BRLM” if: (i) either of them controls,
directly or indirectly through its subsidiary or holding company, not less than 15% of the voting rights in the
other; or (ii) either of them, directly or indirectly, by itself or in combination with other persons, exercises
control over the other; or (iii) there is a common director, excluding nominee director, amongst the Anchor
Investors and the BRLMs.

Further, the Promoters and members of the Promoter Group were not to be allowed to participate by applying
for Equity Shares in the Offer. Furthermore, persons related to the Promoters and the Promoter Group were not
to apply in the Offer under the Anchor Investor Portion. It is clarified that a qualified institutional buyer who
had rights under a shareholders’ agreement or voting agreement entered into with any of the Promoters or
members of the Promoter Group of our Company, veto rights or a right to appoint any nominee director on our
Board, was deemed to be a person related to the Promoters or Promoter Group of our Company.

Bids by Mutual Funds

With respect to Bids by Mutual Funds, a certified copy of their SEBI registration certificate were required to be
lodged with the Bid cum Application Form. Failing this, our Company ithe right to reject any Bid without
assigning any reason thereof. Bids made by asset management companies or custodians of Mutual Funds were
required to specifically state names of the concerned schemes for which such Bids are made.

In case of a Mutual Fund, a separate Bid could be made in respect of each scheme of a Mutual Fund registered
with the SEBI and such Bids in respect of more than one scheme of a Mutual Fund were not to be treated as
multiple Bids, provided that such Bids clearly indicated the scheme for which the Bid is submitted.

No Mutual Fund scheme shall invest more than 10% of its net asset value in equity shares or equity related
instruments of any single company provided that the limit of 10% shall not be applicable for investments in case
of index funds or sector or industry specific scheme. No Mutual Fund under all its schemes should own more
than 10% of any company’s paid-up share capital carrying voting rights.

Bids by Eligible NRIs

Eligible NRIs were required to obtain copies of Bid cum Application Form from the offices of the Designated
Intermediaries. Only Bids accompanied by payment in Indian Rupees or freely convertible foreign exchange
were considered for Allotment. Eligible NRIs applying on a repatriation basis should authorise their SCSBs or
confirm or accept the UPI Mandate Request (in case of RIBs Bidding through the UPI Mechanism) to block
their Non-Resident External Accounts (‘NRE Account”), or Foreign Currency Non-Resident Accounts

382
(“FCNR Account”), and Eligible NRIs bidding on a non-repatriation basis were required to authorise their
SCSBs or confirm or accept the UPI Mandate Request (in case of RIBs Bidding through the UPI Mechanism) to
block their Non-Resident Ordinary (“NRO”) accounts for the full Bid amount, at the time of submission of the
Bid cum Application Form. Participation of Eligible NRIs in the Offer was subject to the FEMA regulations.
NRIs applying in the Offer through the UPI Mechanism were advised to enquire with the relevant bank, whether
their account is UPI linked, prior to submitting a Bid cum Application Form. By way of Press Note 1 (2021
Series) dated March 19, 2021, issued by the DPIIT, it has been clarified that an investment made by an Indian
entity which is owned and controlled by NRIs on a non-repatriation basis, shall not be considered for calculation
of indirect foreign investment.

Eligible NRIs Bidding on a repatriation basis were advised to use the Bid cum Application Form meant for Non-
Residents (blue in colour).

Eligible NRIs Bidding on non-repatriation basis were advised to use the Bid cum Application Form for residents
(white in colour).

For details of restrictions on investment by NRIs, see “Restrictions on Foreign Ownership of Indian Securities”
on page 371.

Bids by HUFs

Bids by Hindu Undivided Families or HUFs, was required to be made in the individual name of the Karta. The
Bidder/applicant was required to specify that the Bid is being made in the name of the HUF in the Bid cum
Application Form/Application Form as follows: “Name of sole or first Bidder/applicant: XYZ Hindu Undivided
Family applying through XYZ, where XYZ is the name of the Karta”. Bids/Applications by HUFs were
considered at par with Bids/Applications from individuals.

Bids by FPIs

In terms of applicable FEMA Rules and the SEBI FPI Regulations, investments by FPIs in the Equity Shares is
subject to certain limits, i.e., the individual holding of an FPI (including its investor group (which means
multiple entities registered as foreign portfolio investors and directly or indirectly, having common ownership of
more than 50% or common control)) was required to be below 10% of our post-Offer Equity Share capital on a
fully diluted basis. In case the total holding of an FPI or investor group increases beyond 10% of the total paid-
up Equity Share capital of our Company, on a fully diluted basis, the total investment made by the FPI or
investor group was re-classified as FDI subject to the conditions as specified by SEBI and the RBI in this regard
and our Company and the investor was required to comply with applicable reporting requirements. Further, the
total holdings of all FPIs put together, with effect from April 1, 2020, was up to the sectoral cap applicable to
the sector in which our Company operates (i.e., up to 100%). In terms of the FEMA Rules, for calculating the
aggregate holding of FPIs in a company, holding of all registered FPIs was required to be included.

In case of Bids made by FPIs, a certified copy of the certificate of registration issued under the SEBI FPI
Regulations was required to be attached to the Bid cum Application Form, failing which our Company ithe right
to reject any Bid without assigning any reason. FPIs who wished to participate in the Offer were advised to use
the Bid cum Application Form for Non-Residents (blue in colour).

To ensure compliance with the above requirement, SEBI, pursuant to its circular bearing reference number
IMD/FPIC/CIR/P/2018/114 dated July 13, 2018, had directed that at the time of uthorized e of the Basis of
Allotment, the Registrar was required to (i) use the PAN issued by the Income Tax Department of India for
checking compliance for a single FPI; and (ii) obtain validation from Depositories for the FPIs who had invested
in the Offer to ensure there is no breach of the investment limit, within the timelines for issue procedure, as
prescribed by SEBI from time to time.

Subject to compliance with all applicable Indian laws, rules, regulations, guidelines and approvals in terms of
Regulation 21 of the SEBI FPI Regulations, an FPI was permitted to issue, subscribe to, or otherwise deal in
offshore derivative instruments, directly or indirectly, only if it complies with the following conditions:

(a) such offshore derivative instruments were issued only by persons registered as Category I FPIs;
(b) such offshore derivative instruments were issued only to persons eligible for registration as Category I
FPIs;

383
( such offshore derivative instruments were issued after compliance with the ‘know your client’ norms as
specified by SEBI; and
(d) such other conditions as may be specified by SEBI from time to time.

An FPI was required to ensure that the transfer of an offshore derivative instruments issued by or on behalf of it,
is subject to (a) the transfer being made to persons which fulfil the criteria provided under Regulation 21(1) of
the SEBI FPI Regulations (as mentioned above from points (a) to (d)); and (b) prior consent of the FPI was
obtained for such transfer, except in cases, where the persons to whom the offshore derivative instruments were
to be transferred, were pre-approved by the FPI.

Bids by following FPIs, submitted with the same PAN but with different beneficiary account numbers, Client
IDs and DP IDs were not be treated as multiple Bids:

. FPIs which —uthori the multi investment manager structure;

. Offshore derivative instruments which have obtained separate FPI registration for ODI and proprietary
derivative investments;

. Sub funds or separate class of investors with segregated portfolio who obtain separate FPI registration;

. FPI registrations granted at investment strategy level/sub fund level where a collective investment
scheme or fund has multiple investment strategies/sub-funds with identifiable differences and managed
by a single investment manager.

. Multiple branches in different jurisdictions of foreign bank registered as FPIs;
. Government and Government related investors registered as Category 1 FPIs; and
. Entities registered as collective investment scheme having multiple share classes.

The Bids belonging to any of the above mentioned seven structures and having same PAN could be collated and
identified as a single Bid in the Bidding process. The Equity Shares allotted in the Bid could be proportionately
distributed to the applicant FPIs (with same PAN).

In order to ensure valid Bids, FPIs making multiple Bids using the same PAN, and with different beneficiary
account numbers, Client IDs and DP IDs, were required to provide a confirmation along with each of their Bid
cum Application Forms that the relevant FPIs making multiple Bids utilize any of the above-mentioned
structures and indicate the name of their respective investment managers in such confirmation. In the absence of
such confirmation from the relevant FPIs, such multiple Bids were to be rejected.

Participation of FPIs in the Offer was subject to the FEMA Rules.

All non-resident investors were to note that refunds (in case of Anchor Investors), dividends and other
distributions, if any, will be payable in Indian Rupees only and net of bank charges and commission.

Bids by SEBI registered AIFs, VCFs and FVCIs

The Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012, as amended (the
“SEBI AIF Regulations”) prescribe, amongst others, the investment restrictions on AIFs. Post the repeal of the
Securities and Exchange Board of India (Venture Capital Funds) Regulations, 1996, venture capital funds which
have not re-registered as AIFs under the SEBI AIF Regulations shall continue to be regulated by the SEBI
(Venture Capital Funds) Regulations, 1996 until the existing fund or scheme managed by the fund is wound up
and such fund shall not launch any new scheme after the notification of the SEBI AIF Regulations. The
Securities and Exchange Board of India (Foreign Venture Capital Investors) Regulations, 2000, as amended
(“SEBI FVCI Regulations”) prescribe the investment restrictions on FVCIs.

The category I and II AIFs could not have invested more than 25% of their investible funds in one investee

384
company. A category III AIF could not have invested more than 10% of its investible funds in one investee
company. A VCF registered as a category I AIF, could not have invested more than one-third of its investible
funds, in the aggregate, in certain specified instruments, including by way of subscription to an initial public
offering of a venture capital undertaking. An FVCI could invest only up to 33.33% of its investible funds, in the
aggregate, in certain specified instruments, which includes subscription to an initial public offering of a venture
capital undertaking or an investee company (as defined under the SEBI AIF Regulations) whose shares are
proposed to be listed.

Participation of AIFs, VCFs and FVCIs was subject to the FEMA Rules.

All non-resident investors were required to note that refunds (in case of Anchor Investors), dividends and
other distributions, if any, were to be paid in Indian Rupees only and net of bank charges and
commission.

Bids by limited liability partnerships

In case of Bids made by limited liability partnerships registered under the Limited Liability Partnership Act,
2008, a certified copy of certificate of registration issued under the Limited Liability Partnership Act, 2008, was
required to be attached to the Bid cum Application Form. Failing this, our Company the right to reject any Bid
without assigning any reason thereof.

Bids by banking companies

In case of Bids made by banking companies registered with RBI, certified copies of: (i) the certificate of
registration issued by RBI, and (ii) the approval of such banking company’s investment committee were
required to be attached to the Bid cum Application Form, failing which our Company reserved the right to reject
any Bid by a banking company without assigning any reason thereof, subject to applicable law.

The investment limit for banking companies in non-financial services companies as per the Banking Regulation
Act, 1949 (the “Banking Regulation Act”), and Master Direction — Reserve Bank of India (Financial Services
provided by Banks) Directions, 2016 is 10% of the paid-up share capital of the investee company or 10% of the
bank’s own paid-up share capital and reserves, as per the last audited balance sheet or a subsequent balance
sheet, whichever is less. Further, the aggregate investment in subsidiaries and other entities engaged in financial
and non-financial services company cannot exceed 20% of the bank’s paid-up share capital and reserves. A
banking company would be permitted to invest in excess of 10% but not exceeding 30% of the paid-up share
capital of such investee company if: (a) the investee company is engaged in non-financial activities in which
banking companies are permitted to engage under the Banking Regulation Act or the additional acquisition is
through restructuring of debt/corporate debt restructuring/strategic debt restructuring, or to protect the bank’s
interest on loans/investments made to a company, provided that the bank was required to submit a time-bound
action plan for disposal of such shares (in this sub-clause (b)) within a specified period to the RBI. A banking
company required a prior approval of the RBI to make investment in excess of 30% of the paid-up share capital
of the investee company, investment in a subsidiary and a financial services company that is not a subsidiary
(with certain exceptions prescribed), and investment in a non-financial services company in excess of 10% of
such investee company’s paid-up share capital as stated in the Reserve Bank of India (Financial Services
provided by Banks) Directions, 2016, as amended.

Bids by SCSBs

SCSBs participating in the Offer were required to comply with the terms of the circulars CIR/CFD/DIL/12/2012
and CIR/CFD/DIL/1/2013 dated September 13, 2012 and January 2, 2013 respectively issued by the SEBI. Such
SCSBs were required to ensure that for making applications on their own account using ASBA, they should
have a separate account in their own name with any other SEBI registered SCSBs. Further, such account was
required to be used solely for the purpose of making application in public issues and clear demarcated funds
were to be made available in such account for such Bids.

Bids by insurance companies
In case of Bids made by insurance companies registered with the IRDA, a certified copy of certificate of

registration issued by IRDA was required to be attached to the Bid cum Application Form. Failing this, the
Company / reserved the right to reject any Bid without assigning any reason thereof. The exposure norms for

385
insurers are prescribed under Regulation 9 of the Insurance Regulatory and Development Authority of India
(Investment) Regulations, 2016 (“IRDA Investment Regulations”), and are based on investments in the equity
shares of a company, the entire group of the investee company and the industry sector in which the investee
company operates. Bidders were advised to refer to the IRDA Investment Regulations for specific investment
limits applicable to them.

Bids by Systemically Important Non-Banking Financial Companies

In case of Bids made by NBFC-SI, a certified copy of the certificate of registration issued by the RBI, a certified
copy of its last audited financial statements on a standalone basis and a net worth certificate from its statutory
auditor(s), were required to be attached to the Bid-cum Application Form. Failing this, our Company reserved
the right to reject any Bid, without assigning any reason thereof. NBFC-SI participating in the Offer were
required to comply with all applicable regulations, guidelines and circulars issued by RBI from time to time.

Bids under Power of Attorney

In case of Bids made pursuant to a power of attorney by limited companies, corporate bodies, registered
societies, eligible FPIs, AIFs, Mutual Funds, insurance companies, NBFC-Sis, insurance funds set up by the
army, navy or air force of the India, insurance funds set up by the Department of Posts, India or the National
Investment Fund and provident funds with a minimum corpus of % 250 million (subject to applicable laws) and
pension funds with a minimum corpus of = 250 million, a certified copy of the power of attorney or the relevant
resolution or authority, as the case may be, along with a certified copy of the memorandum of association and
articles of association and/or bye laws was required to be lodged along with the Bid cum Application Form.
Failing this, our Company reserved the right to accept or reject any Bid in whole or in part, in either case,
without assigning any reason thereof.

Our Company, in consultation with the BRLMs, in its absolute discretion, reserved the right to relax the above
condition of simultaneous lodging of the power of attorney along with the Bid cum Application Form, subject to
such terms and conditions that our Company in consultation with the BRLMs, could deem fit.

Bids by provident funds/pension funds

In case of Bids made by provident funds/pension funds, subject to applicable laws, with minimum corpus of 2
250 million, a certified copy of certificate from a chartered accountant certifying the corpus of the provident
fund/ pension fund was required to be attached to the Bid cum Application Form. Failing this, our Company
reserved the right to reject any Bid, without assigning any reason therefor.

Bids by Eligible Employees

The Bid was required for a minimum of 27 Equity Shares and in multiples of 27 Equity Shares thereafter so
as to ensure that the Bid Amount payable by the Eligible Employee did not exceed % 500,000 on a
net basis. However, the initial allocation to an Eligible Employee in the Employee Reservation Portion
could not exceed % 200,000 (which will be less Employee Discount). Allotment in the Employee
Reservation Portion is as detailed in the section “Offer Structure” beginning on page 372.

However, Allotments to Eligible Employees in excess of = 200,000 were considered on a proportionate basis, in
the event of undersubscription in the Employee Reservation Portion, subject to
the total Allotment to an Eligible Employee not exceeding % 500,000 (which would less Employee
Discount). Subsequent undersubscription, if any, in the Employee Reservation Portion was added
back to the Net Offer. Eligible Employees Bidding in the Employee Reservation Portion could Bid at the Cut-
off Price.

Bids under the Employee Reservation Portion by Eligible Employees were:

+ Made only in the prescribed Bid cum Application Form or Revision Form.

* Only Eligible Employees (excluding such other persons not eligible under applicable laws, rules,

386
regulations and guidelines) would be eligible to apply in this Offer under the Employee Reservation
Portion.

+ In case of joint bids, the sole/ First Bidder shall be the Eligible Employee.
+ Bids by Eligible Employees may be made at Cut-off Price.

* Only those Bids, which are received at or above the Offer Price would be considered for allocation
under this portion.

+ The Bids must be for a minimum of 27 Equity Shares and in multiples of 27 Equity Shares thereafter
so as to ensure that the Bid Amount payable by the Eligible Employee subject to a maximum Bid
Amount of % 500,000 on a net basis.

+ If the aggregate demand in this portion is less than or equal to 27 Equity Shares at or above the Offer
Price, full allocation shall be made to the Eligible Employees to the extent of their demand.

+ Bids by Eligible Employees in the Employee Reservation Portion and in the Net Offer portion shall
not be treated as multiple Bids. Our Company reserves the right to reject, in its absolute discretion, all
or any multiple Bids in any or all categories.

In the event of under-subscription in the Employee Reservation Portion, the unsubscribed portion was
made available for allocation and Allotment, proportionately to all Eligible Employees who had Bid in
excess of % 200,000, subject to the maximum value of Allotment made to such Eligible Employee not
exceeding % 500,000.

If since the aggregate demand in this portion was greater than 250,000 Equity Shares being above the
Offer Price, the allocation shall be made on a proportionate basis. For the method of proportionate basis
of Allotment, see “Offer Procedure” beginning on page 378.

Bids by Anchor Investors

In accordance with the SEBI ICDR Regulations, in addition to details and conditions mentioned in this
section the key terms for participation by Anchor Investors are provided below.

(3) Anchor Investor Application Forms were made available for the Anchor Investor Portion
at the
offices of the Book Running Lead Managers.

(4) The Bid was required to be for a minimum of such number of Equity Shares so that the
Bid Amount exceeds 2100 million. A Bid could not be submitted for over 60% of the QIB
Portion. In case of a Mutual Fund, separate Bids by individual schemes of a Mutual Fund
were aggregated to determine the minimum application size of = 100 million.

(5) One-third of the Anchor Investor Portion was reserved for allocation to domestic Mutual
Funds.

(6) Bidding for Anchor Investors opened one Working Day before the Bid/ Offer Opening

Date, i.e.,

the Anchor Investor Bidding Date, and will be completed on the same day.

387
(7) Our Company, in consultation with the Book Running Lead Managers could finalise
allocation to the Anchor Investors on a discretionary basis, provided that the minimum
number of Allottees in the Anchor Investor Portion were not less than:

(8) maximum of two Anchor Investors, where allocation under the Anchor Investor Portion is
up to

= 100 million;

(9) minimum of two and maximum of 15 Anchor Investors, where the allocation under the
Anchor Investor Portion is more than 7 100 million but up to 22,500 million, subject to a
minimum Allotment of %50 million per Anchor Investor; and

(10) ©in case of allocation above = 2,500 million under the Anchor Investor Portion, a
minimum of five such investors and a maximum of 15 Anchor Investors for allocation up
to = 2,500 million, and an additional 10 Anchor Investors for every additional 2 2,500
million, subject to minimum Allotment of % 50 million per Anchor Investor.

(11) Allocation to Anchor Investors was completed on the Anchor Investor Bidding Date. The
number of Equity Shares allocated to Anchor Investors and the price at which the
allocation is made was made available in the public domain by the Book Running Lead
Managers before the Bid/ Offer Opening Date, through intimation to the Stock Exchange.

(12) Anchor Investors could not withdraw or lower the size of their Bids at any stage after
submission of

the Bid.

(13) If the Offer Price was greater than the Anchor Investor Allocation Price, the additional
amount being the difference between the Offer Price and the Anchor Investor Allocation
Price was required to be paid by the Anchor Investors on the Anchor Investor Pay-in Date
specified in the CAN. If the Offer Price was lower than the Anchor Investor Allocation
Price, Allotment to successful Anchor Investors was at the higher price, i.e., the Anchor
Investor Allocation Price would still be the Anchor Investor Office Price.

(ix) Equity Shares Allotted in the Anchor Investor Portion were required to be locked in for a period of
30 days from the date of Allotment.

(14) Neither the Book Running Lead Managers or any associate of the Book Running Lead
Managers (except Mutual Funds sponsored by entities which are associates of the Book
Running Lead Managers or insurance companies promoted by entities which are associate
of Book Running Lead Managers or AIFs sponsored by the entities which are associate of
the Book Running Lead Managers or FPIs, nor any “person related to the Promoters or
Promoter Group” could apply in the Offer under the Anchor Investor Portion. For further
details, see “- Participation by Promoters, Promoter Group, the BRLMs, associates and
affiliates of the BRLMs and the Syndicate Members and the persons related to Promoters,
Promoter Group, BRLMs and the Syndicate Members” on page 382.

(xi) Bids made by QIBs under both the Anchor Investor Portion and the QIB Portion were not
considered multiple Bids.

388
(xii) For more information, see the General Information Document.

The above information is given for the benefit of the Bidders. Our Company, the Selling Shareholders
and the BRLMs are not liable for any amendments or modification or changes in applicable laws or
regulations, which may occur after the date of the Red Herring Prospectus and this Prospectus. Bidders
are advised to make their independent investigations and ensure that any single Bid from them does not
exceed the applicable investment limits or maximum number of the Equity Shares that can be held by
them under applicable laws or regulation or as specified in the Red Herring Prospectus and this
Prospectus.

In accordance with RBI regulations, OCBs cannot participate in the Offer.
Information for Bidders

The relevant Designated Intermediary entered a maximum of three Bids at different price levels opted in the Bid
cum Application Form and such options were not considered as multiple Bids. It was the Bidder’s responsibility
to obtain the acknowledgment slip from the relevant Designated Intermediary. The registration of the Bid by the
Designated Intermediary did not guarantee that the Equity Shares were allocated/Allotted. Such
Acknowledgement Slip was non-negotiable and by itself did not create any obligation of any kind. When a
Bidder revised his or her Bid, he /she was required to surrender the earlier Acknowledgement Slip and could
request for a revised acknowledgment slip from the relevant Designated Intermediary as proof of his or her
having revised the previous Bid.

In relation to electronic registration of Bids, the permission given by the Stock Exchanges to use their network
and software of the electronic bidding system was not in any way be deemed or construed to mean that the
compliance with various statutory and other requirements by our Company and/or the BRLMs were cleared or
approved by the Stock Exchanges; nor did it in any manner warrant, certify or endorse the correctness or
completeness of compliance with the statutory and other requirements, nor did it take any responsibility for the
financial or other soundness of our Company, the management or any scheme or project of our Company; nor
did it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of the
Draft Red Herring Prospectus or the Red Herring Prospectus or this Prospectus; nor does it warrant that the
Equity Shares were to be listed or would continue to be listed on the Stock Exchanges.

Pre-Offer Advertisement

Subject to Section 30 of the Companies Act, our Company , after filing the Red Herring Prospectus with the
RoC, published a pre-Offer advertisement, in the form prescribed by the SEBI ICDR Regulations, in all editions
of an English national daily newspaper Business Standard, all editions of a Hindi national daily newspaper
Business Standard and Mumbai editions of a Marathi newspaper Navshakti (each of which are widely circulated
English, Hindi and Marathi newspapers, respectively, Marathi being the regional language of Maharashtra,
where our Registered Office is located). Our Company , in the pre-Offer advertisement stated the Bid/Offer
Opening Date, the Bid/Offer Closing Date and the QIB Bid/Offer Closing Date. This advertisement, subject to
the provisions of Section 30 of the Companies Act, was be in the format prescribed in Part A of Schedule X of
the SEBI ICDR Regulations.

Signing of Underwriting Agreement and filing of Prospectus with the RoC

Our Company and the Selling Shareholders entered into an Underwriting Agreement with the Underwriters on
or after the determination of the Offer Price. After signing the Underwriting Agreement, the Company will file
the Prospectus with the RoC. This Prospectus contains details of the Offer Price, Anchor Investor Offer Price,
Offer size and underwriting arrangements and is complete in all material respects.

General Instructions

Please note that QIBs and Non-Institutional Investors were not permitted to withdraw their Bid(s) or lower the
size of their Bid(s) (in terms of quantity of Equity Shares or the Bid Amount) at any stage. RIBs could revise or
withdraw their Bid(s) until the Bid/ Offer Closing Date. Anchor Investors were not allowed to withdraw or

lower the size of their Bids after the Anchor Investor Bidding Date.

Do’s:

389
10.

11.

12.

13.

Check if you are eligible to apply as per the terms of the Prospectus and under applicable law, rules,
regulations, guidelines and approvals;

Ensure that you have Bid within the Price Band;

Ensure that you have mentioned the correct ASBA Account number (for all Bidders other than RIBs
Bidding using the UPI Mechanism) in the Bid cum Application Form and such ASBA account belongs
to you and no one else. RIBs using the UPI Mechanism must mention their correct UPI ID and shall
use only his/her own bank account which is linked to such UPI ID;

RIBs Bidding using the UPI Mechanism shall ensure that the bank, with which they have their bank
account, where the funds equivalent to the application amount are available for blocking is UPI 2.0
certified by NPCI before submitting the ASBA Form to any of the Designated Intermediaries;

RIBs Bidding using the UPI Mechanism shall make Bids only through the SCSBs, mobile applications
and UPI handles whose name appears in the list of SCSBs which are live on UPI, as displayed on the
SEBI website. An application made using incorrect UPI handle or using a bank account of an SCSB or
bank which is not mentioned on the SEBI website is liable to be rejected;

Read all the instructions carefully and complete the Bid cum Application Form in the prescribed form;

Ensure that the details about the PAN, DP ID, Client ID and UPI ID (where applicable) are correct and
the Bidders depository account is active, as Allotment of the Equity Shares will be in dematerialized
form only;

Ensure that your Bid cum Application Form bearing the stamp of a Designated Intermediary is
submitted to the Designated Intermediary at the Bidding Centre within the prescribed time;

In case of joint Bids, ensure that first Bidder is the ASBA Account holder (or the UPI-linked bank
account holder, as the case may be) and the signature of the first Bidder is included in the Bid cum
Application Form;

All Bidders (other than Anchor Investors) should submit their Bids through the ASBA process only;

Ensure that the name(s) given in the Bid cum Application Form is/are exactly the same as the name(s)
in which the beneficiary account is held with the Depository Participant. In case of joint Bids, the Bid
cum Application Form should contain only the name of the First Bidder whose name should also
appear as the first holder of the beneficiary account held in joint names;

Bidders should ensure that they receive the Acknowledgment slip or the acknowledgement number
duly signed and stamped by a Designated Intermediary, as applicable, for submission of the Bid cum
Application Form;

Ensure that you have funds equal to the Bid Amount in the ASBA Account maintained with the SCSB
before submitting the Bid cum Application Form under the ASBA process to any of the Designated
Intermediaries;

390
14.

15.

16.

17.

18.

19.

20.

21.

22.

23.

24.

Ensure that you submit revised Bids to the same Designated Intermediary, through whom the original
Bid was placed and obtain a revised acknowledgment;

Except for Bids (i) on behalf of the Central or State Governments and the officials appointed by the
courts, who, in terms of a SEBI circular dated June 30, 2008, may be exempt from specifying their
PAN for transacting in the securities market, (ii) Bids by persons resident in the state of Sikkim, who,
in terms of a SEBI circular dated July 20, 2006, may be exempted from specifying their PAN for
transacting in the securities market, and (iii) any other category of Bidders, including without
limitation, multilateral/ bilateral institutions, which may be exempted from specifying their PAN for
transacting in the securities market, all Bidders should mention their PAN allotted under the IT Act.
The exemption for the Central or the State Government and officials appointed by the courts and for
investors residing in the State of Sikkim is subject to (a) the Demographic Details received from the
respective depositories confirming the exemption granted to the beneficiary owner by a suitable
description in the PAN field and the beneficiary account remaining in “active status”; and (b) in the
case of residents of Sikkim, the address as per the Demographic Details evidencing the same. All other
applications in which PAN is not mentioned were liable to be rejected;

Ensure that the Demographic Details are updated, true and correct in all respects;

Ensure that thumb impressions and signatures other than in the languages specified in the Eighth
Schedule to the Constitution of India are attested by a Magistrate or a Notary Public or a Special
Executive Magistrate under official seal;

Ensure that the category and the investor status is indicated in the Bid cum Application Form to ensure
proper upload of your Bid in the electronic Bidding system of the Stock Exchanges;

Ensure that in case of Bids under power of attorney or by limited companies, corporates, trust etc.,
relevant documents are submitted;

Ensure that Bids submitted by any person outside India should be in compliance with applicable
foreign and Indian laws;

RIBs Bidding using the UPI Mechanism, should ensure that they approve the UPI Mandate Request
generated by the Sponsor Bank to authorize blocking of funds equivalent to application amount and
subsequent debit of funds in case of Allotment, in a timely manner;

Note that in case the DP ID, UPI ID (where applicable), Client ID and the PAN mentioned in their Bid
cum Application Form and entered into the online IPO system of the Stock Exchanges by the relevant
Designated Intermediary, as the case may be, do not match with the DP ID, UPI ID (where applicable),
Client ID and PAN available in the Depository database, then such Bids are liable to be rejected;

Ensure that you have correctly signed the authorization /undertaking box in the Bid cum Application
Form, or have otherwise provided an authorization to the SCSB or the Sponsor Bank, as applicable via
the electronic mode, for blocking funds in the ASBA Account equivalent to the Bid Amount mentioned
in the Bid cum Application Form at the time of submission of the Bid;

RIBs Bidding using the UPI Mechanism shall ensure that details of the Bid are reviewed and verified
by opening the attachment in the UPI Mandate Request and then proceed to authorize the UPI Mandate
Request using his/her UPI PIN. Upon the authorization of the mandate using his/her UPI PIN, the RIB

391
shall be deemed to have verified the attachment containing the application details of the RIB Bidding
using the UPI Mechanism in the UPI Mandate Request and have agreed to block the entire Bid Amount
and authorized the Sponsor Bank to issue a request to block the Bid Amount mentioned in the Bid Cum
Application Form in his/her ASBA Account;

25. RIBs Bidding using the UPI Mechanism should mention valid UPI ID of only the Bidder (in case of
single account) and of the first Bidder (in case of joint account) in the Bid cum Application Form;

26. RIBs Bidding using the UPI Mechanism, who have revised their Bids subsequent to making the initial
Bid, should also approve the revised UPI Mandate Request generated by the Sponsor Bank to authorise
blocking of funds equivalent to the revised Bid Amount in his/her account and subsequent debit of
funds in case of allotment in a timely manner;

27. Bids by Eligible NRIs, HUFs and any individuals, corporate bodies and family offices, which are
recategorized as category II FPI and registered with SEBI, for a Bid Amount of less than = 200,000
would be considered under the Retail Category for the purposes of allocation and Bids for a Bid
Amount exceeding % 200,000 would be considered under the Non-Institutional Category for allocation
in the Offer; and

28. Ensure that Anchor Investors submit their Bid cum Application Forms only to the BRLMs.

The Bid cum Application Form was liable to be rejected if the above instructions, as applicable, were not
complied with. An application made using incorrect UPI handle or using a bank account of an SCSB or SCSBs.
which is not mentioned in the Annexure ‘A’ to the SEBI circular no. SEBI/HO/CFD/DIL2/CIR/P/2019/85 dated
July 26, 2019 is liable to be rejected.

Don’ts:

1, Do not Bid for lower than the minimum Bid size;

2, Do not Bid/revise Bid Amount to less than the Floor Price or higher than the Cap Price;

By Do not Bid on another Bid cum Application Form after you have submitted a Bid to a Designated
Intermediary;

4. Do not pay the Bid Amount in cash, by money order, cheques or demand drafts or by postal order or by

stock invest;

5. Do not send Bid cum Application Forms by post, instead submit the same to the Designated
Intermediary only;

6. Anchor Investors should not Bid through the ASBA process;

7. Do not submit the ASBA Forms to any non-SCSB bank or to our Company or at a location other than
the Bidding Centers;

8. Do not submit the ASBA Forms to any Designated Intermediary that is not authorised to collect the
relevant ASBA Forms or to our Company;

9. Do not Bid on a physical Bid cum Application Form that does not have the stamp of the relevant
Designated Intermediary;

10. Do not Bid at Cut-off Price (for Bids by QIBs and Non-Institutional Bidders);

11. Do not fill up the Bid cum Application Form such that the Equity Shares Bid for exceeds the

Offer/Issue size and/ or investment limit or maximum number of the Equity Shares that can be held
under the applicable laws or regulations or maximum amount permissible under the applicable

392
regulations or under the terms of this Prospectus;
12. Do not submit your Bid after 3.00 pm on the Bid/Offer Closing Date;
13. If you are a QIB, do not submit your Bid after 3.00 p.m. on the QIB Bid/Offer Closing Date;

14. Do not Bid for a Bid Amount exceeding % 200,000 (for Bids by RIBs) and exceeding 2 500,000 for
Bids by Eligible Employee Bidding under Employee Reservation Portion;

15. Do not submit the General Index Register (GIR) number instead of the PAN;

16. Do not submit incorrect details of the DP ID, Client ID, PAN and UPI ID (where applicable) or provide
details for a beneficiary account which is suspended or for which details cannot be verified by the
Registrar to the Offer;

17. Do not submit the Bid without ensuring that funds equivalent to the entire Bid Amount are available for
blocking in the relevant ASBA Account or in the case of RIBs Bidding using the UPI Mechanism, in

the UPI-linked bank account where funds for making the Bid are available;

18. Do not withdraw your Bid or lower the size of your Bid (in terms of quantity of the Equity Shares or
the Bid Amount) at any stage, if you are a QIB or a Non-Institutional Investor;

19. Do not submit Bids on plain paper or on incomplete or illegible Bid cum Application Forms or on Bid
cum Application Forms in a colour prescribed for another category of Bidder;

20. Do not link the UPI ID with a bank account maintained with a bank that is not UPI 2.0 certified by the
NPCI in case of Bids submitted by RIBs using the UPI Mechanism;

21. Do not submit a Bid in case you are not eligible to acquire Equity Shares under applicable law or your
relevant constitutional documents or otherwise;

22. Do not Bid if you are not competent to contract under the Indian Contract Act, 1872 (other than minors
having valid depository accounts as per Demographic Details provided by the depository);

23. Do not submit more than one Bid cum Application Form per ASBA Account. If you are a RIB Bidding
using the UPI Mechanism, do not submit Bids through an SCSB and/or mobile application and/or UPI
handle that is not listed on the website of SEBI;

24. Do not submit a Bid using UPI ID, if you are not a RIB;

25. Do not submit a Bid cum Application Form with third party UPI ID or using a third party bank account
(in case of Bids submitted by RIBs using the UPI Mechanism); and

26. Do not Bid if you are an OCB.

The Bid cum Application Form was liable to be rejected if the above instructions, as applicable, were not
complied with.

In case of any pre-Offer or post Offer related issues regarding demat credit/refund orders/unblocking etc.,
investors shall reach out to the Company Secretary and Compliance Officer, and the Registrar. For details of the
Company Secretary and Compliance Officer and the Registrar, see “General Information” on page 69.

For helpline details of the Book Running Lead Managers pursuant to the SEBI letter bearing reference number
SEBI/HO.CFD.DIL2/CIR/P/2021/2480/1/M, dated March 16, 2021, see “General Information — Book Running
Lead Managers” on page 71.

Grounds for Technical Rejections

In addition to the grounds for rejection of Bids on technical grounds as provided in the General Information
Document, Bidders were requested to note that Bids could be rejected on the following additional technical

393
grounds:
1. Bid submitted without instruction to the SCSB to block the entire Bid Amount;

2. Bids which do not contain details of the Bid Amount and the bank account details in the ASBA
Form;
3. Bids submitted on a plain paper;
4. Bids under the UPI Mechanism submitted by RIBs using third party bank accounts or using a third
party linked bank account UPI ID;
5. Bids by HUFs not mentioned correctly as provided in —““Who can Apply?”
6. ASBA Form submitted to a Designated Intermediary does not bear the stamp of the Designated
Intermediary;
7. Bids submitted without the signature of the First Bidder or Sole Bidder;
8. The ASBA Form not being signed by the account holders, if the account holder is different from the
Bidder;
9. Bids by persons for whom PAN details have not been verified and whose beneficiary accounts are
“suspended for credit” in terms of SEBI circular (reference number: CIR/MRD/DP/ 22 /2010) dated
July 29, 2010;
10. GIR number furnished instead of PAN;
11. Bids by Retail Individual Bidders with Bid Amount for a value of more than % 200,000 and =
500,000 for Bids by Eligible Employees Bidding in the Employee Reservation Portion;
12. Bids by persons who are not eligible to acquire Equity Shares in terms of all applicable laws, rules,
regulations, guidelines and approvals;
13. Bids accompanied by cheque(s), demand draft(s), stock invest, money order, postal order or cash;
And
14. Bids by OCB.
Names of entities responsible for finalising the basis of allotment in a fair and proper manner
The authorised employees of the Designated Stock Exchange, along with the BRLMs and the Registrar, shall
ensure that the basis of allotment is finalised in a fair and proper manner in accordance with the procedure
specified in SEBI ICDR Regulations.
Method of allotment as may be prescribed by SEBI from time to time
Our Company will not make any allotment in excess of the Equity Shares offered through the Offer through the
offer document except in case of oversubscription for the purpose of rounding off to make allotment, in
consultation with the Designated Stock Exchange. Further, upon oversubscription, an allotment of not more than
1% of the offer to public may be made for the purpose of making allotment in minimum lots.
The allotment of Equity Shares to applicants other than to the RIBs and Anchor Investors shall be on a
proportionate basis within the respective investor categories and the number of securities allotted shall be
rounded off to the nearest integer, subject to minimum allotment being equal to the minimum application size as

determined and disclosed.

The allotment of Equity Shares to each RIB shall not be less than the minimum bid lot, subject to the availability
of shares in RIB category, and the remaining available shares, if any, shall be allotted on a proportionate basis.

Payment into Escrow Account

Our Company, in consultation with the BRLMs, in its absolute discretion, decided the list of Anchor Investors

394
to whom the Allotment Advice were to be sent, pursuant to which the details of the Equity Shares allocated to
them in their respective names were to be notified to such Anchor Investors. Anchor Investors were not
permitted to Bid in the Offer through the ASBA process. Instead, Anchor Investors were required to transfer the
Bid Amount (through direct credit, RTGS, NACH or NEFT) to the Escrow Accounts. The payment instruments
for payment into the Escrow Accounts were required to be drawn in favour of:

(i) In case of resident Anchor Investors: “ANAND RATHI WEALTH LTD RESIDENT ANCHOR
ESCROW ACCOUNT ”

(ii) In case of non-resident Anchor Investors: “ANAND RATHI WEALTH LTD NON RESIDENT
ANCHOR ESCROW ACCOUNT ”

Anchor Investors were required to note that the escrow mechanism is not prescribed by SEBI and has been
established as an arrangement between our Company, the Selling Shareholders, the Syndicate, the Bankers to
the Offer and the Registrar to the Offer to facilitate collections from Anchor Investors.

Depository Arrangements

The Allotment of the Equity Shares in the Offer shall be only in a dematerialised form, (i.e., not in the form of
physical certificates but be fungible and be represented by the statement issued through the electronic mode). In
this context, tripartite agreements had been signed among our Company, the respective Depositories and the
Registrar to the Offer:

. Agreement dated October 20, 2016 entered into between NSDL, our Company and the Registrar to the
Offer.

. Agreement dated July 14, 2016 entered into between CDSL, our Company and the Registrar to the
Offer.

Undertakings by our Company
Our Company undertakes the following:

ji) that the complaints received in respect of the Offer shall be attended to by our Company expeditiously
and satisfactorily;

(ii) that if the Allotment is not made within the prescribed time period under applicable law, the entire
subscription amount received will be refunded/unblocked within the time prescribed under applicable
law, failing which interest will be due to be paid to the Bidders at the rate prescribed under applicable
law for the delayed period;

(iii) that all steps will be taken for completion of the necessary formalities for listing and commencement of
trading at all the Stock Exchanges where the Equity Shares are proposed to be listed within six
Working Days of the Bid/Offer Closing Date or such other time as may be prescribed;

(iv) that funds required for making refunds to unsuccessful applicants as per the mode(s) disclosed shall be
made available to the Registrar to the Offer by our Company;

(v) where refunds (to the extent applicable) are made through electronic transfer of funds, a suitable
communication shall be sent to the applicant within the time prescribed under applicable law, giving
details of the bank where refunds shall be credited along with amount and expected date of electronic
credit of refund;

(vi) that if our Company does not proceed with the Offer after the Bid/Offer Closing Date but prior to
Allotment, the reason thereof shall be given as a public notice within two days of the Bid/Offer Closing
Date. The public notice shall be issued in the same newspapers where the pre-Offer advertisements
were published. The Stock Exchanges on which the Equity Shares are proposed to be listed shall also
be informed promptly;

395
(vii) that if our Company, in consultation with the BRLMs, withdraws the Offer after the Bid/Offer Closing
Date, our Company shall be required to file a fresh draft offer document with the SEBI, in the event our
Company subsequently decides to proceed with the Offer thereafter;

(viii) that adequate arrangements shall be made to collect all Bid cum Application Forms submitted by
Bidders and Anchor Investor Application Form from Anchor Investors; and

(i) that no further issue of Equity Shares shall be made until the Equity Shares issued or offered through
this Prospectus are listed or until the Bid monies are refunded/unblocked in the ASBA Accounts on
account of non-listing, under-subscription etc.

Undertakings by each Selling Shareholder

Each Selling Shareholder, severally and not jointly, undertakes the following in respect of itself as a Selling
Shareholder and its respective portion of the Offered Shares:

@ that its portion of the Offered Shares are eligible for being offered in the Offer for Sale in terms of
Regulation 8 of the SEBI ICDR Regulations and are in dematerialised form;

(ii) that it is the legal and beneficial owner of, and has clear and marketable title to, its portion of the
Offered Shares;

(iii) that it shall provide all reasonable co-operation as requested by our Company in relation to the
completion of allotment and dispatch of the Allotment Advice and CAN, if required, and refund orders
to the extent of its portion of the Offered Shares;

(iv) that it shall not have recourse to the proceeds of the Offer for Sale of its portion of the Offered Shares
which shall be held in escrow in its favour, until final listing and trading approvals have been received
from the Stock Exchanges; and

(v) that it will provide such reasonable support and extend such reasonable cooperation as may be required
by our Company and the BRLMs in redressal of such investor grievances that pertain to its portion of
the Offered Shares.

Impersonation

Attention of the Bidders was specifically drawn to the provisions of sub-section (1) of Section 38 of the
Companies Act, 2013 which is reproduced below: “Any person who — (a) makes or abets making of an
application in a fictitious name to a company for acquiring, or subscribing for, its securities; or (b) makes or
abets making of multiple applications to a company in different names or in different combinations of his name
or surname for acquiring or subscribing for its securities; or (c) otherwise induces directly or indirectly a
company to allot, or register any transfer of, securities to him, or to any other person in a fictitious name, shall
be liable for action under Section 447.” The liability prescribed under Section 447 of the Companies Act, 2013
for fraud involving an amount of at least 21 million or one per cent of the turnover of the company, whichever is
lower, includes imprisonment for a term which shall not be less than six months extending up to 10 years and
fine of an amount not less than the amount involved in the fraud, extending up to three times such amount
(provided that where the fraud involves public interest, such term shall not be less than three years.) Further,
where the fraud involves an amount less than 21 million or one per cent of the tumover of the company,
whichever is lower, and does not involve public interest, any person guilty of such fraud shall be punishable
with imprisonment for a term which may extend to five years or with fine which may extend to 25 million or
with both.

396
SECTION VIII: DESCRIPTION OF EQUITY SHARES AND TERMS OF THE ARTICLES OF
ASSOCIATION

Pursuant to the Companies Act and the SEBI ICDR Regulations, the main provisions of our Articles of
Association relating to, among others, voting rights, dividend, lien, forfeiture, restrictions on transfer and
transmission of Equity Shares or debentures and/or on their consolidation/splitting are detailed below. Please
note that each provision herein below is numbered as per the corresponding article number in our Articles and
capitalised/defined terms herein have the same meaning given to them in our Articles. Subject to our Articles,
any words or expression defined in the Companies Act, 2013 shall, except so where the subject or context
forbids; bear the same meaning in these Articles.

Capitalised terms used in this section have the same meaning that has been given to such terms in the Articles of
Association of our Company.

Pursuant to the Companies Act and the SEBI ICDR Regulations, the main provisions of our Articles of
Association relating to, among others, voting rights, dividend, lien, forfeiture, restrictions on transfer and
transmission of Equity Shares or debentures and/or on their consolidation/splitting are detailed below. Please
note that each provision herein below is numbered as per the corresponding article number in our Articles and
capitalised/defined terms herein have the same meaning given to them in our Articles. Subject to our Articles,
any words or expression defined in the Companies Act, 2013 shall, except so where the subject or context
forbids; bear the same meaning in these Articles.

Capitalised terms used in this section have the same meaning that has been given to such terms in the Articles of
Association of our Company.

 

 

Sr. Particulars Title
No
1. | @) The regulations contained in the Table marked “F” in Schedule I to the | Table F not to apply

Companies Act, 2013, shall not apply to the Company, except in so far as the
same are repeated, contained or expressly made applicable in these Articles or
by the said Act.

(2) The regulations for the management of the Company and for the observance of
the members thereof and their representatives, shall, subject to any exercise of
the statutory powers of the Company with reference to deletion or alternation
of, or addition to its regulations by Special Resolution as prescribed or
permitted by the Companies Act 2013, be such as are contained in these
Articles.

Company to be governed by
these articles.

 

INTERPRETATION CLAUSE

 

2. |(@)_ In the interpretation of these Articles, the following expressions shall have the
following meanings, unless repugnant to the subject or context:

 

“The Act” means the Companies Act, 2013 and includes any statutory modification Act
or re-enactment thereof for the time being in force and the term shall be deemed to
refer to the applicable section thereof which is relatable to the relevant Articles and
any previous Company Law, so far as may be applicable.

 

 

 

(a) “Article” means Articles of Association for the time being in force or as may Articles
be altered from time to time vide Special Resolution.

(b) “Auditors” means and includes those persons appointed as such for the time ‘Auditors
being of the Company.

(© “Business Day” shall mean any day of the year, other than Saturdays and Business Day

Sundays and any other days on which banks are closed for business in the city
where the registered office of the Company is situated.

 

 

 

 

 

 

 

(d) “Board of Directors” or ‘Board’ shall mean the collective board of directors of Board
the Company.

(©) “Capital” means the share capital for the time being raised or authorized to be Capital
raised for the purpose of the Company.

(© “The Company” shall mean “ANAND RATHI WEALTH LIMITED” ‘Company

(g) “Legal Representative” means a person who in law represents the estate of a Legal Representative
deceased Member.

(h)_ Words interpreting the masculine gender also include the feminine gender. Gender

(i) “Meeting” or “General Meeting” means a meeting of members Meeting or

 

 

General Meeting

 

397

 
 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

mentioned in Clause V of Memorandum of Association of the Company from time
to time.

Sr. Particulars Title
No

@)__ “Month” means a calendar month Month

(k) “Annual General Meeting” means a General Meeting of the Members held in | Annual General Meeting
accordance with the provision of section 96 of the Act.

()) “Extra-Ordinary General Meeting” means an Extraordinary General Meeting Extra-Ordinary General
of the Members duly called and constituted and any adjourned holding Meeting
thereof.

(m) “Fully Diluted” means with respect to Securities, all outstanding equity shares Fully Diluted
and all Securities issuable in respect of, Securities convertible into or
exchangeable for equity shares, stock appreciation rights or options, warrants
and other irrevocable rights to purchase or subscribe for equity 48 shares or
securities convertible into or exchangeable into equity shares.

(n) “National Holiday” means Republic Day i.e. 26" January, Independence Day National Holiday
ie. 15 August, Gandhi Jayanti i.e. 2" October and such other day as may be
declared as National Holiday by the Central Government.

(0) “Non-retiring Directors” means a director not subject to retirement by Non-retiring Directors
rotation.

(p)_ “Office” means the registered Office for the time being of the Company. Office

(q) “Ordinary Resolution” shall have the meanings assigned thereto by Section Ordinary Resolution
114 of the Ac

(0) “Person” shall be deemed to include corporations and firms as well as Person
individuals.

(s) “Proxy” means an instrument whereby any person is authorized to vote for a Proxy
member at General Meeting or Poll and includes attorney duly constituted
under the power of attorney.

(0) “The Register of Members” means the Register of Members to be kept Register of Members
pursuant to Section 88(1) (a) of the Act.

(u) “Rules” mean the applicable rules for the time being in force as prescribed Rules
under relevant sections of the Act.

(v) “Securities” shall have the meaning ascribed to the term under Section 2(h) of Securities
the Securities Contract (Regulation) Act, 1956.

(w) “Seal” means the common seal for the time being of the Company. Seal

(x) “Share” means a share in the share capital of the Company and includes stock. Share

(y) “Special Resolution” shall have the meanings assigned to it by Section 114 of Special Resolution
the Act.

(z) Words importing the singular number include where the context admits or Singular number
requires the plural number and vice versa.

(aa) “The Statutes” means the Companies Act, 2013 and every other Act for the Statutes
time being in force affecting the Company.

(bb) “These presents” means the Memorandum of Association and the Articles of These presents
Association as originally framed or as altered from time to time.

(cc) “Year” means the calendar year and “Financial Year” shall have the meaning Year and
assigned thereto by Section 2(41) of the Act. Financial Year

Save as aforesaid any words and expressions contained in these Articles shall bear | Expressions in the Act to bear

the same meanings as in the Act or any statutory modifications thereof for the time | the same meaning in Articles

being in force.
SHARE CAPITAL AND VARIATION OF RIGHTS
3 a) The Authorized Share Capital of the Company shall be such amount as may be ‘Authorized Capital.

 

 

 

b)Subject to the provisions of Section 62 of the Act and these Articles, the shares
in the capital of the company for the time being shall be under the control of the
directors who may issue, allot or otherwise dispose of the same or any of them to
such person, in such proportion and on such terms and conditions and either at a
premium or at par or (subject to the compliance with the provision of section 53 of
the Act and at such time as they may from time to time thing fit and with sanction
of the company in the General Meeting to give to any person or persons the option
or right to call for any shares either at par or premium during such time and for
such consideration as the directors think fit, and may issue and allot shares in the
capital of the company on payment in full or part of any property sold and
transferred or for any services rendered to the company in the conduct of its
business and any shares which may so be allotted may be issued as fully paid up

 

Shares at the disposal of and
under the control of Board

 

398

 
 

Sr.

Particulars

Title

 

shares and if so issued, shall be deemed to be fully paid shares Provided that option
or right to call of shares shall not be given to any person or persons without the
sanction of the company in the General Meeting

 

The Company may in General Meeting from time to time by Ordinary Resolution
increase its capital by creation of new Shares which may be unclassified or may be
classified at the time of issue in one or more classes and of such amount or
amounts as may be deemed expedient. The new Shares shall be issued upon such
terms and conditions and with such rights and privileges annexed thereto as the
resolution shall prescribe and in particular, such Shares may be issued with a
preferential or qualified right to dividends and in the distribution of assets of the
Company and with a right of voting at General Meeting of the Company in
conformity with Section 47 of the Act. Whenever the capital of the Company has
been increased under the provisions of this Article the Directors shall comply with
the provisions of Section 64 of the Act.

Increase of capital by the
Company how carried into
effect

 

Except so far as otherwise provided by the conditions of issue or by these Presents,
any capital raised by the creation of new Shares shall be considered as part of the
existing capital, and shall be subject to the provisions herein contained, with
reference to the payment of calls and instalments, forfeiture, lien, surrender,
transfer and transmission, voting and otherwise.

New Capital same as existing
capital

 

The Company may issue the following kinds of shares in accordance with these
Articles. The Act, the Rules and other applicable laws:

(a) Equity Share Capital

(With voting rights; and / or

(ii)With differential rights as to dividend, voting or otherwise in accordance with
the Rules; and

(b) Preference Share Capital

Kinds of Share and Voting
Rights.

 

Subject to the applicable provisions of the Act and other applicable laws, any
debentures, debenture-stock or other securities may be issued at a discount,
premium or otherwise and may be issued on condition that they shall be
convertible into shares of any denomination and with any privileges and conditions
as to redemption, surrender, drawing, allotment of shares attending (but not voting)
at the General Meeting, appointment of Directors and otherwise etc. Debentures
with the right to conversion into or allotment of shares shall be issued only with the
consent of the Company in the General Meeting by a Special Resolution.

Debentures

 

The Company may exercise the powers of issuing sweat equity shares conferred by
Section 54 of the Act of a class of shares already issued subject to such conditions
as may be specified in that sections and rules framed there under.

Issue of Sweat

Equity Shares

 

The Company may issue shares to Employees including its Directors other than
independent directors and such other persons as the rules may allow, under
Employee Stock Option Scheme (ESOP) or any other scheme, if authorized by a
Special Resolution of the Company in general meeting subject to the provisions of
the Act, the Rules and applicable guidelines made there under, by whatever name
called.

ESOP

 

10.

Subject to the provisions of Section 61of the Act, the Company in general meeting
may, from time to time, sub-divide or consolidate all or any of the share capital
into shares of larger amount than its existing share or sub-divide its shares, or any
of them into shares of smaller amount than is fixed by the Memorandum; subject
nevertheless, to the provisions of clause (d) of sub- section (1) of Section 61;
Subject as aforesaid the Company in general meeting may also cancel shares which
have not been taken or agreed to be taken by any person and diminish the amount
of its share capital by the amount of the shares so cancelled.

Consolidation, Sub-Division
and Cancellation

 

11

Subject to compliance with applicable provision of the Act and rules framed there
under the Company shall have power to issue depository receipts in any foreign
country.

Issue of
Depository Receipts

 

12

(A)Subject to compliance with applicable provision of the Act and rules framed
there under the Company shall have power to issue any kind of securities as
permitted to be issued under the Act and rules framed there under.

(2) Subject to the provision of the Act and rules made there under the Company
shall have power to issue any kind of securities duly subdivided/consolidated as
permitted to be issued under the Act and rules made there under.

Issue of Securities

Issue of Securities duly
subdivided or consolidated

 

 

13

 

The Company or an investor may exercise an option to issue, deal in, hold the
securities (including shares) with a Depository in electronic form and the
certificates in respect thereof shall be dematerialised, in which event the rights and

 

Option to receive share
certificate or hold shares with
depository

 

399

 
 

Sr.
No

Particulars

Title

 

obligations of the parties concerned and matters connected therewith or incidental
thereof, shall be governed by the provisions of the Depositories Act, 1996 as
amended from time to time or any statutory modification thereto or re- enactment
thereof.

 

14,

If any certificate be worn out, defaced, mutilated or torn or if there be no

further space on the back thereof for endorsement of transfer, then upon production
and surrender thereof to the Company, a new Certificate may be issued in lieu
thereof, and if any certificate lost or destroyed then upon proof thereof to the
satisfaction of the company and on execution of such indemnity as the company
deem adequate, being given, a new certificate in lieu thereof shall be given to the
party entitled to such lost or destroyed Certificate. Every certificate under the
article shall be issued without payment of fees if the Directors so decide, or on
payment of such fees (not exceeding Rs.2/- for each certificate) as the Directors
shall prescribe. Provided that no fee shall be charged for issue of new certificates in
replacement of those which are old, defaced or worn out or where there is no
further space on the back thereof for endorsement of transfer.

Provided that notwithstanding what is stated above the Directors shall comply with
such rules or regulation or requirements of any Stock Exchange or the rules made
under the Act or rules made under Securities Contracts (Regulation) Act,1956 or
any other Act, or rules applicable thereof in this behalf.

The provision of this Article shall mutatis mutandis apply to debentures of the
company

Issue of new certificate in
place of one defaced, lost or
Destroyed(where shares are

not in demat form)

 

45.

The provisions of the foregoing Articles relating to issue of certificates shall
mutatis-mutandis apply to issue of certificates for any other securities including
debentures (except where the Act otherwise requires) of the Company.

Provision as to issue of
certificates to apply mutatis
mutandis to debentures, etc.

 

16

(A)The Company may exercise the powers of paying commissions conferred by the
Act, to any person in connection with the subscription to its securities, provided
that the rate per cent or the amount of the commission paid or agreed to be paid
shall be disclosed in the manner required by the Act and the Rules.

(2)The rate or amount of the commission shall not exceed the rate or amount
prescribed in the Rules.

(3)The commission may be satisfied by the payment of cash or the allotment of
fully or partly paid shares or partly in the one way and partly in the other.

(4) The Company may pay on any issue of shares and debentures such brokerage
as may be reasonable and lawful

Power to pay commission in
connection with securities
issued

Rate of commission in
accordance with Rules

Mode of payment of
commission

Brokerage

 

17

(If at any time the share capital is divided into different classes of shares, the
rights attached to any class (unless otherwise provided by the terms of issue of the
shares of that class) may, subject to the provisions of the Act, and whether or not
the Company is being wound up, be varied with the consent in writing of the such
number of the holders of the issued shares of that class, or with the sanction of a
resolution passed at a separate meeting of the holders of the shares of that class, as
prescribed by the Act.

(2) To every such separate meeting, the provisions of these Articles relating to
General Meetings shall mutatis mutandis apply.

Variation of
members’ rights

Provision as to General
Meetings to apply mutatis
mutandis to each meeting.

 

18

The rights conferred upon the holders of the shares of any class issued with
preferred or other rights shall not, unless otherwise expressly provided by the terms
of issue of the shares of that class, be deemed to be varied by the creation or issue
of further shares ranking pari passu therewith.

Issue of further shares not to
affect the rights of existing
members

 

19

Subject to the provisions of the Act, the Company shall have the power to issue or
reissue cumulative or non-cumulative basis preference shares of one or more
classes which are liable to be redeemed, or converted to equity shares, on such
terms and conditions and in such manner as determined by the Company in
accordance with the Act.

Power to issue redeemable
preference shares

 

 

20*

 

(1) Subject to the provisions of the Act and these presents, the new shares
(resulting from an increase of capital as aforesaid) may be issued or disposed of by
the Company in General Meeting or by the Board under their powers in accordance

 

Further issue of share capital

 

400

 
 

Sr.

Particulars

Title

 

with the provisions of the Articles of Association of the Company and the
following provisions:-

(a) (i) Such new shares may be offered to persons who, at the date of the offer,
are holders of equity shares of the company in proportion, as nearly as
circumstances admit, to the paid-up share capital on those shares by
sending a letter of offer.

(ii) The offer shall be made by notice specifying the number of shares
offered and limiting a time not being less than fifteen days and not
exceeding thirty days from the date of the offer within which the offer, if
not accepted, shall be deemed to have been declined;

(iii) The offer aforesaid shall include a right exercisable by the person
concerned to renounce the shares offered to him or any of them in favour
of any other person; and the notice referred to in aforesaid clause shall
contain a statement of this right;

(iv) After the expiry of the time specified in the notice aforesaid, or on receipt
of earlier intimation from the person to whom such notice is given that he
declines to accept the shares offered, the Board of Directors may dispose
of them in such manner which is not dis- advantageous to the
shareholders and the company;

Provided that the right of the renouncees for the share allotment shall be subject to
the right of refusal by the Board under the relevant Articles of Association of the
Company and in the same manner as applicable to transfer of shares, and further
subject to other terms and conditions, if any, whatsoever as may be decided by the
Company in General Meeting or by the Board of Directors and stipulated in the
terms of issue.

(b) Nothing in clause (ii) of article (a) above shall be deemed;
(i) to extend the time within which the offer should be accepted; or

(ii) to authorize any person to exercise the right of renunciation for a
second time on the ground that the person in whose favour the renunciation
was first made has declined to take the shares comprised in the
renunciation.

(c) The new shares may be offered to employees under a scheme of
employees’ stock option, subject to special resolution passed by the
Company and on satisfying other conditions as prescribed by the Act and
the Rules, Guidelines and other regulations made in this regard under any
of the laws.

 

Si

2

ibstituted vide Special Resolution passed at shareholders’ Extraordinary

[December 9, 2019

General Meeting held

on

 

(d) The new shares may also be offered to any persons, whether such persons
include persons mentioned in clause (a) and (c) of this Article, if it is
authorized by a special resolution, either for cash or for consideration other
than cash, if the price of such share is determined by the Valuation Report
of a Registered Valuer, and such other conditions as prescribed by the Act
and the Rules, Guidelines and other regulations made in this regard under
any of the laws are satisfied.

(e) Nothing in this article shall apply to the increase of the subscribed capital
of the Company caused by the exercise of an option attached to the
debentures issued or loans raised by the Company to convert such
debentures or loans into shares in the Company.

 

LIEN

 

 

21

‘The company shall have a first and paramount lien upon all the shares/debentures
(other than fully paid-up shares/debentures) registered in the name of each member

 

 

Company’s lien on
Shares/debentures

 

401

 
 

Sr.

Particulars

Title

 

(whether solely or jointly with others) and upon the proceeds of sale thereof for all
moneys(whether presently payable or not) called or payable at a fixed time in
respect of such shares/debentures and no equitable interest in any share shall be
created except upon the footing and condition that this Article will have full effect
and such lien shall extend to all dividends and bonuses from time to time declared
in respect of such shares/debentures. Unless otherwise agreed the registration of a
transfer of shares/debentures shall operate as a waiver of the company’s lien if any,
on such shares/debentures. The Directors may at any time declare any
shares/debentures wholly or in part to be exempt from the provisions of this clause

 

22

The Company may sell, in such manner as the Board thinks fit, any shares on
which the Company has a lien:

Provided that no sale shall be made—

@ unless a sum in respect of which the lien exists is presently payable;
or

(b) until the expiration of fourteen days after a notice in writing stating
and demanding payment of such part of the amount in respect of which the lien
exists as is presently payable, has been given to the registered holder for the time
being of the share or the person entitled thereto by reason of his death or
insolvency or otherwise.

As to enforcing lien by sale

 

23

(1)To give effect to any such sale, the Board may authorize some person to transfer
the shares sold to the purchaser thereof.

(2). The purchaser shall be registered as the holder of the shares comprised in any
such transfer.

(3) The receipt of the Company for the consideration (if any) given for the share
on the sale thereof shall (subject, if necessary, to execution of an instrument of
transfer or a transfer by relevant system, as the case may be) constitute a good
title to the share and the purchaser shall be registered as the holder of the
share.

(4) The purchaser shall not be bound to see to the application of the purchase
money, nor shall his title to the shares be affected by any irregularity or
invalidity in the proceedings with reference to the sale.

Validity of sale

Purchaser to be registered
holder

Validity of Company’s
receipt

Purchaser not affected

 

py

(1) The proceeds of the sale shall be received by the Company and applied in
payment of such part of the amount in respect of which the lien exists as is
presently payable.

(2) The residue, if any, shall subject to a like lien for sums not presently payable as
existed upon the shares before the sale be paid to the person entitled to the shares at
the date of the sale.

Application of
proceeds of sale

Payments of residual money

 

25

In exercising its lien, the Company shall be entitled to tear the registered holder of
any share as the absolute owner thereof and accordingly shall not (except as
ordered by a court of competent jurisdiction or unless required by any statute) be
bound to recognize any equitable or other person, whether a creditor of the
registered holder or otherwise. The Company’s lien shall prevail notwithstanding
that it has received notice of any such claim.

Outsider’s lien not to affect
Company’s lien

 

26

The provision of these Articles relating to lien shall mutatis mutandis apply to any
other securities including debentures of the Company.

Provision’s as to lien to apply
mutatis mutandis to
debentures, etc.

 

CALLS ON SHARES.

 

 

27

 

(1) The option or right to call on shares shall not be given to any person except
with the sanction of the Company in general meeting.

(2) The Board may, subject to clause (1) above, from time to time, make calls
upon the members in respect of any monies unpaid on their shares (whether
on account of the nominal value of the shares or by way of premium) and not
by the conditions of allotment thereof made payable at fixed times.

(3) A call shall be deemed to have been made at the time when the resolution of

 

Power to make calls

Notice of call

Board may extend time for

 

402

 
 

Sr.

Particulars

Title

 

the Board authorizing the call was passed and may be required to be paid by
instalments.

(4) Each member shall, subject to receiving at least fourteen days’ notice
specifying the time or times and place of payment, pay to the Company, at the
time or times and place so specified, the amount called on his shares.
Provided that before the time for payment of such call and/or before receiving
any amount towards such call, the Board may by notice revoke or postpone
the call so made.

(5) The Board may, from time to time, at its discretion, extend the time fixed for
payment of any call in respect of one or more members as the Board may
deem appropriate in any circumstances.

payment

Revocation or postponement
of call

 

28

The joint holders of a share shall be jointly and severally liable to pay all calls in
respect thereof.

Liability of joint holders of
shares

 

a

(2) Ifa sum called in respect of a share is not paid before or on the day appointed
for payment thereof (the “due date”), the person from whom the sum is due
shall pay interest thereon and such other expenses which have been incurred
by the Company due to non-payment of such call as the Board may think fit,
from the due date to the time of actual payment at such rate as may be fixed
by the Board.

(2) The Board shall be at liberty to waive payment of any such interest and other
expenses wholly or in part.

When interest on call or
instalment payable

Board may waive interest

 

30

(D Any sum which by the terms of issue of a share becomes payable on allotment
or at any fixed date, whether on account of the nominal value of the share or by
way of premium, shall, for the purposes of these Articles, be deemed to be a call
duly made and payable on the date on which by the terms of issue such sum
becomes payable.

(2) In case of non-payment of such sum, all the relevant provisions of these
Articles as to payment of interest and expenses, forfeiture or otherwise shall apply
as if such sum had become payable by virtue of a call duly made and notified.

Sums deemed to be calls

Effect of non —
payment of sums

 

31

The Directors may, if they think fit, subject to the provisions of Section 50 of the
Act, agree to and receive from any member willing to advance the same whole or
any part of the moneys due upon the shares held by him beyond the sums actually
called for, and upon the amount so paid or satisfied in advance, or so much thereof
as from time to time exceeds the amount of the calls then made upon the shares in
respect of which such advance has been made, the company may pay interest at
such rate, as the member paying such sum in advance and the Directors agree upon
provided that money paid in advance of calls shall not confer a right to participate
in profits or dividend. The Directors may at any time repay the amount so
advanced.

The members shall not be entitled to any voting rights in respect of the moneys so
paid by him until the same would but for such payment, become presently payable.

The provisions of these Articles shall mutatis mutandis apply to the calls on
debentures of the company.

Payment in
anticipation of calls may
carry interest

 

32

If by the conditions of allotment of any shares, the whole or part of the amount of
issue price thereof shall be payable by instalments, then every such instalment
shall, when due, be paid to the Company by the person who, for the time being and
from time to time, is or shall be the registered holder of the share or the legal
representative of a deceased registered holder.

Instalments on shares to be
duly paid

 

33

All calls shall be made on a uniform basis on all shares falling under the same
class.

Explanation: Shares of all the same nominal value on which different amounts
have been paid — up shall not be deemed to fall under the same class.

  

Calls on shares of same class
to be on uniform basis

 

 

34

 

Neither a judgment nor a decree in favour of the Company for calls or other money
due in respect of any shares nor any part-payment or satisfaction thereof nor the

 

Partial payment not to
preclude forfeiture

 

403

 
 

Sr.
No

Particulars

Title

 

receipt by the Company of a portion of any money which shall from time to time
be due from any member in respect of any shares either by way of principal or
interest nor any indulgence granted by the Company in respect of payment of any
such money shall preclude the forfeiture of such shares as herein provided.

 

35

The provision of these Articles relating to calls shall mutatis mutandis apply to any
other securities including debentures of the Company.

Provisions as to calls to apply
mutatis mutandis to
debentures, etc

 

TRANSFER OF SHARES

 

36

The Company shall use a common form of transfer. The instrument of transfer
shall be in writing and all the provisions of Section 56 of the Act shall be duly
complied with in respect of all transfers of shares and their registration.

Common form of transfer

 

37

(iThe instrument of transfer of any share in the Company shall be executed by or
on behalf of both the transferor and transferee.

(ii) The transferor shall be deemed to remain a holder of the share until the name of
the transferee is entered in the register of members in respect thereof.

Instrument of transfer to be
executed by
Transferor and transferee

 

38

Subject to the provisions of Section 58, these Articles and other applicable
provisions of the Act or any other law for the time being in force, the Board may
refuse whether in pursuance of any power of the company under these Articles or
otherwise to register the transfer of, or the transmission by operation of law of the
right to, any shares or interest of a Member in or debentures of the Company. The
Company shall within one month from the date on which the instrument of
transfer, or the intimation of such transmission, as the case may be, was delivered
to Company, send notice of the refusal to the transferee and the transferor or to the
person giving intimation of such transmission, as the case may be, giving reasons
for such refusal. Provided that the registration of a transfer shall not be refused on
the ground of the transferor being either alone or jointly with any other person or
persons indebted to the Company on any account whatsoever except where the
Company has a lien on shares except where the Company has a lien on the shares
being transferred

Board may refuse to register
transfer

 

39

The Board may decline to recognize any instrument of transfer unless—

(a) the instrument of transfer is duly stamped, dated and executed and is in the
form as prescribed in the Rules made under sub-section (1) of section 56 of the
Act;

(b) the instrument of transfer is accompanied by the certificate of the shares to
which it relates, and such other evidence as the Board may reasonably require to
show the right of the transferor to make the transfer; and

(c) the instrument of transfer is in respect of only one class of shares.

Board may decline to
recognize instrument of
transfer

 

40

No fee shall be charged for registration of transfer, transmission, Probate,
Succession Certificate and letter of administration, Certificate of Death or
Marriage, Power of Attorney or similar other document with the Company.

No fee on transfer.

 

41

The Board of Directors shall have power on giving not less than seven days
previous notice in accordance with section 91 of the Act and rules made there
under to close the Register of Members and/or the Register of debentures holders
and/or other security holders and registration of transfer may be suspended at such
time or times and for such period or periods, not exceeding thirty days at a time,
and not exceeding in the aggregate forty five days in each year as it may seem
expedient to the Board.

Closure of Register of
Members or debenture holder
or other security holders.

 

42

The instrument of transfer shall after registration be retained by the Company and
shall remain in its custody. All instruments of transfer which the Directors may
decline to register shall on demand be returned to the persons depositing the same.
The Directors may cause to be destroyed all the transfer deeds with the Company
after such period as they may determine.

Custody of transfer Deeds.

 

 

43

 

Where an application of transfer relates to partly paid shares, the transfer shall not
be registered unless the Company gives notice of the application to the transferee

 

Application for transfer of
partly paid shares,

 

404

 
 

Sr.

Particulars

Title

 

and the transferee makes no objection to the transfer within two weeks from the
receipt of the notice.

 

44

The provisions of these Articles relating to transfer of shares shall mutatis
mutandis apply to any other securities including debentures of the Company.

Provisions as to transfer of
shares to apply mutatis
mutandis to debentures, etc.

 

NOMINATION AND TRANSMISSION OF SHARES.

 

45

(Notwithstanding anything contained in the articles, every holder of securities of
the Company may, at any time, nominate a person in whom his/her securities shall
vest in the event of his/her death and the provisions of Section 72 of the
Companies Act, 2013shall apply in respect of such nomination.

(iiJNo person shall be recognized by the Company as a nominee unless an
intimation of the appointment of the said person as nominee has been given to the
Company during the lifetime of the holder(s) of the securities of the Company in
the manner specified under Section 72of the Companies Act, 2013 read with Rule
19 of the Companies (Share Capital and Debentures) Rules, 2014.

(iii)The Company shall not be in any way responsible for transferring the securities
consequent upon such nomination.

(iv)If the holder(s) of the securities survive(s) the nominee, then the nomination
made by the holder(s) shall be of no effect and shall automatically stand revoked.

Nomination

 

46

(1) On the death of a member, the survivor or survivors where the member was a
joint holder, and his nominee or nominees or legal representatives where he
was a sole holder, shall be the only persons recognized by the Company as
having any title to his interest in the shares.

(2) Nothing in clause (1) shall release the estate of a deceased joint holder from
any liability in respect of any share which had been jointly held by him with
other persons.

Title to shares on death of a
member

Estate of deceased member
liable

 

47

(1) Any person becoming entitled to a share in consequence of the death or
insolvency of a member may, upon such evidence being produced as may from
time to time properly be required by the Board and subject as hereinafter provided,
elect, either —

(a) to be registered himself as holder of the share; or

(b)to make such transfer of the share as the deceased or insolvent member could

have made.
(2) The Board shall, in either case, have the same right to decline or suspend
registration as it would have had, if the deceased or insolvent member had
transferred the share before his death or insolvency.
(3)The Company shall be fully indemnified by such person from all liability, if
any, by actions taken by the Board to give effect to such registration or transfer.

Transmission Clause

 

48

(1) If the person so becoming entitled shall elect to be registered as holder of the
share himself, he shall deliver or send to the Company a notice in writing
signed by him stating that he so elects.

(2) If the person aforesaid shall elect to transfer the share, he shall testify his
election by executing a transfer of the share.

(3) All the limitations, restrictions and provisions of these regulations relating to
the right to transfer and the registration of transfers of shares shall be
applicable to any such notice or transfer as aforesaid as if the death or
insolvency of the member had not occurred and the notice or transfer were a
transfer signed by that member.

Right to election of holder of
share

Manner of testifying election

Limitations applicable to
notice

 

 

49

 

‘A person becoming entitled to a share by reason of the death or insolvency of the
holder shall be entitled to the same dividends and other advantages to which he
would be entitled if he were the registered holder of the share, except that he shall
not, before being registered as a member in respect of the share, be entitled in
respect of it to exercise any right conferred by membership in relation to meetings
of the Company:

Provided that the Board may, at any time, give notice requiring any such person to
elect either to be registered himself or to transfer the share, and if the notice is not

 

Claimant to be entitled to
same advantage

 

405

 
 

Sr.
No

Particulars

Title

 

complied with within ninety days, the Board may thereafter withhold payment of
all dividends, bonuses or other monies payable in respect of the share, until the
requirements of the notice have been complied with.

 

50

Notwithstanding anything contained in Article 41, in the case of any share
registered in any register maintained outside India the instrument of transfer shall
be in a form recognized by the law of the place where the register is maintained but
subject thereto shall be as near to the form prescribed under sub-section 1 of
section 56 of the Act or any modification thereof as circumstances permit.

Form of transfer Outside
India.

 

51

The provisions of these Articles relating to transmission by operation of law shall
mutatis mutandis apply to any other securities including debentures of the
Company.

Provisions as to transmission
to apply mutatis mutandis to
debentures, etc.

 

FORFEITURE OF SHARES

 

52

If a member fails to pay any call, or instalment of a call or any money due in
respect of any share, on the day appointed for payment thereof, the Board may, at
any time thereafter during such time as any part of the call or instalment remains
unpaid or a judgment or decree in respect thereof remains unsatisfied in whole or
in part, serve a notice on him requiring payment of so much of the call or
instalment or other money as is unpaid, together with any interest which may have
accrued and all expenses that may have been incurred by the Company by reason
of non-payment.

Tf call or
instalment not paid notice
must be given

 

es)

The company will not be prevented from enforcing a forfeiture of shares, by reason
of receipt by the Company for a portion of any money which may be due from any
member in respect of his shares, or any indulgence that may be granted by the
Company in respect of payment of any such money.

Receipt of part amount or
grant of indulgence not to
affect forfeiture

 

54

The forfeiture of a share shall involve an extinction of all interest in and all claims
and demands against the Company, in respect of the share and all other rights
incidental to the share.

Effect of forfeiture

 

55

A person whose shares have been forfeited shall cease to be a member in respect of
the forfeited shares, but shall remain liable to pay to the Company all amounts
which were payable by him to the Company in respect of the shares.

All such amounts payable shall be paid together with interest at such rate
determined by the Board, from the time of forfeiture until payment or realization.
The Board may enforce the payment of the whole or any portion of the monies due,
without any allowance for the value of the shares at the time of forfeiture or waive
payment in whole or in part.

The liability of such person shall cease if and when the Company receives payment
in full of all such amounts in respect of the shares.

1. Members still liable to pay
money owing at the time of
forfeiture

2. Member still liable to pay
money owing at time of
forfeiture and interest

(3) Cesser of liability

 

56

Upon any sale after forfeiture or for enforcing a lien in exercise of its powers, the
Board may appoint a person to execute an instrument for transfer of the shares sold
and cause the purchaser's name to be entered in the register of members in respect
of the shares sold and after his name has been entered in the register of members in
respect of such shares the validity of the sale shall not be impeached by any person.

Validity of sales

 

57

Upon any sale, re-allotment or other disposal under the provisions of the preceding
provisions, the certificate(s), originally issued in respect of the relative shares shall
(unless the same on demand by the Company has been previously surrendered to it
by the defaulting member) stand cancelled and become null and void and be of no
effect, and the Board shall be entitled to issue a duplicate certificate(s) in respect of
the said shares to the person(s) entitled thereto.

Cancellation of share
certificate in respect of
forfeited shares

 

58

The Board may, subject to the provisions of the Act, accept a surrender of any
share from or by any member desirous of surrendering them on such terms as they
think fit.

Surrender of share certificates

 

ALTERATION OF CAPITAL

 

 

bi

 

Subject to the provisions of the Act, the Company may, by ordinary resolution —
(a) increase the share capital by such sum, to be divided into shares of such
amount as it thinks expedient;

(b) consolidate and divide all or any of its share capital into shares of larger
amount than its existing shares:

Provided that any consolidation and division which results in changes in the voting
percentage of members shall require applicable approvals under the Act;

(©) __ convert all or any of its fully paid-up shares into stock, and reconvert that

 

Power to alter share capital

 

406

 
 

Sr.

Particulars

Title

 

stock into fully paid-up shares of any denomination;

(d) subdivide its existing shares or any of them into shares of smaller amount
than is fixed by the memorandum;

(e) cancel any shares which, at the date of the passing of the resolution, have
not been taken or agreed to be taken by any person.

 

 

60

Where shares are converted into stock:

(a) the holders of stock may transfer the same or any part thereof in the
same manner as, and subject to the same Articles under which, the shares
from which the stock arose might before the conversion have been transferred,
or as near thereto as circumstances admit:

Provided that the Board may, from time to time, fix the minimum amount of
stock transferable, so, however, that such minimum shall not exceed the
nominal amount of the shares from which the stock arose;

(b) the holders of stock shall, according to the amount of stock held by
them, have the same rights, privileges and advantages as regards dividends,
voting at meetings of the Company, and other matters, as if they held the
shares from which the stock arose; but no such privilege or advantage (except
participation in the dividends and profits of the Company and in the assets on
winding up) shall be conferred by an amount of stock which would not, if
existing in shares, have conferred that privilege or advantage;

© such of these Articles of the Company as are applicable to paid-up
shares shall apply to stock and the words “share” and “shareholder”/
“member” shall include “stock” and “stock-holder” respectively.

Shares may be converted into
stock

Right of stockholders

 

61

The Company may, by resolution as prescribed by the Act, reduce in any manner
and in accordance with the provisions of the Act and the Rules:

(a) _ its share capital; and/or

(b) any capital redemption reserve account; and/or

(©) any securities premium account; and/or

(@)__ any other reserve in the nature of share capital.

Reduction of capital

 

JOINT- HOLDERS

 

62

Where two or more persons are registered as joint-holders (not more than three)
of any share, they shall be deemed (so far as the Company is concerned) to hold
the same as joint holders with benefits of survivorship, subject to the following
and other provisions contained in these Articles:

(a) The joint-holders of any share shall be liable severally as well as jointly
for and in respect of all calls or installments and other payments which
ought to be made in respect of such share.

Joint-holders

Liability of Joint holders

 

(b) On the death of any one or more of such joint-holders, the survivor or
survivors shall be the only person or persons recognized by the Company
as having any title to the share but the Directors may require such
evidence of death as they may deem fit, and nothing herein contained
shall be taken to release the estate of a deceased joint-holder from any
liability on shares held by him jointly with any other person.

Death of one or more joint-
holders

 

(c) Any one of such joint holders may give effectual receipts of any
dividends, interests or other moneys payable in respect of such share.

Receipt of one sufficient

 

(d) Only the person whose name stands first in the register of members as
one of the joint-holders of any share shall be entitled to the delivery of
certificate, if any, relating to such share or to receive notice (which term
shall be deemed to include all relevant documents) and any notice served
on or sent to such person shall be deemed service on all the joint-holders.

Delivery of certificate and
giving of notice to first named
holder

 

(e) Several executors or administrators of a deceased member in whose
(deceased member) sole name any share stands, shall for the purpose of
this clause be deemed joint-holders.

Executors or administrators as
joint-holders

 

 

(f) The provisions of these Articles relating to joint holders of shares shall
mutatis-mutandis apply to any other securities including debentures of the
Company registered in joint names.

 

Provisions as to joint holders
as to shares to apply mutatis
mutandis to debentures, etc.

 

 

CAPITALISATION OF PROFITS

 

407

 
 

Sr.

Particulars

Title

 

63

1. The Company, in general meeting may, upon the recommendation of the Board,
resolve—

a) that it is desirable to capitalize any part of the amount for the time being
standing to the credit of any of the Company’s reserve accounts, securities
premium account or to the credit of the profit and loss account, or otherwise
available for distribution; and

b) that such sum be accordingly set free for distribution in the manner
specified in clause(2)

Capitalisation

 

2) The sum aforesaid shall not be paid in cash but shall be applied, either in or
towards:

(a) paying up any amounts for the time being unpaid on any shares held by
such members respectively;

(b) paying up in full, unissued shares or other securities of the Company to
be allotted and distributed, credited as fully paid-up, to and amongst
such members in the proportion as may be determined by the law in
accordance with the law;

(c) partly in the way specified in sub-clause (a) and partly in that specified in
sub-clause (b).

(d) A securities premium account and a capital redemption reserve account
or any other permissible reserve account may, for the purposes of this
Article, be applied in the paying up of unissued shares to be issued to
members of the Company as fully paid bonus shares;

(e) The Board shall give effect to the resolution passed by the Company in
pursuance of this Article.

Sum how applied

 

64

1, Whenever such a resolution as aforesaid shall have been passed, the Board shall
(a) make all appropriations and applications of the amounts resolved to be
authorized thereby, and all allotments and issues of fully paid shares or other
securities, if any; and

(b) generally, do all acts and things required to give effect thereto.

Powers of the Board for
Capitalisation

 

2. The Board shall have power—
(a) To make such provisions, by the issue of fractional certificates/coupons or by
payment in cash or otherwise as it thinks fit, for the case of shares or other
securities becoming distributable in fractions; and

(b) to authorize any person to enter, on behalf of all the members entitled thereto,
into an agreement with the Company providing for the allotment to them
respectively, credited as fully paid-up, of any further shares or other securities to
which they may be entitled upon such authorized on, or as the case may require, for
the payment by the Company on their behalf, by the application thereto of their
respective proportions of profits resolved to be authorized, of the amount or any
part of the amounts remaining unpaid on their existing shares. Any agreement
made under such authority shall be effective and binding on such members.

Board’s power to issue
fractional certificate/coupon
etc.

 

BORROWING POWERS

 

 

65

 

Subject to the provisions of Sections 73, 179 and 180, and other applicable

provisions of the Act and these Articles, the Board may, from time to time, at its

discretion by resolution passed at the meeting of a Board:

accept or renew deposits from Shareholders;

borrow money by way of issuance of Debentures;

borrow money otherwise than on Debentures;

generally, raise or borrow or secure the payment of any sum or sums of
money for the purposes of the Company.

 

Provided, however, that where the money to be borrowed together with the money
already borrowed (apart from temporary loans obtained from the Company’s
bankers in the ordinary course of business) exceed the aggregate of the Paid-up
capital of the Company and its free reserves (not being reserves set apart for any
specific purpose), the Board shall not borrow such money without the consent of
the Company by way of a Special Resolution in a General Meeting.

Provided further that the Board may delegate the power specified in sub-clause (iii)
herein above (i.e. to borrow money otherwise than on debentures) to a committee

 

Power to Borrow

 

408

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sr. Particulars Title

No
constituted for the purpose.

Delegation of power to borrow

66 | Subject to the provisions of the Act and these Articles, any bonds, debentures, | Issue of discount etc. or with
debenture-stock or any other securities (other than equity shares of the Company,) special privileges.
may be issued at a discount, premium or otherwise and with any special privileges
and conditions as to redemption, surrender, allotment of shares, appointment of
Directors or otherwise; provided that debentures with the right to allotment of or
conversion into shares shall not be issued except with the sanction of the Members
by Special Resolution in General Meeting.

67 | The payment and/or repayment of moneys borrowed or raised as aforesaid or any Securing payment or
moneys owing otherwise or debts due from the Company may be secured in such repayment of Moneys
manner and upon such terms and conditions in all respects as the Board may think borrowed.
fit, and in particular by mortgage, charter, lien or any other security upon all or any
of the assets or property (both present and future) or the undertaking of the
Company including its uncalled capital for the time being, or by a guarantee by any
Director, Government or third party, and the bonds, debentures and debenture
stocks and other securities may be made assignable, free from equities between the
Company and the person to whom the same may be issued and also by a similar
mortgage, charge or lien to secure and guarantee, the performance by the Company
or any other person or Company of any obligation undertaken by the Company or
any person or Company as the case may be.

68 | Any bonds, debentures, debenture-stock or their securities issued or to be issued by | Bonds, Debentures etc. to be
the Company shall be under the control of the Board who may issue them upon under the control of the
such terms and conditions, and in such manner and for such consideration as they Directors.
shall consider to be for the benefit of the Company.

69 | If any uncalled capital of the Company is included in or charged by any mortgage | Mortgage of uncalled Capital.
or other security the Directors shall subject to the provisions of the Act and these
Articles make calls on the members in respect of such uncalled capital in trust for
the person in whose favour such mortgage or security is executed.

70 Subject to the provisions of the Act and these Articles if the Directors or any of Indemnity may be given.
them or any other person shall incur or be about to incur any liability whether as
principal or surety for the payment of any sum primarily due from the Company,
the Directors may execute or cause to be executed any mortgage, charge or security
over or affecting the whole or any part of the assets of the Company by way of
indemnity to secure the Directors or person so becoming liable as aforesaid from
any loss in respect of such liability.

BUY BACK OF SHARES

71 | Notwithstanding anything contained in these Articles but subject to all applicable Buy-back of shares
provisions of the Act or any other law for the time being in force, the Company
may purchase its own shares or other specified securities.

GENERAL MEETINGS

72 | All general meetings other than annual general meeting shall be called | Extraordinary general meeting
extraordinary general meeting.

73 | The Board / members may call an extraordinary general meeting giving adequate Powers of Board to call
notice or shorter notice, subject to applicable provisions of the Act Extra-ordinary general

meeting
PROCEEDINGS AT GENERAL MEETINGS

74 | 1.No business shall be transacted at any general meeting unless a quorum of Liability of Members.
members is present while transacting business.
2.No business shall be discussed or transacted at any general meeting except | Business confined to election
election of Chairperson whilst the chair is vacant. of Chairperson whilst chair

vacant
(3) The quorum for a general meeting shall be as provided in section 103 of the
Act. Quorum for general meeting

75 | The Chairperson of the Company shall preside as Chairperson at every general | Chairperson of the
meeting of the Company. meetings

76 If there is no such Chairperson, or if he is not present within fifteen minutes after Directors to elect a
the time appointed for holding the meeting, or is unwilling to act as chairperson of Chairperson
the meeting, the directors present shall elect one among themselves to be
Chairperson of the meeting.

77 If at any meeting no director is willing to act as Chairperson or if no director is Members to elect a

 

present within fifteen minutes after the time appointed for holding the meeting, the

 

Chairperson

 

409

 
 

Sr.

Particulars

Title

 

members present shall, by show of hands, by poll or electronically, choose one of
their members to be Chairperson of the meeting.

 

78

On any business at any general meeting, in case of an equality of votes, whether on
a show of hands or electronically or on a poll, the Chairperson shall have a second
or casting vote.

Casting vote of Chairperson at
general meeting

 

|

1.The Company shall cause minutes of the proceedings of every general meeting of
any class of members or creditors to be prepared and signed in such manner as
prescribed by the Rules and kept by making within thirty days of the conclusion of
every such meeting concerned thereof in books kept for that purpose with their
pages consecutively numbered.

2.There shall not be included in the minutes any matter which, in the opinion of the
Chairperson of the meeting —
(a) _ is, or could reasonably be regarded, as defamatory of any person; or
(b) _ is irrelevant or immaterial to the proceedings; or
© _ is detrimental to the interests of the Company.

3. The Chairperson shall exercise an absolute discretion in regard to the inclusion
or non-inclusion of any matter in the minutes on the grounds specified in the
aforesaid clause.

4.The minutes of the meeting kept in accordance with the provisions of the Act
shall be evidence of the proceedings recorded therein

Minutes of proceedings of
meetings and resolutions
passed by postal ballot

Certain matters not to be
included in Minutes

Discretion of Chairperson in
relation to Minutes

Minutes to be evidence

 

80

1. The books containing the minutes of the proceedings of any general meeting of

the Company or a resolution passed by postal ballot shall:

(a) be kept at the registered office of the Company; and

(b) be open to inspection of any member without charge, during 11.00a.m.
to 1.00 p.m. on all business days.

Provided such member gives at least 7 days’ notice in writing of his intention to do

so.

Inspection of minute books of
general meeting

 

‘Any member shall be entitled to be furnished, within the time prescribed by the
Act, after he has made a request in writing in that behalf to the Company and on
payment of a maximum fee as prescribed in the Act for each page or part thereof,
with a copy of any minutes referred to in clause (1) above:

Provided that a member who has made a request for provision of a soft copy of the
minutes of any previous general meeting held during the period immediately
preceding three financial years, shall be entitled to be furnished with the same free
of cost.

Members may obtain copy of
minutes

 

81

The Board, and also any person(s) authorized by it, may take any action before the
commencement of any general meeting, or any meeting of a class of members in
the Company, which they may think fit to ensure the security of the meeting, the
safety of people attending the meeting, and the future orderly conduct of the
meeting. Any decision made in good faith under this Article shall be final, and
rights to attend and participate in the meeting concerned shall be subject to such
decision.

Powers to arrange security
at meetings

 

(1) Notwithstanding anything contained in these Articles, the Company may, and
in case of resolutions relating to such business as notified under Rule (22)(16)
of the Companies (Management and Administration) Rules, 2014 or other
applicable laws to be passed by postal ballot, shall get the resolution passed
by means of a postal ballot, instead of transacting the business in the general
meeting of the Company.

(2) Where the Company decides to pass the resolution by postal ballot, it shall
follow the procedures as prescribed under Section 110 of the Act read with
Companies (Management and Administration) Rules, 2014, as amended from
time to time.

 

ADJOURNMENT OF MEETING

 

82.

(1) The Chairperson may, with the consent of any meeting at which a quorum is
present, and shall, if so directed by the meeting, adjourn the meeting from time
to time and from place to place.

Chairperson may adjourn
the meeting

 

 

 

(2)_No business shall be transacted at any adjourned meeting other than the

 

Business at adjourned meeting

 

410

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sr. Particulars Title
No
business left unfinished at the meeting from which the adjournment took place.
(3) When a meeting is adjourned for thirty days or more, notice of the adjourned | Notice of adjourned meeting
meeting shall be given as in the case of an original meeting.
(4 Save as aforesaid, and save as provided in section 103 of the Act, it | _ Notice of adjourned meeting
shall not be necessary to give any notice of an adjournment or of the business not required
to be transacted at an adjourned meeting.
VOTING RIGHTS
83. Subject to any rights or restrictions for the time being attached to any class or Entitlement to vote on
classes of shares— show of hands and on poll
(a) on a show of hands, every member present in person shall have one vote;
and
(b) on a poll, the voting rights of members shall be in proportion to his share
in the paid-up equity share capital of the Company.

84 A member may exercise his vote at a meeting by electronic means in accordance Voting through
with section 108 of the Act and shall vote only once electronic means

85 | (4) In the case of joint holders, the vote of the senior who tenders a vote, whether Vote of joint

in person or by proxy, shall be accepted to the exclusion of the votes of the holders
other joint-holders.
(2) For this purpose, seniority shall be determined by the order in which the names
stand in the register of members. Seniority of names

86 | A member of unsound mind, or in respect of whom an order has been made by any How members
court having jurisdiction in lunacy, may vote, whether on a show of hands or on a | non compos mentis and minor
poll, by his committee or other legal guardian, and any such committee or guardian may vote
may, on a poll, vote by proxy. If any member be a minor, the vote in respect of his
share or shares shall be by his guardian or senior most guardian as determined in
the order in which name stands in the document(s) received by the Company
advising of the guardianship.

87 _ | SubjecttotheprovisionsoftheA ctandotherprovisionsoftheseArticles,any person | Votes in respect of shares of
entitled under the Transmission Clause to any shares may vote at any general deceased or insolvent
meeting in respect thereof as if he was the registered holder of such shares, members, etc.
provided that at least 48 (forty eight) hours before the time of holding the meeting
or adjourned meeting, as the case may be, at which he proposes to vote, he shall
duly satisfy the Board of his right to such shares unless the Board shall have
previously admitted his right to vote at such meeting in respect thereof.

88 | Any business other than that upon which a poll has been demanded may be | Business may proceed pending
proceeded with, pending the taking of the poll. poll

89 No member shall be entitled to vote at any general meeting unless all calls or other Restriction on voting rights
sums presently payable by him in respect of shares in the Company have been paid
or in regard to which the Company has exercised any right of lien. The Register of
Members shall be conclusive evidence of the payment of calls, liens or other sums
and in case of any error in the Register of Members, it shall not invalidate the
proceedings of the Meeting.

90 | A member is not prohibited from exercising his voting on the ground that he has | _ Restriction on exercise of
not held his share or other interest in the Company for any specified period voting rights in other
preceding the date on which the vote is taken. cases to be void

91 | Any member whose name is entered in the register of members of the Company Equal rights of members
shall enjoy the same rights and be subject to the same liabilities as all other
members of the same class.

PROXY
92 | Any member entitled to attend and vote at a general meeting may do so either

personally or through his constituted attorney or through another person as a proxy
on his behalf, for that meeting.

Member may vote in
person or otherwise

 

 

 

The instrument appointing a proxy and the power-of attorney or other authority, if
any, under which it is signed or a authorize copy of that power or authority, shall
be deposited at the registered office of the Company not less than 48 hours before
the time for holding the meeting or adjourned meeting at which the person named
in the instrument proposes to vote, or, in the case of a poll, not less than 24 hours
before the time appointed for the taking of the poll and in default the instrument of

 

Proxies when to be
deposited

 

411

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sr. Particulars Title
No

proxy shall not be treated as valid.
93 | An instrument appointing a proxy shall be in the form as prescribed in the Rules

made under section 105 of the Act.

Form of pro:
BOARD OF DIRECTORS
94 | () The number of directors shall not be less than 3 (three) and shall not Board of Directors
be more than 15 (fifteen). The Company by a special resolution may increase
the number of directors more than fifteen in compliance with the Act.
Same individual may be
(2) The same individual may, at the same time, be appointed as the | Chairperson and Managing
Chairperson of the Company as well as the Managing Director or Chief Director/ Chief Executive
Executive Officer of the Company. Officer
95 | Subject to the provisions of the Act, the Board shall have the power to determine
the directors whose period of office is or is not liable to determination by
retirement of directors by rotation Directors not liable to retire by
rotation
% | @ ‘The remuneration of the directors shall, in so far as it consists of a
monthly payment, be deemed to accrue fromday-to-day.
Remuneration of directors
(2) In addition to the remuneration payable to them in pursuance of the Act, the
directors may be paid all travelling, hotel and other expenses properly
incurred by them— Travelling and other
(a) In attending and returning from meetings of the Board of Directors or expenses
any committee thereof or general meetings of the Company; or
(b) in connection with the business of the Company.
97 | All cheques, promissory notes, drafts, hundis, bills of exchange and other

negotiable instruments, and all receipts for monies paid to the Company, shall be

signed, drawn, accepted, endorsed, or otherwise executed, as the case may be, by Execution of

such person and in such manner as hegotiable listititdents

The Board shall from time to time by resolution determine

98 qd) Subject to the provisions of Sections149 & 161 of the Act, the Board Appointment of
shall have power at any time, and from time to time, to appoint a person as an additional directors
additional director, provided the number of the directors and additional
directors together shall not at any time exceed the maximum strength fixed for
the Board by the Articles.

2 Such person shall hold office only upto the date of the next annual
general meeting of the Company but shall be eligible for appointment by the
Company as a direct or at that meeting subject to the provisions of the Act. Duration of office of

additional director
99 *(1) The Board may appoint an alternate director to act for a director (hereinafter
in this Article called “the Original Director”) during his absence for a period
of not less than three months from India. No person shall be appointed as an Appoinemene of
alternate director for an independent director. alternate director

@ ‘An alternate director shall not hold office for a period longer than Duration of office of
that permissible to the Original Director in whose place he has been appointed alternate director
and shall vacate the office if and when the Original Director returns to India.

@) If the term of office of the Original Director is determined before he | Re-appointment provisions
returns to India the automatic reappointment of retiring directors in default of applicable to Original
another appointment shall apply to the Original Director and not to the Director
alternate director.

100 | @) If the office of any director appointed by the Company in general

meeting is vacated before his term of office expires in the normal course, the
resulting casual vacancy may, in default of and subject to any regulations in
the Articles of the Company, be filled by the Board of Directors at a meeting
of the Board.

Appointment of director to
fill acasual vacancy

 

 

 

@ Provided, that the director so appointed shall hold office only upto
the date upto which the director in whose place he is appointed would have
held office if it had not been vacated.

 

Duration of office of
Director appointed to fill
casual vacancy

 

412

 
 

 

 

 

 

 

Sr. Particulars Title
No
"Substituted vide Special Resolution passed at shareholders’ Extraordinary General Meeting held on
Io" December 2019

POWERS OF BOARD
101 ] The management of the business of the Company shall be vested in the Board and

the Board may exercise all such powers, and do all such acts and things, as the
Company is by the memorandum of association or otherwise authorized to exercise
and do, and, not hereby or by the statute or otherwise directed or required to be
exercised or done by the Company in general meeting but subject nevertheless to
the provisions of the Act and other laws and of the memorandum of association
and these Articles and to any regulations, not being inconsistent with the
memorandum of association and these Articles or the Act, from time to time made
by the Company in general meeting provided that no such regulation shall
invalidate any prior act of the Board which would have been valid if such
regulation had not been made.

General powers of the
Company vested in Board

 

 

 

 

 

 

 

 

 

 

PROCEEDINGS OF THE BOARD

102 | (1) The Board of Directors may meet, including giving a shorter notice subject to When meeting to be
the provisions of the Companies Act, 2013, for the conduct of business, convened
adjourn and otherwise regulate its meetings, as it thinks fit.

(2) The Chairperson or any one Director with the previous consent of the Who may
Chairperson may, or the company secretary on the direction of the Chairperson | summon Board meeting
shall, at any time, summon a meeting of the Board.

*(3) The quorum for a Board meeting shall be as provided in the Act and the Quorum for Board
Securities and Exchange Board of India (Listing Obligation and Disclosure Meetings
Requirements) Regulations, 2015, as amended.

(4) The participation of directors in a meeting of the Board may be either in person
or through video conferencing or other audio-visual means as may be
prescribed by the Rules or permitted under law. Participation at Board

meetings

103 | (1) Save as otherwise expressly provided in the Act, questions arising at any
meeting of the Board shall be decided by a majority of votes.

Questions at Board meeting
how decided

(2) In case of an equality of votes, the Chairperson of the Board, if any, shall have
a second or casting vote Casting vote of Chairperson at

Board meeting

104 | The continuing directors may act notwithstanding any vacancy in the Board; but, if

and so long as their number is reduced below the quorum fixed by the Act for a

meeting of the Board, the continuing directors or director may act for the purpose Directors not to ‘ace when’

of increasing the number of directors to that fixed for the quorum, or of | pumber falls below minimum

summoning a general meeting of the Company, but for no other purpose.

105 | @) The Chairperson of the Company shall be the Chairperson at | Who to preside at meetings
meetings of the Board. In his absence, the Board may elect a Chairperson of its of the Board
meetings and determine the period for which he is to hold office.

(2) If no such Chairperson is elected, or if at any meeting the Chairperson is not Directors to elect a
present within fifteen minutes after the time appointed for holding the meeting, Chairperson
the directors present may choose one of their number to be Chairperson of the
meeting.

106 | (1) The Board may, subject to the provisions of the Act, delegate any of its powers Delegation of powers

to Committees consisting of such member or members of its body as it thinks
fit.

 

 

(2) Any Committee so formed shall, in the exercise of the powers so delegated,
conform to any regulations that may be imposed on it by the Board.

 

 

Committee to conform to
Board regulations

 

413

 
 

 

 

Sr. Particulars Title
No
* Substituted vide Special Resolution passed at shareholders’ Extraordinary General Meeting held on
9th December 2019
(3) The participation of directors in a meeting of the Committee may be either in
person or through video conferencing or other audio-visual means, as may be Participation 9

prescribed by the Rules or permitted under law.

Committee meetings

 

 

 

 

 

 

 

107 | (1) A Committee may elect a Chairperson of its meetings unless the Board, while
constituting a Committee, has appointed a Chairperson of such Committee. Chairperson of
Committee
(2) If no such Chairperson is elected, or if at any meeting the Chairperson is not | Who to preside at meetings
present within fifteen minutes after the time appointed for holding the meeting, of Committee
the members present may choose one of their members to be Chairperson of
the meeting
108 | (1) A Committee may meet and adjourn as it thinks fit. Committee to meet
(2) Questions arising at any meeting of a Committee shall be determined by a Questions at Committee
majority of votes of the members present. meeting how decided
(3) In case of an equality of votes, the Chairperson of the Committee or Meeting | Casting vote of Chairperson
shall have a second or casting vote. at Committee meeting
109 | All acts done in any meeting of the Board or of a Committee thereof or by any ‘Acts of Board or
person acting as a director, shall, notwithstanding that it may be afterwards Committee valid
discovered that there was some defect in the appointment of any one or more of | notwithstanding defect of
such directors or of any person acting as aforesaid, or that they or any of them were appointment
disqualified or that his or their appointment had terminated, be as valid as if every
such director or such person had been duly appointed and was qualified to be a
director.
110 | Subject to the provisions of the Act, a resolution of the Board may be passed by Passing of resolution by

circulation, if the resolution has been circulated in draft, along with necessary
documents, if any, to all Directors or members of the Committee, as the case may
be, at their address registered with the Company in India by hand delivery or by
post or by courier or through electronics means and has been approved by majority
of Directors or Members, who are entitled to vote on the resolution.

circulation

 

CHIEF EXECUTIVE OFFICER, MANAGER, COMPANY SECRETARY OR CHIEF FINANCIAL OFFICER

 

111

Subject to the provisions of the Act:

Every whole-time key managerial personnel of the Company shall be appointed by
means of a resolution of the Board containing the terms and conditions of the
appointment including the remuneration. Whole-time key managerial
personnel of the Company so appointed may be removed in pursuance to the
applicable provisions of the Act.

(b)A director may be appointed as chief executive officer, manager, company
secretary or chief financial officer.

Chief Executive Officer, etc.

Director may be chief
executive officer, etc.

 

REGISTERS AND INSPECTION THEROF AND OTHER DOCMENTS

 

 

112

 

(a) The Company shall keep and maintain at its registered office all statutory
registers namely, register of charges, register of debenture holders, register of
any other security holders, the register and index of beneficial owners and
annual return, register of loans, guarantees, security and acquisitions, register
of investments not held in its own name and register of contracts and
arrangements for such duration as the Board may, unless otherwise prescribed,
decide, and in such manner and containing such particulars as prescribed by
the Act and the Rules. The registers and copies of annual return shall be open
for inspection during 11.00a.m.tol.00p.m.on each business day at the
registered office of the Company by the persons entitled thereto provided such
person gives at least 7 days’ notice of his intention to do so, on payment of
such fees as may be fixed by the Board but not exceeding the limits prescribed
by the Rules. Such person if authorized by the Act and the Rules, can also take
copies of such registers by paying a maximum fee as prescribed in the Act per
page or part thereof to the Company. The Company shall take steps to provide
the copies of the registers to such person within 7 days of receipt of the fees.

 

Statutory registers

 

414

 
 

Sr.

Particulars

Title

 

The Board, if deem fit, may waive off this fee.

(b) The Company shall cause to be kept a register and index of members in
accordance with all applicable provisions of the Companies Act, 2013 and the
Depositories Act, 1996 with details of shares held in physical and
dematerialised forms in any medium as may be permitted by law including in
any from of electronic medium. The Company shall be entitled to keep in any
State or Country outside India a branch Register of Members Resident in that
State or Country.

(c) The Company shall, on being so required by a Member, send to him within
seven days of the request and subject to payment of a maximum fee as
prescribed in the Act for each copy of the documents specified in Section17 of
the Act. The Board, if deem fit, may waive off this fee.

 

113

(@ The Company may exercise the powers conferred on it by the Act with
regard to the keeping of a foreign register; and the Board may (subject to the
provisions of the Act) make and vary such regulations as it may think fit
respecting the keeping of any such register.

(b) The foreign register shall be open for inspection and may be closed, and
extracts may be taken there from and copies thereof may be required, in the
same manner, mutatis mutandis, as is applicable to the register of members.

Foreign register

 

THE SEAL

 

114

(1) The Board shall provide for the safe custody of the seal.

(2) The seal of the Company shall not be affixed to any instrument except by the
authority of a resolution of the Board or of a Committee of the Board
authorized by it in that behalf, and except in the presence of one director and
such director shall sign every instrument to which the seal of the Company is
so affixed.

The seal, its custody and
use Affixation of seal

 

DIVIDENDS AND RESERVE

 

115

The Company in general meeting may declare dividends, but no dividend shall
exceed the amount recommended by the Board.

‘Company in general
meeting may declare
dividends

 

116

Subject to the provisions of section 123 of the Act, the Board may from time to
time pay to the members such interim dividends of such amount on such class of
shares and at such times as it may think fit.

Declaration of
dividends

 

117

(1) The Board may, before recommending any dividend, set aside out of the
profits of the Company such sums as it thinks fit as a reserve or reserves which
shall, at the discretion of the Board, be applied for any purpose to which the
profits of the Company may be properly applied, including provision for
meeting contingencies or for authorized dividends; and pending such
application, may, at the like discretion, either be employed in the business of
the Company or be invested in such investments (other than shares of the
Company) as the Board may, from time to time, think fit.

(2) The Board may also carry forward any profits which it may consider necessary
not to divide, without setting them aside as a reserve.

Dividends only to be paid
out of profits.

Carry forward of profits

 

118

(1) Subject to the rights of persons, if any, entitled to shares with special rights as
to dividends, all dividends shall be declared and paid according to the amounts
paid or credited as paid on the shares in respect whereof the dividend is paid,
but if and so long as nothing is paid upon any of the shares in the Company,
dividends may be declared and paid according to the amounts of the shares.

(2) No amount paid or credited as paid on a share in advance of calls shall b
treated for the purposes of this Article as paid on the share.

(3) All dividends shall be apportioned and paid proportionately to the amounts
paid or credited as paid on the shares during any portion or portions of the
period in respect of which the dividend is paid; but if any share is issued on
terms providing that it shall rank for dividend as from a particular date such
share shall rank for dividend accordingly.

Division of profits

Payments in advance

Dividends to be apportioned

 

 

119

 

Where the Company has declared a dividend but which has not been paid or

 

Unpaid dividend account

 

415

 
 

Sr.

Particulars

Title

 

claimed within 30 days from the date of declaration, transfer the total amount of
dividend which remains unpaid or unclaimed within the said period of 30 days, to a
special account to be opened by the company in that behalf in any scheduled bank,
to be called” Unpaid Dividend Account.”

Any money transferred to the unpaid dividend account of a company which
remains unpaid or unclaimed for a period of seven years from the date of such
transfer, shall be transferred by the company to the Fund known as Investor
Education and Protection Fund established under section 125 of the Act. There
shall be no forfeiture of unclaimed dividends before the claim becomes barred by
law.

Unclaimed dividend

 

120

(1) Any dividend, interest or other monies payable in cash in respect of shares may
be paid by electronic mode or by cheque or warrant sent through the post
directed to the registered address of the holder or ,in the case of joint holders,
to the registered address of that one of the joint holders who is first named on
the register of members, or to such person and to such address as the holder or
joint holders may in writing direct.

(2) Every such cheque or warrant shall be made payable to the order of the person
to whom it is sent.

(3) Payment in any way whatsoever shall be made at the risk of the person entitled
to the money paid or to be paid. The Company will not be responsible for a
payment which is lost or delayed. The Company will be deemed to having
made a payment and received a good discharge for it if a payment using any of
the foregoing permissible means is made.

Dividend how remitted

Instrument of payment

Discharge to Company

 

121

‘Anyone of two or more joint holders of a share may give effective receipts for any
dividends, bonuses or other monies payable in respect of such share.

Receipt of one holder
sufficient

 

122

No dividend shall bear interest against the Company.

No interest on dividends

 

123

The waiver in whole or in part of any dividend on any share by any document
(whether or not under seal) shall be effective only if such document is signed by
the member (or the person entitled to the share in consequence of the death or
bankruptcy of the holder) and delivered to the Company and if or to the extent that
the same is accepted as such or acted upon by the Board.

Waiver of dividends

 

ACCOUNTS

 

124

(1) The books of account and books and papers of the Company, or any of them,
shall be open to the inspection of directors in accordance with the applicable
provisions of the Act and the Rules.

(2) No member (not being a director) shall have any right of inspecting any books
of account or books and papers or document of the Company except as
conferred by law or authorised by the Board or by the Company in a general
meeting.

Inspection by
Directors

Restriction on inspection by
members

 

WINDING UP

 

 

125

 

Subject to the applicable provisions of Chapter XX of the Act and the
Rules made there under-

(a) If the Company shall be wound up, the liquidator may, with the sanction of a
special resolution of the Company and any other sanction required by the Act,
divide amongst the members, in specie or kind, the whole or any part of the
assets of the Company, whether they shall consist of property of the same kind
or not.

For the purpose aforesaid, the liquidator may set such value as he deems fair
upon any property to be divided as aforesaid and may determine how such
division shall be carried out as between the members or different classes of
members.

The liquidator may, with the like sanction, vest the whole or any part of such
assets in trustees upon such trusts for the benefit of the contributories if he
considers necessary, but so that no member shall be compelled to accept any

(b)

(c

 

Winding up of Company

 

416

 
 

Sr.

Particulars

Title

 

shares or other securities whereon there is any liability.

 

INDEMNITY AND INSURANCE

 

126

(a) Subject to the provisions of the Act, every officer of the Company shall be
indemnified by the Company out of the funds of the Company, to pay all costs,
losses and expenses (including travelling expense) which such officer may incur
or become liable for by reason of any contract entered into or act or deed done
by him in his capacity as such officer or in any way in the discharge of his duties
in such capacity including expenses.

(b) Subject as aforesaid, every officer of the Company shall be indemnified
against any liability incurred by him in defending any proceedings, whether
civil or criminal in which judgment is given in his favour or in which he is
acquitted or discharged or in connection with any application under applicable
provisions of the Act in which relief is given to him by the Court.

S

The Company may take and maintain any insurance as the Board may think fit
on behalf of its present and/or former directors and key managerial personnel
for indemnifying all or any of them against any liability for any acts in relation
to the Company for which they may be liable but have acted honestly and
reasonably.

Directors and officers right to
indemnity

Insurance

 

127

Every Director, Manager, Auditor, Treasurer, Trustee, Member of a Committee,
Officer, Servant, Agent, Accountant or other person employed in the business of
the Company shall, if so required by the Directors, before entering upon his
duties, sign a declaration pleading himself to observe strict secrecy respecting all
transactions and affairs of the Company with the customers and the state of the
accounts with individuals and in matters relating thereto, and shall by such
declaration pledge himself not to reveal any of the matter which may come to his
knowledge in the discharge of his duties except when required so to do by the
Directors or by any meeting or by a Court of Law and except so far as may be
necessary in order to comply with any of the provisions of law.

Secrecy

 

GENERAL POWER

 

 

128

 

Wherever in the Act, it has been provided that the Company shall have any right,
privilege or authority or that the Company could carry out any transaction only if
the Company is so authorized by its articles, then and in that case this Article
authorizes and empowers the Company to have such rights, privileges or
authorities and to carry out such transactions as have been permitted by the Act,
without there being any specific Article in that behalf herein provided.

 

General power

 

417

 
SECTION IX: OTHER INFORMATION
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION

The copies of the following contracts which have been entered into by our Company (not being contracts
entered into in the ordinary course of business carried on by our Company or contracts entered into more than
two years before the date of the Red Herring Prospectus) which were deemed material were attached to the
copy of the Red Herring Prospectus filed with the RoC and this Prospectus to be filed with the RoC. Copies of
the abovementioned contracts and also the documents for inspection referred to hereunder were available for
inspection at the Registered Office between 10 a.m. and 5 p.m. on all Working Days from the date of the Red
Herring Prospectus until the Bid/Offer Closing Date. The copies of the material contracts and also the
documents for inspection referred to hereunder have also been uploaded on the website of our Company at
https://rathi.com/Wealth/Investorrelations. php

Any of the contracts or documents mentioned in this Prospectus may be amended or modified at any time if so,

required in the interest of our Company or if required by the other parties, without reference to the

Shareholders, subject to compliance of the provisions contained in the Companies Act and other applicable law.

A. Material contracts for the Offer

1. Offer agreement dated July 19, 2021 amongst our Company, the Selling Shareholders and the BRLMs.

2. Registrar Agreement dated July 17, 2021 amongst our Company, the Selling Shareholders and the Registrar
to the Offer.

3. Escrow and Sponsor Bank Agreement dated November 15, 2021 amongst our Company, the Selling
Shareholders, the Registrar to the Offer, the BRLMs and the Banker to the Offer.

4. Share Escrow Agreement dated November 15, 2021 amongst our Company, the Selling Shareholders and
the Share Escrow Agent.

5. Syndicate Agreement dated November 15, 2021 amongst the Syndicate, our Company, the Selling
Shareholders.

6. Underwriting Agreement dated December 7, 2021 amongst our Company, the Selling Shareholders and the
Underwriters.
B. Material documents

1. Certificates of incorporation of our Company dated March 22, 1995, April 6, 2005, March 8, 2007, July 7,
2015, April 3, 2017, July 6, 2017 and January 7, 2021.

2. Resolutions of the Board dated July 16, 2021, approving the Offer.
3. Resolution of the IPO Committee dated October 26, 2021, approving the Employee Reservation Portion.

4. Resolutions of the Board and the IPO Committee dated July 16, 2021 and July 19, 2021, respectively,
approving the Draft Red Herring Prospectus.

5. Board resolution dated November 26, 2021 and December 7, 2021, approving the Red Herring Prospectus
and this Prospectus, respectively, for filing with RoC and subsequently with SEBI and the Stock
Exchanges.

6. Resolution of the board of directors of ARFSL dated June 13, 2015 authorising the transfer of mutual fund
distribution, portfolio management and investment adviser businesses respectively to ARAL.

418
10.

11.

12.

13.

14.

15.

16.

17.

18.

19.

20.

Resolution of the board of directors of ARAL dated August 14, 2015 authorising the acquisition of mutual
fund distribution, portfolio management and investment adviser businesses respectively of ARFSL.

Resolution of the board of directors of ARAL dated June 27, 2016 authorising the transfer of mutual fund
distribution business to our Company.

Board resolution of our Company dated June 27, 2016 authorising the acquisition of mutual fund
distribution business of ARAL.

Asset purchase agreement dated February 17, 2017 entered into amongst our Company, Religare Wealth
Management Limited, ARAL and ARSSBL, as amended on March 15, 2017 and March 30, 2017.

Shareholders’ Agreement dated August 10, 2016 entered into between our Company, Mr. Anand Rathi, Mr.
Amit Rathi and Ms. Supriya Rathi, certain other Anand Rathi Group Shareholders, AR Digital Wealth
Private Limited, and Mr. Sumeet Vaid, Sumeet Surindernath Vaid HUF, Ms. Menka Vaid, Ms. Nandita
Sud, Ms. Swati Agrawal, Mr. Bhupendra Sharma, Mr. Jitendra Tanna, Ms. Anisha Chaturvedi, Techno
Auto-Components (I) Private Limited, Mr. Jayant Davar, Mr. Vikram Nirula, Mr. Sujan Sinha, Mr.
Harshavardhan Raghunath, Parth Infracon Private Limited, Mr. Sandeep Parwal, Ms. Honey Parwal and
Mr. Sandeep Parekh, pursuant to share purchase agreements entered into between each of Mr. Sumeet Vaid,
Sumeet Surindernath Vaid HUF, Ms. Menka Vaid, Ms. Nandita Sud, Ms. Swati Agrawal, Mr. Bhupendra
Sharma, Mr. Jitendra Tanna, Ms. Anisha Chaturvedi, Techno Auto-Components (I) Private Limited, Mr.
Jayant Davar, Mr. Vikram Nirula, Mr. Sujan Sinha, Mr. Harshavardhan Raghunath, Parth Infracon Private
Limited, Mr. Sandeep Parwal, Ms. Honey Parwal and Mr. Sandeep Parekh and, ARDWPL and FWSPL.

Trademark licensing agreement dated April 1, 2018 entered into with Anand Rathi Financial Services
Limited and copy of brand policy approved by the board of Anand Rathi Financial Services Limited on
March 11, 2019 governing payments of brand usage charges

Clarification letter dated June 10, 2021 to RBI requesting for guidance as to whether we may be excluded
from making application to register as NBFC. Further, communication received from RBI vide its letter
dated October 22, 2021, seeking a copy of the aforesaid letter dated June 10, 2021 and Company’s reply
dated November 1, 2021 to RBI’s letter dated October 22, 2021. Further communication on November 26,
2021, from the RBI seeking a copy of the audited financial statements of the Company for Fiscal 2021 and
a certificate from the Statutory Auditors in respect of the Company’s claim of winding up its NBFI
activities during Fiscal 2022. Company’s reply dated December 7, 2021 providing the requisite documents.

Certified copies of our Memorandum of Association and Articles of Association, as amended.

The examination report of the statutory auditors Khimji Kunverji & Co LLP, Chartered Accountants, dated
November 17, 2021, on our Restated Consolidated Financial Information included in this Prospectus.

The statement of special tax benefits dated November 25, 2021, included in this Prospectus.
Copies of the annual reports of our Company for Fiscal 2021, Fiscal 2020 and Fiscal 2019.

Report titled “Research Report on Wealth Management Industry”, dated October 2021, prepared by CARE
Advisory.

The copy of the letter dated December 26, 2018 sent to SEBI by Equirus Capital Private Limited and
Jefferies India Private Limited, the book running lead managers to the erstwhile proposed initial public
offering of the equity shares of the Company in 2018 (“2018 IPO”), withdrawing the draft red herring
prospectus dated September 24, 2018 filed by the Company with SEBI in connection with the 2018 IPO.

Consents of each of our Directors, the BRLMs, legal counsel to the Company as to Indian law, legal
counsel to the BRLMs as to Indian law, International Legal Counsel to the Book Running Lead Managers,
Registrar to the Offer, Escrow Collection Banks, Public Offer Bank(s), Refund Bank(s), the Sponsor
Bank(s), Bankers to our Company, Company Secretary and Compliance Officer, and the Chief Financial
Officer, as referred to, in their specific capacities.

419
21.

22.

23.

24.

25.

26.

27.

28.

Board resolution of Anand Rathi Financial Services Limited, the Promoter Selling Shareholder dated
February 24, 2021 and its consent letter dated July 18, 2021, both approving its participation in the Offer
for Sale.

Consents from Mr. Anand Rathi, Mr. Pradeep Gupta and the Other Selling Shareholders, each dated July
18, 2021, approving their participation in the Offer for Sale.

Consent from Khimji Kunverji & Co LLP, Chartered Accountants, the Statutory Auditor, dated November
25, 2021, to being named as an “expert” under the Companies Act, 2013 and for inclusion of their name,
and their report in the Red Herring Prospectus and this Prospectus.

Tripartite agreement amongst NSDL, our Company and Registrar to the Offer, dated October 20, 2016.
Tripartite agreement amongst CDSL, our Company and Registrar to the Offer, dated July 14, 2016.

In-principle listing approvals dated September 6, 2021 and August 10, 2021 from NSE and BSE,
respectively.

Due diligence certificate dated July 19, 2021 to SEBI from the BRLMs.

Observation letter no. SEBI/HO/CFD/DIL1/YJ/NS/21118/1/2021 dated October 21, 2021.

Any of the contracts or documents mentioned in the Red Herring Prospectus and this Prospectus may be
amended or modified at any time if so required in the interest of our Company or if required by the other parties,
subject to compliance with applicable laws.

420
DECLARATION
I hereby certify and declare that all relevant provisions of the Companies Act, and rules, guidelines and
regulations issued by the Government of India or the guidelines and regulations issued by SEBI (established
under the SEBI Act), as the case may be, have been complied with and no statement made in this Prospectus is
contrary to the provisions of the Companies Act, the SCRA, the SCRR, the SEBI Act, each as amended, or the
rules, regulations or guidelines issued thereunder, as the case may be. | further certify that all statements in this
Prospectus are true and correct.

SIGNED BY

Mr. Anand Rathi
Chairman and Non-Executive Director

Date: December 7, 2021

Place: Mumbai

421
DECLARATION
I hereby certify and declare that all relevant provisions of the Companies Act, and rules, guidelines and
regulations issued by the Government of India or the guidelines and regulations issued by SEBI (established
under the SEBI Act), as the case may be, have been complied with and no statement made in this Prospectus is
contrary to the provisions of the Companies Act, the SCRA, the SCRR, the SEBI Act, each as amended, or the

rules, regulations or guidelines issued thereunder, as the case may be. I further certify that all statements in this.
Prospectus are true and correct.

SIGNED BY

Mr. Pradeep Gupta
Non-Executive Director

Date: December 7, 2021

Place: Mumbai

422
DECLARATION
I hereby certify and declare that all relevant provisions of the Companies Act, and rules, guidelines and
regulations issued by the Government of India or the guidelines and regulations issued by SEBI (established
under the SEBI Act), as the case may be, have been complied with and no statement made in this Prospectus is
contrary to the provisions of the Companies Act, the SCRA, the SCRR, the SEBI Act, each as amended, or the

rules, regulations or guidelines issued thereunder, as the case may be. | further certify that all statements in this
Prospectus are true and correct.

SIGNED BY

Mr. Amit Rathi
Non-Executive Director

Date: December 7, 2021

Place: Mumbai

423
DECLARATION
I hereby certify and declare that all relevant provisions of the Companies Act, and rules, guidelines and
regulations issued by the Government of India or the guidelines and regulations issued by SEBI (established
under the SEBI Act), as the case may be, have been complied with and no statement made in this Prospectus is
contrary to the provisions of the Companies Act, the SCRA, the SCRR, the SEBI Act, each as amended, or the

rules, regulations or guidelines issued thereunder, as the case may be. | further certify that all statements in this
Prospectus are true and correct.

SIGNED BY

Mr. Rakesh Rawal
Executive Director and Chief Executive Officer

Date: December 7, 2021

Place: Bangalore

424
DECLARATION
I hereby certify and declare that all relevant provisions of the Companies Act, and rules, guidelines and
regulations issued by the Government of India or the guidelines and regulations issued by SEBI (established
under the SEBI Act), as the case may be, have been complied with and no statement made in this Prospectus is
contrary to the provisions of the Companies Act, the SCRA, the SCRR, the SEBI Act, each as amended, or the
rules, regulations or guidelines issued thereunder, as the case may be. | further certify that all statements in this
Prospectus are true and correct.

SIGNED BY

Mr. Mohan Tanksale
Independent Director

Date: December 7, 2021

Place: Florida, USA

425
DECLARATION
I hereby certify and declare that all relevant provisions of the Companies Act, and rules, guidelines and
regulations issued by the Government of India or the guidelines and regulations issued by SEBI (established
under the SEBI Act), as the case may be, have been complied with and no statement made in this Prospectus is
contrary to the provisions of the Companies Act, the SCRA, the SCRR, the SEBI Act, each as amended, or the

rules, regulations or guidelines issued thereunder, as the case may be. | further certify that all statements in this
Prospectus are true and correct.

SIGNED BY

Mr. Ramesh Chandak
Independent Director

Date: December 7, 2021

Place: Canton, United States

426
DECLARATION
I hereby certify and declare that all relevant provisions of the Companies Act, and rules, guidelines and
regulations issued by the Government of India or the guidelines and regulations issued by SEBI (established
under the SEBI Act), as the case may be, have been complied with and no statement made in this Prospectus is
contrary to the provisions of the Companies Act, the SCRA, the SCRR, the SEBI Act, each as amended, or the

rules, regulations or guidelines issued thereunder, as the case may be. | further certify that all statements in this
raft Prospectus are true and correct.

SIGNED BY

Mr. Kishan Gopal Somani
Independent Director

Date: December 7, 2021

Place: Delhi

427
DECLARATION
I hereby certify and declare that all relevant provisions of the Companies Act, and rules, guidelines and
regulations issued by the Government of India or the guidelines and regulations issued by SEBI (established
under the SEBI Act), as the case may be, have been complied with and no statement made in this Prospectus is
contrary to the provisions of the Companies Act, the SCRA, the SCRR, the SEBI Act, each as amended, or the

rules, regulations or guidelines issued thereunder, as the case may be. | further certify that all statements in this
Prospectus are true and correct.

SIGNED BY

Ms. Sudha Navandar
Independent Director

Date: December 7, 2021

Place: Mumbai

428
DECLARATION

I hereby certify and declare that all relevant provisions of the Companies Act, and rules, guidelines and
regulations issued by the Government of India or the guidelines and regulations issued by SEBI (established
under the SEBI Act), as the case may be, have been complied with and no statement made in this Prospectus is
contrary to the provisions of the Companies Act, the SCRA, the SCRR, the SEBI Act, each as amended, or the
rules, regulations or guidelines issued thereunder, as the case may be. | further certify that all statements in this
Prospectus are true and correct.

SIGNED BY THE CHIEF FINANCIAL OFFICER

Mr. Rajesh Kumar Bhutara

Date: December 7, 2021
Place: Mumbai

429
DECLARATION BY ANAND RATHI FINANCIAL SERVICES LIMITED

We confirm and declare that all statements, disclosures and undertakings made or confirmed by us in this
Prospectus in relation to ourselves, as a Promoter Selling Shareholder and the Equity Shares which are being
offered by it by way of the Offer for Sale pursuant to the Offer, are true and correct.

SIGNED FOR AND ON BEHALF OF ANAND RATHI FINANCIAL SERVICES LIMITED

Authorised Signatory: Mr. Shailendra Bandi
Designation: Chief financial officer
Date: December 7, 2021

Place: Mumbai

430
DECLARATION BY MR. ANAND RATHI
I hereby confirm and declare that all statements, disclosures and undertakings made or confirmed by me in this
Prospectus in relation to myself, as a Promoter Selling Shareholder and the Equity Shares which are being

offered by me by way of the Offer for Sale pursuant to the Offer, are true and correct.

SIGNED BY:

MR. ANAND RATHI
Date: December 7, 2021

Place: Mumbai

431
DECLARATION BY MR. PRADEEP GUPTA
I hereby confirm and declare that all statements, disclosures and undertakings made or confirmed by me in this
Prospectus in relation to myself, as a Promoter Selling Shareholder and the Equity Shares which are being

offered by me by way of the Offer for Sale pursuant to the Offer, are true and correct.

SIGNED BY:

MR. PRADEEP GUPTA
Date: December 7, 2021

Place: Mumbai

432
DECLARATION BY MR. AMIT RATHI
I hereby confirm and declare that all statements, disclosures and undertakings made or confirmed by me in this
Prospectus in relation to myself, as a Selling Shareholder and the Equity Shares which are being offered by me

by way of the Offer for Sale pursuant to the Offer, are true and correct.

SIGNED BY:

MR. AMIT RATHI
Date: December 7, 2021

Place: Mumbai

433
DECLARATION BY MS. PRITI GUPTA
I hereby confirm and declare that all statements, disclosures and undertakings made or confirmed by me in this
Prospectus in relation to myself, as a Selling Shareholder and the Equity Shares which are being offered by me

by way of the Offer for Sale pursuant to the Offer, are true and correct.

SIGNED BY:

MS. PRITI GUPTA
Date: December 7, 2021

Place: Mumbai

434
DECLARATION BY RAWAL FAMILY TRUST, ACTING THROUGH MR. RAKESH RAWAL

We hereby confirm and declare that all statements and disclosures and undertakings made or confirmed by us in
this Prospectus in relation to ourselves, as a Selling Shareholder and the Equity Shares which are being offered
by us by way of the Offer for Sale pursuant to the Offer, are true and correct.

SIGNED BY:

MR. RAKESH RAWAL
(On behalf of Rawal Family Trust)
Date: December 7, 2021

Place: Bangalore

435
DECLARATION BY MS. SUPRIYA RATHI
I hereby confirm and declare that all statements, disclosures and undertakings made or confirmed by me in this
Prospectus in relation to myself, as a Selling Shareholder and the Equity Shares which are being offered by me

by way of the Offer for Sale pursuant to the Offer, are true and correct.

SIGNED BY:

MS. SUPRIYA RATHI
Date: December 7, 2021

Place: Mumbai

436
DECLARATION BY MR. JUGAL MANTRI
I hereby confirm and declare that all statements, disclosures and undertakings made or confirmed by me in this
Prospectus in relation to myself, as a Selling Shareholder and the Equity Shares which are being offered by me

by way of the Offer for Sale pursuant to the Offer, are true and correct.

SIGNED BY:

MR. JUGAL MANTRI
Date: December 7, 2021

Place: Mumbai

437
DECLARATION BY MR. FEROZE AZEEZ
I hereby confirm and declare that all statements, disclosures and undertakings made or confirmed by me in this
Prospectus in relation to myself, as a Selling Shareholder and the Equity Shares which are being offered by me

by way of the Offer for Sale pursuant to the Offer, are true and correct.

SIGNED BY:

MR. FEROZE AZEEZ
Date: December 7, 2021

Place: Mumbai

438
