Shriram City Union Finance Limited - Karvy

We continue to provide administration services for the securitized/assigned portfolio, the expenses for which areprovided for, at the outset of each transaction. The gains arising out of securitization/assignment, which varyaccording to a number of factors such as the tenor of the securitized/assigned portfolio, the yield on the portfoliosecuritized/assigned and the discounting rate applied are treated as income over the tenure of agreements as per RBIguidelines on securitization of standard assets. Loss, if any, is recognized upfront.The following tables set forth certain information with respect to our securitization/assignment transactions:Total number of Loan Assetssecuritized/assignedTotal book value of Loan Assetssecuritized/assignedSale consideration received forsecuritized/assigned assetsGain on account ofsecuritization/assignmentFor the Financial Year Ended March 31,` In Lakhs2007 2008 2009 2010 2011438,457.00 398,691 314,685 146,402.00 178,502.0080,493.74 75,781.80 88,844.37 30,000.00 117,915.7291,302.42 83,539.14 91,874.15 30,000.00 126,737.0110,808.68 7,757.34 13,182.64 2,554.73 27,163.76As on March 31` In Lakhs2007 2008 2009 2010 2011-Fixed Deposit 5,711.93 46,95.88 10,017.54 7,373.57 15,436.40-Guarantees given by third16.69 - 3,117.77 1,942.77 1,942.77partiesWe are required to provide credit enhancement for the securitization/assignment transactions by way of either fixeddeposits or corporate guarantees and the aggregate credit enhancement amount outstanding as on March 31, 2011was ` 1,5436.40 lakhs. In the event a relevant bank or institution does not realize the receivables due under suchLoan Assets, such bank or institution would have recourse to such credit enhancement.Capital AdequacyWe are subject to the capital adequacy ratio (“CAR”) requirements prescribed by the RBI. We are currently requiredto maintain a minimum CAR of 15.00%, as prescribed under the Prudential Norms Directions, 2007, based on ourtotal capital to risk-weighted assets. As per RBI notification dated February 17, 2011, all deposit taking NBFCs haveto maintain a minimum capital ratio, consisting of Tier I and Tier II capital, which shall not be less than 15.00% ofits aggregate risk weighted assets on balance sheet and risk adjusted value of off-balance sheet items w.e.f. March31, 2012. As a part of our governance policy, we ordinarily maintain capital adequacy higher than the statutorilyprescribed CAR. As of March 31, 2011, our capital adequacy ratio computed on the basis of applicable RBIrequirements was 20.53%, compared to the minimum capital adequacy requirement of 15.00% stipulated by the RBI.The following table sets out our capital adequacy ratios computed on the basis of applicable RBI requirements as ofthe dates indicated:Credit RatingThe following table sets forth certain information with respect to our credit ratings as on the date of this DraftProspectus:94As of March 31,2007 2008 2009 2010 2011Capital adequacy ratio23.95 20.25 25.74 26.28 20.53(%)……………………………………………………….Tier 1 capital……………………………………………. 29,464.00 39,265.00 70,662.00 98,585.00 1,19,419.00