Shriram City Union Finance Limited - Karvy

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Since 1991, the Government has pursued a policy of economic liberalization, including significantlyrelaxing restrictions on the private sector. There can be no assurance that these liberalization policies willcontinue in the future as well. The rate of economic liberalization could change and specific laws andpolicies affecting financial services companies, foreign investment, currency exchange rates and othermatters affecting investments in Indian companies could change as well. A significant slowdown in India’seconomic liberalization and deregulation policies could disrupt business and economic conditions in India,thus affecting our business. Any political instability in the country, including any change in theGovernment, could materially impact our business adversely.49. Civil unrest, terrorist attacks and war would affect our business.Terrorist attacks and other acts of violence, war or conflicts, particularly those involving India, as well asthe United States of America, the United Kingdom, Singapore and the European <strong>Union</strong>, may adverselyaffect Indian and global financial markets. Such acts may negatively impact business sentiment, whichcould adversely affect our business and profitability. India has from time to time experienced and continuesto experience, social and civil unrest, terrorist attacks and hostilities with neighbouring countries. Also,some of India’s neighbouring countries have experienced or are currently experiencing internal unrest.This, in turn, could have a material adverse effect on the Indian economy and in turn may adversely affectour operations and profitability and the market for the NCDs.50. Our business may be adversely impacted by natural calamities or unfavourable climatic changes.India, Bangladesh, Pakistan, Indonesia, Japan and other Asian countries have experienced naturalcalamities such as earthquakes, floods, droughts and a tsunami in recent years. Some of these countrieshave also experienced pandemics, including the outbreak of avian flu. These economies could be affectedby the extent and severity of such natural disasters and pandemics which could, in turn affect the financialservices sector of which our Company is a part. Prolonged spells of abnormal rainfall, draught and othernatural calamities could have an adverse impact on the economy, which could in turn adversely affect ourbusiness and the price of our NCDs.51. Any downgrading of India's sovereign rating by an international rating agency (ies) may affect ourbusiness and our liquidity to a great extent.Any adverse revision to India's credit rating for domestic and international debt by international ratingagencies may adversely impact our ability to raise additional finances at favourable interest rates and othercommercial terms. This could have an adverse effect on our growth, financial performance and ouroperations.PROMINENT NOTES1. This is a public issue of NCDs by our Company aggregating upto ` 37,500 lakhs with an option to retainover-subscription upto ` 37,500 lakhs for issuance of additional NCDs, aggregating to a total of ` 75,000lakhs.2. For details on the interest of our Company’s Directors, please refer to the sections titled “OurManagement” and “Capital Structure” beginning on pages 109 and 47 of this Draft Prospectus, respectively.3. Our Company has entered into certain related party transactions, within the meaning of AS 18 as notifiedby the Companies (Accounting Standards) Rules, 2006, as disclosed in the section titled “FinancialInformation” beginning on page 128 of this Draft Prospectus.4. Any clarification or information relating to the Issue shall be made available by the Lead Managers, theCo-Lead Manager and our Company to the investors at large and no selective or additional informationwould be available for a section of investors in any manner whatsoever.18
5. Investors may contact the Registrar to the Issue, Compliance Officer, the Lead Managers and the Co-LeadManager for any complaints pertaining to the Issue. In case of any specific queries on allotment/refund,Investor may contact Registrar to the Issue.6. In the event of oversubscription to the Issue, allocation of NCDs will be as per the "Basis of Allotment" setout on page 161 of this Draft Prospectus.7. Our Equity Shares are listed on the NSE and BSE.8. Some of our privately placed non convertible debentures are listed in BSE.9. As of March 31, 2011, we had certain contingent liabilities not provided for, including the following:• Guarantees issued by the company – `6.81 lakhs• Guarantees issued by others – `1,942.77 lakhsFor further information on such contingent liabilities, see Annexure VI to our Reformatted UnconsolidatedSummary Financial Statements.10. For further information relating to certain significant legal proceedings that we are involved in, see“Pending Proceedings and Statutory Defaults” beginning on page 164 of this Draft Prospectus.19
Page 1 and 2: Draft ProspectusDated July 21, 2011
Page 3 and 4: SECTION I : GENERALDEFINITIONS / AB
Page 5 and 6: TermDebenture Holder (s)Debt Listin
Page 7 and 8: that notice of such early closure i
Page 9 and 10: TermROCRTGSSBISCRASCRRSEBIDescripti
Page 11 and 12: • Emergence of new competitors;
Page 13 and 14: SECTION II : RISK FACTORSProspectiv
Page 15 and 16: may be lower than the outstanding l
Page 17 and 18: and other liberalization measures a
Page 19 and 20: previous working relationship; succ
Page 21 and 22: As part of our means of raising and
Page 23 and 24: 24. We may have to comply with stri
Page 25 and 26: valuation mechanism, which are pers
Page 27 and 28: Risks Relating to the Utilization o
Page 29: As on March 31, 2011, 24 % of our A
Page 33 and 34: Lead Managers:JM Financial Consulta
Page 35 and 36: Bankers to our CompanyANDHRA BANKCo
Page 37 and 38: STATE BANK OF BIKANER AND JAIPUR1 s
Page 39 and 40: warrant. CRISIL is not responsible
Page 41 and 42: We leverage on the Shriram Group’
Page 43 and 44: Access to a range of cost effective
Page 45 and 46: THE ISSUEThe following is a summary
Page 47 and 48: SUMMARY FINANCIAL INFORMATIONThe fo
Page 49 and 50: B. SUMMARY INFORMATION OF OUR UNCON
Page 51 and 52: C. SUMMARY INFORMATION OF OUR UNCON
Page 53 and 54: ParticularsFor the year ended March
Page 55 and 56: E. SUMMARY INFORMATION OF OUR CONSO
Page 57 and 58: F. SUMMARY INFORMATION OF OUR CONSO
Page 59 and 60: CAPITAL STRUCTUREDetails of share c
Page 61 and 62: Date of AllotmentNumber of sharesis
Page 63 and 64: Sr.NoCategory ofShareholderNumberof
Page 65 and 66: Sr. No. Name of holder Number ofins
Page 67 and 68: 11. List of top ten holders of Secu
Page 69 and 70: Employee Stock Option SchemesPursua
Page 71 and 72: STATEMENT OF TAX BENEFITSUnder the
Page 73 and 74: provisions of Chapter XII-A shall c
Page 75 and 76: SECTION IV : ABOUT THE ISSUER COMPA
Page 77 and 78: Initially, the NBFCs registered wit
Page 79 and 80: Overall Demand Drivers in the Two W
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wheelers and similar forms of intra
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Players are now adopting stringent
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Growth in CV finance disbursements`
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SI.No.YearTotalMSMEs(lakhnumbers)Fi
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women and all loans to the North Ea
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segment and the ability to provide
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NBFCs in the Indian gold loans mark
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We leverage on the Shriram Group’
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Access to a range of cost effective
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Our Company’s ProductsProduct Fin
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All customer origination and evalua
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maintain low gross and net NPA leve
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The following table sets forth the
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Credit RatingAgencyCAREInstruments
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TechnologyWe use information techno
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act as, and to undertake and carry
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Company equal to or more than 7% of
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(c) Term and termination: Either pa
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Pursuant to the Agreement, the Inve
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• more than 50% of the fully dilu
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OUR MANAGEMENTBoard of DirectorsThe
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Name, Designation,Age and DINNation
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commercial banks. He was the chairm
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Remuneration of the DirectorsThe in
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A. Audit CommitteeThe members of th
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To form Sub CommitteesD. Asset liab
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OUR PROMOTERProfile of our Promoter
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Particulars FY 2008 FY 2009 FY 2010
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Particulars FY 2008 FY 2009 FY 2010
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Sr.No.Name of Shareholder Address N
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PIJUSH GUPTA & COC H A R T E R E D
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8. This report should not be in any
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Annexure IShriram City Union Financ
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Annexure IIShriram City Union Finan
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Shriram City Union Finance LimitedA
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Annexure IIIShriram City Union Fina
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Annexure IVShriram City Union Finan
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Annexure VShriram City Union Financ
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Annexure VIShriram City Union Finan
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Annexure VIIShriram City Union Fina
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Annexure VIIIShriram City Union Fin
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Annexure IXShriram City Union Finan
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Annexure IXC. Cash Credit from Bank
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Annexure XShriram City Union Financ
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Annexure - XIIShriram City Union Fi
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c. Fixed Assets, Depreciation / Amo
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g. Revenue recognitioni. Income fro
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j. Segment reportingThe company ope
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2010 - 20112. Notes to Accounts1. P
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c) Term Loans:i. From Financial Ins
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Changes in the present value of the
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Enterprises havingsignificant influ
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Deferred Tax AssetTiming difference
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Stock Options grantedThe weighted a
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12. SecuritizationThe information o
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c) All Debentures under (a) and (b)
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Balance sheetDetails of Provision f
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(Rs. In Lacs)Enterprises havingsign
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5. Deferred Tax Liabilities/(Asset)
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The details of Series I have been s
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Since the enterprise used the intri
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13.1 Licensed Capacity, Installed c
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) Term Loans:As at March 31,2009(Rs
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Profit and Loss accountNet employee
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The estimates of future salary incr
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7. Related Party DisclosuresRelated
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* Denotes transactions with Shriram
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(Rs. in lacs)As at March 31, As at
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Stock Options grantedSeries I:The w
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15. SecuritisationThe Company sells
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2007 - 20082. Notes to Accounts1. P
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2. Subordinated DebtThe Company has
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The principal assumptions used in d
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6. Related Party DisclosuresRelated
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9. Earnings per shareParticularsYea
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Income Tax/Wealth TaxDisputed Incom
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Stock Options grantedSeries I:The w
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15. SecuritisationThe Company sells
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2006 - 2007B) Notes to AccountsPart
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9. Expenses in respect of common br
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15. Details of Deferred Tax Liabili
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3(Rs. In lacs)As on March 31,Partic
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(Rs. In lacs)ParticularsAmount outs
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7 Investor group-wise classificatio
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PIJUSH GUPTA & COC H A R T E R E D
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Other consolidated Financial Inform
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Annexure IIShriram City Union Finan
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Shriram City Union Finance LimitedC
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Shriram City Union Finance LimitedS
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Annexure VIShriram City Union Finan
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Shriram City Union Finance Ltd.,Ann
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Shriram City Union Finance Ltd.,Ann
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Annexure XIShriram City Union Finan
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Page 297 and 298:
(E)InvestmentsInvestments intended
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(K)Segment reportingThe company ope
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) Privately Placed Redeemable Non-C
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Balance sheetDetails of Provision f
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PaymentsEnterprises having signific
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(8) Deferred Tax Liabilities/(Asset
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The details of Stock Option plan ar
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In March 2005 the ICAI has issued a
Page 313 and 314:
As per our report of even dateFor P
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Sr.No.Particulars16. Industrial Dev
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Sr.No.Particulars Date of sanction
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1. to declare and/ or pay dividend
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SECTION VI : ISSUE RELATED INFORMAT
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person, being a nominee, becoming e
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*With respect to applications recei
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e paid on the next working day. Pay
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Please note that failure to do so c
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We may at our discretion redeem the
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other NCDs in their place. The afor
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from the date of receipt of the app
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or entities.Applicants are advised
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3. Filing of the Prospectus with RO
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in the Application Form would be us
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B. Additional ApplicationsAn applic
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12. Allotment Advice / Refund Order
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iii) In the event, there are more t
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SECTION VII : LEGAL AND OTHER INFOR
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within the meaning of section 271 (
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OTHER REGULATORY AND STATUTORY DISC
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ActivityFees payable legal advisors
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(Source: www.bseindia.com)NSEMonth
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Year ended As at 31st March` In Lak
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(ii)NBFCs are not allowed to deal i
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when hire charges are actually rece
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different rates of interest for dif
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Labour LawsThe Company is required
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…Clause (3) of Article 42 at thei
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MATERIAL CONTRACTS AND DOCUMENTS FO
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DECLARATIONWe, the Directors of the
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