Shriram City Union Finance Limited - Karvy

ImpersonationAs a matter of abundant precaution, attention of the investors is specifically drawn to the provisions of sub-section(1) of section 68A of the Act, relating to punishment for fictitious applications.Minimum SubscriptionIf our Company does not receive the minimum subscription of 75 % of the Base Issue, i.e. ` 28,125 lakhs, prior toallotment, the entire subscription shall be refunded to the applicants within 30 days from the date of closure of theIssue. If there is delay in the refund of subscription by more than 8 days after our Company becomes liable to refundthe subscription amount, our Company will pay interest for the delayed period at rates prescribed under sub-sections(2) and (2A) of Section 73 of the Companies Act, 1956.Credit Rating and RationaleThe NCDs proposed to be issued under this Issue have been rated CARE AA by CARE for an amount of upto `75,000 Lakhs vide its letter dated July 14, 2011, and CRISIL AA-/Stable by CRISIL for an amount of upto ` 75,000Lakhs vide its letter dated July 14, 2011. The rating of the NCDs by CARE indicates high degree of safetyregarding timely servicing of financial obligations and carrying very low credit risk. The rating of NCDs by CRISILindicates high degree of safety regarding timely servicing of financial obligations.RationaleThe rationale for the aforementioned credit rating issued by CARE is as follows:The rating factors in the strong business growth of the Company with good profitability and asset qualityparameters. The rating also factors in the strengths that the Company derives from the Shriram Group franchise,SCUF’s position as a niche player in the semi urban and rural areas, diversified product portfolio, adequatecapitalization and strong resource raising capability with diversified funding base and experienced management.The rating is however constrained on account of regional concentration of the Company’s business and evolvingnature of the management information system. SCUF’s ability to maintain asset quality and raise capital to sustaingrowth are the key rating sensitivities.CARE’s ratings are opinions on credit quality and are not recommendations to sanction, renew, disburse or recallthe concerned bank facilities or to buy, sell or hold any security. CARE has based its ratings on informationobtained from sources believed by it to be accurate and reliable. CARE does not, however, guarantee the accuracy,adequacy, or completeness of any information and is not responsible for any errors or omissions or for the resultsobtained from the use of such information. Most entities whose bank facilities/instruments are rated by CARE havepaid a credit rating fee, based on the amount and type of bank facilities/instruments.The rationale for the aforementioned credit rating issued by CRISIL is as follows:The rating reflects the Company’s following strengths, (i) synergies derived from association with the ShriramGroup, (ii) healthy capitalization and (iii) adequate earnings. The aforementioned strengths are partially offset by theCompany’s following weaknesses, (i) exposure to potential asset quality risks from lending to low income groupsegments and (ii) geographical concentration in lending portfolio.CRISIL rating reflects CRISIL's current opinion on the likelihood of timely payment of the obligations under therated instrument and does not constitute an audit of the rated entity by CRISIL. CRISIL ratings are based oninformation provided by the issuer or obtained by CRISIL from sources it considers reliable. CRISIL does notguarantee the completeness or accuracy of the information on which the rating is based. A CRISIL rating is not arecommendation to buy, sell, or hold the rated instrument; it does not comment on the market price or suitability fora particular investor. All CRISIL ratings are under surveillance. Ratings are revised as and when circumstances so26