Private & Confidential – Not for Circulation DISCLOSURE ... SCUFL 70 crs.pdfShriram City has a comprehensive range of offerings comprising financing for consumer durables, Two- Three

Disclosure Document

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Private & Confidential – Not for Circulation

DISCLOSURE DOCUMENT

(As per Schedule I of SEBI guidelines dated JUNE 6, 2008)

Shriram City Union Finance Limited

Registered Office: 123 Angappa Naicken Street, Chennai 600 001 Corporate Office: 221, Royapettah High Road, Mylapore, Chennai – 600 004 Tel: (044) 43915300 Fax: (044) 43915351; Website: www.shriramcity.in

Email: [email protected] Disclosure Document for Private Placement of Secured Redeemable Non-Convertible Debentures (NCDs) in form of Separately Transferable Redeemable Principal Parts (STRPPs) for cash at par aggregating Rs. 70.00

Crores. GENERAL RISK: For taking an investment decision, investors must rely on their own examination of the issue, the disclosure document and the risk involved. The Securities have not been recommended or approved by SEBI nor does SEBI guarantee the accuracy or adequacy of this disclosure document ISSUER’S ABSOLUTE RESPONSIBILITY: The Issuer, having made all reasonable inquiries, accepts responsibility for, and confirms that this Disclosure Document contains all information with regard to the Issuer and the Issue, which is material in the context of the Issue, that the information contained in this Disclosure Document is true and correct in all material respects 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 document as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. CREDIT RATING: “CARE AA-” by Credit Analysis & Research Limited (CARE). Instruments with this rating are considered to offer high safety for timely servicing of debt obligations. Such instruments carry very low credit risk. The rating is not a recommendation to buy, sell or hold securities and investors should take their own decision. The rating may be subject to revision or withdrawal at any time by the assigning rating agency and each rating should be evaluated independently of any other rating. The ratings obtained are subject to revision at any point of time in the future. The rating agency has the right to suspend, withdraw the rating at any time on the basis of new information etc. LISTING: The Secured Redeemable Non-Convertible Debentures (NCDs) in form of Separately Transferable Redeemable Principal Parts (STRPPs) are proposed to be listed on the Whole Sale Debt Market Segment of the Bombay Stock Exchange (‘BSE’). TRUSTEE FOR THE BONDHOLDERS REGISTRAR TO THE ISSUE GDA Trustee & Consultancy Limited Integrated Enterprises India Ltd “Dream Presidency”, 1202/17 E, 5A, 5th Floor, Kences Towers , 1, Ramakrishna

Street, T.Nagar, Shivaji Nagar, off Apte Road, Pune 411004 Chennai - 600 017, Tel.: (020) 2553 2114 Tel No: 28143045 - 46 / 24345193 Fax : (020) 2553 4769 Fax: 28144826 /28140652 Contact Person: Mr. Kulkarni Contact Person: Mr. Suresh Babu

Email Id : [email protected] Email Id : [email protected] This schedule is prepared in conformity with SEBI guidelines on Issue & Listing of Debt Securities regulations 2008 issued vide circular no. LAD-NRO/GN/2008/13/127878 dated June 6, 2008 (referred in this document “SEBI guidelines”)for private placement is neither a prospectus nor a statement in lieu of prospectus and does not constitute an offer to the public generally to subscribe for or otherwise acquire the debentures to be issued by the Issuer.

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Table of Contents I. NAME AND ADDRESS OF THE REGISTERED OFFICE OF THE COMPANY. ...............................................3 II. NAMES AND ADDRESSES OF THE DIRECTORS OF THE COMPANY. ........................................................4 III. BRIEF SUMMARY OF THE BUSINESS/ ACTIVITIES OF THE ISSUER AND ITS LINE OF BUSINESS. ........5 IV. BRIEF HISTORY OF THE ISSUER SINCE ITS INCORPORATION GIVING DETAILS OF ITS

ACTIVITIES INCLUDING ANY REORGANIZATION, RECONSTRUCTION OR AMALGAMATION, CHANGES IN ITS CAPITAL STRUCTURE, (AUTHORIZED, ISSUED AND SUBSCRIBED) AND BORROWINGS, IF ANY. ................................................................................................................................11

V. SECURITIES TO BE ISSSUED AND LISTED UNDER CURRENT DOCUMENT............................................16 VI. DETAILS OF ISSUE SIZE ...............................................................................................................................17 VII. DETAILS OF ULTILISATION OF PROCEEDS OBJECTS OF THE ISSUE ....................................................18 VIII. MATERIAL CONTRACTS INVOLVING FINANCIAL OBLIGATION OF THE COMPANY ............................18 IX. DETAILS OF BORROWINGS IN THE PAST...................................................................................................19 X. MATERIAL DEVELOPMENT...........................................................................................................................20 XI. DEBT SECURITIES ISSUED FOR CONSIDERATION OTHER THAN CASH, AT PREMIUM OR AT

DISCOUNT, IN PURSUANCE OF AN OPTION..............................................................................................21 XII. TOP 10 HOLDERS OF EACH CLASS AND KIND OF SECURITIES..............................................................22 XIII. UNDERTAKING TO USE A COMMON FORM OF TRANSFER......................................................................24 XIV. REDEMPTION AMOUNT, PERIOD OF MATURITY, YEILD ON REDEMPTION.............................................24 XV. TERMS OF OFFER..........................................................................................................................................25 XVI. DISCOUNT ON THE OFFER PRICE ...............................................................................................................38 XVII. DEBT EQUITY RATIO .....................................................................................................................................38 XVIII. SERVICING BEHAVIOUR OF THE EXISTING DEBTS..................................................................................38 XIX. PERMISSION AND CONSENT FROM THE CREDITORS ..............................................................................38 XX. NAME OF DEBENTURE TRUSTEE................................................................................................................39 XXI. RATING RATIONALE ADOPTED BY RATING AGENCIES ...........................................................................39 XXII. LISTING OF DEBENTURES/STRPPS ............................................................................................................39 XXIII. TERM SHEET .................................................................................................................................................40 XXIV. ANNEXURES..................................................................................................................................................41

A) CREDIT Rating Letter from CARE........................................................................................ 41 B) CONSENT LETTER FROM GDA TRUSTEESHIP & CONSULTANCY LTD. .............. 43

XXV. DECLARATION ...............................................................................................................................................44

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I. NAME AND ADDRESS OF THE REGISTERED OFFICE OF THE COMPANY Name Shriram City Union Finance Limited (SCUF)

Registered Office: 123, Angappa Naicken Street, Chennai 600 001

Tel: 044 – 4391 5300

Fax: 044 – 4391 5351

Website www.shriramcity.in Compliance Officer & Company Secretary Mr. C.R. Dash Shriram City Union Finance Limited Corporate Office: 221, Royapettah High Road, Mylapore, Chennai – 600 004, Tel: (044) 43915300 Fax : (044) 43915351 Email: [email protected]

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II. NAMES AND ADDRESSES OF THE DIRECTORS OF THE COMPANY The composition of the Board of Directors of the Company as on date is as under:

Name of the Directors Designation Address

Sri Arun Duggal Chairman Flat No.A 4 West End, New Delhi 110 021

Sri R Kannan Managing Director

No.20/32 II Floor SA-1 Abirami Camelia, 4th Main Road, Kasturibai Nagar, Adyar, Chennai 600 020.

Sri S Venkatakrishnan

Director No. 34 Oliver Road, Mylapore, Chennai -600 004.

Dr T S Sethurathnam Nominee Director C 139, Sarvodaya Enclave, New Delhi 110 017

Sri S Krishnamurthy Director

Flat No. 2/B, Second floor, SPL Uma Apartments, old No. 169, New No. 34, Luz Church Road, Mylapore, Chennai – 600 004

Sri V Parthasarathi Director 9H Chamiers Road, 4th Lane, Nandanam, Chennai 600 035

Sri Mukund Govind Diwan Director

Flat No.3, Gulmohor Building, Vile Parle Kalpataru Co-op Hsg. Soc. , Off Swami Vivekanand Road, Vile Parle (West), Mumbai 400 056

Sri Vipen Kapur Director 101 Sushant Plaza Sector 28 , Gurgaon -122 002, Haryana

Sri Sunil Varma Director 104, Aradhana Apartments, R.K.Puram, Sector 13, New Delhi -110 066

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III. BRIEF SUMMARY OF THE BUSINESS/ ACTIVITIES OF THE ISSUER AND ITS LINE OF

BUSINESS Highlights of the Company Shriram City Union Finance Limited (SCUFL) was established in 1986, and is part of the three decade-old Chennai-based Shriram Group- India’s premier financial services chain, with employee strength of over 33,000 and a network of more than 75,000 agents. Shriram city is registered as a deposit-accepting asset financing company with Reserve Bank of India. The company is today India's premier financial services company, specializing in small-ticket retail finance. Shriram City has a comprehensive range of offerings comprising financing for consumer durables, Two- Three & Four wheeler finance (both new and pre-owned, passenger and commercial), small business loans, personal loans and retail gold loans; this has made Shriram City a dominant player in the financial services sector field. The Company enjoys a very healthy NIM of 15.16 %, low Net NPAs (0.96 % for the year ended March 2009 and 0.77% for the quarter ended June 2009) and has one of the highest Capital adequacy ratio of 25.74% as on 31st March, 2009 as against RBI stipulated norm of 12%. SCUFL has demonstrated consistent growth in the business and profitability, Asset under Management (AUM) has grown at Compounded annual growth rate (CAGR) of 40 % from Rs 2373.36 Crores (which comprises of AUM- on the books and off the books) in FY 06-07 to Rs 4629.46 Crores in FY08- 09, top line & profitability has increased from Rs 349.00 Crores and Rs 51.62 Crores to Rs 933.93 crores and Rs 117.01 Crores at a robust CAGR of 64% and 51 % respectively. In the last couple of years, the company due to its unique business model has seen equity participation from major private equity investors like Asia Bridge, Bessemer, Chrys Capital, ICICI Ventures, TPG Capital & Norwest Venture Partners. Core Business Activities Prior to 2002, the company (SCUF) was exclusively engaged in transport finance with special emphasis on financing used commercial vehicle to Small Road Transport Operators. Since 2002, many product lines have been expanded to include financing of consumer durables, two-wheelers, three-wheelers, tractors, commercial vehicles older than 10 years and non-commercial vehicles, Small Business Loans, personal loans and Gold Loans.

Shriram City Union Finance Limited

Consumer

Durables Loan

Commercial & Passenger

Vehicles Loan

Loan against

Gold

Small Business

Loans

Personal loans

TW

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o CONSUMER DURABLES FINANCE

Shriram City offers Loans against a wide range of white goods and lifestyle products, viz. air-conditioners, computer systems, high-end TVs, audio & video systems, washing machines, refrigerators, microwave ovens, furniture, gym products. The company for more access to the market has inked tie-ups with major manufacturers/dealers and retail outlets at showrooms to enable easy access to products under finance.

o AUTO FINANCE

Shriram City currently offers a variety of loans against new and pre-owned Commercial vehicles & tractors, which provide livelihood to several thousand truck /loading auto operators. The company also provides finance against passenger vehicle like Cars & Two Wheeler which is a boon to commuters especially in the areas where there is less penetration. In order to further penetrate the market and provide convenience to its customers it has wide spread presence in Auto Dealers show rooms

o RETAIL GOLD LOANS

Retail Gold loans are the latest addition to Shriram City's product line. Shriram City's Retail Gold loans offer on-the-spot finance at attractive rates of interest against pledging of the gold ornaments

o SMALL BUSINESS LOANS

The Small business loan dispensed by Shriram City caters to self-employed professionals, wholesale/retail dealers, general merchants, builders, manufacturers, hotel/catering services, tour operators etc. The company acknowledges the fact that micro-entrepreneur/enterprise is critical to nation’s economy, and contributes significantly to the countries production, total export, and industrial employment. A large portion of company’s Small Business Loan portfolio comprises of existing /Past Shriram group customers especially chit fund members. The company operates largely in non-metro, semi-urban and rural pockets of India, which are relatively unaffected by the slow off take witnessed in cities, this has resulted into company’s loan portfolio across segment is largely shielded from the recessionary trends.

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Industry Overview Indian Economy Indian economy has been witnessing a phenomenal growth since the last decade. The robust fundamentals and internal growth drivers of the Indian economy are enabling the country to withstand the current global financial crisis. Quarterly gross domestic product (GDP) at factor cost at constant (1999-2000) prices for Q3FY09 is estimated at US$ 171.24 billion, as against US$ 162.57 billion in Q3FY08, showing a quarter-on-quarter (q-o-q) growth rate of 5.3%. Despite the global slowdown, the Indian economy is estimated to have grown at close to 6.7 % in 2008-09. The Confederation of Indian Industry (CII) pegs the expected GDP growth at 6.1 % in 2009-10. This scenario factors in sectoral growth rates of 2.8%-3%, 5%-5.5% and 7.5%-8%, respectively, for agriculture, industry and services. A number of leading indicators which mirror economic activity, such as increase in hiring, freight movement at major ports and encouraging data from a number of key manufacturing segments, such as steel and cement, indicate that the downturn has bottomed out and highlight the Indian economy's resilience in coming out of this global turmoil. Recent indicators from leading indices, such as Nomura's Composite Leading Index (CLI), UBS' Lead Economic Indicator (LEI) and ABN Amro Purchasing Managers' Index (PMI), too bear out this optimism in the Indian economy. Meanwhile, foreign institutional investors (FIIs) turned net buyers in the Indian equity market in 2009. For the five month period ended 31st May 2009, Direct investment inflows also remain strong, prompting official expectations that foreign direct investment (FDI) inflows in 2009 would better the realized inflows of US$ 33 billion in 2008 and touch US$ 40 billion. According to the Asian Development Bank's (ADB) 'Asia Capital Markets Monitor' report, the Indian equity market has emerged as the third biggest after China and Hong Kong in the emerging Asian region, with a market capitalisation of nearly US$ 600 billion. Economic Scenario The year 2008-09 despite uncertainty and sudden increase in retail lending interest rates, saw demand for financing of various assets remain stable. This happened despite a perception of a slowdown, where people were expected to purchase less and thus seek less financing support. Several factors favored this positive development. One, employees of central and state governments, public sector units and defense units has seen significant increase in their income with the implementation of sixth pay commission during the year. The demand from semi urban and rural segments has not only sustained but in fact has grown stronger .Being on a more conservative side rural and rural populace has not burnt its fingers in the real estate & stock market bust. The rural India growth story The Indian growth story is spreading to the rural and semi-urban areas as well. The next phase of growth is expected to come from rural markets with rural India accounting for almost half of the domestic retail market, valued over US$ 300 billion. Rural India is set to witness an economic boom, with per capita income having grown by 50 per cent over the last 10 years, mainly on account of rising commodity prices and improved productivity. Development of basic infrastructure, generation of employment guarantee schemes, better information services and access to funding are also bringing prosperity to rural households. Per Capita Income The per capita income in real terms (at 1999-2000 prices) during 2008-09 is likely to attain a level of US$ 528 as compared to the Quick Estimate for the year 2007-08 of US$ 500. The growth rate in per capita income is estimated at 5.6 per cent during 2008-09, as against the previous year's estimate of 7.6 per cent.

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THE MAIN OBJECTS TO BE PURSUED BY THE COMPANY ON ITS INCORPORATION ARE

1. To lend money on security on movable or immovable properties or any shares or securities of any nature or

without security and to negotiate loans.

2. To Undertake and carry on the business of financing, hire-purchase contracts relating to property or assets of any description either fixed or movable and in particular relating to Houses, Lands, Government Bonds, Goods, Chattels, Motor-Buses, Motor-lorries, Auto – Rickshaws, Omnibuses, Tricycles, Scooters, Bicycles, Unicycles, Quadricycles, Velocipedes, Carriages, and Vehicles of all kinds whether mechanically propelled by steam, oil, gas, petrol or electricity or otherwise, Tractors, bullion, stocks, Shares, television sets, machineries of all kinds, pump-sets, refrigerators, electric and electronic goods and on other household articles.

3. To draw, accept, endorse, discount, buy, sell and deal in bills of exchange, promissory notes, bonds Debentures and other negotiable instruments and securities.

4. To issue on commission, subscribe for, take acquire and hold, sell, exchange and deal in Shares, stock, bonds, obligations or securities of any Government, local authority or Company.

5. To acquire, improve, manage, work, develop, exercise all rights in respect of leases and mortgages and to sell, dispose of, turn to account and otherwise deal with property of all kinds, and in particular, land, buildings, concessions, patents, business concerns and undertakings.

6. Generally to carry on and undertake any business or operation, commonly carried on or undertaken by capitalists, financiers.

7. To borrow or take deposits of money at interest or otherwise from any person or persons, local authority or Government and advance, lend or deposit any such money or other moneys of the Company for the time being on such security or otherwise as the Company may deem expedient. But the Company shall not do any banking business, as defined in the Banking Regulations Act, 1949.

8. The Company shall either singly or in association with other Bodies Corporate-act as Asset Management Company/ Manager/ Fund Manager in respect of any scheme of Mutual Fund whether Open-End Scheme or Closed-End Scheme, floated/to be floated by any Trust/Mutual Fund (whether offshore or onshore) Company by providing management of Mutual Fund for both offshore and onshore Mutual Funds, Financial Services consultancy, exchange of research and analysis on commercial basis.

Constitute any trust and to subscribe and act as, and to undertake and carry on the office or offices and duties of trustees, custodian trustees, executors, and administrators, liquidators, receivers, treasures, attorneys, nominees and agents; to manage the funds of all kinds of trusts and to render periodic advice on investments, finance, taxation and to invest these funds from time to time in various forms of investments including shares, term loans and debentures etc.

Carry on and undertake the business of portfolio investment and Management, for both individuals as well as large Corporate Bodies and/or such other bodies as approved by the Government, in Equity Shares, Preference Shares, Stock Debentures (both convertible and non-convertible). Company deposits, bonds, unit, loans, obligations and securities issued or guaranteed by Indian or Foreign Governments, States, Dominions, Sovereigns, Municipalities or Public Authorities and/ or any other financial instruments, and to provide a package of Investment/Merchant Banking Services by acting as Managers to Public issue of securities, to act as underwriters, issue house and to carry on the business Registrar to Public issue/various investment schemes and act as Brokers to Public Issue.

Without prejudice to the generality of the foregoing to acquire any shares, stocks, debentures, debenture-stock, bonds, unit of any Mutual Fund Scheme or any other statutory body including Unit Trust of India, obligations or securities by original subscription, and/or through markets both primary, secondary or otherwise participation in syndicates, tender, purchase, (through any stock exchange, OTC exchange or privately), exchange or otherwise, to subscribe for the same whether or not fully paid-up, either conditionally or otherwise, to guarantee subscription thereof and to exercise and to enforce all right and powers conferred by or incidental to the ownership thereof and to advance, deposit or lend money against securities and properties to or with any company, body corporate, firms, person or association or without security and on such terms as may be determined from time to time.

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To engage in Merchant Banking activities, Venture Capital, acquisitions, amalgamations and all related merchant banking activities including loan Syndication.

9. To carry on the business as manufacturers, Exporters, Importers, Contractors, Sub-Contractors, Sellers, Buyers, Lessers or Lessees and Agents for Wind Electric Generators and Turbines, Hydro Turbines, Thermal Turbines, Solar Modules and Components and parts including Rotor Blades, Braking systems, Tower, Nacelle, Control unit, Generators, etc. and to set up Wind Farms for the Company and/or other singly or jointly and also to generate, acquire by purchase in bulk, accumulate, sell distribute and supply electricity and other power (subject to and in accordance with the laws in force from time to time). (Amended at the AGM held on 27.11.96)

10. To carry on business of an investment Company or an Investment Trust Company, to undertake and transact trust and agency investment, financial business, financiers and for that purpose to lend or invest money and negotiate loans in any form or manner, to draw, accept, endorse, discount, buy, sell and deal in bills of exchange, hundies, promissory notes and other negotiable instruments and securities and also to issue on commission, to subscribe for, underwrite, take, acquire and hold, sell and exchange and deal in shares stocks, bond or debentures or securities of any Government or Public Authority or Company, gold and silver and bullion and to form, subsidise and assist companies, syndicates and partnership to promote and finance industrial enterprises and also to give any guarantees for payment of money or performance of any obligation or undertaking, to give advance, loans and subscribe to the capital of industrial undertakings and to undertake any business transaction or operation commonly carried on or undertaken by capitalists, promoters, financiers and underwriters.(Amended at the AGM held on 27.11.1996)

11. To act as investors, guarantors, underwriters and financiers with the object of financing Industrial Enterprises, to lend or deal with the money either with or without interest or security including in current or deposit account with any bank or banks, other person or persons upon such terms, conditions and manner as may from time to time be determined and to receive money on deposit or loan upon such terms and conditions as the Company may approve. Provided that the Company shall not do any banking business as defined under the Banking Regulations Act, 1949. (Amedned at the AGM held on 27.11.1996)

12. To carry on in India or elsewhere the business of consultancy services in various fields, such as, general, administrative, commercial, financial, legal, economic, labour and industrial relations, public relations, statistical, accountancy, taxation and other allied services, promoting enhancing propagating the activity of investment in securities, tendering necessary services related thereto, advising the potential investors on investment activities, acting as brokers, sub-brokers, investment Consultant to act as marketing Agents, General Agents, sub-agents for individuals / bodies corporate / Institutions for marketing of shares, securities, stocks, bonds, fully convertible debentures, partly convertible debentures, non-convertible debentures, debenture stocks, warrants, certificates premium notes, mortgages, obligations, Inter corporate deposits, call money deposits, public deposits, commercial papers general insurance products, life insurance products and other similar instruments whether issued by government, semi government, semi government, local authorities, public sector undertakings, companies, corporations, co-operative societies and other similar organizations at national and international levels. (Amended at the AGM held on 30.03.2000)

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GROWTH STORY Shriram City, with a trusted and creditable presence and a robust business model, has confidently emerged unscathed with a stable performance even in the phase of uncertainty. The company continued to enjoy adequate credit and demand continued to remain strong. The company total income grew at a CAGR (Compounded annual growth rate) of approx 66% from FY 2005-06 to FY 2008-09, while the Net profit grew at a CAGR of 55 % from FY 2005-06 to FY2008- 09.As on FY 2008-09 the company has strong capital adequacy ratio of 25.74% as against the minimum stipulated ratio of 12 % by Reserve bank of India. Growth graphs.

Profit After Tax

23.131.67

51.62

87.64

117.01

0

20

40

60

80

100

120

140

FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

Rs.In crs

Capital Adequacy Ratio

15.58% 15.79%

23.95%

20.25%

25.74%

0%

5%

10%

15%

20%

25%

30%

FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

in %

Total Income

181.19 204.75

348.98

623.18

933.93

0

200

400

600

800

1000

FY 2005 FY 2006 FY 2007 FY 2008 FY 2009Financial Year

Rs.

In C

rs

Asset under Management

255.12 355.46

662.88

620.32

875.56

0

1000

2000

3000

4000

5000

FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

Financial Year

Rs

In C

rs

On Balance sheet Off Balance sheet

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IV. BRIEF HISTORY OF THE ISSUER SINCE ITS INCORPORATION GIVING DETAILS OF ITS

ACTIVITIES INCLUDING ANY REORGANIZATION, RECONSTRUCTION OR AMALGAMATION, CHANGES IN ITS CAPITAL STRUCTURE, (AUTHORIZED, ISSUED AND SUBSCRIBED) AND BORROWINGS, IF ANY.

Capital as on June 30th, 2009 is set forth below:

(In Crs except per share data)

Sr. No. Particulars Aggregate

Nominal Value Issue Amount

1. Share Capital

A Authorized Capital

6,00,00,000 (Previous year- 4,50,00,000) Equity shares of Rs.10/- each 60.00 60.00

40,00,000 (Forty lac) Cumulative Preference Shares of Rs. 100/- (Rupees Hundred) each.

40.00 40.00

B. Issued, Subscribed and Paid up Capital:

i. 4,58,63,850 (Previous year- 4,58,56,800) Equity shares of Rs.10/- each 45.86 45.86

2. PRESENT ISSUE OF DEBENTURES THROUGH THIS Disclosure Document

Issue of 1,000 Secured Redeemable Non-Convertible Debentures (Debentures) of Rs. 10,00,000/- each in form of Separately Transferable Redeemable Principal Parts (STRPPs) of face value of Rs. 1,00,000/- each (including green shoe option)

100.00 100.00

3.

PAID-UP SHARE CAPITAL AFTER THE PRESENT ISSUE 4,58,63,850 Equity shares of Rs.10/- each (The issue is private placement of Secured Redeemable Non-Convertible Debentures (NCDs) which would not have any impact on the Paid up share capital of the Company)

45.86 45.86

4. Share Premium Account

a. Before the Issue 370.58 370.58

b. After the Issue 370.58 370.58

5. Loan Funds

a. Secured Loans 4012.83

b. Unsecured Loans 489.49

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SHARE CAPITAL HISTORY a) Equity Share Capital Equity Shares

The Company was incorporated as a private limited company on 27th March, 1986 under the Indian Companies Act, 1956 and became a public limited company on 29th October 1988. The Company is registered as a Deposit-accepting Asset Financing Company with Reserve Bank of India via CoR No. 07.00458 dated 17th April, 2007 The Company is operating in the Non Banking Financial Services Sector and is engaged in the business of Retail financing. The Company has equity participation from Van Gogh (of Chrys Capital), Asiabridge Capital LLC, Bessemer Venture partners, ICICI Ventures and Norwest Venture Partners Mergers and Amalgamations: Nil Capital Structure:

Authorized Capital - The authorized share capital of the Company is Rs.100,00,00,000/- (Rupees One Hundred Crores) divided into 6,00,00,000 (Six Crores) Equity Shares of Rs. 10/- (Rupees Ten) each and 40,00,000 (Forty lac) Cumulative Preference Shares of Rs. 100/- (Rupees Hundred) each. Issued, Subscribed and Fully Paid up Capital – 4,58,63,850 Equity Shares of Rs. 10/- each Rs. 45,86,38,500/- Total

Equity Share Capital History as on 30th June 2009.

Date of Allotment

No. of Shares issued

Cumulative Paid up Capital

(Rs.)

Mode of Allotment Identity of Allot tees

Face Value (Rs)

Issue Price (Rs.)

27.3.86 20 2000 Subscribers to Memorandum Non Promoters 100 100

7.4.86 4980 500000 Further Issue Promoters & Non Promoters 100 100

14.5.86 1000 600000 -do-

Promoters & Non

Promoters 100 100

30.5.86 4000 1000000 -do- Promoters & Non Promoters 100 100







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Date of Allotment

No. of Shares issued

Cumulative Paid up Capital

(Rs.)

Mode of Allotment Identity of Allot tees

Face Value (Rs)

Issue Price (Rs.)


29.10.88 10000 6000000 Rights Issue Promoters & Non Promoters 100 100

30.12.88 150000 7500000 Rights Issue Non Promoters 10 10 27.3.89 240000 9900000 Rights Issue Non Promoters 10 10 22.1.91 990000 19800000 Rights Issue Non Promoters 10 10 10.6.93 1980000 39600000 Rights Issue Non Promoters 10 10

14.6.94 40000 40000000 Preferential Issue Non Promoters 10 10

22.12.94 2000000 60000000 Public issue Promoters & Non Promoters 10 20*

19.2.96 1500000 75000000 Bonus Issue Promoters & Non Promoters 10 _

12.9.03 19600000 271000000 Preferential Issue Promoters 10 15.35**

22.12.06 4000000 311000000 Preferential Issue Non Promoters 10 160^



20.3.08 2055000 411550000 Preferential Issue (conversion of warrants) Promoters 10 160^

14.5.08 1837500 429925000 Preferential Issue Non Promoters 10 400#

16.5.08 1412500 444050000 Preferential Issue Non Promoters 10 400#

27.6.08 1445000 458500000 Preferential Issue (conversion of warrants) Promoters 10 160^

30.01.09 6800 458568000 ESOP 2006 Non Promoters 10 35@

29.05.09 7050 458638500 ESOP Non Promoters 10 35@

* Premium of Rs.10/- ** Premium of Rs.5.35 ^ Premium of Rs.150/- # Premium of Rs.390/-

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Equity Shareholding Pattern of the Company on the date of filing this Disclosure Document with BSE:

(as on June 30, 2009) Equity Shares

CategoryCode Category of shareholder Total no. of

shares

% of Sharehol

ding (A) Shareholding of Promoter and Promoter Group (1) Indian (a) Individuals / Hindu Undivided Family - - (b) Bodies Corporate 23,363,162 50.94

Sub Total (A)(1) 23,363,162 50.94 (2) Foreign (a) Individuals (Non-Residents Individuals / Foreign Individuals) - -

Sub Total (A) (2)

Total shareholding of Promoter and Promoter Group (A) =(A)(1)+(A)(2) 23,363,162 50.94

(B) Public Shareholding (1) Institutions (a) Mutual Funds / UTI 275 (b) Financial Institutions / Banks 553,192 1.21 (c) Insurance Companies - - (d) Foreign Institutional Investors 2,650,560 5.78

Sub Total (B)(1) 3,204,027 6.99 (2) Non-Institutions (a) Bodies Corporate 2,339,144 5.10 (b) Individuals

i Individual shareholders holding nominal share capital up to Rs.1 lakh 1,161,255 2.53

ii Individual shareholders holding nominal share capital in excess of Rs.1 lakh. 535,579 1.17

(c) Any Others (Specify) 15,260,683 33.27 i Clearing Members 8,157 0.02 ii Trust 2,950,054 6.43 iii Foreign Corporates Bodies 12,300,000 26.82 iv Non Resident Indians 2,472 0.01 Sub Total (B)(2) 19,296,661 42.07 Total Public shareholding (B) = (B)(1)+(B)(2) 22,500,688 49.06 Total (A)+(B) 45,863,850 100.00

(C) Shares held by Custodians and against which Depository Receipts issued

Total (A)+(B)+(C)

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15

a) Promoter holding and lock-in provisions: the promoter holding after this issue would remain intact at 7.63%. Further, the present issue is a debt issue and therefore the provisions of lock-in do not apply.

b) The Issuer Company has not issued any shares or debentures or agreed to issue any shares or debentures for consideration other than cash other than that mentioned elsewhere in the Disclosure Document, within the two years preceding the date of this Disclosure Document.

c) The number of shareholders of the Issuer Company as on June 30, 2009 is 5336.

d) At any given time there shall be only one denomination for each class of shares of the Company and the Company shall comply with such disclosure and accounting norms as specified by SEBI from time to time.

e) Reservation for small investors in allotment: The present Issue of debentures being made on private placement basis, there shall be no reservation for small/ individual investors and the allotment for debentures shall be finalized by the Company at its sole and absolute discretion.

f) The Issuer Company has not raised any bridge loan or any other similar financial arrangement against the proceeds of the Issue.

g) The promoters, Directors and the lead arrangers of the Issuer Company has not entered into any standby, buy-back or similar arrangements for purchase of securities offered through this Disclosure Document.

h) The Company has not revalued any of its assets since its inception.

i) Except as discussed elsewhere in this Disclosure Document or in any Pricing Supplement, the Company and its Directors have not entered into any buy-back and/or standby arrangements for purchase of Equity Shares of the Company from any person.

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V. SECURITIES TO BE ISSSUED AND LISTED UNDER CURRENT DOCUMENT Under the purview of current document, the Company intends to raise an amount of Rs.70 Crores of Secured Redeemable Non-Convertible Debentures (Debentures) in form of Separately Transferable Redeemable Principal Parts (STRPPs). The company has a valid rating of ‘CARE AA-’.by CARE. As per the details given below, the rating letter is enclosed at the end of this document. Detailed term sheet the debenture issue is given in below in this document. CREDIT RATING: “CARE AA-” by Credit Analysis & Research Limited (CARE). Instruments with this rating are considered to offer high safety for timely servicing of debt obligations. Such instruments carry very low credit risk. The rating is not a recommendation to buy, sell or hold securities and investors should take their own decision. The rating may be subject to revision or withdrawal at any time by the assigning rating agency and each rating should be evaluated independently of any other rating. The ratings obtained are subject to revision at any point of time in the future. The rating agency has the right to suspend, withdraw the rating at any time on the basis of new information etc.

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VI. DETAILS OF ISSUE SIZE The Company proposes to mobilize through private placement of Secured Redeemable Non-Convertible Debentures (‘NCD’/ ‘Debentures’) of the Face Value of Rs.10,00,000/- in form of Separately Transferable Redeemable Principal Parts (STRPPs) of the Face Value of Rs.1,00,000/-each at par aggregating Rs.70.00 Crores. Summary Term Sheet Particulars Terms Issuer/Borrower Shriram City Union Finance Ltd Issue Size Rs. 70.00 Crs. Nature of Instrument Secured Redeemable Non-Convertible Debentures (‘NCD’/ ‘Debentures’)

in form of Separately Transferable Redeemable Principal Parts (STRPPs) Credit Rating ‘CARE AA-’ By CARE Instrument Form Only in Dematerialized Form Denomination of the Instrument/ Face Value

Debentures shall have face value of Rs. 10,00,000/- each comprising of 10 Detachable and Separately Transferable Redeemable Principal Parts (“STRPPs”) of face value of Rs. 1,00,000 /- each

No.Of Debentures 700 (Seven Hundred ) Debentures At the end of 3½, 4th, 4½, 5th year in ratio of 20:20:30:30 respectively from Deemed Date of Allotment STRPP/ Debenture Series

Face Value per STRPP

No. of STRPPs in 1 NCD

Redemption Date

Series-I Rs. 1.00 lac

2 At the end of 3½ years (42 Months) from Deemed Date of Allotment ie March 30,2013

Series-II Rs. 1.00 lac

2 At the end of 4 years (48 Months) from Deemed Date of Allotment ie September 30,2013

Series-III Rs. 1.00 lac


Tenure

Series-IV Rs. 1.00 lac

3 At the end of 5 years (60 Months from Deemed Date of Allotment ie September 30,2014

Put & Call Option NIL Coupon Rate 10.75 % p.a. (coupon rate shall be same on all the STRPPs

Series) Interest Payment Annual Deemed Date of Allotment September 30,2009

Interest on application money At the Coupon rate ie 10.75 %

Interest Rate for the 1st Interest Date September 30, 2010

Security

First pari passu charge on the receivables of the Company with a minimum asset cover ratio of 1.10 times.

Listing Proposed on the WDM Segment of BSE Trustees GDA Trustee & Consultancy Limited Issue Opens on September 15,2009 Issue Closes on September 30, 2009

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VII. DETAILS OF ULTILISATION OF PROCEEDS OBJECTS OF THE ISSUE The current borrowing program will be used to augment the working capital of the Company & for General Corporate Purposes. The expenses of the present issue would also be met from the Proceeds of the Issue. The Main Object Clause of the Memorandum of Association of the Company enables it to undertake the activities for which the funds are being raised through the present issue and also the activities, which the Company has been carrying on till date. The Proceeds of this Issue after meeting all expenses of the Issue will be used by the Company for meeting issue objects. The Company undertakes that details of all monies utilized / unutilized out of the issue shall be disclosed in all the Balance Sheets of the Company till final redemption of the these debts. VIII. MATERIAL CONTRACTS INVOLVING FINANCIAL OBLIGATION OF THE COMPANY A. MATERIAL CONTRACTS a) Letter appointing Registrar and Transfer Agents and copy of MoU entered into between the Company and the Registrar. b) Letter appointing GDA Trustee & Consultancy Limited as Trustees to the Debenture holders. B. DOCUMENTS

• Memorandum & Articles of Association • Credit Rating Letter dated August 31,2009 from CARE • Consent from GDA Trustee & Consultancy Limited. to act as Trustee vide their Letter dated

01.09.2009 • Consent of Integrated Enterprises (India) Ltd. to act as Registrar and Transfer Agent vide consent letter

dated 01.09.2009 • Annual reports for the last 5 year starting from the FY 2003-04. • Certified true copies of resolutions dated 30.07.2009, of the Shareholders of the company u/s 293(1)(a)

and 293(1)(d) of the Companies Act, 1956. • Shareholders’ agreements/ Share subscription agreements with

• Vangogh Ltd., dated 12th May 2008 • Bessemer Venture partners Trust dated 12th May 2008 • Asiabridge Fund I LLC dated 9th May 2008 • The Western India Trustee and Executor Company Limited dated 13th may 2008

• License and User Agreement dated 27th November, 2008 with Shriram Capital Ltd previously known as Shriram Financial Services Holding Pvt. Ltd.

• Resolution dated 28th September 2006, of the shareholders of the Company in respect of appointment of the Managing Director. The above material documents and contracts are available for inspection between 9.00 a.m. and 1.00 p.m. on all working days at the registered office of the Company as mentioned below:

Registered Office: 123, Angappa Naicken Street, Chennai - 600 001

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IX. DETAILS OF BORROWINGS IN THE PAST Statement of Secured Loans/Unsecured Instruments as on June 30, 2009: (Rs.In Crs)

Repayment Schedule Sr. No.

Description of loan

Sanctioned Limit

Outstanding Balance as on

30.06.2009 2009-10 2010-11 2011-12 2012-13 2013-14 Security

Secured Loans

1) Term Loans from banks 1791.55 1430.53 877.34 417.24 116.66 19.30 - Exclusive charge on the receivables

of the company. Total 1791.55 1430.53 877.34 417.24 116.66 19.30

Details of Secured Non Convertible Debentures issued to institutions in the past.

Sr. No

Issue Date Issue Allotment

NCDs Redemption

NCDs Redemption

Premium

1 December 2008 950 950 12.76%

2 April 2009 1000 1000 9.75% Details of Subordinated Debt outstanding in the Past:

Year Amount (Rs. In Crs ) 2008-09 417.58 2007-08 280.36 2006-07 200.17 2005-06 89.51

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X. MATERIAL DEVELOPMENT

Open Offer DSP Merrill Lynch Ltd ("Manager to the Offer") on behalf of Shriram Retail Holdings Pvt Ltd ("SRHPL") acting as Acquirer on behalf of TPG India Investments Inc and other PAC has issued a Corrigendum to Public Announcement ("PA") to the Existing Shareholders of Shriram City Union Finance Ltd ("Target Company"), which in conjunction with the Original Public Announcement ("PA") dated September 15, 2008 & corrigendum to PA dated October 31, 2008, pursuant to Regulation 10 & Regulation 12 of, and is in compliance with, the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and subsequent amendments thereto ("SEBI (SAST) Regulations"). Objects of the Open Offer The open offer is made pursuant to the execution of Share Subscription Agreement (SSA) and in accordance with Regulation 10 & Regulation 12 of the SEBI (SAST) regulations since the acquisition of SRHPL shares and the investor warrants by TPG could be regarded as an indirect acquisition of shares and voting rights in the Target company. The object of the SSA and subscription object of the acquisition is for TPG to acquire a substantial beneficial interest in the shareholding of the Target company in a pre-determined proportion. The offer is made pursuant to Regulation 10 & Regulation 12of the SEBI (SAST) regulation to acquire the offer shares, which constitute 20% of the fully diluted equity capital. The offer is been made by SHRPL, acting on behalf of TPG and other PAC. Offer Price The offer price of Rs 400.00 (Rupees Four Hundred Only) is justified as per regulation 20(4) and 20(5) of the SEBI (SAST) regulation being higher than the parameters set out in paragraph 16 of PA as well as the implied price computed as above. Date of opening of the open offer : August 27, 2009 Date of Closing of the open offer: September 15, 2009.

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XI. DEBT SECURITIES ISSUED FOR CONSIDERATION OTHER THAN CASH, AT PREMIUM OR

AT DISCOUNT, IN PURSUANCE OF AN OPTION. The Company had issued Zero Coupon Secured Redeemable Non-Convertible Debentures at a premium during December 2008 & April 2009. The Details are as follows: Issued in December 2008: Amount – Rs. 95 Crores Redeemable at Premium - 12.76% Maturity- December 17, 2009

Issued in April 2009: Amount – Rs. 100 Crores Redeemable at Premium - 9.75% Maturity- April 23, 2010

The Company till date has not issued any Secured Redeemable non convertible debentures for consideration other than cash in whole or part/ pursuance of an option.

The company has not issued and Secured Redeemable non Convertible debentures in pursuance of an option.

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XII. TOP 10 HOLDERS OF EACH CLASS AND KIND OF SECURITIES (as on 31st July 2009)

Equity Shares

SR SHAREHOLDER'S NAME/ ADDRESS SHARES %

1

M/S SHRIRAM ENTERPRISE HOLDINGS PVT. LIMITED MOOKAMBIKA COMPLEX, IV FLOOR, NO.4, LADY DESIKA ROAD MYLAPORE, CHENNAI 600 004

17921462 39.08

2

VAN GOGH LIMITED HDFC BANK LTD CUSTODY SERVICES TRADE WORLD , A WING GR FLOOR KAMLA MILLS COMPOUND, S B MARG LOWER PAREL MUMBAI

5962500 13.00

3

SHRIRAM RETAIL HOLDINGS PRIVATE LIMITED MOOKAMBIKA COMPLEX, II FLOOR, NO.4, LADY DESIKA ROAD MYLAPORE, CHENNAI 600 004

5441700 11.86

4

NORWEST VENTURE PARTNERS X FII TWENTY EIGHT, CYBERCITY, EBENE MAURITIUS

4342179 9.47

5

IDBI TRUSTEESHIP SERVICES LIMITED (INDIA ADVANTAGE FUND VI) STANROSE HOUSE GROUND FLOOR AP MARG PRABHADEVI MUMBAI 400 025

2950054 6.43

6

ACACIA PARTNERS, LP CITI BANK N A, CUSTODY SERVICES 77 RAMNORD HOUSE DR A B ROAD WORLI MUMBAI 400018

1555728 3.39

7

MSA SECURITIES SERVICES PVT LTD OLD NO 21 NEW NO 6 4TH STREET POSTAL COLONY WEST MAMBALAM CHENNAI 600 033

1305838 2.85

8

BESSEMER VENTURE PARTNERS TRUST DEUTSCHE BANK, DB HOUSE, HAZARIMAL SOMANI MARG FORT, POST BOX - 1142 WORLI MUMBAI 400018

1250000 2.73

9

NMS CONSULTANCY PVT LTD FLAT NO 5 B B S FLATS 3RD STREET ABHIRAMAPURAM CHENNAI 600018

738767 1.61

10

ASIABRIDGE FUND I LLC CITI BANK N A, CUSTODY SERVICES 77 RAMNORD HOUSE DR A B ROAD WORLI MUMBAI 400018

587500 1.28

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DEBT SECURITIES Secured Non-Convertible Debentures

SR Debenture holders NAME/ ADDRESS No of Debenture %

1

STANDARD CHARTERED BANK , GLOBAL MARKET OPERATIONS, No.90, M G ROAD, FIRST FLOOR, FORT, MUMBAI – 400 001

950 48.71

2

STANDARD CHARTERED BANK , GLOBAL MARKET OPERATIONS, No.90, M G ROAD, FIRST FLOOR, FORT, MUMBAI – 400 001

1000 51.28

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XIII. UNDERTAKING TO USE A COMMON FORM OF TRANSFER The normal procedure for transfer of securities held in dematerialized form shall be followed for transfer of these debentures held in electronic form. The seller should give delivery instructions containing details of the buyer’s DP account to his depository participant. The Issuer undertakes that there will be a common transfer form / procedure for transfer of Debentures. XIV. REDEMPTION AMOUNT, PERIOD OF MATURITY, YEILD ON REDEMPTION Coupon Rate 10.75 % p.a. (coupon rate shall be same on all the STRPPs Series)

Each Debenture (NCD) of face value of Rs. 10 Lakhs shall comprise of 10 Detachaband Separately Transferable Redeemable Principal Parts (“STRPPs”) of face value Rs. 1 Lakh each which shall be allotted 4 different ISIN numbers by tDepository(ies) and shall be redeemable as under:

STRPP/ Debenture

Series

Face Value per STRPP

No. of STRPPs in 1

NCD

Redemption Date

Series-I Rs. 1.00 lac 2 At the end of 3½ years (42 Months) from Deemed Date of Allotment ie March 30,2013

Series-II Rs. 1.00 lac 2 At the end of 4 years (48 Months) from Deemed Date of Allotment ie September 30,2013

Series-III Rs. 1.00 lac 3 At the end of 4½ years (54 Months) from Deemed Date of Allotment ie March 30,2014

Redemption Date

Series-IV Rs. 1.00 lac 3 At the end of 5 years (60 Months from Deemed Date of Allotment ie September 30,2014

Depository NSDL

Security First pari passu charge on the receivables of the Company with a minimum asset cover ratio of 1.10 times.

Settlement Payment of interest and principal will be made by way of Cheque(s)/interest warrant (s)/demand draft(s)/ RTGS.

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XV. TERMS OF OFFER Particulars Terms Issuer/Borrower Shriram City Union Finance Ltd Issue Size Rs. 70.00 Crs. Nature of Instrument Secured Redeemable Non-Convertible Debentures (‘NCD’/ ‘Debentures’)



No.Of Debentures 700 (Seven Hundred ) Debentures At the end of 3½, 4th, 4½, 5th year in ratio of 20:20:30:30 respectively from Deemed Date of Allotment STRPP/

Debenture Series

Face Value per

STRPP


Redemption Date







Tenure







Security



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Private placement of Secured Redeemable Non-Convertible Debentures (NCDs/ Debentures) of Rs.10,00,000/- in form of Separately Transferable Redeemable Principal Parts (STRPPs) of face value of Rs. 1,00,000/- each for cash at par aggregating to Rs. 70 crores to be issued by SCUFL. Governing Law & Provisions The Debentures offered are subject to provisions of the Companies Act, 1956, Securities Contract Regulation Act, 1956, terms of this Disclosure Document, Instructions contained in the Application Form and other terms and conditions as may be incorporated in the Trustee Agreement and the Trust Deed. Over and above such terms and conditions, the Debentures shall also be subject to the applicable provisions of the Depositories Act 1996 and the laws as applicable, guidelines, notifications and regulations relating to the allotment & issue of capital and listing of securities issued from time to time by the Government of India (GoI), Reserve Bank of India (RBI), Securities & Exchange Board of India (SEBI), concerned Stock Exchange or any other authorities and other documents that may be executed in respect of the Debentures. Any disputes arising out of this issue will be subject to the exclusive jurisdiction of the Court at Mumbai, Maharashtra. The proceeds of this issue will be used by the corporation for its regular business purpose. Authority for the Placement This private placement of Debentures is being made pursuant to the resolution of the Board of Directors passed at its meeting held on which has approved the placement of Debentures upto Rs 100 Crores The present issue of Rs.70.00 Crores is within the general borrowing limits in terms of the resolution passed under Section 293(1)(d) of the Companies Act, 1956, at the Annual General Meeting of the shareholders of the Company held on 30th July 2009 giving their consent to the borrowing by the Directors of the Company from time to time not exceeding Rs 10,000 Crores (Rupees Ten Thousand Crores)subject to any restrictions imposed by the terms of the agreement entered into from time to time for grant of loans to the Company of all monies deemed by them to be requisite or proper for the purpose of carrying on the business of the Company. The borrowings under these Debentures will be within the prescribed limits as aforesaid. The Company can carry on its existing activities and future activities planned by it in view of the existing Approvals, and no further approvals from any Government authority are required by the Company to carry on its said activities. Face Value, Issue Price, Effective Yield for Investor As each Debenture has a face value of Rs. 10,00,000/- and is issued at par i.e. for Rs. 10,00,000/-. Each Debenture of Rs. 10.00 lacs shall comprise of 10 Detachable and Separately Transferable Redeemable Principal Parts (“STRPPs”) of face value of Rs. 1,00,000/- each redeemable at par. Since there is no premium or discount on either issue price or on redemption value of the Debenture/ STRPPs, the effective yield for the investors held to maturity shall be the same as the coupon rate on the Debentures/ STRPPs. Minimum Subscription As the current issue of Debentures is being made on private placement basis, the requirement of minimum subscription shall not be applicable and therefore the Company shall not be liable to refund the issue subscription(s)/ proceed(s) in the event of the total issue collection falling short of issue size or certain percentage of issue size. Deemed Date of Allotment Interest on Debentures shall accrue to the Debentureholder(s) from and including September 30,2009, which shall be the Deemed Date of Allotment. All benefits relating to the Debentures will be available to the investors from the Deemed Date of Allotment. The actual allotment of Debentures may take place on a date other than the Deemed Date of Allotment. The Company reserves the right to keep multiple allotment date(s)/ deemed date(s) of allotment at its sole and absolute discretion without any prior notice. In case if the issue closing date is changed (pre-poned/ postponed), the Deemed Date of Allotment may also be changed (pre-poned/ postponed) by the Company at its sole and absolute discretion.

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Credit Rating The NCDs are rated ‘CARE AA-’ By CARE (pronounced as CARE Double A minus) by Credit Analysis and Research Limited vide their letter dated August 31,2009. Instruments with this rating are considered to offer high safety for timely servicing of debt obligations. Such instruments carry very low credit risk. Please note that the rating is not a recommendation to buy, sell or hold securities and investors should take their own decision. The rating may be subject to revision or withdrawal at any time by the assigning rating agency and each rating should be evaluated independently of any other rating. The rating obtained is subject to revision at any point of time in the future. The rating agencies have a right to suspend, withdraw the rating at any time on the basis of new information etc. Underwriting The present Issue of Debentures on private placement basis has not been underwritten. Listing Listing is proposed on the Wholesale Debt Market segment of Bombay Stock Exchange (BSE). Security The Debentures, interest thereon, Trustees’ remuneration and all other monies relating thereto shall be secured by way of first pari passu charge on receivables of the company having minimum asset cover of 1.10 times at all times during the tenure of the NCDs, to be decided in consultation with the Trustees. The said security will be created in favour of the Trustees within 3 months from the deemed date of allotment of the Debentures or such extended period as may be permissible. The actual form, mode and method of security creation shall be decided in mutual consultation with the Trustees. The Company shall at all times in consultation of the trustees maintain a minimum security cover of 1.10 times of the value of all the outstanding Debentures proposed to be issued by the company on receivables of the company to be charged for the purpose of this Debenture issue. The Security will be created by the Company as aforesaid in favour of the Trustees on such of the assets for which the Company obtains, the requisite consents and permissions applicable under law or in accordance with conditions of holding of such assets for creating the above mentioned charge. The creation of such security shall be sufficient compliance of the Company’s obligation to create security. The trustee shall provide consent to create pari-passu charge in future. Record Date The ‘Record Date’ for the Debentures shall be 15 days prior to each interest payment and/ or principal repayment date (in case of exercise of call option). Market Lot The market lot shall be one STRPPs/Debentures Series of face value of Rs. 1.00 Lac each (“Market Lot”). Since the STRPPs are being issued only in dematerialised form, the odd lots will not arise either at the time of issuance or at the time of transfer of STRPPs. Interest on Application Money Interest at the respective coupon rate @10.75 % (subject to deduction of income tax under the provisions of the Income Tax Act, 1961, or any other statutory modification or re-enactments thereof, as applicable) will be paid to all the applicants on the application money for the Debentures. Such interest shall be paid from the date of realisation of cheque(s)/ demand draft(s)/ RTGS upto one day prior to the Deemed Date of Allotment. The interest on application money will be computed on an Actual/ 365 day basis (366 in case of leap year) Such interest would be paid on all the valid applications. Where the entire subscription amount has been refunded, the interest on application money will be paid along with the Refund Orders. Where an applicant is allotted lesser number of debentures than applied for, the excess amount paid on application will be refunded to the applicant alongwith the interest on refunded money. The interest cheque(s)/ demand draft(s) for interest on application money (along with Refund Orders, in case of refund of application money, if any) shall be dispatched by the Company within 15 days from the Deemed Date of Allotment by registered post to the sole/ first applicant, at the sole risk of the applicant.

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Interest on NCDs /STRPPs The Debentures/STRPPs shall carry interest at the rate of 10.75 per cent per annum (subject to deduction of tax at source at the rates prevailing from time to time under the provisions of the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof for which a certificate will be issued by the Company) payable to the holders of Debentures (the “Holders” and each, a “Holder”) as of the relevant Record Date. The interest payable on any Interest Payment Date will be paid to the Bondholder(s) whose names appear in the List of Beneficial Owners given by the Depository to the Company as on the Record Date. The first interest period is defined as the actual number of days falling between the Deemed Date of Allotment to September 29, 2010 including both the first date and the last date. The first interest payment would be made on _September 30,2010. The second and subsequent interest period (except the last interest period) is defined as the actual number of days in a year as 365 (366 in case of a leap year) between September 30 and September 29, including both the days and so on..The last interest payment would be made on the redemption date along with the redemption of principal amount. If any interest payment date falls on a day which is not a Business Day (‘Business Day’ being a day on which Commercial Banks are open for Business in the city of Mumbai, Maharashtra) then payment of interest will be made on the next day that is a business day but without liability for making payment of interest for the intervening period. In case the Deemed Date of Allotment is revised (pre-poned/ postponed) then the above Interest Payment Date may also be revised (pre-poned/ postponed) accordingly by the Company at its sole & absolute discretion. Computation of Interest Interest for each of the interest periods shall be calculated, on 'actual/ 365 (366 in case of a leap year) days' basis, on the face value of principal outstanding on the Debentures at the coupon rate rounded off to the nearest Rupee. Tax Deduction at Source Tax as applicable under the provisions of Income Tax Act, 1961, or any other applicable statutory modification or re-enactments thereof will be deducted at source at the time of payment of interest/principal amount. The investor(s) desirous of claiming exemption from deduction of income tax at source on the interest on application money are required to submit the necessary certificate(s) as applicable thereof, in duplicate, along with the Application Form in terms of Income Tax rules. Interest payable subsequent to the Deemed Date of Allotment of Debentures will be treated as “Interest on Securities” in accordance with the provisions of Income Tax Rules. Bondholders desirous of claiming exemption from deduction of income tax at source on the interest payable on Debentures should submit tax exemption certificate/ document, as per Section 193 of the Income Tax Act, 1961, if any, at the Registered Office of the Company, at least 45 days before the due date of payment. Regarding deduction of tax at source and the requisite declaration forms to be submitted, prospective investors are advised to consult their own tax consultant(s). Failure to comply with the above shall entitle the Company to deduct tax at source as may be advised to it. Debentures in Dematerialized Form The Company has finalized Depository Arrangements with National Securities Depository Limited (NSDL) for dematerialization of the Debentures. The investor has to necessarily hold the Debentures in dematerialized form and deal with the same as per the provisions of Depositories Act, 1996 (as amended from time to time). The normal procedures followed for transfer of securities held in dematerialized form shall be followed for transfer of these Debentures held in electronic form. The seller should give delivery instructions containing details of the buyer’s DP account to his depository participant. Applicants to mention their Depository Participant’s name, DP-ID and Beneficiary Account Number/Client ID in the appropriate place in the Application Form. In case the depository arrangement is finalised before the

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29

completion of all legal formalities for issue of Debenture Certificates, Debentures to successful allottee(s) having Depository Account shall be credited to their Depository Account against surrender of Letter of Allotment. Interest or other benefits with respect to the Debentures would be paid to those Debenture holders whose names appear on the list of beneficial owners given by the Depositories to the Issuer as on a record date/book closure date. The Issuer would keep in abeyance the payment of interest or other benefits, till such time that the beneficial owner is identified by the Depository and informed to the Issuer where upon the interest/benefits will be paid to the beneficiaries within a period of 30 days. Transfer of Debentures Debentures /STRPPs shall be transferred subject to and in accordance with the rules/ procedures as prescribed by the NSDL Depository Participant of the transferor/ transferee and any other applicable laws and rules notified in respect thereof. The normal procedure followed for transfer of securities held in dematerialized form shall be followed for transfer of these Debentures held in electronic form. The seller should give delivery instructions containing details of the buyer’s DP account to his depository participant. Transfer of Debentures to and from NRIs/ OCBs, in case they seek to hold the Debentures and are eligible to do so, will be governed by the then prevailing guidelines of RBI. The transferee(s) should ensure that the transfer formalities are completed prior to the Record Date. In the absence of the same, interest will be paid/ redemption will be made to the person, whose name appears in the records of the Depository. In such cases, claims, if any, by the transferee(s) would need to be settled with the transferor(s) and not with the company. Payment of Redemption Each Debenture of Rs. 10.00 lacs shall comprise of 10 Detachable and Separately Transferable Redeemable Principal Parts (“STRPPs”) of face value of Rs. 1,00,000/- each redeemable at par at the end of their respective maturity as specified in the term sheet. The Debentures will not carry any obligation, for interest or otherwise, after the date of redemption. The Debentures held in the dematerialized form shall be taken as discharged on payment of the redemption amount by the Company on maturity to the registered Bondholders whose name appear in the Register of Bondholders on the Record Date. Such payment will be a legal discharge of the liability of the Company towards the Bondholders. On such payment being made, the Company will inform NSDLand accordingly the account of the Bondholders with NSDL will be adjusted. In case if the principal redemption date falls on a day which is not a Business Day (‘Business Day’ being a day on which Commercial Banks are open for business in Mumbai), then the payment due shall be made on the next Business Day together with additional interest for the intervening period. Right to Reissue Debenture(s) The Company will have the power, as provided for under the Companies Act, 1956, exercisable at its absolute discretion from time to time to repurchase some or all the Debenture at any time prior to the specified date of maturity as per the prevailing guidelines/regulations of Reserve Bank of India and other Authorities. This right does not construe a call option. In the event of the Debenture being bought back, or redeemed before maturity in any circumstance whatsoever, the Company shall be deemed to always have the right, subject to the provisions of Section 121 of the Companies Act, 1956 to re-issue such Non-convertible debenture either by re-issuing the same Debenture or by issuing other Non-convertible debenture in their place. The Company may also, at its discretion and as per the prevailing guidelines/regulations of Reserve Bank of India and other Authorities at any time purchase Secured Non Convertible Debenture at discount, at par or at premium in the open market. Such Secured Non Convertible Debenture may, at the option of Company, be cancelled, held or resold at such price and on such terms and conditions as the Company may deem fit and as permitted by Law.

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Future Borrowings The Company will be entitled to borrow/raise loans or avail of financial assistance in whatever form including issue of Debentures/ other securities in any manner having such ranking in priority, pari passu or otherwise and change the capital structure including the issue of shares of any class, on such terms and conditions as the Company may think appropriate, without having any need to obtain the consent of, or intimation to, the Debenture holders or the Trustees in this connection. Letter/s of allotment/refund order(s) and interest in case of delay in dispatch The beneficiary account of the investor(s) with National Securities Depository Ltd. (NSDL), Depository Participant will be given initial credit within two working days from the Deemed Date of Allotment. The initial credit in the account will be akin to the Letter of Allotment. On completion of the all statutory formalities, such credit in the account will be akin to a Debenture Certificate. The issuer further agrees to pay interest as per the applicable provisions of the Companies Act, 1956, if the allotment letters/refund orders have not been dispatched to the applicants within 30 days from the date of the closure of the issue. Right to Accept or Reject Applications The Company reserves its full, unqualified and absolute right to accept or reject any application, in part or in full, without assigning any reason thereof. The applicants will be intimated about such rejection along with the refund warrant, together with interest on application money, if applicable, from the date of realization of the cheque(s)/ demand drafts(s) till one day prior to the date of refund. The application forms that are not complete in all respects are liable to be rejected and such applicant would not be paid any interest on the application money. Application would be liable to be rejected on one or more technical grounds, including but not restricted to: a. Number of debentures applied for is less than the minimum application size; b. Applications exceeding the issue size; c. Bank account details not given; d. Details for issue of debentures in electronic/ dematerialised form not given; PAN not mentioned in

appropriate place. e. In case of applications under Power of Attorney by limited companies, corporate bodies, trusts, etc. relevant documents not submitted; In the event, if any Bond(s) applied for is/ are not allotted in full, the excess application money of such Debentures will be refunded, as may be permitted. Who Can Apply The following categories of investors may apply for the Debentures, subject to fulfilling their respective investment norms/ rules by submitting all the relevant documents alongwith the application form. 1. Scheduled Commercial Banks; 2. Financial Institutions; 3. Insurance Companies; 4. Primary/ State/ District/ Central Co-operative Banks (subject to permission from RBI); 5. Regional Rural Banks; 6. Mutual Funds; 7. Companies, Bodies Corporate authorised to invest in Debentures; 8. Provident Funds , Gratuity, Superannuation & Pension Funds, subject to their Investment guidelines 9. Trusts Application not to be made by 1. Hindu Undivided Family (neither by the name of the Karta); 2. Partnership Firms or their nominees; 3. Overseas Corporate Bodies (OCBs); 4. Foreign Institutional Investors (FIIs); 5. Non Resident Indians(NRIs)

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Although above investors are eligible to apply however only those investors, who are individually addressed through direct communication by the Company / Sole Arranger, are eligible to apply for the Debentures. No other person may apply. Hosting of Disclosure Document on the website of the BSE should not be construed as an offer to issue and the same has been hosted only as it is stipulated by SEBI. Investors should check about their eligibility before making any investment. The applications must be accompanied by certified true copies of (1) Memorandum and Articles of Association/ Constitution/ Bye-laws (2) Resolution authorising investment and containing operating instructions (3) Specimen signatures of authorised signatories and (4) Xerox copy of PAN Card. (5) Necessary forms for claiming exemption from deduction of tax at source on the interest income/ interest on application money, wherever applicable. Applications under Power of Attorney In case of applications made under a Power of Attorney or by a Limited Company or a Body Corporate or Registered Society or Mutual Fund, and scientific and/or industrial research organisations or Trusts etc, the relevant Power of Attorney or the relevant resolution or authority to make the application, as the case may be, together with the certified true copy thereof along with the certified copy of the Memorandum and Articles of Association and/or Bye-Laws as the case may be must be attached to the Application Form or lodged for scrutiny separately with the photocopy of the Application Form, quoting the serial number of the Application Form at the Company’s branch where the application has been submitted, or at the office of the Registrars to the Issue after submission of the Application Form to the bankers to the issue or any of the designated branches as mentioned on the reverse of the Application Form, failing which the applications are liable to be rejected. Such authority received by the Registrars to the Issue more than 10 days after closure of the subscription list may not be considered Application by Mutual Funds In case of applications by Mutual Funds, a separate application must be made in respect of each scheme of an Indian Mutual Fund registered with SEBI and such applications will not be treated as multiple applications, provided that the application made by the Asset Management Company/ Trustees/ Custodian clearly indicate their intention as to the scheme for which the application has been made. PAN/GIR Number All Applicants should mention their Permanent Account Number or the GIR Number allotted under Income Tax Act, 1961 and the Income Tax Circle / Ward / District. In case where neither the PAN nor the GIR Number has been allotted, the fact of such a non-allotment should be mentioned in the Application Form in the space provided. Signatures Signatures should be made in English or in any of the Indian Languages. Thumb impressions must be attested by an authorized official of a Bank or by a Magistrate/Notary Public under his/her official seal. Nomination Facility As per Section 109 A of the Companies Act, 1956, only individuals applying as sole applicant/Joint Applicant can nominate, in the prescribed manner, a person to whom his Debentures shall vest in the event of his death. Non-individuals including holders of Power of Attorney cannot nominate. Disputes and Governing Law The Debentures shall be construed to be governed in accordance with Indian Law. The competent courts at Mumbai alone shall have jurisdiction in connection with any matter arising out of or under these precincts. Over and above the aforesaid Terms and Conditions, the said Debentures shall be subject to the Terms and Conditions to be incorporated in the Debentures to be issued to the allottees and the Debenture Trust Deed/Trustee Agreement. Trading of Debentures/ STRPPs The trading of privately placed Debt securities would be permitted in the anonymous, order driven system of the

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Stock Exchange in a separate trading segment. The marketable lot would be one STRPP of face value of Rs. 1,00,000/- . All class of investors would be permitted to trade subject to the standard denomination/marketable lot. The trades executed on spot basis shall be required to be reported to the Stock Exchange.

List of Beneficial Owners The Company shall request the Depository to provide a list of Beneficial Owners as at the end of the Record Date. This shall be the list, which shall be considered for payment of interest or repayment of principal amount, as the case may be. Succession In the event of demise of the sole/first holder of the Bond(s) or the last survivor, in case of joint holders for the time being, the Company will recognize the executor or administrator of the deceased Bondholder, or the holder of succession certificate or other legal representative as having title to the Bond(s). The Company shall not be bound to recognize such executor or administrator, unless such executor or administrator obtains probate, letter of administration wherever it is necessary, or such holder is the holder of succession certificate or other legal representation, as the case may be, from a Court in India having jurisdiction over the matter. The Company may, in its absolute discretion, where it thinks fit, dispense with production of probate or letter of administration or succession certificate or other legal representation, in order to recognize such holder as being entitled to the Bond(s) standing in the name of the deceased Bondholder on production of sufficient documentary proof or indemnity. Where a non-resident Indian becomes entitled to the Bond by way of succession, the following steps have to be complied: a. Documentary evidence to be submitted to the Legacy Cell of the RBI to the effect that the Bond was acquired by the NRI as part of the legacy left by the deceased holder. b. Proof that the NRI is an Indian National or is of Indian origin. Such holding by the NRI will be on a non-repatriation basis.

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Mode of Subscription/ How to Apply This being a Private Placement Offer, Investors who are established/ resident in India and who have been addressed through this communication directly, only are eligible to apply. All Application Forms, duly completed, together with cheque/ demand draft for the amount payable on application must be delivered before the closing date of the issue to the Sole Arranger to the Issue. Applications for the Debentures must be in the prescribed form (enclosed) and completed in BLOCK CAPITAL LETTERS in English and as per the instructions contained therein. Applications complete in all respects (along with all necessary documents as detailed in this Disclosure Document) must be submitted before the last date indicated in the issue time table or such extended time as decided by the Bank, at any of the designated collection centres, accompanied by the subscription amount by way of cheque(s)/ demand draft(s) drawn on any bank including a co-operative bank which is situated at and is a member of the Bankers’ clearing house located at a place where the application form is submitted. Outstation cheque(s)/ Bank draft(s) drawn on Bank(s) not participating in the clearing process at the designated clearing centres will not be accepted. Money orders/ postal orders will also not be accepted. The Company assumes no responsibility for any applications/ cheques/ demand drafts lost in mail. No separate receipt will be issued for the application money. However, the Company’s designated collection branches or Arranger(s) receiving the duly completed Application Form will acknowledge receipt of the application by stamping and returning to the applicant the Acknowledgment Slip at the bottom of the each Application Form. As a matter of precaution against possible fraudulent encashment of interest warrants/ cheques due to loss/ misplacement, the applicant should furnish the full particulars of his or her bank account (i.e. Account Number, name of the bank and branch) at the appropriate place in the Application Form. Interest warrants will then be made out in favour of the bank for credit to his/ her account so specified and dispatched to the investors, who may deposit the same in the said bank. Effect of Holidays Should any of the dates defined above or elsewhere in this Memorandum excepting the date of allotment, fall on a Saturday, Sunday or a Public Holiday, the next working day following shall be considered as the effective date(s). Notices The notices to the Debenture holder(s) required to be given by the Company or the Trustees shall be deemed to have been given if sent by registered post to the sole/first allottee or sole/first registered holder of the Debentures, as the case may be. All notices to be given by the Debenture holder(s) shall be sent by registered post or by hand delivery to Registrars or to such persons at such address as may be notified by the Company from time to time. All transfer related documents, tax exemption certificates, intimation for loss of Letter of Allotment/Debenture(s), etc., requests for issue of duplicate debentures, interest warrants etc. and/or any other notices / correspondence by the Debenture holder(s) to the Company with regard to the issue should be sent by Registered Post or by hand delivery to the Registrar, or to such persons at such persons at such address as may be notified by the Company from time to time. Applications under Power of Attorney A certified true copy of the power of attorney or the relevant authority as the case may be along with the names and specimen signatures of all the authorized signatories and the tax exemption certificate/document, if any, must be lodged along with the submission of the completed Application Form. Further modifications/additions in the power of attorney or authority should be notified to the Company at its registered office. Disclosure Clause In the event of default in the repayment of the principal and/or interest thereon on the due dates, the investors and/or the Reserve Bank of India/SEBI will have an unqualified right to disclose or publish the name of the

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borrower and its directors as defaulter in such manner and through such medium as the Investors and/or the Reserve Bank of India in their absolute discretion may think fit. Over and above the aforesaid Terms and Conditions, the said Debentures shall be subject to the Terms and Conditions to be incorporated in the Debenture Trust Deed/Trustee Agreement. Registrars Integrated Enterprises (India) Limited are acting as Registrar and Transfer agents for the Company for debt instruments. Requests for registration of transfer, along with Debenture Certificates/Letters of Allotment and appropriate transfer documents should be sent to the Registrars. The transferee shall also furnish name, address and specimen signatures and wherever necessary, authority for purchase of Debentures. The Registrars after examining the adequacy and correctness of the documentation shall register the transfer in its books. However, as the NCDs are compulsory issued in demat mode, this may not be applicable. Trustees The Company has appointed., GDA Trustee & Consultancy Limited as Debenture Trustees registered with SEBI, for the holders of the Debentures (hereinafter referred to as ‘Trustees’). The Company will enter into a Trustee Agreement/Trust Deed, inter-alia, specifying the powers, authorities and obligations of the Company and the Trustees in respect of the Debentures. The Debenture holders shall, without any further act or deed, be deemed to have irrevocably given their consent to and authorized the Trustees or any of their Agents or authorized officials to do, inter alia, all such acts, deeds and things necessary in respect of or relating to the security to be created for securing the Debentures being offered in terms of this Memorandum of Private Placement. All rights and remedies under the Debenture Trust Deed and/or other security documents shall rest in and be exercised by the Trustees without having it referred to the Debenture holders. Any payment made by the Company to the Trustees on behalf of the Debenture holder(s) shall discharge the Company pro tanto to the Debenture holder(s). The Trustees will protect the interest of the Debenture holders in the event of default by the Company in regard to timely payment of interest and repayment of principal and they will take necessary action at the cost of the Company. The Trustees may appoint a nominee director on the Board of the Company in consultation with other institutional debenture holders in the event of default. The major events of default which happen and continue without being remedied for a period of 30 days after the dates on which the monies specified in (i) and (ii) below become due and will necessitate repayment before stated maturity are as follows:

(i) Default in payment of monies due in respect of interest/principal owing upon the Debentures;

(ii) Default in payment of any other monies including costs, charges and expenses incurred by the Trustees. Other events of default are:

a. Default is committed in the performance or observance of any covenant, condition or provision contained in these presents and/or the financial Covenants and Conditions (other than the obligation to pay principal and interest) and, except where the Trustees certify that such default is in their opinion incapable of remedy (in which case no notice shall be required), such default continues for 30 days after written notice has been given thereof by the Trustees to the Company requiring the same to be remedied.

b. Any information given by the company in its applications to the Debenture holders, in the reports and other information furnished by the Company and the warranties given/deemed to have been given by it to the Debenture holders/trustees is misleading or incorrect in any material respect.

c. The Company is unable to or has admitted in writing its inability to pay its debt as they mature.

d. A Receiver or a Liquidator has been appointed or allowed to be appointed of all or any part of the undertaking of the Company and such appointment is not dismissed within 60 days of appointment.

e. The Company ceases to carry on its business.

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Rights, Powers and Discretion of the Trustees General Rights, Powers and Discretions - In addition to the other powers conferred on the Trustees and provisions for their protection and not by way of limitation or derogation neither of anything contained in this Agreement nor of any statute limiting the liability of the Trustees, it is expressly stated as follows:

1. The Trustees shall not be bound to give notice to any person of the execution hereof or to see to the performance or observance of any of the obligations hereby imposed on the Company or in any way to interfere with the conduct of the Company’s business unless and until the rights under the Debentures shall have become enforceable and the Trustees shall have determined to enforce the same;

2. Save as herein otherwise expressly provided the Trustees shall, as regards all trusts, powers, authorities and discretions, have absolute and uncontrolled discretion as to the exercise thereof and to the mode and time of exercise thereof and in the absence of fraud shall not be responsible for any loss, costs, charges, expenses or inconvenience that may result from the exercise or non- exercise thereof and in particular they shall not be bound to act at the request or direction of the Debenture holders under any provisions of these presents unless sufficient monies shall have been provided or provision to the satisfaction of the Trustees made for providing the same and the Trustees are indemnified to their satisfaction against all further costs, charges, expenses and liability which may be incurred in complying with such request or direction;

3. With a view to facilitate any dealing under any provision of these presents the Trustees shall have full power to consent (where such consent is required) to a specified transaction or class of transactions conditionally;

4. The Trustees shall not be responsible for the monies paid by applicants for the Debentures;

5. The Trustees shall not be responsible for acting upon any resolution purporting to have been passed at any meeting of the Debenture holders in respect whereof minutes have been made and signed even though it may subsequently be found that there was some defect in the constitution of the meeting or the passing of the resolution or that for any reason the resolution was not valid or binding upon the Debenture holders;

6. The Trustees shall have full power to determine all questions and doubts arising in relation to any of the provisions hereof and every such determination bonafide made (whether or not the same shall relate wholly or partially to the acts or proceedings of the Trustees) shall be conclusive and binding upon all persons interested hereunder;

7. The Trustees shall not be liable for anything whatsoever except a breach of trust knowingly and intentionally committed by the Trustees;

8. The Trustees shall not be liable for any default, omission or delay in performing or exercising any of the powers or trusts herein expressed or contained or any of them or in enforcing the covenants herein contained or any of them or in giving notice to any person or persons of the execution hereof or in taking any other steps which may be necessary, expedient or desirable for any loss or injury which may be occasioned by reason thereof unless the Trustees shall have been previously requested by notice in writing to perform, exercise or do any of such steps as aforesaid by the holders representing not less than three-fourths of the nominal amount of the Debentures for the time being outstanding or by a Special Resolution duly passed at a meeting of the Debenture holders and the Trustees shall not be bound to perform, exercise or do any such acts, powers or things or to take any such steps unless and until sufficient monies shall have been provided or provision to the satisfaction of the Trustees made for providing the same by or on behalf of the Debenture holders or some of them in order to provide for any costs, charges and expenses which the Trustees may incur or may have to pay in connection with the same and the Trustees are indemnified to their satisfaction against all further costs, charges, expenses and liabilities which may be incurred in complying with such request.

Provided Nevertheless that nothing contained in this clause shall exempt the Trustees from or indemnify them against any liability for breach of trust nor any liability which by virtue of any rule or law would otherwise attach to them in respect of any negligence, default or breach of trust which they may be guilty of in relation to their duties hereunder.

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Rights of Debenture holders

a. The Debentures shall not, except as provided in the Act, confer upon the holders thereof any rights or privileges available to the members of the Company including the right to receive Notices or Annual Reports of, or to attend and/or vote, at the General Meeting of the Company. However, if any resolution affecting the rights attached to the Debentures is to be placed before the shareholders, the said resolution will first be placed before the concerned registered Debenture holders for their consideration. In terms of Section 219(2) of the Act, holders of Debentures shall be entitled to a copy of the Balance Sheet on a specific request made to the Company.

b. The rights, privileges and conditions attached to the Debentures may be varied, modified and/or abrogated with the consent in writing of the holders of at least three-fourths of the outstanding amount of the Debentures or with the sanction of Special Resolution passed at a meeting of the concerned Debenture holders, provided that nothing in such consent or resolution shall be operative against the Company, where such consent or resolution modifies or varies the terms and conditions governing the Debentures, if the same are not acceptable to the Company .

c. The registered Debenture holder or in case of joint-holders, the one whose name stands first in the Register of Debenture holders shall be entitled to vote in respect of such Debentures, either in person or by proxy, at any meeting of the concerned Debenture holders and every such holder shall be entitled to one vote on a show of hands and on a poll, his/her voting rights shall be in proportion to the outstanding nominal value of Debentures held by him/her on every resolution placed before such meeting of the Debenture holders. The quorum for such meetings shall be at least five Debenture holders present in person.

d. The Debentures are subject to the provisions of the Companies Act, 1956, the Memorandum and Articles, the terms of this Prospectus and Application Form. Over and above such terms and conditions, the Debentures shall also be subject to other terms and conditions as may be incorporated in the Trustee Agreement/Letters of Allotment/Debenture Certificates, guidelines, notifications and regulations relating to the issue of capital and listing of securities issued from time to time by the Government of India and/or other authorities and other documents that may be executed in respect of the Debentures.

e. Save as otherwise provided in this Prospectus, the provisions contained in Annexure C and/or Annexure D to the Companies (Central Government’s) General Rules and Forms, 1956 as prevailing and to the extent applicable, will apply to any meeting of the Debenture holders, in relation to matters not otherwise provided for in terms of the Issue of the Debentures.

f. A register of Debenture holders will be maintained in accordance with Section 152 of the Act and all interest and principal sums becoming due and payable in respect of the Debentures will be paid to the registered holder thereof for the time being or in the case of joint-holders, to the person whose name stands first in the Register of Debenture holders.

g. The Debenture holders will be entitled to their Debentures free from equities and/or cross claims by the Company against the original or any intermediate holders thereof.

h. Debentures can be rolled over only with the positive consent of the Debenture holders. Bondholder not a Shareholder The bondholders will not be entitled to any of the rights and privileges available to the shareholders. If, however, any resolution affecting the rights attached to the Debentures is placed before the members of the Bank, such resolution will first be placed before the bondholders for their consideration. Modification of Rights The rights, privileges, terms and conditions attached to the Debentures may be varied, modified or abrogated with the consent, in writing, of those holders of the Debentures who hold at least three fourth of the outstanding amount of the Debentures or with the sanction accorded pursuant to a resolution passed at a meeting of the Bondholders, provided that nothing in such consent or resolution shall be operative against the Company where such consent or resolution modifies or varies the terms and conditions of the Debentures, if the same are not acceptable to the Company.

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Debenture Redemption Reserve (DRR) As per the circular of the Department of Company affairs (No. 6/3/2001-CL.V) dated 18th April 2002, Debenture Redemption reserve is not required to be created for issue of privately placed debentures by Non-Banking Finance Companies /registered with Reserve Bank of India under Section 45 IA of the RBI (Amendment) Act 1997. Undertaking by the Company The Issuer Company undertakes that:

a) The complaints received in respect of the Issue shall be attended to by the Company expeditiously and satisfactorily;

b) It shall take all steps for completion of formalities for listing and commencement of trading at the concerned stock exchange where securities are to be listed within specified time frame;

c) Necessary co-operation to the credit rating agencies shall be extended in providing true and adequate information till the debt obligations in respect of the instrument are outstanding.

d) It shall use a common form of transfer for the instrument.

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XVI. DISCOUNT ON THE OFFER PRICE The debentures are being issued at the face value and not at discount to offer price. XVII. DEBT EQUITY RATIO (Rs. In Crs)

Pre-Offer latest audited as on 31st March, 2009

Post offer based on last audited As on 31st March, 2009

Secured Loan 3804.44 3804.44 Fresh issue 70.00 Unsecured Loan 418.31 418.31 Total Debts 4222.75 4292.75 Shareholder Funds: Equity Share Capital 45.86 45.86 Reserves 620.50 620.50 Total Net worth 666.36 666.36 Debt / Equity Ratio 6.33 6.44

XVIII. SERVICING BEHAVIOUR OF THE EXISTING DEBTS The Company is discharging all its liabilities in time and would continue doing so in future as well. The Company has been paying regular interest and on redemption repaying the Bank. XIX. PERMISSION AND CONSENT FROM THE CREDITORS The trustee shall in future provide consent to create pari-passu charge subject to the issuer Company complying with the requisite terms of the Debentures issued.

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XX. NAME OF DEBENTURE TRUSTEE The Company has appointed GDA Trustee & Consultancy Limited a SEBI approved Trust Management Company as the agent and trustees for and on behalf of the Debenture holders. The address and contact details of the Trustees are as under: GDA Trustee & Consultancy Limited “Dream Presidency”, 1202/17 E, Shivaji Nagar, off Apte Road, Pune 411004 Tel.: (020) 2553 2114 Fax : (020) 2553 4769 XXI. RATING RATIONALE ADOPTED BY RATING AGENCIES Credit Analysis & Research ltd (“CARE ”) has assigned a ‘CARE AA- ’ (pronounced as CARE Double A Minus) rating for an amount of Rs. 100 crores to the present Non Convertible Debentures issued by the Company vide its letter dated August 31,2009. Instruments with this rating are considered to offer high safety for timely servicing of debt obligations. Such instruments carry very low credit risk.A copy of rating letter from CARE is enclosed elsewhere in this Disclosure Document. Other than the credit rating mentioned hereinabove, the company has not sought any other credit rating from any other credit rating agency (ies) for the Bonds offered for subscription under the terms of this Disclosure Document. The above ratings are not a recommendation to buy, sell or hold securities and investors should take their own decision. The ratings may be subject to revision or withdrawal at any time by the assigning rating agencies and each rating should be evaluated independently of any other rating. The ratings obtained are subject to revision at any point of time in future. The rating agencies have the right to suspend, withdraw the rating at any time on the basis of new information etc. XXII. LISTING OF DEBENTURES/STRPPs

The Secured Redeemable Non-Convertible Debentures in form STRPPs are proposed to be listed on the Whole Sale Debt Market Segment of the Bombay Stock Exchange of India Ltd. (‘BSE’).

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XXIII. TERM SHEET Particulars Terms Issuer/Borrower Shriram City Union Finance Ltd Issue Size Rs. 70.00 Crs. Nature of Instrument Secured Redeemable Non-Convertible Debentures (‘NCD’/ ‘Debentures’)



No.Of Debentures 700 (Seven Hundred ) Debentures At the end of 3½, 4th, 4½, 5th year in ratio of 20:20:30:30 respectively from Deemed Date of Allotment STRPP/

Debenture Series

Face Value per

STRPP


Redemption Date







Tenure







Security



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XXIV. ANNEXURES A) CREDIT Rating Letter from CARE

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B) CONSENT LETTER FROM GDA TRUSTEESHIP & CONSULTANCY LTD.

Documents

Private & Confidential – Not for Circulation DISCLOSURE ... SCUFL 70 crs.pdfShriram City has a comprehensive range of offerings comprising financing for consumer durables, Two- Three