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Shriram Transport Finance Company Limited Draft

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					                                                                                                                                                                                         Draft Prospectus

                                                                                                                                                                                            April 20, 2010




                                                   Shriram Transport Finance Company Limited
A Public Limited Company Incorporated under the Companies Act, 1956 (Registered as a Non-Banking Financial Company within the meaning of the Reserve Bank of India Act, 1934 (2 of 1934))
Registered Office: 123, Angappa Naicken Street, Chennai – 600 001, Tamil Nadu, India Corporate Office: Wockhardt Towers, Level – 3, West Wing, C-2, G Block, Bandra-Kurla Complex, Bandra
(East), Mumbai – 400 051 Tel. No.: +91-22-4095 9595 Fax: +91-22-4095 9596/97 Website: www.stfc.in Compliance Officer and Contact Person: Mr. K. Prakash; E-mail: stfcncd2@stfc.in

Public Issue by Shriram Transport Finance Company Limited, (“Company” or “Issuer”) of Non-Convertible Debentures of face value of Rs.1,000 each, (“NCDs”),
aggregating upto Rs. 25,000 lacs with an option to retain over-subscription upto Rs. 25,000 lacs for issuance of additional NCDs aggregating to a total of upto Rs.50,000
lacs, hereinafter referred to as the “Issue” including a reservation for unsecured NCDs, (“Unsecured NCDs”), aggregating upto Rs. 20,000 lacs. The Unsecured NCDs
will be in the nature of subordinated debt and will be eligible for Tier II capital.

                                                                                           GENERAL RISK
Investors are advised to read the Risk Factors carefully before taking an investment decision in the Issue. For taking an investment decision, the investors must rely on their own examination of the
Issuer and the Issue including the risks involved. Specific attention of the investors is invited to the Risk Factors on pages xi to xxx of this Draft Prospectus.
                                                                           ISSUER’S ABSOLUTE RESPONSIBILITY
The Issuer, having made all reasonable inquiries, accepts responsibility for, and confirms that this Draft Prospectus 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 Draft Prospectus 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 Draft Prospectus as a whole or any of such information or the expression of any such opinions or
intentions misleading in any material respect.
                                                                                           CREDIT RATING
The Secured NCDs proposed to be issued under this Issue have been rated ‘CARE AA+’ and the Unsecured NCDs proposed to be issued under this Issue have been rated ‘CARE AA’ by CARE vide
their letters dated April 19, 2010. The rating of the Secured NCDs as well as the Unsecured NCDs by CARE indicates high safety for timely servicing of debt obligations and carrying low credit
risk.The ratings provided by CARE may be suspended, withdrawn or revised at any time by the assigning rating agency and should be evaluated independently of any other rating. These ratings are
not a recommendation to buy, sell or hold securities and investors should take their own decisions. Please refer to page 39 for rationale for the above ratings.
                                                                                        PUBLIC COMMENTS
This Draft Prospectus is open for public comments. All comments on this Draft Prospectus are to be forwarded to the attention of Mr. K. Prakash, Compliance Officer at the following address:
Wockhardt Towers, Level-3, West Wing, C–2, G Block, Bandra – Kurla Complex, Bandra (East), Mumbai – 400 051 Tel. No. 91-22-4095 9595 Fax: 91-22-4095 9597/96; E-mail:
stfcncd2@stfc.in. All comments MUST be received by the Issuer within 7 working days of hosting this Draft Prospectus on the website of the Designated Stock Exchange. Comments by post, fax
and email shall be accepted, however please note that all comments by post must be received by the Issuer by 5 p.m. on the 7th working day from the date on which this Draft Prospectus is hosted on
the website of the Designated Stock Exchange

                                                                                                LISTING
The NCDs offered through this Draft Prospectus are proposed to be listed on the National Stock Exchange of India Limited (“NSE”). Our Company has applied to the NSE for their ‘in-principle’
approval for the Issue. For the purposes of the Issue, NSE shall be the Designated Stock Exchange.
                                  Lead Managers to the Issue                                                  Co-Lead Manager to the Issue                            Registrar to the Issue




 JM Financial Consultants Private Limited               ICICI Securities Limited                            RR Investors Capital Services Private              Integrated Enterprises (India) Limited
 141 Maker Chambers III                                                                                     Limited                                           2nd Floor,
 Nariman Point                                          ICICI Centre, H.T. Parekh Marg,                     33A, Mittal Tower, Nariman Point,                 Kences Towers,
 Mumbai – 400 021                                       Churchgate                                          Mumbai - 400021                                   No. 1, Ramakrishna Street,
 Tel : +91 22 6630 3030                                 Mumbai- 400 020                                     Tel : + 91 22 22886627                            North Usman Road, T. Nagar,
 Fax: +91 22 2204 2137                                  Tel: +91 22 2288 2460                               Fax: + 91 22 22851925                             Chennai - 600 017
 Email: STFCBondIssue@jmfinancial.in                    Fax:+91 22 22826580                                 Email: stfcndc2@rrfcl.com                         Tel:+91 44 2814 0801/03
 Investor Grievance Email:                              Email: stfc.debtissue@icicisecurities.com           Investor Grievance Email:                         Fax: +91 44 2814 2479
 grievance.ibd@jmfinancial.in                           Investor Grievance Email:                           rrinvestors@rrfcl.com                             Email: stfcipo@iepindia.com
 Website: www.jmfinancial.in                            customercare@icicisecurities.com                    Website: www.rrfcl.com/ rrfinance.com             Investor Grievance Email:
 Contact Person : Ms. Lakshmi Lakshmanan                Website: www.icicisecurities.com                    Contact Person: Mr. Brahmadutta Singh             sureshbabu@iepindia.com
 SEBI Registration No.: INM000010361                    Contact Person: Mr. Mangesh Ghogle / Mr.            SEBI Registration No: INM000007508                Website: www.iepindia.com
                                                        Johnny Barnett                                                                                        Contact Person: Ms. Anusha N.
                                                        SEBI Registration No: INM000011179                                                                    SEBI Registration No.: INR000000544



                                                                                        ISSUE PROGRAMME
                                  ISSUE OPENS ON : [●], 2010                                                                           ISSUE CLOSES ON : [●], 2010

The subscription list for the Issue shall remain open for subscription at the commencement of banking hours and close at the close of banking hours on the dates indicated
above or earlier or on such date as may be decided at the discretion of the Committee of Directors of our Company subject to necessary approvals. In the event of such early
closure of subscription list of the Issue, our Company shall ensure that notice of such early closure is given at least three days prior to such early date of closure.

IDBI Trusteeship Services Limited has by its letter dated April 12, 2010 given its consent for its appointment as Debenture Trustee to the Issue and for its name to be
included in this Draft Prospectus and in all the subsequent periodical communications sent to the holders of the Debentures issued pursuant to this Issue.

A copy of the final Prospectus shall be filed with the Registrar of Companies, Chennai, Tamil Nadu, in terms of section 56 and section 60 of the Act, along with the requsite
endorsed/certified copies of all requisite documents. For further details please refer to the section titled “Material Contracts and Documents for Inspection” beginning on page
223 of this Draft Prospectus.
                                                                                      TABLE OF CONTENTS

SECTION I : GENERAL ................................................................................................................................................................................i
Definitions / Abbreviations ................................................................................................................................................................................i
Forward Looking Statements...........................................................................................................................................................................vii
Presentation of Financial and Other Information……………………………………………………………………………………...………ix
SECTION II : RISK FACTORS...................................................................................................................................................................xi
SECTION III : INTRODUCTION ..............................................................................................................................................................31
General Information ........................................................................................................................................................................................31
Summary of Business, Strength & Strategy ....................................................................................................................................................41
The Issue .........................................................................................................................................................................................................47
Summary Financial Information......................................................................................................................................................................50
Capital Structure..............................................................................................................................................................................................63
Objects of the Issue .........................................................................................................................................................................................85
Statement of Tax Benefits ...............................................................................................................................................................................86
SECTION IV : ABOUT THE ISSUER COMPANY AND THE INDUSTRY .........................................................................................88
Industry............................................................................................................................................................................................................88
Our Business....................................................................................................................................................................................................95
History, Main Objects and Key Agreements .................................................................................................................................................113
Our Management ...........................................................................................................................................................................................121
Our Promoter .................................................................................................................................................................................................132
Our Subsidiaries ............................................................................................................................................................................................135
SECTION V : FINANCIAL INFORMATION.........................................................................................................................................136
Disclosures on Existing Financial Indebtedness............................................................................................................................................137
Material Developments .................................................................................................................................................................................157
SECTION VI : ISSUE RELATED INFORMATION ..............................................................................................................................158
Terms Of The Issue .......................................................................................................................................................................................158
Issue Structure ...............................................................................................................................................................................................162
Issue Procedure..............................................................................................................................................................................................185
SECTION VII : LEGAL AND OTHER INFORMATION .....................................................................................................................199
Pending Proceedings and Statutory Defaults .................................................................................................................................................199
Other Regulatory and Statutory Disclosures .................................................................................................................................................201
Regulations and Policies................................................................................................................................................................................214
Summary of Key Provisions of Articles of Association................................................................................................................................221
Material Contracts and Documents for Inspection ........................................................................................................................................223
Declaration ....................................................................................................................................................................................................225




                                                                                                       -b-
                                          SECTION I : GENERAL

                                         DEFINITIONS / ABBREVIATIONS

Company related terms

Term                                       Description

"STFCL", "Issuer", “the Company” and       Shriram Transport Finance Company Limited, a company
“our Company”                              incorporated under the Companies Act, 1956, registered as a Non-
                                           Banking Financial Company with the Reserve Bank of India under Section
                                           45-IA of the Reserve Bank of India Act, 1934, and having its Registered
                                           Office at 123, Angappa Naicken Street, Chennai – 600 001

Act                                        The Companies Act, 1956, as amended from time to time

AOA/Articles / Articles of Association     Articles of Association of our Company

Axis Bank                                  Axis Bank Limited (Formerly known as UTI Bank Limited)

Board / Board of Directors                 The Board of Directors of our Company and includes any Committee thereof

BSE                                        Bombay Stock Exchange Limited

CAGR                                       Compounded Annual Growth Rate

CAR                                        Capital Adequacy Ratio

CARE                                       Credit Analysis & Research Limited

CDSL                                       Central Depository Services (India) Limited

Debentures / NCDs                          Redeemable, Non-Convertible Debentures offered through this Draft
                                           Prospectus aggregating upto Rs. Rs. 25,000 lacs with an option to retain over-
                                           subscription upto Rs. 25,000 lacs for issuance of additional NCDs
                                           aggregating to a total of upto Rs. 50,000 lacs including Unsecured
                                           Debentures and Secured Debentures.

Debenture Holder (s)                       The holders of the NCDs

Debt Listing Agreeement                    The listing agreement entered into/to be entered into between the Company
                                           and the relevant stock exchange(s) in connection with the listing debt
                                           securities of the Company

Debt Regulations                           SEBI (Issue and Listing of Debt Securities) Regulations, 2008, issued by
                                           SEBI, effective from June 6, 2008 as amended from time to time

Depositories Act                           The Depositories Act, 1996, as amended from time to time

Depository(ies)                            National Securities Depository Limited (NSDL)              and /or    Central
                                           Depository Services (India) Limited (CDSL)

DP / Depository Participant                A depository participant as defined under the Depositories Act


                                                          -i-
Term                        Description

Designated Stock Exchange   National Stock Exchange of India Limited

ESOP/ESOS                   Company’s Employee Stock Option Scheme 2005.

Equity Shares               Equity shares of face value of Rs 10/- each of our Company

FEMA                        Foreign Exchange Management Act, 1999, as amended from time to time

FII/FIIs                    Foreign Institutional Investor(s)

FITCH                       Fitch Ratings India Private Limited

GoI                         Government of India

IRDA                        Insurance Regulatory and Development Authority

IT Act                      The Income Tax Act, 1961, as amended from time to time

Loan Assets                 Portfolio under financing activities

MIS                         Management Information System of our Company

Memorandum / MOA            Memorandum of Association of our Company

MCA                         Ministry of Corporate Affairs, Government of India

MSE                         Madras Stock Exchange Limited

NEFT                        National Electronic Funds Transfer

Net Loan Assets             Portfolio under financing activities net of Provision for non-performing assets

NAV                         Net Asset Value

NBFC                        Non-Banking Financial Company as defined under Section 45-IA of the RBI
                            Act, 1934

NECS                        National Electronic Clearing Services

NPA                         Non Performing Asset

NSDL                        National Securities Depository Limited

NSE                         National Stock Exchange of India Limited

Promoter                    Shriram Holdings (Madras) Private Limited

RBI                         The Reserve Bank of India

RBI Act                     The Reserve Bank of India Act, 1934 , as amended from time to time

Rs./ INR/ Rupees            The lawful currency of the Republic of India


                                           - ii -
Term                                Description

ROC                                 Registrar of Companies

RTGS                                Real Time Gross Settlement

SCRA                                Securities Contracts (Regulation) Act, 1956, as amended from time to time

SCRR                                The Securities Contracts (Regulation) Rules, 1957, as amended from time
                                    to time

SCL                                 Shriram Capital Limited (Formerly known as Shriram Financial Services
                                    Holdings Private Limited)

SEBI                                The Securities and Exchange Board of India constituted under the
                                    Securities and Exchange Board of India Act, 1992

SEBI Act                            The Securities and Exchange Board of India Act, 1992 as amended from
                                    time to time

SIL                                 Shriram Investments Limited

SOFL                                Shriram Overseas Finance Limited

Statutory Auditors/Joint Auditors   Our joint auditors being M/s. S. R. Batliboi & Co. and M/s. G. D. Apte &
                                    Co.

Subsidiaries                        Subsidiaries of our Company namely Shriram Equipment Finance
                                    Company Limited and Shriram Automall India Limited

WDM                                 Wholesale Debt Market

“We”, “us” and “our”                Our Company and/or its Subsidiaries, unless the context otherwise requires

Issue related terms

Term                                Description

Allotment / Allotted                Unless the context otherwise requires, the allotment of the NCDs pursuant
                                    to the Issue to the Allottees

Allottee                            The successful applicant to whom the NCDs are being/have been allotted

Application Form                    The form used by an applicant to apply for NCDs being issued through the
                                    Prospectus
                                    The bank(s) with whom Escrow Accounts will be opened as specified on
Bankers to the Issue/Escrow
                                    page 187 of this Draft Prospectus
Collection Banks
                                    Public Issue of NCDs by our Company aggregating upto Rs. 25,000 lacs
Base Issue

Basis of Allotment                  The basis on which NCDs will be allotted to applicants under the Issue and
                                    which is described in “Issue Procedure – Basis of Allotment” on page 194

                                                  - iii -
Term                             Description
                                 of this Draft Prospectus.

Co-Lead Manager                  RR Investors Capital Services Private Limited

Debt Listing Agreement           Listing Agreement entered into by the issuer company with the stock
                                 exchanges for the purpose of listing and issuance of debt securities in
                                 accordance with SEBI (Issue and Listing of Debt Securities) regulations,
                                 2008

Draft Prospectus / Draft Offer   This draft prospectus dated April 20, 2010 filed in accordance with the
Document                         provisions of the Act and the Debt Regulations

DIN                              Director Identification Number

Escrow Agreement                 Agreement to be entered into amongst our Company, the Registrar, the
                                 Escrow Collection Bank(s), the Lead Managers and Co-Lead Manager for
                                 collection of the application amounts and for remitting refunds, if any, of
                                 the amounts collected, to the applicants on the terms and conditions
                                 contained therein

Escrow Account                   Accounts opened in connection with the Issue with the Escrow Collection
                                 Banks and in whose favour the applicant will issue cheques or bank drafts
                                 in respect of the application amount while submitting the application

Issue                            Public Issue by our Company of NCDs aggregating upto Rs. 25,000 lacs
                                 with an option to retain over-subscription upto Rs. 25,000 lacs for issuance
                                 of additional NCDs aggregating to a total of upto Rs.50,000 lacs including a
                                 reservation for Unsecured NCDs aggregating upto Rs. 20,000 lacs. The
                                 Unsecured NCDs will be in the nature of subordinated debt and will be
                                 eligible for Tier II capital.

Issue Opening Date               [●], 2010

Issue Closing Date∗              [●], 2010

Lead Brokers                     [●]

Lead Managers                    JM Financial Consultants Private Limited and ICICI Securities Limited

Options                          Options being offered to the applicants as stated in the section titled ‘Issue
                                 Related Information’ at page 158 of this Draft Prospectus

Prospectus / Offer Document      The Prospectus issued and filed with the ROC in accordance with the Debt
                                 Regulations containing inter alia the coupon rate for the NCDs and certain
                                 other information

Registrar to the Issue           Integrated Enterprises (India) Limited

Secured NCDs                     NCDs offered under this Issue which are secured by a charge on the assets of
                                 our Company, namely the NCDs issued under Option I, Option II and Option
                                 III as detailed in this Draft Prospectus.

Senior Citizen                   Any person who has completed the age of 60 years as on the date of
                                 Prospectus
                                               - iv -
  Term                                         Description

  Trustees / Debenture Trustee                 Trustees for the Debenture Holders in this case being IDBI Trusteeship
                                               Services Limited

  Unsecured NCDs                               NCDs offered under this Issue which are not secured by any charge on the
                                               assets of our Company, namely the NCDs issued under Option IV and Option
                                               V, which will be in the nature of subordinated debt and will be eligible for
                                               Tier II capital, as detailed in this Draft Prospectus.
∗The subscription list for the public issue shall remain open for subscription at the commencement of banking hours and close at
the close of banking hours on the dates indicated or earlier or on such date as may be decided at the discretion of the Board of
Directors or any committee of our Company subject to necessary approvals

  Technical & Industry Terms

  Term                                                            Description

  AFC                                                             Asset Finance Company

  ALM                                                             Asset Liability Management

  CV                                                              Commercial Vehicle

  FTU(s)                                                          First Time Users

  LC                                                              Loan Company

  LCV(s)                                                          Light Commercial Vehicles

  SME                                                             Small and Medium Enterprises

  SRTO(s)                                                         Small Road Transport Operators

  STO(s)                                                          Small Truck Owners

  Conventional / General Terms

  Term                                                            Description

  AGM                                                             Annual General Meeting

  AS                                                              Accounting Standard

  DRR                                                             Debenture Redemption Reserve

  EGM                                                             Extraordinary General Meeting

  EPS                                                             Earnings Per Share

  Financial Year / FY                                             Financial Year ending March 31

  GDP                                                             Gross Domestic Product


                                                               -v-
Term              Description

GIR               General Index Registration Number

HUF               Hindu Undivided Family

Indian GAAP       Generally Accepted Accounting Principles in India

NRI               Non Resident Indian

PAN               Permanent Account Number

SBI               State Bank of India

TDS               Tax Deducted at Source




              - vi -
                                     FORWARD LOOKING STATEMENTS

Certain statements contained in this Draft Prospectus that are not statements of historical fact constitute “forward-
looking statements.” Investors can generally identify forward-looking statements by terminology such as “aim”,
“anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “intend”, “may”, “objective”, “plan”, “potential”,
“project”, “pursue”, “shall”, “should”, “will”, “would”, or other words or phrases of similar import. All statements
regarding our Company’s expected financial condition and results of operations and business plans and prospects are
forward-looking statements. These forward-looking statements include statements as to our Company’ business
strategy, revenue and profitability, planned projects and other matters discussed in this Draft Prospectus that are not
historical facts. These forward-looking statements and any other projections contained in this Draft Prospectus
(whether made by our Company or any third party) are predictions and involve known and unknown risks,
uncertainties, assumptions and other factors that may cause our Company’s actual results, performance or
achievements to be materially different from any future results, performance or achievements expressed or implied
by such forward-looking statements or other projections. All forward-looking statements are subject to risks,
uncertainties and assumptions about our Company that could cause actual results to differ materially from those
contemplated by the relevant forward-looking statement. Important factors that could cause actual results to differ
materially from our Company’s expectations include, among others:


•        General economic and business conditions in India and globally;

•        Our ability to successfully implement our strategy, our growth and expansion plans and technological
         changes;

•        Our ability to compete effectively and access funds at competitive cost;

•        Changes in the value of Rupee and other currency changes;

•        Unanticipated turbulence in interest rates, equity prices or other rates or prices; the performance of the
         financial and capital markets in India and globally;

•        Availability of funds and willingness of our lenders to lend;

•        Changes in political conditions in India;

•        The rate of growth of our loan assets;

•        The outcome of any legal or regulatory proceedings we are or may become a party to;

•        Changes in Indian and/or foreign laws and regulations, including tax, accounting, banking, securities,
         insurance and other regulations; changes in competition and the pricing environment in India; and regional
         or general changes in asset valuations;

•        Changes in laws and regulations that apply to NBFCs in India, including laws that impact our lending rates
         and our ability to enforce our collateral;

•        Emergence of new competitors;

•        Growth of transportation services in India;

•        Performance of the Indian debt and equity markets;



                                                        - vii -
•        Occurrence of natural calamities or natural disasters affecting the areas in which our Company has
         operations; and

•        Other factors discussed in this Draft Prospectus, including under the section titled “Risk Factors” beginning
         on page xi of this Draft Prospectus.

All forward-looking statements are subject to risks, uncertainties and assumptions about our Company that could
cause actual results and valuations to differ materially from those contemplated by the relevant statement.
Additional factors that could cause actual results, performance or achievements to differ materially include, but are
not limited to, those discussed under the sections titled “Industry” and “Our Business”. The forward-looking
statements contained in this Draft Prospectus are based on the beliefs of management, as well as the assumptions
made by and information currently available to management. Although our Company believes that the expectations
reflected in such forward-looking statements are reasonable at this time, it cannot assure investors that such
expectations will prove to be correct or will hold good at all times. Given these uncertainties, investors are cautioned
not to place undue reliance on such forward-looking statements. If any of these risks and uncertainties materialise, or
if any of our Company’s underlying assumptions prove to be incorrect, our Company’s actual results of operations
or financial condition could differ materially from that described herein as anticipated, believed, estimated or
expected. All subsequent forward-looking statements attributable to our Company are expressly qualified in their
entirety by reference to these cautionary statements. Neither our Company, our Directors and Officers nor any of
their respective affiliates have any obligation to update or otherwise revise any statements reflecting circumstances
arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do
not come to fruition




                                                        - viii -
                         PRESENTATION OF FINANCIAL AND OTHER INFORMATION

General

In this Draft Prospectus, unless the context otherwise indicates or implies, references to “you,” “offeree,”
“purchaser,” “subscriber,” “recipient,” “investors” and “potential investor” are to the prospective investors in this
Offering, references to our “Company”, the “Company” or the “Issuer” are to Shriram Transport Finance Company
Limited.

In this Draft Prospectus, references to “US$” is to the legal currency of the United States and references to “Rs.” and
“Rupees” are to the legal currency of India. All references herein to the “U.S.” or the “United States” are to the
United States of America and its territories and possessions and all references to “India” are to the Republic of India
and its territories and possessions, and the "Government", the "Central Government" or the "State Government" are
to the Government of India, central or state, as applicable.

Unless otherwise stated, references in this Draft Prospectus to a particular year are to the calendar year ended on
December 31 and to a particular “fiscal” or “fiscal year” are to the fiscal year ended on March 31.

Unless otherwise stated all figures pertaining to the financial information in connection with our Company are on an
unconsolidated basis.

Presentation of Financial Information

Our Company publishes its financial statements in Rupees. Our Company’s financial statements are prepared in
accordance with Indian GAAP and the Companies Act. Unless otherwise indicated, all financial data in this Draft
Prospectus are derived from our Company’s financial statements prepared in accordance with Indian GAAP. Indian
GAAP differs in certain significant respects from International Financial Reporting Standards, (“IFRS”), and U.S.
GAAP. Our Company does not provide a reconciliation of its financial statements to IFRS or U.S. GAAP financial
statements. We have not attempted to explain those differences or quantify their impact on the financial information
included herein, and we urge you to consult your own advisors regarding such differences and their impact on our
financial information. Accordingly, the degree to which the Reformatted Summary Financial Statements (defined
hereinafter) included in this Draft Prospectus will provide meaningful information is entirely dependent on the
reader’s level of familiarity with the respective accounting practices.

Our audited unconsolidated financial statements as at and for the years ended March 31, 2005 and March 31, 2006
as audited by our Company’s statutory auditor, M/s. G. D. Apte & Co., and our audited unconsolidated financial
statements as at and for the years ended March 31, 2007, March 31, 2008, March 31, 2009 and as at and for the nine
months ended December 31, 2009 as jointly audited by our Company’s Statutory Auditors, M/s. S. R. Batliboi &
Co. and M/s.G. D. Apte & Co. form the basis of the statement of reformatted unconsolidated assets and liabilities of
the our Company and the reformatted unconsolidated profit and loss account and the statement of reformatted
unconsolidated cash flow as at and for the years ended March 31, 2005, 2006, 2007, 2008 and 2009 and as at and for
the nine months period ended December 31, 2009, (“Reformatted Unconsolidated Summary Financial
Statements”). The consolidated balance sheet of the Company, its subsidiaries and associate (collectively referred
to as the “Group”) as at December 31, 2009 and the related consolidated profit and loss account and consolidated
cash flow statement for the nine month period from April 1, 2009 to December 31, 2009, form the basis for the
statement of reformatted consolidated assets and liabilities of the Group as at December 31, 2009, and the statement
of reformatted consolidated profit and loss account and the statement of reformatted consolidated cash flow
statement for the nine month period ended December 31, 2009, (“Reformatted Consolidated Summary Financial
Statements”). The Reformatted Unconsolidated Summary Financial Statements and the Reformatted Consolidated
Summary Financial Statements are included in this Draft Prospectus and collectively referred to hereinafter as the
“Reformatted Summary Financial Statements”. The examination reports of our Company’s Statutory Auditors,
M/s. S. R. Batliboi & Co. and M/s.G. D. Apte & Co.on the Reformatted Summary Financial Statements are included
in this Draft Prospectus.

Any discrepancies in the tables included herein between the amounts listed and the totals thereof are due to rounding
off.
                                                        - ix -
Unless stated otherwise, macroeconomic and industry data used throughout this Draft Prospectus has been obtained
from publications prepared by providers of industry information, government sources and multilateral institutions.
Such publications generally state that the information contained therein has been obtained from sources believed to
be reliable but that their accuracy and completeness are not guaranteed and their reliability cannot be assured.
Although the Issuer believes that industry data used in this Draft Prospectus is reliable, it has not been independently
verified.




                                                         -x-
                                      SECTION II : RISK FACTORS

Prospective investors should carefully consider the risks and uncertainties described below, in addition to the other
information contained in this Draft Prospectus before making any investment decision relating to the NCDs. If any
of the following risks or other risks that are not currently known or are now deemed immaterial, actually occur, our
business, financial condition and result of operation could suffer, the trading price of the NCDs could decline and
you may lose your all or part of your interest and / or redemption amounts. Unless otherwise stated in the relevant
risk factors set forth below, we are not in a position to specify or quantify the financial or other implications of any
of the risks mentioned herein. The ordering of the risk factors is intended to facilitate ease of reading and reference
and does not in any manner indicate the importance of one risk factor over another.

This Draft Prospectus contains forward looking statements that involve risk and uncertainties. Our Company’s
actual results could differ materially from those anticipated in these forward looking statements as a result of
several factors, including the considerations described below and elsewhere in this Draft Prospectus.

Investors are advised to read the following risk factors carefully before making an investment in the NCDs offered
in this Issue. You must rely on your own examination of our Company and this Issue, including the risks and
uncertainties involved.

INTERNAL RISK FACTORS

Risks relating to our Company and its Business

1.       Our financial performance is particularly vulnerable to interest rate volatility.

         Our results of operations are substantially dependent upon the level of our Net Interest Margins. Finance
         and service charges, or interest income from our portfolio under financing activities, is the largest
         component of our total income, and constituted 86.96% and 85.76% of our total income in fiscal 2009 and
         the nine month period ended December 31, 2009, respectively. We provide loans at fixed rates of interest.
         As of December 31, 2009, our portfolio under financing activities was Rs. 2,153,641.55 lacs. We borrow
         funds on both fixed and floating rate basis. Volatility in interest rates can materially and adversely affect
         our financial performance. In a rising interest rate environment, if the yield on our interest-earning assets
         does not increase simultaneously with or to the same extent as our cost of funds, or, in a declining interest
         rate environment, if our cost of funds does not decline simultaneously or to the same extent as the yield on
         our interest-earning assets, our net interest income and net interest margin would be adversely impacted.
         Additional risks arising from increasing interest rates, among others, include:

         •   increases in the rates of interest charged on various loans in our loan portfolio, which could result in
             the extension of loan maturities and higher monthly installments due from borrowers which, in turn,
             could result in higher rates of default;

         •   reductions in the volume of commercial vehicle loans as a result of clients' inability to service high
             interest rate payments; and

         •   reduction in the value of fixed income securities held in our investment portfolio.

         Accordingly, our operations are susceptible to fluctuations in interest rates. Interest rates are highly
         sensitive and fluctuations thereof are dependant upon many factors which are beyond our control, including
         the monetary policies of the RBI, de-regulation of the financial services sector in India, domestic and
         international economic and political conditions, inflation and other factors. Difficult conditions in the
         global and Indian economy resulting from the economic dislocations and liquidity disruptions of the credit
         crisis since 2008 adversely affected the availability of credit. While credit conditions have eased in recent
         months, decreased liquidity resulting from the economic downturn led to an increase in interest rates on


                                                         - xi -
     loans provided by banks and financial institutions, and market interest rates in India have been volatile in
     recent periods.

2.   Our business requires substantial capital, and any disruption in funding sources would have a material
     adverse effect on our liquidity and financial condition.

     As an asset finance company, our liquidity and ongoing profitability are, in large part, dependent upon our
     timely access to, and the costs associated with, raising capital. Our funding requirements historically have
     been met from a combination of term loans from banks and financial institutions, issuance of redeemable
     non-convertible debentures, public deposits, the issue of subordinated bonds and commercial paper, as well
     as through securitization/assignment of our loan portfolio. Thus, our business depends and will continue to
     depend on our ability to access diversified funding sources. Our ability to raise funds on acceptable terms
     and at competitive rates continues to depend on various factors including our credit ratings, the regulatory
     environment and policy initiatives in India, developments in the international markets affecting the Indian
     economy, investors' and/or lenders' perception of demand for debt and equity securities of NBFCs, and our
     current and future results of operations and financial condition.

     Our funding strategy was adversely affected by the ongoing crisis in the global credit markets since 2008.
     These adverse conditions reached unprecedented levels through the second half of 2008 and the first half of
     2009. The capital and lending markets remained highly volatile and access to liquidity was adversely
     affected. These conditions resulted in increased borrowing costs and difficulty in accessing funds in a cost-
     effective manner. Changes in economic and financial conditions or continuing lack of liquidity in the
     market could make it difficult for us to access funds at competitive rates. As an NBFC, we also face certain
     restrictions on our ability to raise money from international markets which may further constrain our ability
     to raise funds at attractive rates.

     Any disruption in our primary funding sources at competitive costs would have a material adverse effect on
     our liquidity and financial condition.

3.   Our business is focused on commercial vehicle finance for new and pre-owned commercial vehicles and
     any adverse developments in this sector would adversely affect our results of operations.

     As we focus on providing financing for pre-owned and new commercial vehicles, our asset and NPA
     portfolios have, and will likely continue in the future to have, a high concentration of pre-owned and new
     commercial vehicle financing arrangements. Moreover, our customer base has, and will likely continue in
     the future to have, a high concentration of FTUs and SRTOs. Our business is, therefore, entirely dependent
     on various factors that impact this customer segment, such as the demand for transportation services in
     India, changes in Indian regulations and policies affecting pre-owned commercial vehicles, natural disasters
     and calamities, and macroeconomic environment in India and globally. Also, individual borrowers and
     FTUs and SRTOs generally are less financially resilient than larger corporate borrowers or fleet owners,
     and, as a result, can be more adversely affected by declining economic conditions. Such factors may result
     in a decline in the sales or value of new and pre-owned commercial vehicles. Correspondingly, the demand
     for finance for pre-owned and new commercial vehicles may decline, which in turn may adversely affect
     our financial condition and the results of our operations. Further, the ability of commercial vehicle owners
     and/or operators to perform their obligations under existing financing agreements may be adversely
     affected if their businesses suffer as a result of the aforesaid factors.

     Accordingly, since our business is not a diversified business, any factor which adversely impacts this
     segment may have a disproportionate impact on our operations and profitability.

4.   High levels of customer defaults could adversely affect our business, financial condition and results of
     operations.

     Our primary business involves lending money to commercial vehicle owners and operators in India, and we
     are subject to customer default risks including default or delay in repayment of principal or interest on our
     loans. Customers may default on their obligations to us as a result of various factors including bankruptcy,


                                                   - xii -
     lack of liquidity and operational failure. If borrowers fail to repay loans in a timely manner or at all, our
     financial condition and results of operations will be adversely impacted.

     In addition, our customer portfolio principally consists of SRTOs and FTUs with underdeveloped banking
     habits, and individual borrowers generally are less financially resilient than larger corporate borrowers,
     and, as a result, they can be more adversely affected by declining economic conditions. In addition, a
     significant majority of our client base belongs to the low income group. The owners and/or operators of
     commercial vehicles financed by us often do not have any credit history supported by tax returns and other
     related documents which would enable us to assess their creditworthiness. In addition, we may not receive
     updated information regarding any change in the financial condition of our customers or may receive
     inaccurate or incomplete information as a result of any fraudulent misrepresentation on the part of our
     customers. Furthermore, unlike several developed economies, a nationwide credit bureau has only recently
     become operational in India, so there is less financial information available about the creditworthiness of
     individuals, particularly our client segment who are mainly from the low income group and who typically
     have limited access to other financing sources. It is therefore difficult to carry out precise credit risk
     analyses on our clients. Although we follow certain procedures to evaluate the credit profile of our
     customers at the time of sanctioning a loan, we generally rely on the referrals from the local trucking
     community and value of the commercial vehicle provided as underlying collateral rather than on a stringent
     analysis of the credit profile of our customers. Although we believe that our risk management controls are
     sufficient, we cannot be certain that they will continue to be sufficient or that additional risk management
     policies for individual borrowers will not be required. Failure to continuously monitor the loan contracts,
     particularly for individual borrowers, could adversely affect our credit portfolio which could have a
     material and adverse effect on our results of operations and financial condition.

5.   We may not be able to recover, on a timely basis or at all, the full value of collateral or amounts which
     are sufficient to cover the outstanding amounts due under defaulted loans.

     As a security interest for the financing facilities provided by us to our customers, the vehicles purchased by
     our customers are hypothecated in our favor. The value of the vehicle, however, is subject to depreciation,
     deterioration, and/or reduction in value on account of other extraneous reasons, over the course of time.
     Consequently, the realizable value of the collateral for the credit facility provided by us, when liquidated,
     may be lower than the outstanding loan from such customers. Any default in repayment of the outstanding
     credit obligations by our customers may expose us to losses. Furthermore, in the case of a default, we
     typically repossess the commercial vehicles financed and sell such vehicles through auctions. The
     hypothecated vehicles, being movable property, may be difficult to locate or seize in the event of any
     default by our customers. There can also be no assurance that we will be able to sell such vehicles provided
     as collateral at prices sufficient to cover the amounts under default. In addition, there may be delays
     associated with such process. A failure or delay to recover the expected value from sale of collateral
     security could expose us to a potential loss. Any such losses could adversely affect our financial condition
     and results of operations. Furthermore, enforcing our legal rights by litigating against defaulting customers
     is generally a slow and potentially expensive process in India. Accordingly, it may be difficult for us to
     recover amounts owed by defaulting customers in a timely manner or at all. The recovery of monies from
     defaulting customers may be further compounded by the fact that we do not generally insist on, or receive
     post dated cheques as security towards the timely repayment of dues from customers to whom we have
     provided loans.

6.   The Company is involved in certain legal proceedings for alleged contravention of certain State
     legislations in India relating to “money lending” activities. Any unfavorable outcome in such
     proceedings and the imposition of any additional restrictive statutory and/or regulatory requirements
     may adversely affect our goodwill, business prospects and results of operations.

     Certain criminal proceedings have been initiated against the Company and our Managing Director by the
     State of Gujarat and the Inspector of Money Lenders, Gujarat in connection with the alleged contravention
     of the Bombay Money Lenders Act, 1946, as amended (“BMLA”), before the Metropolitan Magistrate,
     Ahmedabad. The complainants have, among other allegations, asserted that the conduct of our financing
     business without the requisite license under the BMLA is in contravention of such legislation. Accordingly,
     the complainants have sought to prosecute and penalize the Company and our Managing Director under
                                                    - xiii -
     Section 34 of the BMLA. We filed an application under Section 482 of the Code of Criminal Procedure,
     1973 against the State of Gujarat and the Inspector of Money Lenders, Gujarat before the High Court of
     Gujarat at Ahmedabad (“Quashing Application”), seeking to quash such criminal proceedings, and
     seeking an order for the stay of such criminal proceedings during the pendency of the Quashing
     Application. These proceedings initiated against the Company and our Managing Director, and the
     application filed by the Company, are currently pending hearing and final disposition. Under the provisions
     of the BMLA, any person who carries out the business of “money lending” (as defined therein) within the
     states of Maharashtra and Gujarat without a valid license for such business under the provisions of the
     BMLA or enters into any agreement in the course of business of money lending without a valid license, is,
     on conviction, punishable (i) for the first offence, with imprisonment up to one year or a fine of up to
     Rs.1,500.00 or both, and (ii) for a second or subsequent offence, with additional terms of imprisonment of
     not less than two years, in the case of an individual, and with additional fine of not less than Rs.5,000.00, in
     the case of a corporate entity.

     The Company has also filed an appeal before the Supreme Court of India against an order dated November
     18, 2009 passed by the High Court of Kerala in connection with a writ petition filed by the Company
     challenging the action of the Commissioner of Commercial Taxes, Kerala, directing the Company to
     register under the provisions of the Kerala Money Lenders Act, 1946, as amended (“KMLA”). The High
     Court of Kerala, pursuant to the impugned order, had dismissed an appeal in connection with such writ
     petition, thereby, among other matters, confirming such impugned order passed by the Commissioner of
     Commercial Taxes, Kerala. The Supreme Court has granted a stay of the order passed by the High Court of
     Kerala until final disposal of the appeal at the Supreme Court.

     There can be no assurance that these proceedings will not be determined adversely to us or that penal or
     other action will not be taken against the Company and/or any senior management party to such
     proceedings. In the event of an adverse ruling in these proceedings, the Company may be required to
     register as a money lending entity under the provisions of the BMLA and/ or the KMLA in order to carry
     on its financing business, and will be required to comply with the provisions of such legislation with
     respect to its business operations within the relevant States. There can also be no assurance that in the event
     of such an adverse ruling, similar regulatory authorities in other States of India where we currently carry on
     business or propose to carry on business in the future, will not require us to similarly register as a money
     lending entity under, and comply with the provisions of, the respective State legislation. State legislation
     may specify various terms and conditions that must be complied with in connection with money lending
     activities, including the imposition of maximum interest rates that we may charge, and these maximum
     interest rates may be significantly lower than the interest rates that we typically charge on our portfolio
     against financing activities to our customers. If we are required to comply with such maximum interest rate
     limits or any other restrictive provisions specified under such legislation, our interest income and net
     interest margin may be adversely impacted. There can also be no assurance that other conditions and
     restrictions under such legislation, if applicable to us, will not adversely affect the conduct of our
     operations.

     For further information relating to such proceedings, see “Pending Proceedings and Statutory Defaults”.

7.   A large part of our collections are in cash and consequently we face the risk of misappropriation or
     fraud by our employees.

     A significant portion of our collections from our customers is in cash. Large cash collections expose us to
     the risk of fraud, misappropriation or unauthorized transactions by our employees responsible for dealing
     with such cash collections. While we have taken insurance policies, including fidelity coverage and
     coverage for cash in safes and in transit, and undertake measures to detect and prevent any unauthorized
     transaction, fraud or misappropriation by our representatives and officers, this may not be sufficient to
     prevent or deter such activities in all cases, which may adversely affect our operations and profitability.
     Further, we may be subject to regulatory or other proceedings in connection with any unauthorized
     transaction, fraud or misappropriation by our representatives and employees, which could adversely affect
     our goodwill.


                                                    - xiv -
8.   Our significant indebtedness and the conditions and restrictions imposed by our financing arrangements
     could restrict our ability to conduct our business and operations in the manner we desire.

     As of December 31, 2009, we had outstanding secured debt of Rs. 1,914,975.11 lacs and unsecured debt of
     Rs. 340,637.49 lacs, and we will continue to incur additional indebtedness in the future. Most of our
     borrowings are secured by our immovable and other assets. Our significant indebtedness could have several
     important consequences, including but not limited to the following:

         •    a portion of our cash flow may be used towards repayment of our existing debt, which will reduce
              the availability of our cash flow to fund working capital, capital expenditures, acquisitions and
              other general corporate requirements;

         •    our ability to obtain additional financing in the future at reasonable terms may be restricted or our
              cost of borrowings may increase due to sudden adverse market conditions, including decreased
              availability of credit or fluctuations in interest rates;

         •    fluctuations in market interest rates may affect the cost of our borrowings, as some of our
              indebtedness are at variable interest rates;

         •    there could be a material adverse effect on our business, financial condition and results of
              operations if we are unable to service our indebtedness or otherwise comply with financial and
              other covenants specified in the financing agreements; and

         •    we may be more vulnerable to economic downturns, may be limited in our ability to withstand
              competitive pressures and may have reduced flexibility in responding to changing business,
              regulatory and economic conditions.

     Some of our financing agreements also include various conditions and covenants that require us to obtain
     lender consents prior to carrying out certain activities and entering into certain transactions. Failure to meet
     these conditions or obtain these consents could have significant consequences on our business and
     operations. Specifically, under some of our financing agreements, we require, and may be unable to obtain,
     consents from the relevant lenders for, among others, the following matters: entering into any scheme of
     merger; spinning-off of a business division; selling or transferring all or a substantial portion of our assets;
     making any change in ownership or control or constitution of the Company; making amendments in our
     Memorandum and Articles of Association; creating any further security interest on the assets upon which
     the existing lenders have a prior charge; and raising funds by way of any fresh capital issue. Our financing
     agreements also typically contain certain financial covenants including the requirement to maintain, among
     others, specified debt-to-equity ratios, debt-to-net worth ratios, or Tier I to Tier II capital ratios that may be
     higher than statutory or regulatory requirements. These covenants vary depending on the requirements of
     the financial institution extending the loan and the conditions negotiated under each financing document.
     Such covenants may restrict or delay certain actions or initiatives that we may propose to take from time to
     time.

     We have in the past failed to comply with certain covenants in our loan documents. However, there has
     been no delay in repayment of principal amount, except on certain situations we have delayed repayment of
     interest thereon. A failure to observe the covenants under our financing arrangements or to obtain necessary
     consents required thereunder may lead to the termination of our credit facilities, acceleration of all amounts
     due under such facilities and the enforcement of any security provided. Any acceleration of amounts due
     under such facilities may also trigger cross default provisions under our other financing agreements. If the
     obligations under any of our financing documents are accelerated, we may have to dedicate a substantial
     portion of our cash flow from operations to make payments under such financing documents, thereby
     reducing the availability of cash for our working capital requirements and other general corporate purposes.
     Further, during any period in which we are in default, we may be unable to raise, or face difficulties raising,
     further financing. In addition, other third parties may have concerns over our financial position and it may
     be difficult to market our financial products. Furthermore, under the terms of certain of our financing
     agreements, in the event of any default thereunder, the relevant lender is entitled to change the constitution

                                                      - xv -
      of our Board, including, among other matters, the appointment of new directors and/or removal of any
      existing Director of the Company. Any of these circumstances could adversely affect our business, credit
      rating and financial condition and results of operations. Moreover, any such action initiated by our lenders
      could result in the price of our NCDs being adversely affected.

9.    We face increasing competition in our business which may result in declining margins if we are unable
      to compete effectively.

      We primarily provide vehicle finance loans to FTUs and SRTOs. Our primary competition historically has
      been private unorganized financiers who principally operate in the local market. However, the significant
      growth in the commercial vehicle finance segment in recent periods has resulted in various banks and
      NBFCs increasing their focus on this sector, particularly for new commercial vehicle finance. In addition,
      interest rate deregulation and other liberalization measures affecting the commercial vehicle finance sector,
      together with increased demand for capital by FTUs and SRTOs, have resulted in an increase in
      competition. The demand for commercial vehicle finance has also increased due to relatively lower and
      affordable interest rates and the increased need for urgent borrowing or bridge financing requirements
      which could result in our potential customers seeking alternative cheaper sources of funding.

      All of these factors have resulted in us facing increased competition from other lenders in the commercial
      vehicle finance sector, including commercial banks and other NBFCs. Our ability to compete effectively
      will depend, to some extent, on our ability to raise low-cost funding in the future. Furthermore, as a result
      of increased competition in the commercial vehicle finance sector, vehicle finance products are becoming
      increasingly standardized and variable interest rate and payment terms and lower processing fees are
      becoming increasingly common in the commercial vehicle finance sector in India. There can be no
      assurance that we will be able to react effectively to these or other market developments or compete
      effectively with new and existing players in the increasingly competitive commercial vehicle finance
      industry. Increasing competition may have an adverse effect on our net interest margin and other income,
      and, if we are unable to compete successfully, our market share may decline.

      In addition, we intend to expand our operations to increasingly focus on equipment finance, particularly
      construction equipment, and we face significant competition from most banks and NBFCs that are already
      well established in this segment. If we are unable to compete effectively with other participants in the
      commercial vehicle finance or equipment finance sectors, our business, future financial performance and
      the trading price of the NCDs may be adversely affected.

10.   We have in the past acquired, and may continue to acquire in the future, portfolios relating to various
      credit and financing facilities from banks and other institutions on a non-recourse basis. If the
      performance of such portfolios deteriorates, our business, financial condition and results of operations
      may be adversely affected

      We have in the past acquired, and may in the future continue to acquire, portfolios relating to various credit
      and financing facilities from various originators including banks and other institutions, in the ordinary
      course of our business.

      Notably, pursuant to the terms of an Assignment Agreement dated December 22, 2009 (the Assignment
      Agreement) between the Company, GE Capital Services India and GE Capital Financial Services
      (collectively, the GE Entities), we have acquired with effect from December 24, 2009 from the GE Entities,
      on a non-recourse basis, a certain portfolio of receivables in connection with certain loan facilities relating
      to commercial vehicle loans and construction equipment loans (the GE Receivables), together with all
      right, title and interest therein under the relevant underlying loan and security documents relating to the GE
      Receivables as of November 28, 2009.

11.   We may not be able to successfully sustain our growth strategy.

      In recent years, we have experienced substantial growth. Our growth strategy includes growing our loan
      book and expanding our customer base. There can be no assurance that we will be able to sustain our

                                                     - xvi -
      growth strategy successfully or that we will be able to expand further or diversify our product portfolio. If
      we grow our loan book too rapidly or fail to make proper assessments of credit risks associated with new
      borrowers, a higher percentage of our loans may become non-performing, which would have a negative
      impact on the quality of our assets and our financial condition.

      We also face a number of operational risks in executing our growth strategy. We have experienced rapid
      growth in our commercial vehicle finance business, our branch network has expanded significantly, and we
      are entering into new, smaller towns and cities within India as part of our growth strategy. Our rapid
      growth exposes us to a wide range of increased risks, including business risks, such as the possibility that a
      number of our impaired loans may grow faster than anticipated, as well as operational risks, fraud risks and
      regulatory and legal risks. Moreover, our ability to sustain our rate of growth depends significantly upon
      our ability to manage key issues such as selecting and retaining key managerial personnel, maintaining
      effective risk management policies, continuing to offer products which are relevant to our target base of
      clients, developing managerial experience to address emerging challenges and ensuring a high standard of
      client service. We will need to recruit new employees, who will have to be trained and integrated into our
      operations. We will also have to train existing employees to adhere properly to internal controls and risk
      management procedures. Failure to train our employees properly may result in an increase in employee
      attrition rates, require additional hiring, erode the quality of customer service, divert management
      resources, increase our exposure to high-risk credit and impose significant costs on us.

12.   We may not be able to successfully diversify our product portfolio.

      We have expanded our product portfolio to provide, in addition to pre-owned and new commercial vehicle
      financing, financing for passenger commercial vehicles, multi-utility vehicles, three-wheelers and tractors,
      ancillary equipment and vehicle parts finance, working capital loans for commercial vehicle operators, and
      freight bill discounting. Furthermore, we intend to enter into certain new lines of business as part of our
      growth strategy.

      For example, we intend to further develop our equipment finance business, particularly for construction
      equipment, through a wholly-owned subsidiary established for this purpose. We have limited experience in
      these new lines of business which are partly targeted at a different customer segment, and may encounter
      additional risks by entering into such new lines of business. We also intend to develop pre-owned
      commercial vehicle hubs across India called "Automalls", through a wholly-owned subsidiary which has
      been incorporated for this purpose, designed to provide a trading platform for the sale of pre-owned
      commercial vehicles, showrooms for branded new and refurbished pre-owned commercial vehicles, as well
      as commercial vehicles repossessed by financing companies. We intend to provide electronic advertising
      and trading infrastructure in these "Automalls", and to utilize this platform for marketing of our financial
      products.

      We cannot assure that such diversification or expansion of operations will yield favorable or expected
      results, as our overall profitability and success will be subject to various factors, including, among others,
      our ability to obtain necessary statutory and/or regulatory approvals in connection with such proposed
      business in a timely manner, our ability to effectively recruit, retain and motivate appropriate managerial
      talent, our relative inexperience in the equipment finance sector and ability to compete with banks and
      other NBFCs that are already well established in this market segment, as well as our ability to effectively
      absorb additional infrastructure costs. There can also be no assurance that our proposed "Automalls" will be
      successful in creating additional source of business for our financial products.

      New businesses will require significant capital investments and commitments of time from our senior
      management, there also can be no assurance that our management will be able to develop the skills
      necessary to successfully manage these new business areas. Our inability to effectively manage any of
      these issues could materially and adversely affect our business and impact our future financial performance.

13.   We may experience difficulties in expanding our business into new regions and markets in India.

      As part of our growth strategy, we continue to evaluate attractive growth opportunities to expand our
      business into new regions and markets in India. Factors such as competition, culture, regulatory regimes,
                                                    - xvii -
      business practices and customs and customer requirements in these new markets may differ from those in
      our current markets, and our experience in our current markets may not be applicable to these new markets.
      In addition, as we enter new markets and geographical regions, we are likely to compete not only with
      other banks and financial institutions but also the local unorganized or semi-organized private financiers,
      who are more familiar with local regulations, business practices and customs, and have stronger
      relationships with customers.

      If we plan to expand our geographical footprint, our business may be exposed to various additional
      challenges, including obtaining necessary governmental approvals, identifying and collaborating with local
      business and partners with whom we may have no previous working relationship; successfully gauging
      market conditions in local markets with which we have no previous familiarity; attracting potential
      customers in a market in which we do not have significant experience or visibility; being susceptible to
      local taxation in additional geographical areas of India; and adapting our marketing strategy and operations
      to different regions of India in which different languages are spoken. Our inability to expand our current
      operations may adversely affect our business prospects, financial conditions and results of operations.

14.   Any downgrade of our credit ratings would increase borrowing costs and constrain our access to capital
      and lending markets and, as a result, would negatively affect our net interest margin and our business.

      The cost and availability of capital is also dependent on our short-term and long-term credit ratings. Ratings
      reflect a rating agency’s opinion of our financial strength, operating performance, strategic position, and
      ability to meet our obligations. In relation to our long-term debt instruments, we currently have long term
      ratings of CARE AA+ from CARE and AA (Ind) from FITCH. In relation to our short-term debt
      instruments, we have also received short term ratings of F1+ from FITCH and P1+ from CRISIL. The
      Secured NCDs proposed to be issued under this Issue have been rated ‘CARE AA+’ and the Unsecured
      NCDs proposed to be issued under this Issue have been rated ‘CARE AA’ by CARE vide their letter dated
      April 19, 2010.

      Any downgrade of our credit ratings would increase borrowing costs and constrain our access to capital and
      debt markets and, as a result, would negatively affect our net interest margin and our business. In addition,
      downgrades of our credit ratings could increase the possibility of additional terms and conditions being
      added to any additional financing or refinancing arrangements in the future. Any such adverse development
      could adversely affect our business, financial condition and results of operations.

15.   If we are unable to successfully expand, maintain or leverage our partnership arrangements with private
      financiers involved in commercial vehicle financing, our business prospects, results of operations and
      financial conditions may be adversely affected.

      Our partnership and co-financing arrangements with private financiers involved in commercial vehicle
      financing across India is an integral part of our growth strategy. We enter into strategic partnership
      agreements with private financiers ranging from individual financiers and small local private financiers,
      including other NBFCs, to capitalize on their local knowledge, infrastructure and personnel base of our
      partners in order to source new customers. Our franchising and co-financing arrangements include various
      revenue-sharing arrangements at pre-determined amounts. For further information on our franchising and
      co-financing arrangements, see “Our Business - Our Operations - Customer Origination - Partnership and
      Co-Financing Arrangements with Private Financiers”.

      There can be no assurance that our partners will faithfully comply with the procedural and other conditions
      specified by us in connection with our arrangements with them in the context of customer origination,
      credit appraisal process, loan administration and monitoring and any loan recovery processes, or that our
      partners will not act in any manner that could adversely affect our reputation, brand, customer relationships
      or business interests. For example, we have in the past experienced certain instances of fraud by certain of
      our partners. There can also be no assurance that we will be able to leverage and benefit from our
      partnership arrangements to effectively source a sufficient volume of new customers and business
      commensurate to the revenue-sharing and other incentives provided to our partners under our arrangements
      with them.

                                                    - xviii -
      In addition, we may not be able to identify suitable private financiers in the future with whom we can
      successfully partner through such arrangements, or in joint marketing and customer support activities, and
      there can be no assurance that we will be able to ensure any level of success with such partnership
      arrangements for any sustained period of time. Furthermore, there can be no assurance that there will not be
      any dispute with such partners in the future. If we are unable to successfully expand, maintain or leverage
      our partnership arrangements and relationship with our partners, our business prospects, results of
      operations and financial conditions may be adversely affected.

16.   If we are unable to manage the level of NPAs in our loan portfolio, our financial position and results of
      operations may suffer.

      Our Gross NPAs as a percentage of Total Loan Assets was were 2.14% and 2.43% as of March 31, 2009
      and December 31, 2009 respectively, while our Net NPAs as a percentage of Net Loan Assets was 0.83%
      and 0.67% as of March 31, 2009 and December 31, 2009, respectively. We cannot be sure that we will be
      able to improve our collections and recoveries in relation to our NPAs, or otherwise adequately control our
      level of NPAs in future. Moreover, as our loan portfolio matures, we may experience greater defaults in
      principal and/or interest repayments. Thus, if we are not able to control or reduce our level of NPAs, the
      overall quality of our loan portfolio may deteriorate and our results of operations may be adversely
      affected. Furthermore, our current provisions may not be adequate when compared to the loan portfolios of
      other financial institutions. Moreover, there also can be no assurance that there will be no further
      deterioration in our provisioning coverage as a percentage of Gross NPAs or otherwise, or that the
      percentage of NPAs that we will be able to recover will be similar to our past experience of recoveries of
      NPAs. In the event of any further deterioration in our NPA portfolio, there could be an even greater,
      adverse impact on our results of operations.

17.   A decline in our capital adequacy ratio could restrict our future business growth.

      We are required under applicable laws and regulations to maintain a capital adequacy ratio of at least
      12.00% of our risk-weighted assets, consisting of both Tier I and Tier II capital. Our capital adequacy ratio
      was 17.07% as of December 31, 2009, with Tier I capital comprising 12.15%. If we continue to grow our
      loan portfolio and asset base, we will be required to raise additional Tier I and Tier II capital in order to
      continue to meet applicable capital adequacy ratios with respect to our business. There can be no assurance
      that we will be able to raise adequate additional capital in the future on terms favorable to us or at all, and
      this may adversely affect the growth of our business.

18.   As part of our business strategy we assign or securitize a substantial portion of our loans to banks and
      other institutions. Any deterioration in the performance of any pool of receivables assigned or
      securitized to banks and other institutions may adversely impact our financial performance.

      As part of our means of raising and/or managing our funds, we assign or securitize a substantial portion of
      the receivables from our loan portfolio to banks and other institutions. Such assignment or securitization
      transactions are conducted on the basis of our internal estimates of our funding requirements, which may
      vary from time to time. In fiscal 2007, 2008 and 2009, and in the nine months ended December 31, 2009,
      we securitized/assigned assets of a book value of Rs. 285,979.49 lacs, Rs. 211,822.17 lacs, Rs. 312,498.40
      lacs and Rs. 326,229.88 lacs, respectively. Any change in statutory and/regulatory requirements in relation
      to assignments or securitizations by financial institutions, including the requirements prescribed by RBI
      and the Government of India, could have an adverse impact on our assignment and securitization
      transactions.

      We are also required to provide a credit enhancement for the securitization/assignment transactions by way
      of either fixed deposits or corporate guarantees and the aggregate credit enhancement amount outstanding
      as on December 31, 2009 was Rs. 152,736.05 lacs. In the event a relevant bank or institution does not
      realize the receivables due under such loan assets, such bank or institution would have recourse to such
      credit enhancement, which could have a material adverse effect on our results of operations and financial
      condition.


                                                     - xix -
19.   System failures or inadequacy and security breaches in computer systems may adversely affect our
      business.

      Our business is increasingly dependent on our ability to process, on a daily basis, a large number of
      transactions. Our financial, accounting or other data processing systems may fail to operate adequately or
      become disabled as a result of events that are wholly or partially beyond our control, including a disruption
      of electrical or communications services.

      Our ability to operate and remain competitive will depend in part on our ability to maintain and upgrade
      our information technology systems on a timely and cost-effective basis. The information available to and
      received by our management through our existing systems may not be timely and sufficient to manage risks
      or to plan for and respond to changes in market conditions and other developments in our operations. We
      may experience difficulties in upgrading, developing and expanding our systems quickly enough to
      accommodate our growing customer base and range of products.

      Our operations also rely on the secure processing, storage and transmission of confidential and other
      information in our computer systems and networks. Our computer systems, software and networks may be
      vulnerable to unauthorized access, computer viruses or other malicious code and other events that could
      compromise data integrity and security.

      Any failure to effectively maintain or improve or upgrade our management information systems in a timely
      manner could materially and adversely affect our competitiveness, financial position and results of
      operations. Moreover, if any of these systems do not operate properly or are disabled or if there are other
      shortcomings or failures in our internal processes or systems, it could affect our operations or result in
      financial loss, disruption of our businesses, regulatory intervention or damage to our reputation. In addition,
      our ability to conduct business may be adversely impacted by a disruption in the infrastructure that supports
      our businesses and the localities in which we are located.

20.   We may not be able to maintain our current levels of profitability due to increased costs or reduced
      spreads.

      Our business strategy involves a relatively high level of ongoing interaction with our customers. We
      believe that this involvement is an important part of developing our relationship with our customers,
      identifying new cross-selling opportunities and monitoring our performance. However, this level of
      involvement also entails higher levels of costs and also requires a relatively higher gross spread, or margin,
      on the finance products we offer in order to maintain profitability. There can be no assurance that we will
      be able to maintain our current levels of profitability if the gross spreads on our finance products were to
      reduce substantially, which could adversely affect our results of operations.

21.   We face asset-liability mismatches which could affect our liquidity and consequently may adversely
      affect our operations and profitability.

      We face potential liquidity risks due to varying periods over which our assets and liabilities mature. As is
      typical for NBFCs, a portion of our funding requirements is met through short-term funding sources such as
      bank loans, working capital demand loans, cash credit, short term loans and commercial papers. However,
      a large portion of our loan assets mature over a medium term. Consequently, our inability to obtain
      additional credit facilities or renew our existing credit facilities, in a timely and cost-effective manner or at
      all, may lead to mismatches between our assets and liabilities, which in turn may adversely affect our
      operations and financial performance. Further, mismatches between our assets and liabilities are
      compounded in case of pre-payments of the financing facilities we grant to our customers.

22.   Our loan portfolio may no longer continue to be classified as priority sector advances by the RBI.

      The RBI currently mandates domestic commercial banks operating in India to maintain an aggregate 40.0%
      (32.0% for foreign banks) of their advances or credit equivalent amount of off-balance sheet exposure,
      whichever is higher as “priority sector advances”. These include advances to agriculture, small enterprises
      (including SRTOs, which constitute the largest proportion of our loan portfolio), exports and similar sectors
                                                      - xx -
      where the Government seeks to encourage flow of credit for developmental reasons. Banks in India that
      have traditionally been constrained or unable to meet these requirements organically, have relied on
      specialized institutions like us that are better positioned to or exclusively focus on originating such assets
      through on-lending or purchase of assets or securitized/assigned pools to comply with these targets.

      In the event that any part of our loan portfolio is no longer classified as a priority sector advance by the
      RBI, our ability to securitize our asset pool will be hampered, which may adversely affect our financial
      condition and results of operations.

23.   Any change in control of our Promoter may correspondingly adversely affect our operations and
      profitability.

      As of December 31, 2009, SCL holds 50.17% of the paid up share capital of our Promoter, Shriram
      Holdings (Madras) Private Limited, and the remaining shares in Shriram Holdings (Madras) Private
      Limited were held by certain strategic investors. Shriram Holdings (Madras) Private Limited holds 41.40%
      of the paid up share capital of our Company. If SCL ceases to exercise control over our Promoter as a
      result of any transfer of shares or otherwise, our ability to derive any benefit from the brand name
      “Shriram” and our goodwill as a part of the Shriram group of companies may be adversely affected, which
      in turn could adversely affect our business and results of operations. Any such change of control could also
      significantly influence our business policies and operations.

24.   The trade mark/service mark and logo in connection with the “Shriram” brand which we use is licensed
      to us and consequently, any termination or non-renewal of such license may adversely affect our
      goodwill, operations and profitability.

      Pursuant to a license and user agreement dated November 28, 2003 between the Company and SCL
      (formerly Shriram Financial Services Holdings Private Limited), we are entitled to use the brand name
      “Shriram” and the associated mark for which we pay periodic royalty of 0.25% of the Company's total
      gross income to SCL on a quarterly basis. In addition to the royalty, the Company agreed to pay a fee
      equivalent to 0.1% of the total gross funds mobilized by SCL in relation to the Company's right to access
      SCL's agent network and Chit subscribers. The royalties and fees shall accrue in favor of the licensor until
      termination of the agreement.
      This license agreement is valid until March 31, 2011. In the event such license and user agreement is
      terminated or is not renewed or extended in the future, we will not be entitled to use the brand name
      “Shriram” and the associated mark in connection with our business operations. Consequently, we will not
      be able to derive the goodwill that we have been enjoying under the “Shriram” brand. We operate in a
      competitive environment, and we believe that our brand recognition is a significant competitive advantage
      to us. If the license and user agreement is not renewed or terminated, we may need to change our name,
      trade mark/service mark or the logo. Any such change could require us to incur additional costs and may
      adversely impact our goodwill, business prospects and results of operations.
      Our Company has also made applications for the registration of brand names ‘AUTOMALL’ ‘NEW
      LOOK’ AND ‘ONE STOP’ under various classes with the Registrar of Trademarks.

25.   We have certain contingent liabilities which may adversely affect our financial condition.

      As of December 31, 2009, we had certain contingent liabilities not provided for, including the following:
      disputed income tax/ interest tax demand contested in appeals not provided for of Rs. 164.76 lacs, income
      tax penalty of Rs. 349.86 lacs, demands in respect of service tax of Rs. 312.00 lacs, guarantees issued and
      outstanding by the Company of Rs. 700 lacs. For further information on such contingent liabilities, see
      Annexure VI to our Reformatted Summary Financial Statements. In the event that any of these contingent
      liabilities materialize, our financial condition may be adversely affected.


26.   We are involved in various legal and other proceedings that if determined against us could have a
      material adverse effect on our financial condition and results of operations.


                                                     - xxi -
      We are currently involved in a number of legal proceedings arising in the ordinary course of our business.
      These proceedings are pending at different levels of adjudication before various courts and tribunals,
      primarily relating to civil suits and tax disputes. For further information relating to certain significant legal
      proceedings that we are involved in, see “Pending Proceedings and Statutory Defaults”.

      An adverse decision in these proceedings could materially and adversely affect our business, financial
      condition and results of operations.

27.   We may have to comply with strict regulations and guidelines issued by regulatory authorities in India.

      We are regulated principally by and have reporting obligations to the RBI. We are also subject to the
      corporate, taxation and other laws in effect in India. The regulatory and legal framework governing us may
      continue to change as India’s economy and commercial and financial markets evolve. In recent years,
      existing rules and regulations have been modified, new rules and regulations have been enacted and
      reforms have been implemented which are intended to provide tighter control and more transparency in
      India’s asset finance sector. Further, RBI may increase the minimum capital adequacy requirement for
      deposit taking NBFCs such as us.

      Compliance with many of the regulations applicable to our operations may involve significant costs and
      otherwise may impose restrictions on our operations. If the interpretation of the regulators and authorities
      varies from our interpretation, we may be subject to penalties and the business of our Company could be
      adversely affected. There can be no assurance that changes in these regulations and the enforcement of
      existing and future rules by governmental and regulatory authorities will not adversely affect our business
      and future financial performance.

28.   Our ability to assess, monitor and manage risks inherent in our business differs from the standards of
      some of our counterparts in India and in some developed countries.

      We are exposed to a variety of risks, including liquidity risk, interest rate risk, credit risk, operational risk
      and legal risk. The effectiveness of our risk management is limited by the quality and timeliness of
      available data.

      Our hedging strategies and other risk management techniques may not be fully effective in mitigating our
      risks in all market environments or against all types of risk, including risks that are unidentified or
      unanticipated. Some methods of managing risks are based upon observed historical market behavior. As a
      result, these methods may not predict future risk exposures, which could be greater than the historical
      measures indicated. Other risk management methods depend upon an evaluation of information regarding
      markets, customers or other matters. This information may not in all cases be accurate, complete, current,
      or properly evaluated. Management of operational, legal or regulatory risk requires, among other things,
      policies and procedures to properly record and verify a number of transactions and events. Although we
      have established these policies and procedures, they may not be fully effective. Our future success will
      depend, in part, on our ability to respond to new technological advances and evolving NBFC and vehicle
      finance sector standards and practices on a cost-effective and timely basis. The development and
      implementation of such technology entails significant technical and business risks. There can be no
      assurance that we will successfully implement new technologies or adapt our transaction-processing
      systems to customer requirements or evolving market standards.

29.   Our Promoter has significant control in the Company, which will enable them to influence the outcome
      of matters submitted to shareholders for approval, and their interests may differ from those of other
      holders of Equity Shares.

      As of March 31, 2010, Shriram Holdings (Madras) Private Limited, our Promoter, beneficially owned
      approximately 41.40% of our share capital. See “Capital Structure”. Our Promoter has the ability to control
      our business including matters relating to any sale of all or substantially all of our assets, the timing and
      distribution of dividends and the election or termination of appointment of our officers and directors. This
      control could delay, defer or prevent a change in control of the Company, impede a merger, consolidation,
      takeover or other business combination involving the Company, or discourage a potential acquirer from
                                                     - xxii -
      making a tender offer or otherwise attempting to obtain control of the Company even if it is in the
      Company’s best interest. In addition, for so long as our Promoter continues to exercise significant control
      over the Company, it may influence the material policies of the Company in a manner that could conflict
      with the interests of our other shareholders. The Promoter group may have interests that are adverse to the
      interests of our other shareholders and may take positions with which we or our other shareholders do not
      agree.

30.   Certain shareholders of our Promoter Shriram Holdings (Madras) Private Limited have rights to
      nominate directors on our Board.

      Pursuant to the Share Subscription Agreement dated February 2, 2006, as amended on September 12, 2008
      (“Share Subscription Agreement”), Newbridge India Investments II Limited (“New Bridge”), which
      currently holds 49.0% of the paid-up share capital of our Promoter Shriram Holdings (Madras) Private
      Limited, is entitled to appoint two nominee directors on our Board. Furthermore, in the event that the size
      of the Board is increased beyond 12 directors, New Bridge and the Founders (defined as R. Thyagarajan, T.
      Jayaraman, A.V.S. Raja and Shriram Financial Services Holdings Private Limited, collectively) will each
      be entitled to appoint three directors on the Board. In the event that any shareholder having a right to
      nominate a director ceases to have such right, then the resulting vacancy shall be filled by the appointment
      of independent directors. In addition, New Bridge, on the one hand, and the Founders, on the other hand,
      are entitled to nominate an equal number of nominees on any committee of the Board.

      Under the terms of such Share Subscription Agreement, certain reserved matters require the affirmative
      vote and/or prior consent of the directors nominated by New Bridge and the Founders on our Board or any
      committee thereof. These matters include, among others, any further issuance of any Equity Shares by the
      Company; acquisition of the assets of any other business; creation of a joint venture or partnership, or
      merger, demerger and consolidation or any other business combination; disinvestment in any subsidiary;
      appointment, removal and revision of the compensation of key personnel; capital expenditure in excess of
      Rs.30.00 lacs; any amendment to the memorandum or articles of association of the Company; any
      amendment in the annual business plan of the Company; commencement of a new line of business; any
      changes to material accounting or tax policies; recommendation of or declaration of dividend or
      distribution of any kind; removal of the statutory or internal auditor; any bankruptcy, dissolution,
      insolvency, recapitalization, reorganization, assignment to creditors, winding up and/or liquidation; an
      increase or reorganization in the issued, subscribed or paid up equity or preference share capital; any
      connected person transaction; any amendment, modification or cancellation of the trademark license
      agreement (license and user agreement) between Shriram Financial Services Holdings Private Limited, as
      licensor, and the Company for the use of the "Shriram" brand and associated logos. In the event that the
      beneficial ownership of New Bridge in the Company, indirectly through our Promoter or directly, becomes
      greater than that of the Founders, then the number of reserved matters requiring the affirmative vote of the
      directors nominated by the Founders would be reduced; moreover, in such event, New Bridge shall also be
      entitled to appoint and remove the managing director (whether designated as managing director, CEO,
      COO or otherwise) and other key employees of the Company and of our Promoter.

      As an exit mechanism, New Bridge may, at any time after expiry of two years from September 12, 2008,
      require our Promoter to distribute the shares held by our Promoter in the Company amongst the Founders
      and New Bridge in proportion to their respective holdings in our Promoter; in the alternative, New Bridge
      may require the merger of our Promoter with the Company in order to effect such distribution. Moreover,
      within two years from September 12, 2008, New Bridge is entitled to acquire controlling interest in our
      Promoter from the Founders, subject to the payment of a call option price plus a control premium. The
      Company, the Founders and our Promoter Shriram Holdings (Madras) Private Limited have agreed to
      jointly and severally indemnify New Bridge in the event of any breach of the terms of such Share
      Subscription Agreement. Drag along rights are also provided for in the Share Subscription Agreement.
      After March 11, 2011 New Bridge is entitled, at any time to require the founders to sell all or part of the
      latter's shares or warrants in the Company or in our Promoter. In the event that New Bridge does not accept
      the purchase offer of a proposed purchaser as communicated by the Founders, New Bridge may in turn
      present the Founders with the terms of another purchase offer, which shall not provide for a lower purchase
      price.

                                                   - xxiii -
      New Bridge and the Founders, pursuant to their rights under the Share Subscription Agreement and as
      shareholders in our Promoter, may influence policies of the Company in a manner that could conflict with
      the interests of our other shareholders. New Bridge and the Founders may have interests that are adverse to
      the interests of our other shareholders and may take positions with which the Company or our other
      shareholders do not agree.


31.   We have entered into certain related party transactions.

      We have entered into transactions with related parties, within the meaning of AS 18 as provided under the
      Companies (Accounting Standards) Rules, 2006. These transactions include royalty paid to SCL pursuant
      to the License and User Agreement dated November 28, 2003 between the Company and SCL in
      connection with the use of the brand name "Shriram" and the associated mark, for which we pay periodic
      royalty of 0.25% of the Company's total gross income to SCL on a quarterly basis. In addition to the
      royalty, our Company agreed to pay an annualized fee to SCL equivalent to 0.1% of the total gross funds
      mobilized by SCL for access to the database of agents and Chit subscribers. For further information on our
      related party transactions please see the section titiled “Financial Information”. Such transactions may
      give rise to current or potential conflicts of interest with respect to dealings between us and such related
      parties. Additionally, there can be no assurance that any dispute that may arise between us and related
      parties will be resolved in our favor.

32.   Any failure by us to identify, manage, complete and integrate acquisitions, divestitures and other
      significant transactions successfully could adversely affect our results of operations, business and
      prospects.

      As part of our business strategy, we may acquire complementary companies or businesses, divest non-core
      businesses or assets, enter into strategic alliances and joint ventures and make investments to further our
      business. In order to pursue this strategy successfully, we must identify suitable candidates for and
      successfully complete such transactions, some of which may be large and complex, and manage the
      integration of acquired companies or employees. We may not fully realize all of the anticipated benefits of
      any such transaction within the anticipated timeframe or at all. Any increased or unexpected costs,
      unanticipated delays or failure to achieve contractual obligations could make such transactions less
      profitable or unprofitable. Managing business combination and investment transactions requires varying
      levels of management resources, which may divert our attention from other business operations, may result
      in significant costs and expenses and charges to earnings. The challenges involved in integration include:

          •   combining product offerings and entering into new markets in which we are not experienced;

          •   consolidating and maintaining relationships with customers;

          •   consolidating and rationalizing transaction processes and corporate and IT infrastructure;

          •   integrating employees and managing employee issues;

          •   coordinating and combining administrative and other operations and relationships with third
              parties in accordance with applicable laws and other obligations while maintaining adequate
              standards, controls and procedures;

          •   achieving savings from infrastructure integration; and

          •   managing other business, infrastructure and operational integration issues.


33.   The BSE has suspended the trading of our Equity Shares in the past.

      Pursuant to an order dated December 18, 1998, issued by the BSE, the trading of our Equity Shares on the

                                                   - xxiv -
      BSE was suspended from December 21, 1998 to January 3, 1999 on account of alleged non-compliance
      with clauses 15 and 16 of the listing agreement entered into with the BSE in connection with the listing and
      trading of our Equity Shares.

      Our failure to comply with the provisions of the listing agreements executed between our Company and the
      stock exchanges where our securities are listed, in a timely manner or at all, may expose us to regulatory
      proceedings and/or penal action.

34.   Our success depends in large part upon our management team and key personnel and our ability to
      attract, train and retain such persons.

      Our ability to sustain our rate of growth depends significantly upon our ability to manage key issues such
      as selecting and retaining key managerial personnel, developing managerial experience to address emerging
      challenges and ensuring a high standard of client service. In order to be successful, we must attract, train,
      motivate and retain highly skilled employees, especially branch managers and product executives. If we
      cannot hire additional qualified personnel or retain them, our ability to expand our business will be
      impaired and our revenue could decline. We will need to recruit new employees, who will have to be
      trained and integrated into our operations. We will also have to train existing employees to adhere properly
      to internal controls and risk management procedures. Failure to train and motivate our employees properly
      may result in an increase in employee attrition rates, require additional hiring, erode the quality of customer
      service, divert management resources, increase our exposure to high-risk credit and impose significant
      costs on us. Hiring and retaining qualified and skilled managers are critical to our future, as our business
      model depends on our credit-appraisal and asset valuation mechanism, which are personnel-driven
      operations. Moreover, competition for experienced employees in the commercial vehicle finance sector
      can be intense. While we have an incentive structure and an Employee Stock Option Scheme designed to
      encourage employee retention, our inability to attract and retain talented professionals, or the resignation or
      loss of key management personnel, may have an adverse impact on our business and future financial
      performance.

35.   We are exposed to fluctuations in the market values of our investment and other asset portfolio.

      Recent turmoil in the financial markets has adversely affected economic activity globally, including in
      India. Continued deterioration of the credit and capital markets could result in volatility of our investment
      earnings and impairments to our investment and asset portfolio, which could negatively impact our
      financial condition and reported income.

36.   Our results of operations could be adversely affected by any disputes with our employees.

      As of December 31, 2009, we employed over 12,823 full-time employees. Currently, none of our
      employees are members of any labor union. While we believe that we maintain good relationships with our
      employees, there can be no assurance that we will not experience future disruptions to our operations due to
      disputes or other problems with our work force, which may adversely affect our business and results of
      operations.

37.   Our inability to obtain, renew or maintain our statutory and regulatory permits and approvals required
      to operate our business may have a material adverse effect on our business.

      We require certain statutory and/or regulatory permits and approvals for our business. In the future, we will
      be required to renew such permits and approvals and obtain new permits and approvals for any proposed
      operations. There can be no assurance that the relevant authorities will issue any of such permits or
      approvals in a timely manner,- or at all, and/or on favorable terms and conditions. Failure by us to comply
      with the terms and conditions to which such permits or approvals are subject, and/or to renew, maintain or
      obtain the required permits or approvals may result in the interruption of our operations and may have a
      material adverse effect on our business, financial condition and results of operations.

38.   We are subject to supervision and regulation by the RBI as a deposit-taking NBFC, and changes in
      RBI’s regulations governing us could adversely affect our business.
                                                     - xxv -
        We are subject to the RBI’s guidelines on financial regulation of NBFCs, including capital adequacy,
        exposure and other prudential norms. The RBI also regulates the credit flow by banks to NBFCs and
        provides guidelines to commercial banks with respect to their investment and credit exposure norms for
        lending to NBFCs. The RBI’s regulations of NBFCs could change in the future which may require us to
        restructure our activities, incur additional cost or could otherwise adversely affect our business and our
        financial performance.

        The RBI, from time to time, amends the regulatory framework governing NBFCs to address, inter-alia,
        concerns arising from certain divergent regulatory requirements for banks and NBFCs. Pursuant to two
        notifications dated December 6, 2006, (Notifications No. DNBS. 189 / CGM (PK)-2006 and DNBS.190 /
        CGM (PK)-2006), the RBI amended the NBFC Acceptance of Public Deposits (Reserve Bank) Directions,
        1998, reclassifying deposit taking NBFCs, such as us. We are also subject to the requirements of the Non
        Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank)
        Directions, 2007, issued by the RBI on February 22, 2007, as amended.

        The laws and regulations governing the banking and financial services industry in India have become
        increasingly complex and cover a wide variety of issues, such as interest rates, liquidity, securitization,
        investments, ethical issues, money laundering and privacy. In some cases, there are overlapping
        regulations and enforcement authorities. Moreover, these laws and regulations can be amended,
        supplemented or changed at any time such that we may be required to restructure our activities and incur
        additional expenses to comply with such laws and regulations, which could materially and adversely affect
        our business and our financial performance.

        Compliance with many of the regulations applicable to our operations in India and/or outside India,
        including any restrictions on investments, lending and other activities currently being carried out by our
        Company, involves a number of risks, particularly in areas where applicable regulations may be subject to
        varying interpretations. If the interpretation of the regulators and authorities varies from our interpretation,
        we may be subject to penalties and our business could be adversely affected. We are also subject to changes
        in Indian laws, regulations and accounting principles and practices. There can be no assurance that the laws
        governing the Indian financial services sector will not change in the future or that such changes or the
        interpretation or enforcement of existing and future laws and rules by governmental and regulatory
        authorities will not adversely affect our business and future financial performance.

39.     Our insurance coverage may not adequately protect us against losses.

        We maintain such insurance coverage that we believe is adequate for our operations. Our insurance
        policies, however, may not provide adequate coverage in certain circumstances and are subject to certain
        deductibles, exclusions and limits on coverage. We maintain general liability insurance coverage,
        including coverage for errors or omissions. We cannot, however, assure you that the terms of our insurance
        policies will be adequate to cover any damage or loss suffered by us or that such coverage will continue to
        be available on reasonable terms or will be available in sufficient amounts to cover one or more large
        claims, or that the insurer will not disclaim coverage as to any future claim.

        A successful assertion of one or more large claims against us that exceeds our available insurance coverage
        or changes in our insurance policies, including premium increases or the imposition of a larger deductible
        or co-insurance requirement, could adversely affect our business, financial condition and results of
        operations.

Risks Relating to the Utilization of Issue Proceeds

40.     The fund requirement and deployment mentioned in the Objects of the Issue have not been appraised by
        any bank or financial institution.

        We intend to use the proceeds of the Issue, after meeting the expenditures of and related to the Issue, for
        our various financing activities including lending and investments, subject to the restrictions contained in

                                                       - xxvi -
        the Foreign Exchange Management (Borrowing and Lending in Rupee) Regulations, 2000, and other
        applicable statutory and/or regulatory requirements, to repay our existing loans and our business operations
        including for our capital expenditure and working capital requirements. The Unsecured NCDs will be in the
        nature of subordinated debt and will be eligible for Tier II capital and accordingly will be utilised in
        acordnce with statutory and regulatory requirements including requirements of RBI. For further details,
        please refer to the section titled “Objects of the Issue” beginning on page 85 of this Draft Prospectus. The
        fund requirement and deployment is based on internal management estimates and has not been appraised by
        any bank or financial institution. Accordingly, the management will have significant flexibility in applying
        the proceeds received by us from the Issue. Further, as per the provisions of the Debt Regulations, we are
        not required to appoint a monitoring agency and therefore no monitoring agency has been appointed for
        this Issue.

Risks Relating to the NCDs

41.     Changes in interest rates may affect the price of our NCDs.

        All securities where a fixed rate of interest is offered, such as our NCDs, are subject to price risk. The price
        of such securities will vary inversely with changes in prevailing interest rates, i.e. when interest rates rise,
        prices of fixed income securities fall and when interest rates drop, the prices increase. The extent of fall or
        rise in the prices is a function of the existing coupon, days to maturity and the increase or decrease in the
        level of prevailing interest rates. Increased rates of interest, which frequently accompany inflation and/or a
        growing economy, are likely to have a negative effect on the price of our NCDs.


42.     You may not be able to recover, on a timely basis or at all, the full value of the outstanding amounts
        and/or the interest accrued thereon in connection with the Secured NCDs.

        Our ability to pay interest accrued on the Secured NCDs and/or the principal amount outstanding from time
        to time in connection therewith would be subject to various factors inter-alia including our financial
        condition, profitability and the general economic conditions in India and in the global financial markets.
        We cannot assure you that we would be able to repay the principal amount outstanding from time to time
        on the Secured NCDs and/or the interest accrued thereon in a timely manner or at all. Although our
        Company will create appropriate security in favour of the Debenture Trustee for the Secured NCD holders
        on the assets adequate to ensure 100% asset cover for the Secured NCDs, which shall be free from any
        encumbrances, the realizable value of the assets charged as security, when liquidated, may be lower than the
        outstanding principal and/or interest accrued thereon in connection with the Secured NCDs. A failure or
        delay to recover the expected value from a sale or disposition of the assets charged as security in
        connection with the Secured NCDs could expose you to a potential loss.

43.     If we do not generate adequate profits, we may not be able to maintain an adequate Debenture
        Redemption Reserve, (“DRR”), for the NCDs issued pursuant to this Draft Prospectus.

        Section 117C of the Act states that any company that intends to issue debentures must create a DRR to
        which adequate amounts shall be credited out of the profits of the company until the debentures are
        redeemed. The Ministry of Corporate Affairs has, through its circular dated April 18, 2002, (“Circular”),
        specified that the quantum of DRR to be created before the redemption liability actually arises in normal
        circumstances should be ‘adequate’ to pay the value of the debentures plus accrued interest, (if not already
        paid), till the debentures are redeemed and cancelled. The Circular however further specifies that, for
        NBFCs like our Company, (NBFCs which are registered with the RBI under Section 45-IA of the RBI
        Act), the adequacy of the DRR will be 50% of the value of debentures issued through the public issue.
        Accordingly our Company is required to create a DRR of 50% of the value of debentures issued through
        the public issue. As further clarified by the Circular, the amount to be credited as DRR will be carved out
        of the profits of the company only and there is no obligation on the part of the company to create DRR if
        there is no profit for the particular year. Accordingly, if we are unable to generate adequate profits, the
        DRR created by us may not be adequate to meet the 50% of the value of the NCDs. This may have a
        bearing on the timely redemption of the NCDs by our Company.

                                                      - xxvii -
44.   Any downgrading in credit rating of our NCDs may affect the value of NCDs and thus our ability to
      raise further debts.

      The Secured NCDs proposed to be issued under this Issue have been rated ‘CARE AA+’ and the
      Unsecured NCDs proposed to be issued under this Issue have been rated ‘CARE AA’ by CARE vide their
      letters dated April 19, 2010. The Issuer cannot guarantee that this rating will not be downgraded. The
      ratings provided by CARE may be suspended, withdrawn or revised at any time by these assigning rating
      agencies. Any revision or downgrading in the above credit rating(s) may lower the value of the NCDs and
      may also affect the Issuers ability to raise further debt.

45.   There is no active market for the NCDs on the WDM segment of the stock exchanges. As a result the
      liquidity and market prices of the NCDs may fail to develop and may accordingly be adversely affected.

      There can be no assurance that an active market for the NCDs will develop. If an active market for the
      NCDs fails to develop or be sustained, the liquidity and market prices of the NCDs may be adversely
      affected. The market price of the NCDS would depend on various factors inter alia including (i) the interest
      rate on similar securities available in the market and the general interest rate scenario in the country, (ii) the
      market price of our Equity Shares, (iii) the market for listed debt securities, (iv) general economic
      conditions, and, (v) our financial performance, growth prospects and results of operations. The
      aforementioned factors may adversely affect the liquidity and market price of the NCDs, which may trade
      at a discount to the price at which you purchase the NCDs and/or be relatively illiquid.

46.   There are certain risks in connection with the Unsecured NCDs

      The Unsecured NCDs will be in the nature of subordinated debt and hence the claims of the holders thereof
      will be subordinated to the claims of other secured and other unsecured creditors of our Company. Further,
      since no charge upon the assets of our Company would be created in connection with the the Unsecured
      NCDs, in the event of default in connection therewith, the holders of Unsecured NCDs may not be able to
      recover their principal amount and/or the interest accrued thereoin in a timely manner, for the entire value
      of the Unsecured NCDs held by them or at all. Accordingly, in such a case the holders of Unsecured NCDs
      may lose all or a part of their investment therein. Further, the payment of interest and the repayment of the
      prinicipal amount in connection with the Unsecured NCDs would be subject to the requirements of RBI,
      which may also require our Company to obtain a prior approval from the RBI in certain circumstances.

47.   There may be a delay in making refunds to applicants.

      We cannot assure you that the monies refundable to you, on account of (a) withdrawal of your applications,
      (b) our failure to receive minimum subscription in connection with the Base Issue, (c) withdrawal of the
      Issue, or (d) failure to obtain the final approval from the NSE for listing of the NCDs, will be refunded to
      you in a timely manner. We however, shall refund such monies, with the interest due and payable thereon
      as prescribed under applicable statutory and/or regulatory provisions.

B.    EXTERNAL RISK FACTORS

1.    Our business is dependent on the automobile and transportation industry in India.

      Our business to a large extent depends on the continued growth in the automobile and transportation
      industry in India, which is influenced by a number of extraneous factors which are beyond our control,
      inter-alia including (a) the macroeconomic environment in India, (b) the demand for transportation
      services, (c) natural disasters and calamities, and (d) changes in regulations and policies in connection with
      motor vehicles. Such factors may result in a decline in the sales or value of new and pre-owned CVs.
      Correspondingly, the demand for availing finance for new and pre-owned commercial vehicles may
      decline, which in turn may adversely affect our financial condition and the results of our operations.
      Further, the ability of CV owners and/or operators to perform their obligations under existing financing
      agreements may be adversely affected if their businesses suffer as a result of the aforesaid factors.

                                                     - xxviii -
2.   Increase in competition from our peer group in the CV finance sector may result in reduction of our
     market share, which in turn may adversely affect our profitability.

     Our Company provides loans to pre-owned and new CV owners and/or operators in suburban and rural
     areas in India. Although, we are currently one of the largest providers of CV finance, we have been
     increasingly facing competition from domestic and foreign banks and NBFCs operating in the CV finance
     segment of the industry. Some of our competitors are very aggressive in underwriting credit risk and
     pricing their products and may have access to funds at a lower cost, wider networks and greater resources
     than our Company. Our financial condition and results of operations are dependent on our ability to obtain
     and maintain low cost funds and to provide prompt and quality services to our customers. If our Company
     is unable to access funds at a cost comparable to or lower than our competitors, we may not be able to offer
     loans at competitive interest rates to our customers.

     While our Company believes that it has historically been able to offer competitive interest rates on the
     loans extended to our customers, there can be no assurance that our Company will be able to continue to do
     so in the future. An increase in competition from our peer group may result in a decline in our market
     share, which may in turn result in reduced incomes from our operations and may adversely affect our
     profitability.

3.   Our growth depends on the sustained growth of the Indian economy. An economic slowdown in India
     and abroad could have a direct impact on our operations and profitability.

     Macroeconomic factors that affect the Indian economy and the global economic scenario have an impact on
     our business. The quantum of our disbursements is driven by the growth in demand for CVs. Any slow
     down in the Indian economy may have a direct impact on our disbursements and a slowdown in the
     economy as a whole can increase the level of defaults thereby adversely impacting our Company’s,
     profitability, the quality of its portfolio and growth plans.

4.   Political instability or changes in the government could delay further liberalization of the Indian
     economy and adversely affect economic conditions in India generally, which could impact our business.

     Since 1991, the Government has pursued a policy of economic liberalization, including significantly
     relaxing restrictions on the private sector. There can be no assurance that these liberalization policies will
     continue in the future as well. The rate of economic liberalization could change, and specific laws and
     policies affecting financial services companies, foreign investment, currency exchange rates and other
     matters affecting investments in Indian companies could change as well. A significant slowdown in India’s
     economic liberalization and deregulation policies could disrupt business and economic conditions in India,
     thus affecting our business. Any political instability in the country, including any change in the
     Government, could materially impact our business adversely.

5.   Civil unrest, terrorist attacks and war would affect our business.

     Terrorist attacks and other acts of violence, war or conflicts, particularly those involving India, as well as
     the United States of America, the United Kingdom, Singapore and the European Union, may adversely
     affect Indian and global financial markets. Such acts may negatively impact business sentiment, which
     could adversely affect our business and profitability. India has from time to time experienced, and
     continues to experience, social and civil unrest, terrorist attacks and hostilities with neighbouring countries.
     Also, some of India’s neighbouring countries have experienced, or are currently experiencing internal
     unrest. This, in turn, could have a material adverse effect on the Indian economy and in turn may adversely
     affect our operations and profitability and the market for the NCDs.

6.   Our business may be adversely impacted by natural calamities or unfavourable climatic changes.


                                                    - xxix -
      India, Bangladesh, Pakistan, Indonesia and other Asian countries have experienced natural calamities such
      as earthquakes, floods, droughts and a tsunami in recent years. Some of these countries have also
      experienced pandemics, including the outbreak of avian flu. These economies could be affected by the
      extent and severity of such natural disasters and pandemics which could ,in turn affect the financial services
      sector of which our Company is a part. Prolonged spells of abnormal rainfall, draught and other natural
      calamities could have an adverse impact on the economy, which could in turn adversely affect our business
      and the price of our NCDs.

7.    Any downgrading of India's sovereign rating by an international rating agency(ies) may affect our
      business and our liquidity to a great extent.

      Any adverse revision to India's credit rating for domestic and international debt by international rating
      agencies may adversely impact our ability to raise additional finances at favourable interest rates and other
      commercial terms. This could have an adverse effect on our growth, financial performance and our
      operations.

PROMINENT NOTES

1.    This is a public issue of NCDs by our Company aggregating upto Rs. 25,000 lacs with an option to retain
      over-subscription upto Rs. 25,000 lacs for issuance of additional NCDs aggregating to a total of Rs. 50,000
      lacs, including a reservation for Unsecured NCDs aggregating upto Rs. 20,000 lacs. The Unsecured NCDs
      will be in the nature of subordinated debt and will be eligible for Tier II capital.

2.    For details on the interest of our Company’s Directors, please refer to the sections titled “Our
      Management” and “Capital Structure” on page 121 and 63 of this Draft Prospectus, respectively.

3.    Our Company has entered into certain related party transactions, within the meaning of AS 18 as provided
      under the Companies (Accounting Standards) Rules, 2006, as disclosed in the section titled “Financial
      Information” beginning on page 136 of this Draft Prospectus.

4.    Any clarification or information relating to the Issue shall be made available by the Lead Managers, the
      Co-Lead Manager and our Company to the investors at large and no selective or additional information
      would be available for a section of investors in any manner whatsoever.

5.    Investors may contact the Registrar to the Issue, Compliance Officer, the Lead Managers the Co-Lead
      Manager for any complaints pertaining to the Issue. In case of any specific queries on allotment/refund,
      Investor may contact Registrar to the Issue.

6.    In the event of oversubscription to the Issue, allocation of NCDs will be as per the "Basis of Allotment" set
      out on page 194 of this Draft Prospectus.

7.    Our Equity Shares are listed on the NSE, BSE and MSE.

8.    The non convertible debentures issued pursuant to the public issue vide the prospectus dated July 16, 2009
      are listed in NSE and BSE. Some of our privately placed non convertible debentures and other debt
      instruments are listed in BSE and some in NSE.

9.    As of December 31, 2009, we had certain contingent liabilities not provided for, including the following:
      disputed income tax/ interest tax demand contested in appeals not provided for of Rs. 164.76 lacs, income
      tax penalty of Rs. 349.86 lacs, demands in respect of service tax of Rs. 312.00 lacs, guarantees issued and
      outstanding by the Company of Rs. 700 lacs. For further information on such contingent liabilities, see
      Annexture VI to our Reformatted Summary Financial Statements.

10.   For further information relating to certain significant legal proceedings that we are involved in, see
      “Pending Proceedings and Statutory Defaults”.

                                                    - xxx -
                                       SECTION III : INTRODUCTION

                                              GENERAL INFORMATION

Shriram Transport Finance Company Limited

Date of Incorporation: June 30, 1979. Our Company was incorporated as a public limited company under the provisions of
the Act.

Registered Office:

123, Angappa Naicken Street, Chennai – 600 001, Tamil Nadu, India

Registration:

Corporate Identification Number: L65191TN1979PLC007874 issued by the Registrar of Companies, Tamil Nadu.

Our Company holds a certificate of registration dated September 4, 2000 bearing registration no. A-07-00459 issued by the
RBI to carry on the activities of a NBFC under section 45 IA of the RBI Act, 1934, which has been renewed on April 17,
2007, (bearing registration no. 07-00459).

Compliance Officer (and Company Secretary):

The details of the person appointed to act as Compliance Officer for the purposes of this Issue is set out below:

Investors may contact the Registrar to the Issue or the Compliance Officer in case of any pre-issue or post Issue related
issues such as non-receipt of letters of allotment, demat credit, refund orders or interest on application money.

Mr K. Prakash
Vice President (Corporate Affairs) & Company Secretary
Shriram Transport Finance Company Limited
Wockhardt Towers, Level-3, West Wing, C –2, G Block,
Bandra-Kurla Complex, Bandra (East), Mumbai –400 051.
Tel. No. +91 22-40959595
Fax No.: +91 22-40959596/97
Email: stfcncd2@stfc.in

Lead Managers:

JM Financial Consultants Private Limited
141 Maker Chambers III
Nariman Point
Mumbai – 400 021
Tel : +91 22 6630 3030
Fax: +91 22 2204 2137
Email: STFCBondIssue@jmfinancial.in
Investor Grievance Email: grievance.ibd@jmfinancial.in
Website: www.jmfinancial.in
Contact Person : Ms. Lakshmi Lakshmanan
Compliance Officer: Mr. Chintal Sakaria
SEBI Registration No.: INM000010361
                                                            - 31 -
ICICI Securities Limited:

ICICI Centre,
H.T. Parekh Marg,
Churchgate, Mumbai 400 020,
Maharashtra, India
Tel: +91 22 2288 2460
Fax: +91 22 2282 6580
Email: stfc.debtissue@icicisecurities.com
Compliance Officer: Mr. Subir Saha
Investor Grievance Email: customercare@icicisecurities.com
Website: www.icicisecurities.com
Contact Person: Mr. Mangesh Ghogle / Mr. Johnny Barnett
SEBI Registration no: INM000011179

Co-Lead Manager

RR Investors Capital Services Private Limited
133A, Mittal Tower, Nariman Point,
Mumbai - 400021
Tel : + 91 22 22886627
Fax: + 91 22 22851925
Email: stfcndc2@rrfcl.com
Investor Grievance Email:
rrinvestors@rrfcl.com
Website: www.rrfcl.com/ rrfinance.com
Contact Person: Mr. Brahmadutta Singh
Compliance Officer: Mr. Brahmadutta Singh
SEBI Registration No: INM000007508

Debenture Trustee:

IDBI Trusteeship Services Limited
Asian Building, Ground Floor,
17, R Kamani Marg,
Ballard Estate, Mumbai – 400 001
Tel: +91 22 4080 7000
Fax: + 91 22 6631 1776
Website: www.idbitrustee.co.in
Contact Person: Ms. Brindha V.
Email: brindha@idbitrustee.co.in
SEBI Registration No.IND000000460

IDBI Trusteeship Services Limited has by its letter dated April 12, 2010 given its consent for its appointment as Debenture
Trustee to the Issue and for its name to be included in this Draft Prospectus and in all the subsequent periodical
communications sent to the holders of the Debentures issued pursuant to this Issue.
Registrar

Integrated Enterprises (India) Limited
2nd Floor,
Kences Towers,
No1, Ramakrishna Street,
North Usman Road, T. Nagar,
Chennai - 600 017
Tel:+91 44 2814 0801/03
                                                           - 32 -
Fax: +91 44 2814 2479
Email for this issue : stfcipo@iepindia.com
Investor Grievance Email: sureshbabu@iepindia.com
Website: www.iepindia.com
Contact Person: Ms. Anusha N.
Compliance Officer: Mr. Suresh Babu K.
SEBI Registration No.: INR000000544


Statutory Auditors:
Our joint auditors being:

M/s. S. R. Batliboi & Co.                           M/s. G. D. Apte & Co.
Chartered Accountants                               Chartered Accountants
6th floor, Express Towers                           Dream Presidency, 1202/17E,
Nariman Point                                       Shivajinagar, Off Apte Road,
Mumbai – 400 021                                    Pune – 411 004
Email: SRBC@in.ey.com                               Tel: +91 20 2553 2114
Tel: +91 22 6657 9200                               Fax: +91 20 2553 4769
Fax: +91 22 2287 6401



Credit Rating Agencies:

Credit Analysis & Research Limited
4th Floor, Godrej Coliseum,
Somaiya Hospital Road,
Off Eastern Express Highway,
Sion (East), Mumbai – 400 022
Tel: +91 22 6754 3456
Fax: +91 22 6754 3457

Legal Advisor to the Issue:

J Sagar Associates
Vakils House,
18, Sprott Road
Ballard Estate
Mumbai- 400 001
Tel: +91 22 4341 8500
Fax: +91 22 6656 1515

Advisors to the Issuer

VNS Legal
Advocates

5th Floor, Mookambika Complex
4, Lady Desika Road
Mylapore
Chennai - 600 004, India
Tel: + 91 94440 76813, +91 44 2499 7133
Fax : + 91 44 2499 0549

Bankers to the Issue:
                                                    - 33 -
Bankers to the Issue shall be finalised prior to filing Prospectus with the ROC.

Bankers to the Company:


ABN AMRO                                                      ABU DHABI COMMERCIAL BANK
74, 7th Floor,                                                75 Rehmat Manzil,
Sakhar Bhavan,                                                Veer Nariman Road,
Nariman Point,                                                Churchgate,
Mumbai – 400 021                                              Mumbai – 400 020
Tel: +91 22- 66372413                                         Tel: +91 22- 39534100, 22855658
Fax: +91 22- 66372455                                         Fax:+91 22- 22870686

ALLAHABAD BANK                                                ANDHRA BANK
41, Mount Road,                                               Corporate Finance Branch,
Chennai – 600 002                                             16th, Earnest House,
Tel: +91 44- 24546272/7497,                                   NCPA Marg,
Fax: +91 44- 28555959                                         Nariman Point,
                                                              Mumbai – 400 021
                                                              Tel: +91 22- 22885846
                                                              Fax: +91 22- 22885841

AXIS BANK                                                     BANK OF AMERICA
 Maker Towers, ‘F’,                                           16th Floor, Express Towers,
13th Floor, Cuffe Parade, Colaba, Mumbai – 400 005            Nariman Point, Mumbai – 400 021
Tel: +91 22- 67074407                                         Tel: +91 22- 66323352
Fax: +91 22- 22186944/1429                                    Fax: +91 22- 66323114



BANK OF BAHRAIN & KUWAIT                                      BANK OF BARODA
Jolly Maker Chambers II, 225,                                 Corporate Financial Services Branch,
Nariman Point,                                                3, Hirachand Walchand Marg, Ballard Pier,
Mumbai – 400 021                                              Mumbai – 400 001
Tel: +91 22- 22823698 / 99                                    Tel: +91 22- 43407301/02,43407318
Fax: +91 22- 22044458 / 22841416                              Fax: +91 22- 22655778/22610413



BANK OF CEYLON                                                BANK OF INDIA
No. 1090, Poonamallee High Road,                              Bank of India Building
Chennai – 600 084                                             4th Floor, 70-80
Tel: +91 44-26420972/73/74/76                                 M.G. Road Fort,
Fax: +91 44- 25325590                                         Mumbai – 400 023
                                                              Tel:+91 22- 22610918, 22696817
                                                              Fax: +91 -22 22650634 /22671718




                                                             - 34 -
BANK OF MAHARASHTRA                       BANK OF RAJASTHAN
1St Floor, Janmangal                      Old No. 15, New No. 26,
45/47, Mumbai Samachar Marg               Gopalakrishan Street, Pondy Bazar,
Fort ,Mumabi-400023                       T-Nagar,
                                          Chennai – 600 017 (TN)
                                          Tel: +91 44- 28157290, 32558890
                                          Fax: +91 44-28157290


BANK OF TOKYO – MITSUBISHI UFJ LIMITED    SYNDICATE BANK
15th Floor, Hoechst House, 193,           82,B Pokar Mansion
Vinay K. Shah Marg,                       N. G. Acharya Marg,Govandi
Nariman Point,                            Chembur, Mumbai-400071
Mumbai – 400 021                          Tel :022-25214476
Tel: +91 22- 66693000                     Fax:022-2522015
Fax: +91 22- 66693010




CANARA BANK                               CALYON BANK
101, 1st Floor, Dalamal Towers,           Westminster 2nd Floor,
B Wing, Free Press Journal Marg,          New No.70, Old No. 108,
Nariman Point,                            Dr. Radhakrishnan Salai Mylapore,
Mumbai – 400 021                          Chennai – 600 004
Tel: +91 22- 22846723/6921/6923           Tel : +91 44- 66351000
Fax: +91 22-22844963                      Fax : +91 44- 28474619




CENTRAL BANK OF INDIA                     CHINA TRUST COMMERCIAL BANK
Chandremukhi                              A-1-16,Wenger House
Nariman Point,                            Rajiv Chowk,Cannught Place
Mumbai – 400 021                          New Delhi-110001
Tel : +91 22- 40785801/39                 011-23731815
Fax: +91 22- 40785840


CITI BANK N. A.                           CITY UNION BANK LIMITED
Citi centre,                              402, Jains Arcade,
7th Floor,                                14th Road Junction, Khar (W),
Bandra-Kurla                              Mumbai – 400 052
Complex, Bandra (E),                      Tel: +91 22-26040632, 26055575
Mumbai – 400 051.                         Fax: +91 22-26043907
Tel: +91 22-40015028,
Fax: +91 22-26535872

CORPORATION BANK                          DBS BANK LIMITED
Fort Mumba Branch,                        3rd Floor, Fort House,
Gr. Floor, Veena Chambers,                221, Dr. D. N. Road, Fort,
Dalal Steet,                              Mumbai – 400 001
Mumbai – 400 023                          Tel: +91 22-66388888
Tel: + 91 22- 22671715                    Fax: +91 22-66388897
Fax: +91 22-22672101



                                         - 35 -
DENA BANK                            DEUTSCHE BANK A. G.
Sapthgiri Apartment,                 Kodak House
83, T. T. K. Road,                   222-Dr. D.N. Road
Alwarpet,                            Fort , Mumbai
Chennai – 600 018                    Tel: +91 22- 66703056
Tel: +91 44-24994279                 Fax:+91 22-66703065
Fax: -+91 44-24988892


DEVELOPMENT CREDIT BANK LIMITED      FEDERAL BANK LIMITED
Corporate Office,                    1st Floor, Raj Bahadur mansion
301, Trade Plaza,                    32, Mumbai Samachar Marg
414, Veer Savarkar Marg,             Fort, Mumbai-400001
Prabhadevi,                          Tel: +91 22-22812335
Mumbai – 400 025                     Fax: +91 22-22028726
Tel: +91 22- 66187297 /99
Fax: +91 22-24231520 /26

HDFC BANK LIMITED                    THE HONGKONG AND SHANGHAI BANKING
Process House,                       CORPORATION LIMITED
2nd Floor, Kamala Mills Compound,    52/60, Mahatma Gandhi Road,
Lower Parel,                         Mumbai – 400 001
Mumbai – 400 013                     Tel: +91 22-22680011
Tel: +91 22-24961616/24988484        Fax: +91 22-22680254
Fax: +91 22-24963994/24968135


ICICI BANK LIMITED                   INDIAN BANK
ICICI Bank Towers,                   325, Gitanjali Building,
Bandra-Kurla Complex,                Nehru Road, Vile Parle (E),
Bandra (E),                          Mumbai – 400 057
 Mumbai – 400 051                    Tel: +91 22- 26146662/26148753
Tel: +91 22- 26536428/80             Fax: +91 22- 26174297
Fax: +91 22-26531206


INDIAN OVERSEAS BANK                 INDUSIND BANK
Merchant Chamber, Ground Floor,      1st Floor Indusind House
New Marine Line,                     425, Dr. D.B. Marg
Mumbai – 400 020                     Opera House , Mumbai-400004
Tel:+91 22-22016822/2528             022-43457506
 Fax: +91 22- 22036621



IDBI Bank Limited                    ING VYSYA BANK
 IDBI Towers,                        602-B, Poonam Chambers,
WTC Complex,                         A Wing,
Cuffe Parade,                        Dr. A B Road, Worli,
Mumbai – 400 005                     Mumbai – 400 018
Tel: +91 22- 66553355/22187111       Tel: +91 22- 66666489
Fax: +91 22-22180411                 Fax:+91 22- 66666449




                                    - 36 -
TAMILAND MERCANTILE BANK LIMITED          JP MORGAN CHASE BANK N.A.
101-104, Goradia House,                   J P Morgan Tower
Kazi Syed Street, Mandvi,                 Off CST Road , Kalina
Mumbai – 400 003                          Santa Cruz (E)
Tel: +91 22-23415624/23413140             Mumbai-400021
Fax: +91 22-23401667                      022-61573000



KARUR VYSYA BANK LIMITED                  KARNATAKA BANK LIMITED
P. N. No. 1414,                           294/A, Haroon House,
Kamanwala Chambers,                       Perin Nariman Street, Fort,
Sir P. M. Road, Fort, Mumbai – 400 001    Mumbai – 400 001
Tel: +91 22- 22665467/22665914            Tel: +91 22-22662283/22663256
Fax:+91 22- 22612761                      Fax:+ 91 22- 22661685



KOTAK MAHINDRA BANK LIMITED               THE LAKSHMI VILAS BANK LIMITED
13th Floor, Nariman Bhavan,               No. 64, Dr. V. B. Gandhi Marg,
227 Nariman Point,                        Kalaghoda, Fort,
Mumbai – 400 021                          Mumbai – 400 001
Tel: +91 22-66596393                      Tel : +91 22-22672247/22672255
Fax: +91 22-22817527                      Fax : +91 22-22670267




ORIENTAL BANK OF COMMERCE                 PUNJAB & SIND BANK
Shreeji Chambers,                         165 Thambu Chetty Street,
Tata Road No.2,                           Chennai – 600 001
Opera House,                              Tel: +91 44 22342562/25359665
Mumbai – 400 004                          Fax: +91 44-25342016
Tel: +91 22- 23643571/2/3/4
Fax:+91 22-23637667

PUNJAB NATIONAL BANK                      THE RATNAKAR BANK LIMITED
10, Raja Street, T. Nagar,                7, Homji Street,
Chennai – 600 001                         Rohimtoola House,
Tel :+91 44 24333934                      Horniman Circle, Fort,
Fax : +91 44-24341050                     Mumbai – 400 001
                                          Tel: +91 22-22703635/22703638
                                          Fax: +91 22-22703639


SHINHAN BANK                              THE SOUTH INDIAN BANK LIMITED
42, Jolly Maker Chambers II,              289, Emca House,
Nariman Point, Mumbai – 400 021           S. B. Singh Road, Fort,
Tel: +91 22-22822200                      Mumbai – 400 038
Fax: +91 22-22884277                      Tel: +91 22-22611209/22658974
                                          Fax: +91 22- 22614749




                                         - 37 -
STANDARD CHARTERED BANK               STATE BANK OF INDORE
Box 725, 90,                          Sterling Centre,
Mahatma Gandhi Road,                  Dr. Annie Basant Road, Worli,
Fort, Mumbai – 400 023                Mumbai – 400 018
Tel: +91 22- 22673516                 Tel: +91 22-24952404 / 24929633
Fax: +91 22-22655295                  Fax: +91 22-24938903


STATE BANK OF BIKANER AND JAIPUR      SOCIETE GENERALE CORPORATE &
United India Life Building,           INVESTMENT BANKING
Sir P. M. Road, Fort,                 Maker Chamber IV,
Mumbai – 400 023                      13th Floor, Nariman Point,
Tel: +91 22-22663189/22662573         Mumbai 400 021
Fax: +91 22-22660875                  Tel: +91 22- 66309500
                                      Fax:+91 22-22045459


STATE BANK OF HYDERABAD               STATE BANK OF INDIA
C-11, Mittal Tower, 210,              Leather & International Branch,
Nariman Point,                        Mid Corporate Group,
Mumbai – 400 021                      MVJ Towers, 177/1, P. H. Road,
Tel: +91 22-228433550/ 3543/4096      Kalipauk,
Fax: +91 22-22841096                  Chennai – 600 010
                                      Tel: +91 44 28287902
                                      Fax: +91 44-28360456


STATE BANK OF MAURITIUS LIMITED       STATE BANK OF MYSORE
101, Raheja Centre,                   # 224, C Wing, Mittal Court,
Free Press Journal Road,              Nariman Point, Mumbai – 400 021
Nariman Point, Mumbai – 400 021       Tel: +91 22-22790534
Tel: +91 22-22846560/22842965         Fax: +91 22-22044281
Fax: +91 22-22842966



STATE BANK OF PATIALA                 STATE BANK OF TRAVANCORE
Commercial Branch,                    Commercial Branch,
Atlanta, 1st Floor, Nariman Point,    Jeevan Anand,
Mumbai – 400 021                      556, Anna Salai, Teynampet,
Tel: + 91 22-22851775/22851762        Chennai – 600 018
Fax: +91 22-66375703                   Tel: +91 44-24359435/24359432
                                       Fax: +91 44-24351671

UCO BANK                              UNION BANK OF INDIA
Flagship Corporate Branch,            Union Bank Bhavan,
1st Floor, Mafatlal Centre,           239, Vidhan Bhavan Marg,
Nariman Point, Mumbai – 400 021       Nariman Point, Mumbai – 400 021
Tel: +91 22-40549191                  Tel: +91 22-22892150/22892022
Fax:+91 22-40549122                   Fax:+ 91 22-22855037




                                     - 38 -
UNITED BANK OF INDIA                                         VIJAYA BANK
Hotel Oberai Towers Branch,                                  29 Clover Apartment,
Hotel Oberai Towers Building,                                Cuffe Parade,
Nariman Point, Mumbai – 400 021                              Colaba, Mumbai – 400 005
Tel: +91 22-22047121                                         Tel: +91 22-22186515/22163590
Fax: +91 22-22026366                                         Fax: +91 22-22182546



YES BANK LIMITED                                             DHANLAXMI BANK LTD
4th Floor, Nehru Centre,                                     Gr. Floor, Janambhoomi Bhavan
Worli, Mumbai – 400 018                                      Janambhoomi Marg Fort
Tel: + 91 22-66699197                                        Mumbai-400013
Fax:+ 91 22-24901128                                         Tel:+91 22-22022943
                                                             Fax: +91 22-22871637

MIZUHO CORPORATE BANK LIMITED
Maker Chamber III
1st Floor Jamnalalbajaj Road
Nariman Point, Mumbai -400021
Tel: 022-22886638
Fax:022-22886640



Lead Brokers to the Issue:

[●]

Impersonation

As a matter of abundant precaution, attention of the investors is specifically drawn to the provisions of sub-section (1) of
section 68A of the Act, relating to punishment for fictitious applications.

Minimum Subscription

If our Company does not receive the minimum subscription of 75 % of the Base Issue, i.e. Rs. 18,750 lacs, prior to
allotment, the entire subscription shall be refunded to the applicants within 15 days from the date of closure of the Issue.
If there is delay in the refund of subscription by more than 8 days after our Company becomes liable to pay the
subscription amount, our Company will pay interest for the delayed period, at rates prescribed under sub-sections (2) and
(2A) of Section 73 of the Companies Act, 1956.

Credit Rating and Rationale

The Secured NCDs proposed to be issued under this Issue have been rated ‘CARE AA+’ and the Unsecured NCDs
proposed to be issued under this Issue have been rated ‘CARE AA’ by CARE vide their letters dated April 19, 2010.
The rating of the Secured NCDs as well as the Unsecured NCDs by CARE indicates high safety for timely servicing of
debt obligations and carrying low credit risk. The rationale for the aforementioned credit ratings issued by CARE is as
follows:

“The rating factors in STFCL’s dominant position and almost three decades of experience in the pre-owned commercial
vehicle (CV) financing segment, its overall healthy profitability parameters, its strong resource raising capabilities, and
its proactive and experienced management. The rating is however constrained by STFCL’s concentration in a single
asset class and the underlying industry risk linked with its target customer segment of Small Truck Operators, which may
be relatively more vulnerable to an economic downturn.



                                                           - 39 -
STFCL’s ability to maintain the asset quality of its portfolio, which has grown rapidly in recent years, timely infusion of
additional capital to fuel growth and maintaining its spreads would remain key rating sensitivities.”

Disclaimer

CARE’s ratings are opinions on credit quality and are not recommendations to sanction, renew, disburse or recall the
concerned bank facilities or to buy, sell or hold any security. CARE has based its ratings on information obtained from
sources believed by it to be accurate and reliable. CARE does not, however, guarantee the accuracy, adequacy, or
completeness of any information and is not responsible for any errors or omissions or for the results obtained from the
use of such information. Most entities whose bank facilities/instruments are rated by CARE have paid a credit rating fee,
based on the amount and type of bank facilities/instruments.


Utilisation of Issue proceeds

Our Board of Directors certifies that:

•          all monies received out of the Issue shall be credited/transferred to a separate bank account other than the bank
           account referred to in sub-section (3) of Section 73 of the Act;

•          details of all monies utilised out of the Issue referred above shall be disclosed under an appropriate separate
           head in our balance sheet indicating the purpose for which such monies have been utilised;

•          details of all unutilised monies out of the Issue, if any, shall be disclosed under an appropriate head in our
           balance sheet indicating the form in which such unutilised monies have been invested; and

•          we shall utilize the Issue proceeds only upon creation of security as stated in this Draft Prospectus in the section
           titled “Issue Structure” on page 162.

•          the Issue proceeds shall not be utilized towards full or part consideration for the purchase or any other
           acquisition, inter alia by way of a lease, of any property.

Issue Programme

The subscription list for the Issue shall remain open for subscription at the commencement of banking hours and shall
close at the close of banking hours on the dates indicated below or earlier or on such date, as may be decided at the
discretion of the Board of Directors or any committee of the Board of Directors of our Company subject to necessary
approvals

 ISSUE OPENS ON                                                                                          [●], 2010
 ISSUE CLOSES ON                                                                                         [●], 2010
The subscription list for the Issue shall remain open for subscription at the commencement of banking hours and close at the close of banking hours on
the dates indicated above or earlier or on such date as may be decided at the discretion of the Committee of Directors of our Company subject to
necessary approvals. In the event of such early closure of subscription list of the Issue, our Company shall ensure that notice of such early closure is
given at least three days prior to such early date of closure.




                                                                        - 40 -
                                    SUMMARY OF BUSINESS, STRENGTH & STRATEGY

Overview

We are one of the largest asset financing NBFCs in India with a primary focus on financing pre-owned commercial
vehicles. We are among the leading financing institutions in the organized sector for the commercial vehicle industry in
India for FTUs and SRTOs. We also provide financing for passenger commercial vehicles, multi-utility vehicles, three
wheelers, tractors and construction equipment. In addition, we provide ancillary equipment and vehicle parts finance,
such as loans for tyres and engine replacements, and provide working capital facility for FTUs and SRTOs. We also
provide ancillary financial services targeted at commercial vehicle operators such as freight bill discounting and also
market co-branded credit cards targeted at commercial vehicle operators in India, thereby providing comprehensive
financing solutions to the road logistics industry in India.

Our Company was established in 1979 and we have a long track record of over three decades in the commercial vehicle
financing industry in India. The Company has been registered as a deposit-taking NBFC with the RBI since September
4, 2000 under Section 45IA of the Reserve Bank of India Act, 1934. We are a part of the Shriram group of companies
which has a strong presence in financial services in India, including commercial vehicle financing, consumer finance,
life and general insurance, stock broking, chit funds and distribution of financial products such as life and general
insurance products and mutual fund products, as well as a growing presence in other businesses such as property
development, engineering projects and information technology.

Our widespread network of branches across India has been a key driver of our growth over the years. As of December
31, 2009 we had 482 branches across India, including at most of the major commercial vehicle hubs along various road
transportation routes in India. We have also strategically expanded our marketing network and operations by entering
into partnership and co-financing arrangements with private financiers in the unorganized sector involved in commercial
vehicle financing. As of December 31, 2009 our total employee strength was approximately 12,823.

We have demonstrated consistent growth in our business and in our profitability. Our Assets Under Management
includes Assets Under Management in the books of the Company, assets that have been securitized / assigned by us and
portfolio managed by the Company under portfolio management arrangements with banks and other institutions from
which we receive fee income for the provision of client sourcing and collection activities. Our Assets Under
Management* has grown by a compounded annual growth rate, or CAGR*, of 38.85 % from Rs. 1,208,828.79 lacs
(comprising Assets Under Management in the books of the Company of Rs. 842,456.87 lacs, loan assets
securitized/assigned of Rs. 3,14,054.92 lacs and portfolio managed by the Company* of Rs. 52,317.00 lacs) as of March
31, 2007 to Rs. 2,330,415.12 lacs (comprising Assets Under Management in the books of the Company of Rs.
1,794,701.61 lacs, loan assets securitized/assigned of Rs. 5,31,092.91 lacs and portfolio managed by the Company* of
Rs. 4,620.60lacs) as of March 31, 2009. Our Assets Under Management as of December 31, 2009*, was Rs.
2,816,300.15 lacs (comprising Assets Under Management in the books of the Company of Rs. 2,153,649.48 lacs, loan
assets securitized /assigned of Rs. 6,62,623.83 lacs and portfolio managed by the Company* of Rs. 26.84 lacs). Our
capital adequacy ratio as of March 31, 2009 and December, 2009 was 16.35% and 17.07 %, respectively, compared to
the RBI stipulated minimum requirement of 12.00%. Our Tier 1 capital as of December 31, 2009 was Rs. 285,727.21
lacs. Our Gross NPAs as a percentage of Total Loan Assets were 2.14% and 2.43% as of March 31, 2009 and December
31, 2009 respectively. Our Net NPAs as a percentage of Net Loan Assets was 0.83% and 0.67% as of March 31, 2009
and December 31, 2009, respectively.

Our total income increased from Rs. 142,138.60 lacs in fiscal 2007 to Rs. 373,112.97 lacs in fiscal 2009, at a CAGR of
62.02%. Our net profit after tax increased from Rs. 19,039.71 lacs in fiscal 2007 to Rs. 61,240.21 lacs in fiscal 2009, at a
CAGR of 79.34%. In the nine months ended December 31, 2009, our total income and net profit after tax were Rs.
327,039.34 lacs and Rs. 60,868.68 lacs, respectively.
* Please note these figures are based on certificates provided by the management.
Recent Developments

Allotment of Equity Shares pursuant to our Company’s ESOP scheme

On March 26, 2010 our Company has issued and allotted 1,084,700 Equity Shares at a price of Rs. 35 per Equity Share
pursuant to the exercise of stock options issued under our ESOP scheme. Our Company has made separate applications
                                                                        - 41 -
all dated April 13, 2010, to MSE, NSE, and BSE in connection with obtaining approval therefrom, for trading of the
aforementioned Equity Shares. The said listing approvals in connection with the trading of the aforementioned Equity
Shares from all the exchanges are awaited.

Allotment of Equity Shares pursuant to Chapter VIII of the Securities and Exchange Board of India (Issue of Capital and
Disclosure Requirements) Regulations, 2009

On January 28, 2010, our Company issued and allotted 11,658,552 Equity Shares of at a price of Rs.500.80 per such
Equity Share, aggregating to Rs. 58,386.03 lacs to Qualified Institutional Buyers pursuant to the provisions of Chapter
VIII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as
amended.

Incorporation of a subsidiary of our Company

Shriram Automall India Limited, a subsidiary of our Company was incorporated pursuant to a certificate of incorporation
dated February 11, 2010 issued by the Registrar of Companies, Chennai, Tamil Nadu and is having its registered office
situated at 123, Angappa Naickan Street, Chennai 600001,Tamil Nadu, India.

Acquisition of Receivables Portfolio

Pursuant to the terms of an Assignment Agreement dated December 22, 2009 (the “Assignment Agreement”) between
the Company, GE Capital Services India and GE Capital Financial Services (collectively, the “GE Entities”), we have
acquired with effect from December 24, 2009 from the GE Entities, on a non-recourse basis, a certain portfolio of
receivables in connection with certain loan facilities relating to commercial vehicle loans and construction equipment
loans (the “GE Receivables”), together with all right, title and interest therein under the relevant underlying loan and
security documents relating to the GE Receivables as of November 28, 2009.

Our Strengths

We believe that the following are our key strengths:

One of the largest asset financing NBFCs in India

We believe that we are one of the largest asset financing NBFCs in India, with particular focus on financing pre-owned
commercial vehicles. We primarily cater to FTUs and SRTOs and we believe we are among the leading financing
institutions in the organized sector in this particular segment. Our widespread network of 482 branches across India as of
December 31, 2009 enables us to access a large customer base including in most major and minor commercial vehicle
hubs along various road transportation routes in India. We believe that our widespread branch network enables us to
service and support our existing customers from proximate locations which provide customers easy access to our
services. We have also strategically expanded our marketing and customer origination network by entering into
partnership and co-financing arrangements with private financiers involved in commercial vehicle financing. We believe
our relationship with these partners is a critical factor in sourcing new customers and enhancing reach and penetration at
low upfront capital cost. The relationships we have developed with our customers provide us with opportunities for
repeat business and to cross sell our other products as well as derive benefit from customer referrals.

Our Assets Under Management as of December 31, 2009*, was Rs. 2,816,300.15 lacs (comprising Assets Under
Management in the books of the Company of Rs. 2,153,649.48 lacs, loan assets securitized /assigned of Rs. 662,623.83
lacs and portfolio managed by the Company* of Rs. 26.84lacs). This is supported by a strong capital base, with share
capital of Rs. 21,279.86 lacs and reserves and surplus of Rs. 286,716.43 lacs as of December 31, 2009. Our capital
adequacy ratio as of December 31, 2009 was 17.07%, compared to the RBI stipulated minimum requirement of 12.00%.
Our Tier 1 capital as of December 31, 2009 was Rs. 285,727.21 lacs.

* Please note these figures are based on certificates provided by the management.




                                                                        - 42 -
Access to a range of cost effective funding sources

We fund our capital requirements through a variety of sources. Our fund requirements are currently predominantly
sourced through term loans from banks, issue of redeemable non-convertible debentures, and cash credit from banks
including working capital loans. We access funds from a number of credit providers, including nationalized banks,
private Indian banks and foreign banks, and our track record of prompt debt servicing has allowed us to establish and
maintain strong relationships with these financial institutions. We also place commercial paper and access inter-
corporate deposits. As a deposit-taking NBFC, we are also able to mobilize retail fixed deposits at competitive rates. We
have also raised subordinated loans eligible for Tier II capital. We undertake securitization/assignment transactions to
increase our capital adequacy ratio, increase the efficiency of our loan portfolio and as a cost effective source of funds.

In relation to our long-term debt instruments, we currently have ratings of CARE AA+ from Credit Analysis and
Research Ltd. (“CARE”) and AA (Ind) from FITCH. In relation to our short-term debt instruments, we have also
received ratings of F1+ from FITCH and P1+ from CRISIL. We believe that we have been able to achieve a relatively
stable cost of funds despite the difficult conditions in the global and Indian economy in fiscal 2008 and 2009 and the
resultant reduced liquidity and an increase in interest rates, primarily due to our improved credit ratings, effective
treasury management, and innovative fund raising programs. We believe we are able to borrow from a range of sources
at competitive rates. The Secured NCDs proposed to be issued under this Issue have been rated ‘CARE AA+’ and the
Unsecured NCDs proposed to be issued under this Issue have been rated ‘CARE AA’ by CARE vide their letters dated
April 19, 2010. The rating of the Secured NCDs as well as the Unsecured NCDs by CARE indicates high safety for
timely servicing of debt obligations and carrying low credit risk.

The RBI currently mandates domestic commercial banks operating in India to maintain an aggregate of 40.00% (32.00%
for foreign banks) of their advances or credit equivalent amount of off-balance sheet exposure, whichever is higher as
“priority sector advances”. These include advances to agriculture, small enterprises (including SRTOs, which constitute
the largest proportion of our loan portfolio), exports and similar sectors where the Government seeks to encourage flow
of credit for developmental reasons. Banks in India that have traditionally been constrained or unable to meet these
requirements organically, have relied on specialized institutions like us that are better positioned to or exclusively focus
on originating such assets through on-lending or purchase of assets or securitized/assigned pools to comply with these
targets. Our securitized/assigned asset pools are particularly attractive to these banks as such transactions provide them
with an avenue to increase their asset base through low cost investments and limited risk. Majority of our loan portfolio
being classified as priority sector lending also enables us to negotiate competitive interest rates with banks and other
financial institutions. In fiscal 2008 and 2009, the total book value of loan assets securitized/assigned was Rs. 211822.17
lacs and Rs. 312,498.40 lacs, respectively. In the nine months ended December 31, 2009, the total book value of loan
assets securitized/assigned was Rs. 326,229.88 lacs.

Unique business model and a track record of strong financial performance

We primarily cater to FTUs and SRTOs and we believe we are the only financing institution in the organized sector
providing finance to FTUs and SRTOs in the pre-owned commercial vehicle finance segment. Most of our customers are
not a focus segment for banks or other NBFCs as these customers lack substantial credit history and other financial
documentation on which many of such financial institutions rely to identify and target new customers. As the market for
commercial vehicle financing, especially the pre-owned commercial vehicle financing, is fragmented, we believe our
credit evaluation techniques, relationship based approach, extensive branch network and strong valuation skills make our
business model unique and sustainable as compared to other financiers. In particular, our internally-developed valuation
methodology requires deep knowledge and practical experience developed over a period of time, and we believe this is a
key strength that is difficult to replicate. We provide finance to pre-owned commercial vehicle operators at favourable
interest rates and repayment terms as compared to private financiers in the unorganized sector.

Our retail focus, stringent credit policies and relationship based model has helped us maintain relatively low NPA levels.
Our Gross NPAs as a percentage of Total Loan Assets were 2.14% and 2.43% as of March 31, 2009 and December 31,
2009 respectively. Our Net NPAs as a percentage of Net Loan Assets was 0.83% and 0.67% as of March 31, 2009 and
December 31, 2009, respectively.

Strong brand name

                                                           - 43 -
We believe that the "Shriram" brand is well established in commercial vehicle financing throughout India. We believe
that we are the only organized sector financing company with particular focus on the pre-owned commercial vehicle
financing segment to FTUs and SRTOs in India. Our targeted focus on and the otherwise fragmented nature of this
market segment, our widespread branch network, particularly in commercial vehicle hubs across India, as well as our
large customer base has enabled us to build a strong brand. Our efficient credit approval procedures, credit delivery
process and relationship-based loan administration and monitoring methodology have also aided in increasing customer
loyalty and earn repeat business and customer referrals.

Extensive experience and expertise in credit appraisal and collection processes

We have developed a unique business model that addresses the needs of a specific market segment with increasing
demand. We focus on closely monitoring our assets and borrowers through product executives who develop long-term
relationships with commercial vehicle operators, which enables us to capitalize on local knowledge. We follow stringent
credit policies, including limits on customer exposure, to ensure the asset quality of our loans and the security provided
for such loans. Further, we have nurtured a culture of accountability by making our product executives responsible for
loan administration and monitoring as well as recovery of the loans they originate.

Extensive expertise in asset valuation is a pre-requisite for any NBFC providing loans for pre-owned assets. Over the
years, we have developed expertise in valuing pre-owned vehicles, which enables us to accurately determine a
recoverable loan amount for commercial vehicle purchases. We believe a tested valuation technique for these assets is a
crucial entry barrier for others seeking to enter our market segment. Furthermore, our entire recovery and collection
operation is administered in-house and we do not outsource loan recovery and collection operations. We believe that our
loan recovery procedure is particularly well-suited to our target market in the commercial vehicle financing industry, as
reflected by our high loan recovery ratios compared to others in the financial services industry, and we believe that this
knowledge and relationship based recovery procedure is difficult to replicate in the short to medium term.

Experienced senior management team

Our Board consists of 10 Directors, including representatives of Newbridge India Investments II Ltd (TPG Group) , with
extensive experience in the automotive and/or financial services sectors. Our senior and middle management personnel
have significant experience and in-depth industry knowledge and expertise. Most of our senior management team has
grown with the Company and have more than 15 years experience with us. Our management promotes a result-oriented
culture that rewards our employees on the basis of merit. In order to strengthen our credit appraisal and risk management
systems, and to develop and implement our credit policies, we have hired a number of senior managers who have
extensive experience in the Indian banking and financial services sector and in specialized lending finance firms
providing loans to retail customers.. We believe that the in-depth industry knowledge and loyalty of our management and
professionals provide us with a distinct competitive advantage.

Our Strategies

Our key strategic priorities are as follows:

Further expand operations by growing our branch network and increasing partnership and co-financing
arrangements with private financiers

We intend to continue to strategically expand our operations in target markets that are large commercial vehicle hubs by
establishing additional branches. Our marketing and customer origination and servicing efforts strategically focus on
building long term relationships with our customers and address specific issues and local business requirements of
potential customers in a particular region. We also intend to increase our operations in certain regions in India where we
historically had relatively limited operations, such as in eastern and northern parts of India, and to further consolidate our
position and operations in western and southern parts of India.

The pre-owned commercial vehicle financing industry in India is dominated by private financiers in the unorganized
sector. We intend to continue to strategically expand our marketing and customer origination network by entering into
partnership and co-financing arrangements with private financiers across India involved in commercial vehicle financing.
In view of the personnel-intensive requirements of our operations, we continue to focus on growing our business by

                                                            - 44 -
increasingly relying on partnership arrangements to effectively leverage the local knowledge, infrastructure and
personnel base of our partners.

Introduce innovative marketing and sales initiatives and build our brand to further grow market share

We continue to develop innovative marketing and customer origination initiatives specifically targeted at FTUs and
SRTOs. For example, we organize "Truck Bazaars" in several commercial vehicle hubs in India every month.
Customarily the sale and purchase of pre-owned commercial vehicles is made through brokers or intermediaries, with
limited transparency and access to information and suitable opportunities. At our Truck Bazaars, we provide a
comprehensive platform for access to information about pre-owned commercial vehicles available for purchase and sale,
a venue for transporters to buy and sell pre-owned commercial vehicles directly without the intervention of brokers, and
a facility for providing advisory services for a fee on such transactions, together with access to our financing products.
This initiative enables us to develop long standing relationships with repeat customers, and provides us with
opportunities to generate new business. These programs provide a platform to increase our brand awareness and enable
us to promote our financing products.

We also intend to develop pre-owned commercial vehicle hubs across India called "Automalls", through a wholly-owned
subsidiary incorporated for this purpose, designed to provide a trading platform for the sale of pre-owned commercial
vehicles, showrooms for branded new and refurbished pre-owned commercial vehicles manufactured by various
manufacturers, as well as commercial vehicles repossessed by financing companies. Through our Automalls, we intend
to set up a one-stop shop catering to the various needs of commercial vehicle owners, including through the provision of
workshop facilities. We intend to provide electronic advertising and trading infrastructure in these Automalls, such as
touch-screen kiosks, through which customers will be able to access real-time information on pre-owned vehicles
available for sale. These electronic touch-screen kiosk facilities, which will also be installed in our branches, will
eventually replace our physical Truck Bazaar events. We intend to utilize our Automall platform for marketing of our
financial products and develop new customers. We intend to commence operation of such "Automalls" during the first
quarter of 2011, and to gradually expand to between 50 and 60 Automalls in the next 12 to 15 months.

Diversify our product portfolio

We intend to further develop our equipment finance business, particularly construction equipment. We believe that
infrastructure development and construction businesses are likely to benefit from the significant investment in
infrastructure by the Government of India and state governments and as well as by the private sector. Many of our FTU
and SRTO customers are increasingly entering the construction equipment business, and we believe that the construction
equipment business segment will be a logical extension of our product portfolio for our existing customer base. We
believe that the construction equipment finance segment provides significant growth opportunity and intend to
increasingly focus on construction equipment finance as a distinct business segment through our wholly-owned
subsidiary Shriram Equipment Finance Company Limited. We are in the process of recruiting senior management and
other personnel for this business segment.

We are focused on leveraging our leadership in truck financing to expand our product portfolio, which now also includes
financing for passenger commercial vehicles, multi-utility vehicles, three-wheelers, tractors, and construction equipment.
We expect this will enable us to offer new products to existing customers and expand our customer base. These products
have strong synergies with the truck financing sector which is our primary business line. Further, by offering additional
downstream products, such as vehicle parts and other ancillary loans, credit cards and freight bill discounting, we
maintain contact with the customer throughout the product lifecycle and increase our revenues. The relationships we
have developed with our customers provide us with opportunities for repeat business and to cross sell our other products
and products of our affiliates.

Continue to implement advanced processes and systems

We have invested in our technology systems and processes to create a stronger organization and ensure good
management of customer credit quality. Our information technology strategy is designed to increase our operational and
managerial efficiency. We aim to increasingly use technology in streamlining our credit approval, administration and
monitoring processes to meet customer requirements on a real-time basis. We continue to implement technology led
processing systems to make our appraisal and collection processes more efficient, facilitate rapid delivery of credit to our
customers and augment the benefits of our relationship based approach. We also believe deploying strong technology
                                                         - 45 -
systems that will enable us to respond to market opportunities and challenges swiftly, improve the quality of services to
our customers, and improve our risk management capabilities.




                                                          - 46 -
                                                       THE ISSUE

The following is a summary of the Issue. This summary should be read in conjunction with, and is qualified in its
entirety by, more detailed information in the chapter titled “Terms of the Issue” beginning on page 158 of this Draft
Prospectus.

Common Terms of NCDs

 Issuer                           Shriram Transport Finance Company Limited
 Issue                            Public Issue by our Company of NCDs aggregating to Rs. 25,000 lacs with an option to
                                  retain over-subscription upto Rs. 25,000 lacs for issuance of additional NCDs
                                  aggregating to a total of upto Rs.50,000 lacs, including a reservation for Unsecured
                                  NCDs aggregating upto Rs. 20,000 lacs. The Unsecured NCDs will be in the nature of
                                  subordinated debt and will be eligible for Tier II capital.
 Stock Exchanges proposed
                                  NSE
 for listing of the NCDs
 Issuance and Trading             Compulsorily in dematerialised form
 Trading Lot                      1 (one) NCD
 Depositories                     NSDL and CDSL
 Security                         Security for the purpose of this Issue will be created in accordance with the terms of
                                  the Debenture Trust Deed. For further details please refer to the section titled “Issue
                                  Structure” beginning on page 162 of this Draft Prospectus. Please note that no
                                  security will be created in connection with the Unsecured NCDs.
                                  The Secured NCDs proposed to be issued under this Issue have been rated ‘CARE
                                  AA+’ and the Unsecured NCDs proposed to be issued under this Issue have been
  Rating                          rated ‘CARE AA’ by CARE vide their letters dated April 19, 2010.
  Issue Schedule ∗                The Issue shall be open from [●], 2010 to [●], 2010 with an option to close earlier
                                  and/or extend upto a period as may be detrmined by our Board.
                                  3 (three) Business Days from the date of reciept of application or the date of
  Pay-in date                     realisation of the cheques/demand drafts, whichever is later.
  Deemed Date of Allotment        Deemed date of allotment shall be the date of issue of the letter of allotment / regret.
∗[The subscription list shall remain open for a period as indicated, with an option for early closure or extension by such
period, upto a period of 30 days from date of opening of the Issue, as may be decided by the Board of Directors of our
Company.]

The specific terms of each instrument are set out below:

TERMS AND CONDITIONS IN CONNECTION WITH THE SECURED NCDs

Nature of the Secured NCDs

We are offering Secured NCDs which shall have a fixed rate of interest. The Secured NCDs will be issued at a face
value of Rs. 1,000/- per Secured NCD. Interest on the Secured NCDs shall be payable on semi-annual or on an
annual basis, as the case may be, as set out hereinafter. The terms of the Secured NCDs offered pursuant to the
Issue are as follows:

Options                                   I                         II                        III
Name                                     [●]                         -                         -
Frequency of Interest       Annual                         Semi-Annual             Annual
Payment
Minimum Application         Rs. 10,000                     Rs. 10,000            Rs. 10,000
                                                               Or
                            Rs. 10,000/- (10 NCDs) (for option I, II and III either taken individually or
                            collectively)
In Multiples of             Rs. 1,000                Rs. 1,000                   Rs. 1,000
Face Value of NCDs          Rs. 1,000                Rs. 1,000                   Rs. 1,000
                                                             - 47 -
Options                                I                           II                         III
Name                                  [●]                           -                          -
(Rs. / NCD)
Issue Price (Rs. / NCD)    Rs. 1,000                   Rs. 1,000                   Rs. 1,000
Mode of Interest           Through           Various   Through           Various   Through           Various
Payment                    options available           options available           options available
Coupon (%) p.a.**          [●]% per annum              [●]% per annum              [●]% per annum

Premium (Rs. per           N/A                         N/A                         N/A
NCD)
Yield on redemption**      [●]%                        [●]%                        [●]%

Put and call option        Exercisable at the end of   Exercisable at the end of   N/A
                           36 months from the          60 months from the
                           Deemed       Date      of   Deemed       Date      of
                           Allotment                   Allotment
Tenor                      60 months                   84 months                   60 months
Redemption Date            60 months from the          84 months from the          60 months from the
                           Deemed       Date      of   Deemed       Date      of   Deemed     Date of
                           Allotment. *                Allotment. *                Allotment.

Redemption Amount          Repayment of the Face       Repayment of the Face       Re-payment of the Face
(Rs./NCD)                  Value plus any interest     Value plus any interest     Value of the NCDs in
                           that may have accrued at    that may have accrued at    stages    between     the
                           the Redemption Date, or     the Redemption Date, or     period commencing on
                           at the date of early        at the date of early        the expiry of 36 months
                           redemption if any Put       redemption if any Put       till Redemption Date,
                           Option or Call Option is    Option or Call Option is    with 40% of the Face
                           exercised, as the case      exercised, as the case      Value of the NCDs
                           may be. *                   may be.*                    payable at the end of the
                                                                                   36 months from the
                                                                                   Deemed       Date      of
                                                                                   Allotment, 40% of the
                                                                                   Face Value of the
                                                                                   NCDs, payable at the
                                                                                   end of 48 months from
                                                                                   the Deemed Date of
                                                                                   Allotment and 20% of
                                                                                   the Face Value of the
                                                                                   NCDs payable at the
                                                                                   end of 60 months from
                                                                                   the Deemed Date of
                                                                                   Allotment. The Face
                                                                                   Value at each stage of
                                                                                   redemption as detailed
                                                                                   above, shall be payable
                                                                                   together     with    any
                                                                                   interest which may have
                                                                                   accrued on the date of
                                                                                   such redemption.
Nature of Indebtedness       Pari Passu with other     Pari Passu with other       Pari Passu with other
                             secured creditors and     secured creditors and       secured creditors and
                             priority over unsecured   priority over unsecured     priority over unsecured
                             creditors                 creditors                   creditors
Credit Rating                CARE AA+                  CARE AA+                    CARE AA+
* Subject to exercise of put/call option.

                                                          - 48 -
**Our Company, at its sole discretion, may offer a premium in yield / coupon to the applicants in the Reserved Individual
Portion of upto [●]bps. In addition, our Company may offer a premium of [●] bps and/or an additional interest at the rate
of [●]% per annum to Senior Citizens.

 TERMS AND CONDITIONS IN CONNECTION WITH THE UNSECURED NCDs

Nature of Unsecured NCDs

We are offering Unsecured NCDs which will be issued at a face value of Rs. 1,000/- per Unsecured NCD. Interest
on the Option V Unsecured NCDs shall be payable on an annual basis, and there shall be no interest payable on the
Iption IV Unsecured NCDs, as set out hereinafter. The Option IV NCDs, however shall be redeemable at a premium
of Rs. [●] at the end of its tenor. The terms of the Unecured NCDs offered pursuant to the Issue are as follows:


Options                                            IV                                     V
Name                                          Double Bond
Frequency of Interest Payment                 Not Applicable                          Annual
Minimum Application                            Rs. 10,000                            Rs. 10,000
                                                                      Or
                                     Rs. 10,000/- (10 NCDs) (for Option IV and V either taken individually
                                     or collectively)
In Multiples of                                   Rs. 1,000                         Rs. 1,000
Face Value of NCDs                                Rs. 1,000                         Rs. 1,000
(Rs. / NCD)
Issue Price (Rs. / NCD)                         Rs. 1,000                            Rs. 1,000
Mode of Interest Payment                      Not Applicable                  Through Various options
                                                                                     available
Coupon (%) p.a.**                             Not Applicable                      [●]% per annum

Premium (Rs. per NCD)                            Rs. 1,000                               N/A

Yield on redemption**                              [●]%                                 [●]%

Put and call option                                N/A                                  N/A
Tenor                                 For Unsecured NCD holders in                   84 months
                                     the Reserved Individual Portion –
                                                [●] months

                                       For all other Unsecured NCD
                                           holders – [●] months
Redemption Date                       For Unsecured NCD holders in        84 months from the Deemed Date
                                     the Reserved Individual Portion –             of Allotment
                                       [●] months from the Deemed
                                             Date of Allotment

                                       For all other Unsecured NCD
                                       holders – [●] months from the
                                         Deemed Date of Allotment
Redemption Amount                      Repayment of the Face Value          Repayment of the Face Value
(Rs./NCD)                               plus a premium of Rs. 1,000        plus any interest that may have
                                                                                        accrued
Nature of Indebtedness                  Subordinated debt and will be       Subordinated debt and will be
                                          eligible for Tier II capital.       eligible for Tier II capital.
Credit Rating                                     CARE AA                             CARE AA
** Our Company, at its sole discretion, may offer a premium in yield / coupon to the applicants in the Reserved Individual
Portion of upto [●]bps. In addition, our Company may offer a premium of [●] bps and/or an additional interest at the rate
of [●]% per annum to Senior Citizens.
                                                             - 49 -
                                                        SUMMARY FINANCIAL INFORMATION


                 The following tables present an extract of Reformatted Summary Financial Statements of our Company. The
                 Reformatted Summary Financial Statements should be read in conjunction with the examination report thereon issued by
                 our Statutory Auditors and statement of significant accounting policies and notes to accounts on the Reformatted
                 Summary Financial Statements contained in the section titled “Financial Information” beginning on page 136 of this
                 Draft Prospectus.

                 Reformatted summary of Standalone Assets and Liabilities

                                                                                                                               (Rs. in lacs)
                                           As at
                  Particulars            December                                            As at March 31,
                                            31,
                                           2009            2009              2008                 2007           2006                2005

        Assets

A       Fixed Assets and Intangible        4,899.34         13,426.57            14,264.44         16,746.53      15,722.12              4,912.41
        Assets (Net) (including CWIP)

B       Investments                      125,493.97         65,476.33        138,512.02            22,457.16         915.42               407.49

C       Deferred Tax Asset (Net)           5,404.50          2,639.48                    -                 -               -                    -

D       Current Assets                  2,661,783.68     2,377,211.62      1,654,704.81         1,023,399.87     572,319.69           181,788.15

E       Other Loans & Advances            64,898.28         40,219.23            19,379.58         20,931.89      17,945.76              9,458.96


F       Total (A+B+C+D+E)               2,862,479.77     2,498,973.23      1,826,860.85         1,083,535.45     606,902.99           196,567.01

        Liabilities


G       Secured Loans                   1,914,975.11     1,677,459.31      1,154,494.87           630,015.59     374,201.79           129,998.95


H       Unsecured Loans                  340,637.49        334,671.85        322,807.83           239,495.26      65,279.01             16,115.93


I       Deferred tax Liability (Net)                -               -             3,592.21          8,661.98      13,368.85              5,349.98

J       Current Liabilities              247,519.34        211,907.94        137,279.30            81,430.61      61,279.78             20,189.65


K       Provisions                        53,383.85         43,270.53            27,050.74         15,304.49        8,924.98             2,611.34


L       Total (G+H+I+J+K)               2,556,515.79     2,267,309.63      1,645,224.95           974,907.93     523,054.41           174,265.85


M       Net Worth (F-L)                  305,963.98        231,663.60        181,635.90           108,627.52      83,848.58             22,301.16

        Represented By
(i)     Share Capital                     21,279.86         20,353.56            20,315.94         18,418.27      16,921.05              9,073.50
(ii)    Share application money                                 13.80                21.37                 -              -                     -
        pending allotment                     12.97
(iii)   Stock Option Outstanding           1,497.93          2,138.90             1,826.64          1,227.38         353.49                     -

                                                                        - 50 -
                                           As at
                Particulars              December                                    As at March 31,
                                            31,
                                           2009       2009              2008              2007         2006         2005
(iv)
       Optionally Convertible warrants            -     2,400.00          2,400.00            772.80     1,992.03       103.81
(v)    Reserves and Surplus              286,716.43   206,757.34        157,071.95         88,222.80    64,623.18    13,168.28
(vi)   Less : Miscellaneous
       Expenditure (to the extent not
       written off or adjusted)            3543.21             -                 -             13.73        41.17        44.43
       Total (i+ii+iii+iv+v-vi)          305,963.98   231,663.60        181,635.90        108,627.52    83,848.58    22,301.16




                                                                   - 51 -
      Reformatted Summary of Standalone Profit and Loss Account

                                                                                                                        (Rs. in lacs)

                                                      For the
                                                    period April
                                                                                    For the year ended March 31,
                      Particulars                    01, 2009 to
                                                    December 31,
                                                        2009            2009        2008            2007         2006         2005

A      Income

i      Income from Operations                         323,209.53      365,978.05   245,328.68     140,299.54    88,534.58    33,831.76

ii     Other Income                                     3,829.81        7,134.92     5,574.00       1,839.06     2,095.93      737.08

       Total Income                                   327,039.34      373,112.97   250,902.68     142,138.60    90,630.51    34,568.84


B      Expenditure


i      Interest & Other Charges                       167,377.84      197,767.21   129,661.64      73,833.11    41,913.24    16,561.34
ii     Raw Material Consumed                                   -          687.17       258.06              -            -            -
iii    Personnel Expenses                              16,396.29       20,053.60    12,547.76       7,263.39     4,776.62     1,421.88
iv     Operating & Other Expenses                      20,031.75       27,925.50    19,476.96      13,815.54    13,201.72     6,101.76
v      Depreciation                                     1,196.22        3,480.59     3,705.97       1,281.85       969.02       352.03
vi     Impairment loss/(Reversal) on Fixed assets
       & stock                                                -           560.87            -       (296.72)         9.97       119.63
vii    Provisions & Write offs (net)                  30,842.97        30,574.92    24,668.99      17,319.01     8,143.07     2,225.31

       Total Expenditure                             235,845.07       281,049.86   190,319.38     113,216.18    69,013.64    26,781.95


C      Net Profit Before Taxation (A-B)               91,194.27        92,063.11    60,583.30      28,922.42    21,616.87     7,786.89


D      Provision for taxation
       Current tax                                    33,090.61       34,998.86     26,387.42      14,445.62     5,984.29     1,464.23
       Deferred tax                                  (2,765.02)       (4,477.15)   (5,069.77)                                 1,390.28
                                                                                                (4,706.87)   1,345.26
       Fringe Benefit Tax                                   -            301.19       283.00          143.96        123.22           -

       Total Tax                                      30,325.59        30,822.90    21,600.65       9,882.71     7,452.77     2,854.51


E      Net Profit after Taxation (C-D)                60,868.68        61,240.21    38,982.65      19,039.71    14,164.10     4,932.38

       Balance in Profit & Loss Account brought
       forward                                        58,309.25        27,486.21   12,248.92        5,322.65     3,396.32     1,914.29
           on amalgamation of SIL                             -                -           -               -      3,387.15           -
           on amalgamation of SOFL                            -                -           -               -        106.96           -

       Provision for Dividend no longer required                -              -           -               -             -        4.76

F      Balance Available for Appropriations          119,177.93        88,726.42   51,231.57      24,362.36     21,054.53     6,851.43


                                                             - 52 -
                                                                                                               (Rs. in lacs)

                                                 For the
                                               period April
                                                                             For the year ended March 31,
                   Particulars                  01, 2009 to
                                               December 31,
                                                   2009          2009        2008          2007         2006           2005
G   Appropriations

    Dividend - Cumulative Redeemable
    Preference Shares                                    -              -              -            -     423.67        228.21
    Equity Shares - Interim dividend              4,254.76       2,035.03   2,031.35        1,749.01    4,271.43        519.50
    Equity Shares - Final dividend                  325.18          10.52     138.85
    Equity Shares - Proposed final dividend              -       8,140.46   8,125.42        3,683.17      559.38        981.43
    Tax on dividend                                 778.36       1,731.16   1,749.74          871.26      736.95        225.97
    Short Provision for Dividend Tax of
    previous Year                                         -             -           -               -      18.09              -
    Transfer to statutory reserve                        -      12,300.00   7,800.00        3,810.00    2,834.01       1,000.00
    Transfer to general reserve                          -       6,200.00   3,900.00        2,000.00    1,500.00        500.00
    Transfer to Capital Redemption Reserve                              -           -               -   5,388.35             -
    Transfer to debenture redemption reserve       6802.27              -           -               -              -         -

    Total Appropriations                         12,160.57      30,417.17   23,745.36      12,113.44    15,731.88      3,455.11


H   Balance carried to Balance Sheet (F-G)      107,017.36      58,309.25   27,486.21      12,248.92    5,322.65       3,396.32




                                                       - 53 -
Reformatted Standalone Summary of Cash Flow Statement

                                                                                                                        (Rs in lacs)

                                For the period                                 For the year ended March 31,
                               April 01, 2009 to
      Particulars
                                December 31,          2009             2008              2007            2006           2005
                                     2009

A. Cash flow from
operating activities
Net Profit before taxation            91,194.27      92,063.11          60,583.30        28,922.42       21,616.87         7,786.89
Depreciation                           1,196.22       3,480.59           3,705.97         1,281.85          969.02           352.03
Depreciation netted off
against income on Sale of                 19.04               -                   -                -                -               -
windmill
Share and debenture issue                      -              -               13.74          27.44             39.35           22.85
expenses written off
(Profit) / loss on sale of              (88.78)          87.77                17.39         231.02             33.00            7.63
fixed assets (net)
(Profit) / loss on sale of
current and long term                  (822.32)        (512.62)           (717.70)         (11.65)            (19.06)          (6.84)
investments (net)
Interest and dividend
income on current and long
term investments and                 (2,449.62)      (3,254.35)         (3,487.19)        (419.80)         (349.91)        (121.13)
interest on fixed deposits
Employees Stock option                   292.00         580.57             653.95           987.16            353.49                -
compensation cost
Provision for impairment of                    -        560.87                    -       (248.28)                  -          70.15
windmill
Provision for impairment -                     -              -                   -        (48.44)              9.97           49.48
others
Provision for hedging                          -       (705.44)            690.42            15.02                  -               -
contracts
Provision for credit loss on           3,317.30       4,464.01           2,009.30         1,640.19                  -               -
securitisation
Provisions for non
performing assets and bad             27,901.02      26,794.90          21,875.36        15,742.63        8,322.05         2,217.12
debts written off
Provision for gratuity                   119.91         141.16             148.45           22.92              19.67            6.40
Provision for leave                      119.59         227.65             120.73           (0.82)             12.50            5.00
encashment
Provision for diminution in                                                                                                    19.85
value of investments                      21.67          81.14              60.67         (167.60)             11.79
Operating profit before                                                 85,674.39                                        10,409.43
working capital changes              120,820.30     124,009.36                           47,974.06       31,018.74
Movements in working
capital:
(Increase) / decrease in
current assets:
(Increase) / decrease in                 126.81         (60.28)            (66.53)                 -                -           -
inventories
(Increase) / decrease in
portfolio under financing          (372,706.08)    (293,889.32)       (692,459.86)    (308,228.67)     (248,606.35)     (68,774.96)
activities
(Increase) / decrease in                 399.24        (151.13)            100.56           402.91         (556.59)                 -
sundry debtors
(Increase) / decrease in                                                          -                                             5.77
lease assets - net of sales                    -              -                                 0.56            1.16
                                                             - 54 -
Reformatted Standalone Summary of Cash Flow Statement

                                                                                                                       (Rs in lacs)

                                For the period                                 For the year ended March 31,
                               April 01, 2009 to
      Particulars
                                December 31,          2009             2008              2007            2006          2005
                                     2009
(Increase) / decrease in             (55,995.04)              -                   -               -                -               -
other current assets

(Increase) / decrease in                                                 1,803.88                                          (64.36)
other loans and advances            (24,681.54)     (22,834.07)                          (3,369.91)       5,980.88

Increase / (decrease) in              37,303.06      73,274.91          57,152.49        22,311.54       18,306.00        6,437.64
current liabilities
Cash generated from                (294,733.25)    (119,650.53)       (547,795.07)    (240,909.51)    (193,856.16)     (51,986.48)
operations
Direct taxes paid (net of           (33,095.56)     (35,067.48)        (26,899.61)      (14,205.81)      (6,480.97)     (1,832.63)
refunds)
Net cash used in operating         (327,828.81)    (154,718.01)       (574,694.68)    (255,115.32)    (200,337.13)     (53,819.11)
activities (A)

B. Cash flows from
investing activities
Investment in Fixed                 (62,129.42)     (47,214.27)        (33,178.65)      (32,445.92)       9,179.84      (1,331.52)
deposits (net)
Purchase of fixed assets and           (544.02)      (3,369.47)         (5,252.92)       (1,622.25)      (1,075.00)       (127.29)
intangibles
Change in capital work in                      -              -          3,986.91        (1,414.06)      (2,244.05)           (4.05)
progress (fixed and
intangible assets)
Proceeds from sale of fixed            7,944.77          78.10                24.70         746.91            302.00           2.41
assets
Purchase of Investment           (1,418,400.94)     (64,790.83)       (776,661.44)      (21,364.74)                -               -
Investment in associate                       -               -            (30.00)         (180.00)                -               -
company
Investment in subsidiary               (214.99)               -                   -          (4.99)                -               -
company
Proceeds from sale of
investments in subsidiary                  5.00               -                4.99               -                -               -
company
Proceeds from sale of
investments in associate                       -              -            112.50                 -                -               -
company
Proceeds from sale of              1,359,415.61     138,339.14         661,221.69            19.63             78.58           6.84
investments
Interest and dividend
received on current and
long term investments and                514.12       2,477.27           1,381.20           (32.93)       1,838.48         137.50
interest on fixed deposits
Net cash used in investing         (113,409.87)      25,519.94        (148,391.02)      (56,298.35)       8,079.85      (1,316.11)
activities (B)

C. Cash Flows from
financing activities
Proceeds from issue of
equity share capital                                                                                                      6,107.40
including securities                  22,041.21         124.09          43,003.42        11,028.07       30,687.67
premium & Share
application
                                                             - 55 -
Reformatted Standalone Summary of Cash Flow Statement

                                                                                                                   (Rs in lacs)

                                For the period                              For the year ended March 31,
                               April 01, 2009 to
      Particulars
                                December 31,         2009            2008             2007            2006         2005
                                     2009
Redemption of preference                       -             -                 -               -      (5,388.35)               -
shares
Proceeds from issue of                         -             -         2,400.00                -       1,792.00           103.81
share warrants
Increase / (decrease) in             219,120.27    320,120.96        443,172.48      278,640.26      116,255.06     18,849.14
bank borrowings (net)
Increase / (decrease) in                                                                                            12,430.57
long term borrowings from           (40,515.12)    (41,471.04)        27,824.90       85,438.50       18,041.38
others (net)
Increase / (decrease) in               7,802.15        146.45          (763.73)        (342.36)       (1,325.98)      (219.51)
fixed deposits (net)
Increase / (decrease) in              36,906.16     55,816.44         30,577.18       29,924.71       13,225.78       9,401.10
subordinate debts (net)
Increase / (decrease) in                                                                                            14,433.61
redeemable non convertible            67,006.98    169,124.14        119,111.61        2,368.94       10,126.91
debentures (net)
Increase / (decrease) in                                                                                               (15.00)
inter corporate deposits and        (50,382.21)     31,091.52        (12,214.36)      34,000.00        (331.71)
commercial papers (net)
Dividend paid                       (12,720.40)    (10,170.97)        (5,853.38)      (5,320.67)      (3,575.25)    (1,528.17)
Tax on dividend                      (2,161.83)     (1,728.56)          (994.78)        (746.23)        (519.52)      (198.32)
Net cash from financing             247,097.21     523,053.03        646,263.34      434,991.22      178,987.99      59,364.63
activities (C)
Net increase / (decrease)                                                                                             4,229.41
in cash and cash                   (194,141.47)    393,854.96        (76,822.36)     123,577.55      (13,269.29)
equivalents (A + B + C)
Cash and Cash                                                                                                       13,420.96
Equivalents at the                   461,054.26     67,199.30        144,021.66       20,444.11       33,713.40
beginning of the year
Cash and Cash                                                         67,199.30                                     17,650.37
Equivalents at the end of            266,912.79    461,054.26                        144,021.66       20,444.11
the year




                                                            - 56 -
 Reformatted Summary of Cash Flow Statement
                                                                                                                        (Rs in lacs)

Components of Cash and Cash Equivalents          As at
                                               December                                   As at March 31,
                                                  31,
                                                 2009           2009          2008            2007          2006            2005
Cash on hand                                       2469.68      7,062.48      5,639.48        2,281.08      1,756.21         563.37
Cheques on hand                                    2614.89      1,490.15        856.52          215.76         54.65          80.15
Remittances in transit                              144.00            10.16     193.69        2,375.05        829.39          66.20
With Banks – in Current Account
           - in unpaid dividend accounts $      163,186.32     95,601.30      45,275.37      26,253.34      15,584.83     16,800.73
            - in fixed deposits (Original           294.26        165.70         109.36         160.05         125.48        139.92
              maturity being three months or
              less)                              98,203.64   356,724.47       15,124.88     112,736.38       2,093.55             -
                                                266,912.79   461,054.26       67,199.30     144,021.66      20,444.11     17,650.37

     Note:
     *Cash and Cash Equivalents at the beginning of the year for the year 2006 includes cash and cash equivalents of M/s.
     Shriram Investments Limited Rs. 15,792.04 Lacs and of M/s. Shriram Overseas Finance Limited Rs. 270.99 Lacs. The
     same is not included in Cash and cash equivalents at the end of the year 2005.
     $ These balance are not available for use by they represent corresponding unpaid dividend liability.




                                                             - 57 -
        Shriram Transport Finance Company Limited
        Reformatted Consolidated Summary of Assets and Liabilities
                                                                                         (Rs. in lacs)

                                    Particulars                              As at December 31, 2009


        Assets

A.      Fixed and Intangibles Assets(Net) (including CWIP)                                  4,899.34

B       Investments                                                                       125,460.67

C       Deferred Tax Asset (Net)                                                            5,404.50

D       Current Assets                                                                  2,661,993.78

E       Other Loans & Advances                                                             64,895.65

F       Total (A+B+C+D+E)                                                               2,862,653.94

        Liabilities

G       Secured Loans                                                                   1,914,975.11

H       Unsecured Loans                                                                   340,637.49

I       Current Liabilities                                                               247,519.61

        Provisions                                                                         53,383.85

K       Minority Interest                                                                        0.01

L       Total (G+H+I+J+K)                                                               2,556,516.07



M       Net Worth (F-L)                                                                   306,137.87

        Represented By
(i)     Share Capital                                                                      21,279.86
(ii)    Share application money pending allotment                                              12.97
(iii)   Stock Option Outstanding                                                            1,497.93
(iv)    Reserves and Surplus                                                              286,890.32
(v)     Less : Miscellaneous Expenditure (to the extent not written off or                  3,543.21
        adjusted)
        Total (i+ii+iii+iv-v)                                                             306,137.87




                                                                  - 58 -
      Shriram Transport Finance Company Limited
      Reformatted Consolidated Summary of Profit and Loss Account

                                                                                                    (Rs. in lacs)

                                                                               For the period April 01, 2009 to
                                            Particulars
                                                                                     December 31, 2009



A     Income

i     Income from Operations                                                                         323,209.53

ii    Other Income                                                                                     3,833.39

      Total Income (A+B)                                                                             327,042.92

B     Expenditure

  i   Interest & Other Charges                                                                       167,377.84
 ii   Raw Material Consumed                                                                                   -
iii   Personnel Expenses                                                                              16,396.29
iv    Operating & Other Expenses                                                                      20,038.13
 v    Depreciation                                                                                     1,196.22
vi    Provisions & Write offs (net)                                                                   30,842.97

      Total Expenditure                                                                              235,851.45

C.    Net Profit Before Taxation (A-B)                                                                91,191.47

D.    Provision for taxation

      Current tax
                                                                                                      33,090.61
      Deferred tax
                                                                                                      (2,765.02)

      Total Tax                                                                                       30,325.59

E.    Net Profit after Taxation (C-D)                                                                 60,865.88

      Share of Losses of Associate                                                                        (6.02)
F     Profit after taxes, Minority Interest and Share of Profit of Associate                          60,859.86
      Balance in Profit & Loss Account brought forward                                                58,309.25

G     Balance Available for Appropriations                                                           119,169.11




                                                              - 59 -
    Shriram Transport Finance Company Limited
    Reformatted Consolidated Summary of Profit and Loss Account
                                                                                      (Rs. in lacs)
                                                                  For the period April 01, 2009 to
                                           Particulars
                                                                        December 31, 2009
H   Appropriations



     Equity Shares - Interim dividend                                                     4,254.76

     Equity Shares - Final dividend                                                         325.18

     Tax on dividend                                                                        778.36

     Transfer to debenture redemption reserve                                             6,802.27

    Total Appropriations                                                                 12,160.57

I   Balance carried to Balance Sheet (G-H)
                                                                                        107,008.54




                                                         - 60 -
SHRIRAM TRANSPORT FINANCE COMPANY LIMITED

Reformatted Consolidated Cash Flow Statement
                                                                                                      (Rs in lacs)

                                                                             For the period April 01, 2009 to
                                Particulars
                                                                                   December 31, 2009



A. Cash flow from operating activities
Net profit before taxation                                                                              91,191.47
Depreciation                                                                                             1,196.22
Depreciation netted off against income on Sale of windmill                                                  19.04
(Profit) / loss on sale of fixed assets (net)                                                             (88.78)
(Profit) / loss on sale of current and long term investments (net)                                       (822.32)
Interest and dividend income on current and long term investments and                                  (2,450.05)
interest on fixed deposits
Employees Stock option compensation cost                                                                   292.00
Provision for credit loss on securitisation                                                              3,317.30
Provisions for non performing assets and bad debts written off                                          27,901.02
Provision for gratuity                                                                                     119.91
Provision for leave encashment                                                                             119.59
Provision for diminution in value of investments                                                            21.67
Operating profit before working capital changes                                                        120,817.07
Movements in working capital:
(Increase) / decrease in inventories                                                                       126.81
(Increase) / decrease in portfolio under financing activities                                        (372,706.08)
(Increase) / decrease in sundry debtors                                                                    399.24
(Increase) / decrease in other current assets                                                         (55,995.04)
(Increase) / decrease in other loans and advances                                                     (24,678.90)
Increase / (decrease) in current liabilities                                                            37,303.33
Cash generated from operations                                                                       (294,733.57)
Direct taxes paid (net of refunds)                                                                    (33,095.57)
Net cash used in operating activities (A)                                                            (327,829.14)

B. Cash flows from investing activities
Investment in Fixed deposits (net)                                                                    (62,129.42)
Purchase of fixed assets                                                                                 (544.02)
Proceeds from sale of fixed assets                                                                       7,944.77
Purchase of Investment                                                                             (1,418,405.94)
Proceeds from sale of investments                                                                    1,359,420.61
Interest and dividend received on current and long term investments and                                    514.55
interest on fixed deposits
Net cash used in investing activities (B)                                                            (113,199.45)
C. Cash Flows from financing activities
Proceeds from issue of equity share capital including securities premium &                              22,041.21
Share application
Increase / (decrease) in bank borrowings (net)                                                         219,120.27
Increase / (decrease) in long term borrowings from others (net)                                       (40,515.12)

                                                         - 61 -
SHRIRAM TRANSPORT FINANCE COMPANY LIMITED

Reformatted Consolidated Cash Flow Statement
                                                                                                           (Rs in lacs)

                                                                                  For the period April 01, 2009 to
                                  Particulars
                                                                                        December 31, 2009

Increase   / (decrease) in fixed deposits (net)                                                               7,802.15
Increase   / (decrease) in subordinate debts (net)                                                           36,906.16
Increase   / (decrease) in redeemable non convertible debentures (net)                                       67,006.98
Increase   / (decrease) in inter corporate deposits and commercial papers (net)                            (50,382.21)
Dividend paid                                                                                              (12,720.39)
Tax on dividend                                                                                              (2,161.83)
Net cash from financing activities (C)                                                                      247,097.22
Net increase / (decrease) in cash and cash equivalents (A + B + C)                                        (193,931.37)
Cash and Cash Equivalents at the beginning of the year                                                      461,054.26
Cash and Cash Equivalents at the end of the year                                                            267,122.89

                                                                                                          (Rs in lacs)
Components of Cash and Cash Equivalents                                              As at December 31, 2009
Cash on hand                                                                                                 2,469.68
Cheques on hand                                                                                              2,614.89
Remittances in transit                                                                                         144.00
With Banks - in Current Account                                                                            163,196.32
          - in unpaid dividend accounts $                                                                      294.26
           - in fixed deposits (Original maturity being three months or less)                               98,403.74
                                                                                                           267,122.89




                                                           - 62 -
                                                CAPITAL STRUCTURE

Details of share capital

The share capital of our Company as at date of this Draft Prospectus is set forth below:

Share Capital                                                                                         Rupees in Lacs
AUTHORISED SHARE CAPITAL
33,50,00,000 Equity Shares of Rs.10/- each                                                                    33,500
2,00,00,000 Preference Shares of Rs.100/- each                                                                20,000

TOTAL                                                                                                         53,500

ISSUED
225,571,959 Equity Shares of Rs.10/- each                                                                   22,557.20

SUBSCRIBED
225,571,959 Equity Shares of Rs.10/- each                                                                   22,557.20

PAID-UP SHARE CAPITAL
225,517,818 Equity Shares of Rs. 10/- each                                                                  22,551.78
48,000 Equity Shares of Rs. 10/- each, paid up Rs. 5/- each                                                      2.40

TOTAL                                                                                                       22,554.18
NOTES:
Of the total Equity shares an aggregate of 79,279,236 Equity Shares have been allotted for
consideration other than cash of which:

a.       60,633,350 fully paid-up Equity Shares of our Company have been allotted to the
         shareholders of SIL, pursuant to a scheme of amalgamation sanctioned by the Hon’ble
         High Court of Madras vide its order dated November 25, 2005, in a ratio of 1 fully paid up
         Equity Share of our Company, for every 1 fully paid up equity share of the face value of
         Rs. 10/- each, of SIL; and

b.       18,645,886 fully paid-up Equity Shares of our Company have been allotted to the
         shareholders of SOFL, pursuant to a scheme of amalgamation sanctioned by the Hon’ble
         High Court of Madras vide its order dated December 1, 2006, in a ratio of 3 fully paid up
         Equity Shares of our Company, for every 5 fully paid up equity shares of the face value of
         Rs. 10/- each, of SOFL

(i)      Pursuant to the issuance of 6,495,420 Equity Shares on a rights basis on April 21, 1995,
         6,484,910 Equity Shares were allotted, and 10,510 Equity Shares were kept in abeyance
         and not allotted, on account of unavailability of certain information in connection with
         certain applicants of Equity Shares in the said rights issue. Subsequently, 2,369 Equity
         Shares and 2,000 Equity Shares of the aforementioned Equity Shares kept in abeyance,
         were allotted on November 11, 1995 and December 28, 1995, respectively. Currently,
         6,141 Equity Shares are still kept in abeyance and pending allotment.

(ii)     48,000 equity shares of Rs. 10/- each of SIL, on which Rs.5/- was paid up for each of the
         said shares, were forfeited on January 17, 1997, (“Forfeited Shares”). Pursuant to the
         scheme of amalgamation sanctioned by the Hon’ble High Court of Madras vide its order
         dated November 25, 2005, as detailed in para (a) above, the Forfeited Shares have become
         a part of the share capital of our Company, by operation of law.


                                                           - 63 -
Changes in the authorised capital of our Company as on the date of this Draft Prospectus:

Sr.     FY       Alteration
No.
1.      1983     The Authorised share capital of our Company was increased from Rs 10,00,000 divided into 1,00,000
                 Equity Shares to Rs 50,00,000 divided into 5,00,000 Equity Shares.
2.      1986     The Authorised share capital of our Company was increased from Rs 50,00,000 divided into 5,00,000
                 Equity Shares to Rs 1,00,00,000 divided into 10,00,000 Equity Shares.
3.      1989     The Authorised share capital of our Company was increased from Rs 1,00,00,000 divided into
                 10,00,000 Equity Shares to Rs 2,00,00,000 divided into 20,00,000 Equity Shares.
4.      1991     The Authorised share capital of our Company was increased from Rs 2,00,00,000 divided into
                 20,00,000 Equity Shares to Rs 6,50,00,000 divided into 65,00,000 Equity Shares.
5.      1995     The Authorised share capital of our Company was increased from Rs 6,50,00,000 divided into
                 65,00,000 Equity Shares to Rs 40,00,00,000 divided into 3,00,00,000 Equity Shares and 10,00,000
                 cumulative redeemable preference shares of Rs 100 each.
6.      1997     The Authorised share capital of our Company was increased from Rs 40,00,00,000 divided into
                 300,00,000 Equity Shares and 10,00,000 cumulative redeemable preference shares of Rs 100 each to
                 Rs 60,00,00,000 divided into 500,00,000 Equity Shares and 10,00,000 cumulative redeemable
                 preference shares of Rs 100 each.
7.      1998     The Authorised share capital of our Company was increased from Rs 60,00,00,000 divided into
                 500,00,000 Equity Shares and 10,00,000 cumulative redeemable preference shares of Rs 100 each to
                 Rs 65,00,00,000 divided into 500,00,000 Equity Shares and 15,00,000 cumulative redeemable
                 preference shares of Rs 100 each
8.      2000     The Authorised share capital of our Company was increased from Rs 65,00,00,000 divided into
                 500,00,000 Equity Shares and 15,00,000 cumulative redeemable preference shares of Rs 100 each to
                 Rs 90,00,00,000 divided into 500,00,000 Equity Shares and 40,00,000 cumulative redeemable
                 preference shares of Rs 100 each
9.      2003     The Authorised share capital of our Company was increased from Rs 90,00,00,000 divided into
                 500,00,000 Equity Shares and 40,00,000 cumulative redeemable preference shares of Rs 100 each to
                 Rs 1,15,00,00,000 divided into 7,50,00,000 Equity Shares each and 40,00,000 cumulative redeemable
                 preference shares of Rs 100 each
10.     2004     The Authorised share capital of our Company was increased from Rs 1,15,00,00,000 divided into
                 7,50,00,000 Equity Shares and 40,00,000 cumulative redeemable preference shares of Rs 100 each to
                 Rs 1,25,00,00,000 divided into 7,50,00,000 Equity Shares and 50,00,000 cumulative redeemable
                 preference shares of Rs 100 each.
11.     2004     The Authorised share capital of our Company was reorganised from Rs 1,25,00,00,000 divided into
                 7,50,00,000 Equity Shares and 50,00,000 cumulative redeemable preference shares of Rs 100 each to
                 1,25,00,00,000 divided into 7,50,00,000 Equity Shares and 50,00,000 preference shares of Rs 100
                 each.
12.     2006     The Authorised share capital of our Company was increased from Rs 1,25,00,00,000 divided into
                 7,50,00,000 Equity Shares and 50,00,000 preference shares of Rs 100 each to Rs 3,50,00,00,000
                 divided into 22,50,00,000 Equity Shares and 1,25,00,000 preference shares of Rs 100 each
13.     2006     The Authorised share capital of our Company was reorganised from Rs 3,50,00,00,000 divided into
                 22,50,00,000 Equity Shares and 1,25,00,000 preference shares of Rs 100 each to Rs 4,80,00,00,000
                 divided into 30,00,00,000 Equity Shares and 1,80,00,000 preference shares of Rs 100 each*
14.     2006     The Authorised share capital of our Company was reorganised from Rs 4,80,00,00,000 divided into
                 30,00,00,000 Equity Shares and 1,80,00,000 preference shares of Rs 100 each to Rs 5,35,00,00,000
                 divided into 33,50,00,000 Equity Shares and 2,00,00,000 preference shares of Rs 100 each**
NOTES:
* The authorised capital of our Company was increased pursuant to a scheme of amalgamation of the erstwhile SIL, with
our Company (“SIL Scheme of Merger”). The appointed date for the SIL Scheme of Merger was April 1, 2005 and the
record date for the purposes of re-organisation and issue of shares was December 21, 2005, as approved by the Hon’ble
High Court of Madras, vide its order dated November 25, 2005.

                                                        - 64 -
Sr.     FY       Alteration
No.
** The authorised capital of our Company was increased, pursuant to a scheme of amalgamation of the erstwhile SOFL,
with our Company (“SOFL Scheme of Merger”). The appointed date for the SOFL Scheme of Merger was April 1,
2005 and the record date for the purposes of re-organisation and issue of shares was February 9, 2007, as approved by
the Hon’ble High Court of Madras, vide its order dated December 1, 2006.


Equity Share Capital History of our Company

Date of Allotment Number of shares     Cumulative                Nature of Issue        Issue Price Premium (Rs.)
                  issued and allotted Paid-up capital                                      (Rs.)
                                        in (Rs.)


December 30, 1979                 50,000         5,00,000 Subscribers to the MOA           10/-        N.A
                                                                 and AOA

     April 17, 1984             2,50,000        30,00,000          Public issue            10/-         N.A

     April 26, 1986                             75,00,000          Rights issue            10/-         N.A
                                4,50,000
                      (45,000 debentures
                        of Rs.100/- each)
    March 31, 1989              5,75,000      1,32,50,000          Rights issue            10/-         N.A

November 30, 1990             51,70,420       6,49,54,200 Public cum Rights Issue          10/-         N.A
                              ( 3,45,000
                           debentures of
                          Rs.150/- each)

     April 21, 1995            64,84,910     12,98,03,300          Rights issue            10/-         N.A

November 11, 1995                  2,369     12,98,26,990 Issue out of shares kept in      10/-         N.A
                                                                  abeyance

December 28, 1995                  2,000     12,98,46,990 Issue out of shares kept in      10/-         N.A
                                                                  abeyance
      June 26, 1997                          35,65,65,490 Public cum Rights Issue          10 /-        N.A
                            2,26,71,850
                             ( 45,34,370
                           debentures of
                           Rs.50/- each )
November 28, 2002              62,43,000     41,89,95,490        Preferential Issue        12 /-        2/-

     April 26, 2004            46,00,000     46,49,95,490        Preferential Issue       29.81/-     19.81/-

      July 23, 2004            54,50,000     51,94,95,490        Preferential Issue       25.50/-     15.50/-

 February 16, 2005           1,34,79,000     65,42,85,490        Preferential Issue        35/-         25/-

December 23, 2005            6,06,33,350    1,26,06,18,990 Merger of SIL with our    For               N.A.
                                                          Company                 considerati
                                                        - 65 -
Date of Allotment Number of shares     Cumulative             Nature of Issue         Issue Price Premium (Rs.)
                  issued and allotted Paid-up capital                                    (Rs.)
                                        in (Rs.)


                                                                                        on other
                                                                                       than cash
  February 2, 2006        2,44,78,681   1,50,54,05,800       Preferential Issue         112/-        102/-


   August 7, 2006          57,15,000    1,56,25,55,800    Conversion of warrants         35/-         25/-
                                                          issued on February 16,
                                                         2005 on preferential basis




  January 23, 2007             59,250   1,56,31,48,300          ESOP$              35/-              25/-
 February 12, 2007        1,86,45,886   1,74,96,07,160 Merger of SOFL with our     For               N.A.
                                                              Company          considerati
                                                                                 on other
                                                                                than cash

   March 27, 2007             79,300    1,75,04,00,160            ESOP$                  35/-         25/-
   March 30, 2007          91,00,000    1,84,14,00,160 Conversion of warrants           112/-        102/-
                                                       issued on February 2, 2006
                                                           on preferential basis




   March 30, 2007             18,700    1,84,15,87,160            ESOP$                  35/-         25/-


   April 27, 2007             16,000    1,84,17,47,160            ESOP$                  35/-         25/-


     June 30, 2007            19,500    1,84,19,42,160            ESOP$                  35/-         25/-


     July 31, 2007         69,00,000    1,91,09,42,160 Conversion of warrants           112/-        102/-
                                                      issued on February 2, 2006
                                                          on preferential basis
  August 10, 2007              7,000    1,91,10,12,160            ESOP$                  35/-         25/-


 October 13, 2007             34,200    1,91,13,54,160            ESOP$                  35/-         25/-


December 14, 2007         1,20,00,000   2,03,13,54,160       Preferential Issue         300/-        290/-


     June 25, 2008            87,100    2,03,22,25,160            ESOP$                  35/-         25/-

                                                    - 66 -
Date of Allotment Number of shares     Cumulative                  Nature of Issue      Issue Price Premium (Rs.)
                  issued and allotted Paid-up capital                                      (Rs.)
                                        in (Rs.)


         July 14, 2008             81,150    2,03,30,36,660            ESOP$                35/-         25/-

         July 24, 2008             94,850    2,03,39,85,160            ESOP$                35/-         25/-

September 19, 2008                 74,600    2,03,47,31,160            ESOP$                35/-         25/-

     October 27, 2008              29,300    2,03,50,24,160            ESOP$                35/-         25/-

December 10, 2008                    9,200   2,03,51,16,160            ESOP$                35/-         25/-

        May 16, 2009               34,200    2,03,54,58,160            ESOP$                35/-         25/-

        June 12, 2009           80,00,000    2,11,54,58,160 Conversion of warrants 300/-                 290/-
                                                            issued December 14, 2007
                                                            on preferential basis.
     July 16, 2009                 95,350    2,11,64,11,660           ESOP$            35/-              25/-
November 10, 2009               10,96,750    2,12,73,79,160           ESOP$            35/-              25/-
November 24, 2009                  36,650    2,12,77,45,660           ESOP$            35/-              25/-
 January 28, 2010              11,658,552    2,24,43,31,180 Qualified Institutional
                                                                     Placement       500.80/-          490.80/-
March 26, 2010                  10,84,700    2,25,51,78,180           ESOP$            35/-              25/-

                Total        22,55,17,818


$          Equity Shares allotted to the employees of our Company as fully paid up under the Company’s Employees
           Stock Option Scheme 2005 on exercise of vested options.

Notes:

1.         45,000 convertible debentures of face value of Rs.100/- each were issued on April 26, 1986. 15,000 of the
           convertible debentures were converted into 1,50,000 Equity Shares on October 26, 1986, another 15,000 of the
           convertible debentures were converted into 1,50,000 Equity Shares on October 26, 1987 and the remaining
           15,000 of the convertible debentures were converted into 1,50,000 Equity Shares on October 26, 1988.

2.         3,45,000 convertible debentures of face value of Rs.150/- each, were issued on November 30, 1990. Pursuant
           to the conversion of the debentures, 17,25,000 Equity Shares have been allotted on June 1, 1991, 17,25,000
           Equity Shares have been allotted on March 1, 1992 and 17,20,420 Equity Shares have been allotted on
           December 1, 1992.

3.         45,34,370 convertible debentures of face value of Rs.50/- each were issued on June 26, 1997. Pursuant to the
           conversion of the debentures, 45,34,370 Equity Shares have been allotted on June 26, 1998, 90,68,740 Equity
           Shares have been allotted on June 26, 1999 and 90,68,740 Equity Shares have been allotted on June 26, 2000.

4.         Pursuant to a scheme of amalgamation sanctioned by the Hon’ble High Court of Madras vide its order dated
           November 25, 2005, our Company issued and allotted 6,06,33,350 fully paid-up Equity Shares of our Company
           to the shareholders of SIL, whose names appeared in the register of members on record date in connection with
           the aforesaid scheme of amalgamation, in a ratio of 1 fully paid up Equity Shares of our Company, for every 1
           fully paid up equity share of the face value of Rs. 10/- each, of SIL.


                                                          - 67 -
5.          Pursuant to a scheme of amalgamation sanctioned by the Hon’ble High Court of Madras vide its order dated
            December 1, 2006, our Company issued and allotted 1,86,45,886 fully paid-up Equity Shares of our Company
            to the shareholders of SOFL, whose names appeared in the register of members on record date in connection
            with the aforesaid scheme of amalgamation, in a ratio of 3 fully paid up Equity Shares of our Company, for
            every 5 fully paid up equity share of the face value of Rs. 10/- each, of SOFL.

6.          On January 28, 2010, our Company issued and allotted 11,658,552 Equity Shares of at a price of Rs.500.80 per
            such Equity Share, aggregating to Rs. 58,386.03 lacs to Qualified Institutional Buyers pursuant to the provisions
            of Chapter VIII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
            Regulations, 2009, as amended.

7.          On March 26, 2010 our Company has issued and allotted 1,084,700 Equity Shares at a price of Rs. 35 per
            Equity Share pursuant to the exercise of stock options issued under our ESOP scheme. Our Company has made
            separate applications all dated April 13, 2010, to MSE, NSE, and BSE in connection with obtaining approval
            therefrom, for trading of the aforementioned Equity Shares. The said listing approvals in connection with the
            trading of the aforementioned Equity Shares from all the exchanges are awaited.


Share holding pattern of our Company as on April 16, 2010:

 Sr.                      Name of the Shareholder            No. of shares       Nominal Value (Rs.)   Total Paid up      Percentage (% )
 No.                                                                                                   capital (Rs.)




     A     PROMOTER AND PROMOTER GROUP


     (1)   Indian

     a     Individual/Hindu Undivided Family

     b     Central Government/ State Governments

     c     Bodies Corporate                                        9,33,71,512                    10       93,37,15,120             41.40

     d     Financial Institutions / Banks                                                                                                   -

     e     Any other (Specify)                                                                                                              -

                                            Sub Total A(1)         9,33,71,512                    10       93,37,15,120             41.40

     (2)   Foreign

     a     Individual (Non resident Individuals / Foreign
           individuals)
     b     Bodies Corporate

     c     Institutions

     d     Any other (Specify)

                                            Sub Total A(2)                   -

           Total shareholding of Promoter and Promoter             9,33,71,512                    10       93,37,15,120             41.40
                              Group (A)= (A)(1) +(A)(2)

     B     Public Shareholding
     (1)   Institutions

     a     Mutual Funds/ UTI                                         88,73,959                    10        8,87,39,590              3.93

     b     Financial Institutions / Banks                             2,00,120                    10          20,01,200               0.09


                                                                - 68 -
  c      Central Government/ State Governments

  d      Venture capital Funds

  e      Insurance Companies

  f      Foreign Institutional Investors                       7,53,62,123   10    75,36,21,230     33.42

  g      Foreign Venture Capital Investors

  h      Any other (Foreign Banks)

                                           Sub Total B(1)      8,44,36,202   10    84,43,62,020     37.44

(2)      Non-Institutions

  a      Bodies Corporate                                      2,65,04,840   10    26,50,48,400     11.75

  b      Individuals

(i)      Individual Shareholders holding Nominal Share         1,63,17,857   10    16,31,78,570      7.24
         Capital upto Rs.1 Lac


( i i)   Individual Shareholders holding Nominal Share          40,43,010    10     4,04,30,100      1.79
         Capital in excess of Rs.1 Lac


  c      Any other

          NRI                                                    3,13,225    10       31,32,250      0.14

          Overseas Corporate Bodies                                    50    10             500      0.00

          Clearing Members                                       5,30,122    10       53,01,220      0.24

          Trusts                                                     1,000   10          10,000      0.00

                                           Sub Total B(2)      4,77,10,104   10    47,71,01,040     21.16

         Total Public Shareholding (B)= (B)(1)+(B)(2)        13,21,46,306    10   1,32,14,63,060    58.60

         TOTAL (A) + (B)                                     22,55,17,818    10   2,25,51,78,180   100.00

 C       Shares held by Custodians and against which
         Depository Receipts have been issued

                             Grand Total (A) + (B) + ( C)    22,55,17,818    10   2,25,51,78,180   100.00




                                                            - 69 -
List of top 10 holders of Equity Shares of our Company as on April 16, 2010:

                                                                            Total Number of Equity    Percentage Holding
  S.No              Name of shareholders                Address
                                                                                  Shares held                (%)
         1   Shriram Holdings (Madras) Private   Mookambika Complex,4                   9,33,71,512                   41.40
             Limited                             Lady Desika Road
                                                 Mylapore
                                                 Chennai
                                                 600004
         2   Genesis Indian Investment Company   Deutsche Bank AG,DB                    1,57,20,957                   6..97
             Limited -General Sub Fund           House, Hazarimal
                                                 Somani Marg
                                                 Post Box No. 1142, Fort
                                                 Mumbai
                                                 400001
         3   ICICI Prudential Life Insurance     Deutsche Bank AG,DB                    1,09,47,813                    4.85
             Company Limited                     House, Hazarimal
                                                 Somani Marg
                                                 Post Box No. 1142, Fort
                                                 Mumbai
                                                 400001
         4   FID Funds (Mauritius) Limited       Citibank N. A. Custody                  36,25,000                     1.61
                                                 Services,3rd Flr Trent
                                                 House G Block
                                                 Plot No 60 BKC Bandra
                                                 East
                                                 Mumbai
                                                 400051
         5   Reliance Life Insurance Company     Deutsche Bank AG,DB                     28,69,635                     1.27
             Limited                             House, Hazarimal
                                                 Somani Marg
                                                 Post Box No. 1142, Fort
                                                 Mumbai
                                                 400001
         6   Wellington Management Company,      HSBC Securities                         27,62,307                     1.22
             LLP A/C Bay Pond MB                 Services,2nd
                                                 Floor"Shiv", Plot
                                                 No.139-140 B
                                                 Western Exp Highway,
                                                 Sahar Road Junction,
                                                 Vile Parle-East, Mumbai
                                                 400057
         7   Copthall Mauritius Investment       J.P.Morgan Chase Bank                   25,55,035                     1.13
             Limited                             N.A.,India Sub Custody
                                                 6th Floor, Paradigm B
                                                 Mindspace, Malad West,
                                                 Mumbai
                                                 400064
         8   Columbia Acorn International        Deutsche Bank AG,DB                     23,96,050                     1.06
                                                 House, Hazarimal
                                                 Somani Marg
                                                 Post Box No. 1142, Fort
                                                 Mumbai
                                                 400001
         9   Norges Bank A/C Government          C/O Standard Chartered                  23,09,028                     1.02
             Petroleum Fund                      Bank,Securities Services
                                                 23- 25 M. G. Road
                                                 Mumbai
                                                 400001
     10      Sloane Robinson LLP A/C Sr Global   HSBC Securities                         20,09,730                     0.89
             (Mauritius)Limited (Class G -       Services,2nd Floor
             Emerging)                           'Shiv', Plot No.139-140
                                                 B
                                                 Western Express
                                                 Highway, Sahar Road
                                                 Junction,
                                                 Vile Parle-East, Mumbai
                                                 400057


                                                                  - 70 -
List of top 10 holders of debt instruments, as on April 16, 2010.

1.        List of top 10 Subordinate Debt instruments holders (issued on private placement basis) face value Rs.1000/-
          as on April 16, 2010.

 S. No.     Name of holder                    Address                                        Number of        Aggregate
                                                                                             instruments      Amount (Rs.
                                                                                                              in lacs)


 1.         Shriram General Insurance         E-8, Epip Riico, Sitapur, Jaipur                     1,15,000           1,150.00
            Company Limited                   Rajasthan.


 2.         Shriram Asset Management          106, “Shiv” Chambers, Sector-11, CBD,                  41,340            413.40
            Company Limited                   Belapur, Navi Mumbai , Maharashtra.


 3.         Milind P. Bhandarkar              The Great Eastern, Retreat, FP 496-497 A,              10,100            101.00
                                              Model Colony Near Lakaki Bungalow, Flat
                                              No. 101, Pune, Maharashtra.

 4.         S. Krishnan                       31, Khushali, Plot No. 358, Central Avenue              9,170              91.70
                                              Road, Chembur, Mumbai , Maharashtra.
 5.         Urmila Ulhas Ghosalkar            Daily Ratnagiri Times H. No. 1777, Maruti               8,716              87.16
                                              Lane, Ratnagiri, Maharashtra.
 6.         Shriram Life Insurance            Regd. Office, 3-6-478, Anand Estates 3rd                8,400              84.00
            Company Limited                   Floor, Liberty Road, Himayath Nagar,
                                              Hyderabad, Andhra Pradesh.

 7.         T. N. Swaminathan                 Flat 31, 3rd Floor, 'Khushali' Plot No. 358,            8,135              81.35
                                              Central Avenue Road, Chembur, Mumbai,
                                              Maharashtra.

 8.         Leela Ramachandran                Flat F8, 3rd Floor,No.12, Postal Colony, 2nd            6,840              68.40
                                              Street, West Mambalam, Chennai,
                                              Tamilnadu.

 9.         Sudha Patel                       Shanti Bihar Colony, Rajakhedi,                         6,453              64.53
                                              Makronia,Sagar, Madhya Pradesh.
 10.        Devyani Richharia                 T -1, Thadaram Apartment - 2,                           6,146              61.46
                                              Kohefiza,Bhopal, Madhay Pradesh.

2.        List of top 10 Debenture (issued on private placement basis) holders face value Rs.1000/- as on April 16,
          2010.

 S. No.     Name of Debenture holder          Address                                        Number of        Aggregate
                                                                                             Debentures       Amount (Rs.
                                                                                                              in lacs)

 1.         V. Shankar                        A-121, Kalpataru Residency, Opp .Cine                250,000            2,500.00
                                              Planet, Sion (East ), Mumbai ,
                                              Maharashtra.



                                                          - 71 -
 S. No.     Name of Debenture holder           Address                                       Number of       Aggregate
                                                                                             Debentures      Amount (Rs.
                                                                                                             in lacs)

 2.         Shriram Life Insurance             Regd. Office 3-6-478, Anand Estates, 3rd            227,050       2,270.50
            Company Limited                    Floor, Himayath Nagar, Hyderabad, Andhra
                                               Pradesh.

 3.         T. N. Swaminathan                  Flat-31, 3rd Floor, Khushali, Plot No. 358,          58,150        581.50
                                               Central Avenue Road, Chembur, Mumbai ,
                                               Maharashtra .

 4.         Vanilla Holding & Investments      New No. 8, Old No. 25, 2nd Street, D. P.             35,000        350.00
            Private Limited                    Nagar, Koturpuram, Chennai, Tamilnadu.


 5.         JRG Fincorp Limited                JRG House, Ashoka Road, Kaloor,                      35,000        350.00
                                               Ernakulam, Kerala.
 6.         Om Bhoo Vikas & Insurance          Opp. New Bus Stand, Pachari,                         27,710        277.10
            Private Limited                    Paradurg, Chhattisgarh.
 7.         Ravindra Bahl                      Eg-1/49, Garden Estate, Gurgaon, Haryana.            21,200        212.00


 8.         Renu Hingorani                     7A, Jeevan Jagruti, Dr. Ambedkar Road,               20,000        200.00
                                               Bandra (West), Mumbai , Maharashtra.
 9.         Lalitha Swaminathan                Flat No. 31, 3rd Floor,'Khushali', Plot No.          16,500        165.00
                                               358, Central Avenue Road, Chembur,
                                               Mumbai , Maharashtra.
 10.        Shuneel Kumari Ram                 N-29C, 1st Floor, SFS Flats, Saket ,                 16,000        160.00
                                               New Delhi.



3.        List of top 10 holders of deposits as on April 16, 2010.

 S. No.     Name of holder                     Address                                              Aggregate Amount
                                                                                                    (Rs. in lacs)

 1          Raghuram J. Chandrani              6/36, Jalaram Nivas, Jalaram Apa,                                  390.00
                                               Virpur, Rajkot, Gujarat.
 2          Express Newspapers Private         Express Estates No. 2, Club House Road, Mount                      298.00
            Limited                            Road, Chennai, Tamil Nadu.

 3          Sudershan Nirula                   A-17, Sector-19, Nodia, Gautam Budh Nagar, Nodia,                  240.00
                                               Uttar Pradesh.
 4          LTS Consultants (Private)          DD-21, Kalkaji, New Delhi.                                         200.00
            Limited
 5          Rategain IT Solutions Private      Rategain IT Solutions Private Limited,                             198.00
            Limited                            B-15, Sector-57, Noida, Uttar Pradesh.




                                                           - 72 -
 S. No.     Name of holder                     Address                                                   Aggregate Amount
                                                                                                         (Rs. in lacs)

 6          Shiva Shakti Properties Private    706, 7th Floor, Raheja Centre, 214, Free Press                         198.00
            Limited                            Journal Marg, Nariman Point, Mumbai,
                                               Maharashtra.

 7          Welfare for Indian Seamen          No 22/1A, Mohanchand Road, Kidderpore, Kolkata,                        126.00
            Everywhere                         West Bengal.
 8          Ultramarine & Pigments             No : 556, Vanagaram Road, Ambattur, Chennai,                           125.00
            Limited                            Tamil Nadu.
 9          Automotive Exchange Private        11th Floor, Vishwaroop IT Park, Sector-30 A, Vashi,                    100.00
            Limited                            Navi Mumbai, Maharashtra.
 10         Cheviot Agro Industries            24-Park Street, Magma House, 9th Floor, Kolkata,                       100.00
            Limited                            West Bengal.
 10         Institute of Actuaries of India    302, Indian Globes Chambers, 142, Fort Street, D. N.                   100.00
                                               Road, Near CST Station, Mumbai , Maharashtra.


 10         Naishadh Jawahar Paleja            901/902, Kaveri Neelkanth Valley, Rajawadi Road                        100.00
                                               No.7, Ghatkopar (East), Mumbai , Maharashtra.


 10         Leena Gandhi Tewari                41 - Ritu Apartment, 208 B. J. Road, Bandra (West),                    100.00
                                               Mumbai, Maharashtra.


4.        List of top ten holders of Secured Non-Convertible Debentures issued to public - Option –I (Rs. 87.25 crore)
          of face value Rs. 1000/- per debenture as on April 16, 2010

 S.       Name of holder                 Address                                 Number of                Aggregate Amount (Rs.
 No.                                                                             Instrument               In lacs)
 1        LICMF Monthly Income           LIC Mutual Fund, Asset Management                 1,71,627                     1,716.27
          Plan                           Company Limited, Industrial
                                         Assurance Building, 4th Floor, Opp.
                                         Churchgate Station, Mumbai -
                                         400020

 2        LICMF Floater MIP-Plan         Jeevan Bima Sahayog Asset                              61,002                      610.02
          'A'                            Management,
                                         Industrial Assurance Building,
                                         4th Floor,Opp Churchgate Station,
                                         Mumbai- 400020
 3        Bangiya Gramin Vikash          BMC House, Chuapurp O,                                 50,000                      500.00
          Bank                           Berhampore,
                                         Dist. Murshidabad,
                                          West Bengal - 742101

 4        Kotak Mahindra Trustee         Deutsche Bank, AGDB House,                             32,984                      329.84
          Company Limited A/C            Hazarimal Somani Marg
          Kotak Mahindra Income          Post Box No. 1142, Fort
          Plus                           Mumbai - 400001
 5        LICMF Unit Linked              LIC Mutual Fund, Asset Management                      21,246                      212.46
          Insurance Scheme               Company Limited, Industrial
                                         Assurance Building, 4th Floor, Opp.
                                                          - 73 -
                                    Churchgate Station,
                                    Mumbai- 400020
 6      Kotak Mahindra Trustee      Deutsche Bank, AGDB House,                           14,850                      148.50
        Company Limited A/C -       Hazarimal Somani Marg,
        Kotak Mahindra Balance      Post Box No. 1142, Fort,
        Units                       Mumbai - 400001

 7      LICMF Childrens Fund        Jeevan Bima Sahayog Asset                             9,000                          90.00
                                    Management, Industrial Assurance
                                    Building, 4th Floor,
                                    Opp Churchgate Station,
                                    Mumbai - 400020
 8      Pinkhem Investments         Bombay Cotton Mills Compound,                         6,265                          62.65
        Company Private Limited     Dattaram Lad Path, Mumbai - 400033

 9      Trustees Hindustan Steel    Steel Authority of India Limited,                     4,354                          43.54
        Limited Contributory        Rourkela - 769001
        Provident Fund, Rourkela
 10     Power And Insulators        115, N.S. Road, 3rd. Floor,                           4,235                          42.35
        Private Limited             Kolkata - 700001

5.     List of top ten holders of Secured Non-Convertible Debentures issued to public - Option –II (Rs. 73.75
       crore) of face value Rs. 1000/- per debenture as on April 16, 2010

 S.    Name of holder               Address                                 Number of             Aggregate Amount
 No.                                                                        Instrument            (Rs. In lacs)
 1     IDBI Bank Limited - TBO      IDBI Limited, IDBI Tower 17th                        32,984                 329.84
                                    Floor, World Trade Centre Complex,
                                    Cuffe Parade, Mumbai 400005
 2     UCO Bank                     Treasury Branch,                                     32,984                 329.84
                                    UCO Bank Building,
                                    Mezzanine Floor,
                                    359, Dr. D N Road,
                                    Fort, Mumbai 400001
 3     Vipul Rameshchandra Shah     C/o. JM Financial Products Private                    5,700                  57.00
                                    Limited, Apeejay House, 3rd Floor,
                                    3, Dinshaw Vachha Road,
                                    Churchgate,
                                    Mumbai 400020
 4     Dr. Shripal Mansukhlal       21, Sadhna, 2nd Floor,                                2,500                  25.00
       Doshi                        B Road, Churchgate
                                    Mumbai 400020
 5     Rakesh Agrawal               Elegant House, Raghuvanshi Mills                      2,089                  20.89
                                    Compound,
                                    Senapati Bapat Marg,
                                    Lower Parel, Mumbai 400013
 6     Elegant Marbles and Grani    Elegant House, Raghuvanshi Mills                      2,089                  20.89
       Industries Limited           Compound, Senapati Bapat Marg,
                                    Lower Parel,
                                    Mumbai 400013
 7     Hemant Jaysukhlal Gandhi     411, Veena Vihar,                                     1,887                  18.87
                                    Near Shanmukhananda Hall
                                    Sion, Mumbai 400022


                                                      - 74 -
 S.    Name of holder                Address                                 Number of              Aggregate Amount
 No.                                                                         Instrument             (Rs. In lacs)
 8     Jinender Jain                 S-21, Greater Kailash-II,                             1,800                  18.00
                                     Ground Floor,
                                     New Delhi 110048
 9     Kalawati Kothari              502, Venus Appartment,                                1,500                     15.00
                                     Behind Pancholi Hospital,
                                     Nathpai Nagar,
                                     Ghatkopar East,
                                     Mumbai 400077
 10    Kishore Hargovind Gopani      113, Mahagiri Apartment,                              1,500                     15.00
                                     Ashok Road, Near Jain Temple,
                                     Kandivali ( East ),
                                     Mumbai 400101

6.     List of top ten holders of Secured Non-Convertible Debentures issued to public - Option –III (Rs. 104.23
       crore) of face value Rs. 1000/- per debenture as on April 16, 2010

 Sr.     Name of holder              Address                                 Number of              Aggregate
 No.                                                                         Instrument             Amount (Rs. In
                                                                                                    lacs)
 1       ECL Finance Limited         14 th Floor, Express Tower                           104,442                 1,044.42
                                     Nariman Point,
                                     Mumbai 400021
 2       Edelweiss Finance And       14 th Floor, Express Tower                            80,000                  800.00
         Investments Limited         Nariman Point,
                                     Mumbai 400021
 3       UTI-MIS-Advantage Plan      UTI AMC Private Limited                               65,969                  659.69
                                     UTI Tower,
                                     GN Block, Bandra
                                     Kurla Complex, Bandra (East),
                                     Mumbai 400051
 4       Haren Textile Private       Before Dahisar Toll Naka, Western                     35,251                  352.51
         Limited                     Express Highway, Dahisar (East),
                                     Mumbai 400068
 5       Cheviot Company Limited     24, Park Street, Nagma House                          20,000                  200.00
                                     9th Floor, Kolkata 700016
 6       ECL Finance Limited         14th Floor, Express Tower                             15,558                  155.58
                                     Nariman Point,
                                     Mumbai 400021
 7       Agarwal Packaging           364, Tejal Housing Society,                            8,499                   84.99
         Private Limited             Gokhale Road, Model Colony
                                     Pune 411016
 8       Kusum Shroff                Nirvan Building,                                       8,352                   83.52
                                     2nd Floor, Oomer Park,
                                     95/D, Bhulabhai Desai Road,
                                     Mumbai 400036.
 9       Kamesh Goyal                C/O.Chief Executive Officer,                           6,467                   64.67
                                     Bajaj Allianz General Insurance
                                     Company Limited,
                                     GE Plaza, Airport Road,
                                     Yerawada, Pune 411006
 10      Sarla P. Parikh             4, Jayant Mahal Road,                                  4,588                   45.88
                                     Churchgate, Mumbai 400020

                                                       - 75 -
7.     List of top ten holders of Secured Non-Convertible Debentures issued to public - Option –IV (Rs. 22.74 crore)
       of face value Rs. 1000/- per debenture as April 16, 2010

Sr.   Name of holder                   Address                                Number of            Aggregate Amount
No.                                                                           Instrument           (Rs. In lacs)
1     ECL Finance Limited              14th Floor, Express Towers,                    1,04,402                 1,044.02
                                       Nariman Point, Mumbai 400021
2     Vishnu Kumar Bangur              199, Chittaranjan Avenue,                           2,188                  21.88
                                       Kolkata 700006
3     Manish Kishan Gupta              1,Sardar Patel Nagar, Ellisbridge,                  2,100                  21.00
                                       Ahmedabad 380006
4     Bharati Ajay Sheth               10 Kailas Deep, 2 nd Floor,                         1,700                  17.00
                                       38, Bajaj Road, Vile Parle
                                       Mumbai, Opp Vishwakarma Baug,
                                       Mumbai 400056
5     PJL Clothing ( India ) Limited   27, Raghuvanshi Estate,                             1,486                  14.86
                                       Senapati Bapat Marg,
                                       Lower Parel, Mumbai 400013
6     Meena Bangur                     199, Chittaranjan Avenue,                           1,453                  14.53
                                       Kolkata 700006
7     Paru Mayur Shridharani           A-707/708, Shree Adinath Tower,                     1,000                  10.00
                                       Near Nensey Colony
                                       Borivli East, Mumbai 400066
8     Baroda Brokers Private           Klassic Chambers,                                     950                    9.50
      Limited                          2nd Floor, Nr Navrangpura Post
                                       Office, Navrangpura,
                                       Ahmedabad 380009

9     Bedrock Limited                  6 B, Court Chambers,                                  801                    8.01
                                       35, New Marine Lines,
                                       Mumbai 400020
10    Vinay Kumar Baid                 Hanut Niwas,                                          755                    7.55
                                       Dadabhai Road ,
                                       No. 2 , Andheri (West)
                                       Mumbai 400058

8.     List of top ten holders Secured Non-Convertible Debentures issued to public - Option –V (Rs. 669.89 crore)
       of face value Rs. 1000/- per debenture as on April 16, 2010

Sr.   Name of holder                   Address                                  Number of          Aggregate Amount
No.                                                                             Instrument         (Rs. In lacs)
1     Kotak Mahindra Trustee           Deutsche Bank, AGDB House,                     20,90,003               20,900.03
      Company Limited A/C -            Hazarimal Somani Marg,
      Kotak Flexi Debt Scheme          Post Box No. 1142, Fort,
                                       Mumbai 400001
2     Kotak Mahindra Bank Limited      KMBL Treasury Account                            7,65,114               7,651.14
                                       2nd Floor, Bakhtawar, 229, Nariman
                                       Point, Mumbai,
                                       Maharashtra 400021



                                                       - 76 -
Sr.       Name of holder                  Address                                    Number of           Aggregate Amount
No.                                                                                  Instrument          (Rs. In lacs)
3         ECL Finance Limited             14th Floor, Express Towers Nariman                477,711                  4,777.11
                                          Point,
                                          Mumbai 400021
4         HDFC Trustee Company            HDFC Bank Limited                                  388,876                3,888.76
          Limited A/C High Interest       Custody Services,
          Fund Short Term Plan            Lodha - I Think Techno Campus,
                                          Off Floor 8, Next To Kanjur Marg
                                          Station, Kanjur Marg (East)
                                          Mumbai 400042
5         Axis Bank Limited               A Wing, 3rd Floor,                                 263,876                2,638.76
                                          Bezzola Complex, Suman Nagar, Sion,
                                          Trombay Road, Chembur,
                                          Mumbai 400071
6         IDFC Super Saver Income         Deutsche Bank, AGDB House,                         250,969                2,509.69
          Fund- Short Term                Hazarimal Somani Marg,
                                          Post Box No. 1142, Fort,
                                          Mumbai 400001
7         Radha Madhav Investments        Mittal Chambers,                                   250,000                    2500
          Limited                         Nariman Point,
                                          Mumbai 400021
8         HDFC Trustee Company            HDFC Bank Limited, Custody Services,               190,969                1,909.69
          Limited, HDFC Mutual Fund,      Lodha - I Think Techno Campus, Off
          Monthly Income Plan Long        Floor 8, Next To Kanjur Marg Station,
          Term Plan                       Kanjurmarg (East), Mumbai 400042
9         Kotak Mahindra Trustee          Deutsche Bank AGDB House,                          186,523                 1865.23
          Company Limited A/C -           Hazarimal Somani Marg,
          Kotak Mahindra Bond Short       Post Box No. 1142, Fort
          Term                            Mumbai 400001
10        Wishbone Global Investment      Citibank N. A, Custody Services                    150,000                 1500.00
          Holdings                        3rd Floor, Trent House,
                                          G Block, Plot No. 60, Bandra-Kurla
                                          Complex, Bandra (East), Mumbai
                                          400051

9.         List of top ten holders of A-series non convertible debentures (Rs. 489 crore) of face value Rs. 10 Lacs per debenture, as
           on April 16, 2010.

 S. No        Name of holder                     Address                                     Number of          Aggregate
                                                                                            instrument         Amount (Rs. In
                                                                                                               lacs)
      1       ICICI Prudential Flexible Income   HDFC Bank Limited, Custody                            1,000          10,000.00
              Plan                               Services, Lodha – I, Think Techno
                                                 Campus Office, 8th Floor, Next to
                                                 Kanjurmarg Station, Kanjurmarg East
                                                 Mumbai – 400042.
      2       UTI - Treasury Advantage Fund      UTI Mutual Fund, UTI Asset                              986            9,860.00
                                                 Management Company Limited,
                                                 Department of Fund Accounts ,UTI
                                                 Tower, ‘GN’ Block, Bandra Kurla
                                                 Complex, Bandra (East), Mumbai –
                                                 400051.



                                                           - 77 -
 S. No       Name of holder                      Address                                    Number of          Aggregate
                                                                                           instrument         Amount (Rs. In
                                                                                                              lacs)
      3      UTI-Unit Linked Insurance Plan      UTI AMC Private Limited UTI Tower,                     450           4,500.00
                                                 ‘GN’Block, Bandra Kurla Complex
                                                 Bandra (East), Mumbai – 400051.
      4      UTI - Retirement Benefit Pension    UTI Mutual Fund, UTI Asset                             290              2,900.00
             Fund                                Management Company Private
                                                 Limited, Department of Fund
                                                 Accounts, UTI Tower, ‘GN’Block,
                                                 Bandra Kurla Complex, Bandra (East),
                                                 Mumbai – 400051.
      5      The Hongkong And Shanghai           HSBC Securities Services, 2nd Floor                    250              2,500.00
             Banking Corporation Limited         "Shiv", Plot No. 139-140B, Western
                                                 Express Highway, Sahar Road
                                                 Junction, Vile Parle-East, Mumbai -
                                                 400057.
      6      UTI – Children’s Career             UTI Mutual Fund, UTI Asset                             250              2,500.00
             Balanced Plan                       Management company Limited,
                                                 Department of Fund Accounts ,UTI
                                                 Tower, ‘GN’ Block, Bandra Kurla
                                                 Complex Bandra (East), Mumbai –
                                                 400051.
      7      UTI-Liquid Cash Plan                UTI AMC Private Limited UTI Tower,                     250              2,500.00
                                                 ‘GN’Block Bandra Kurla Complex,
                                                 Bandra (East),       Mumbai – 400051.
      8      UTI-Unit Scheme For Charitable      UTI AMC Private Limited, UTI Tower,                    250              2,500.00
             And Religious Trusts And            ‘GN’ Block Bandra Kurla Complex,
             Registered Societies                Bandra (East), Mumbai - 400051.
      9      Kotak Mahindra Trustee              Deutsche Bank AGDB House,                              200              2,000.00
             Company Limited A/C Kotak           Hazarimal Somani Marg, Post Box
             Fixed Maturity Plan 370 Days        No. 1142, Fort,         Mumbai –
             Series 1                            400001.
      10     HDFC Trustee Company Limited        HDFC Bank Limited, Custody                             159              1,590.00
             - A/C HDFC Fixed Maturity Plan      Services, Lodha - I, Think Techno
             36M June 2007                       Campus Office, 8th Floor, Next to
                                                 Kanjurmarg Station, Kanjurmarg East,
                                                 Mumbai – 400042.

10.        List of top ten holders of B-series non convertible debentures (Rs.935 Crore) of face value Rs. 10 Lacs per
           debenture, as on April 16, 2010.

 S. No       Name of holder                      Address                                    Number of          Aggregate
                                                                                           instrument         Amount (Rs. In
                                                                                                              lacs)
      1      Standard Chartered Bank             Standard Chartered Bank (Mauritius)                  2,500          25,000.00
             (Mauritius) Limited –Debt           Securities Services, 23-25 M.G. Road,
                                                 Fort,         Mumbai – 400001.
      2      Templeton India Ultra-Short         CITI Bank N A, Custody Services, 3rd                 1,000              10,000.00
             Bond Fund                           Floor, Trent House, G Block, Plot No.
                                                 60, Bandra Kurla Complex, Bandra
                                                 East,      Mumbai – 400051.
      3      ICICI Prudential Fixed Maturity     HSBC Securities Services,2nd Floor                     800               8,000.00
             Plan – Series 45 - Three Years      "Shiv", Plot No 139-140 B, Western
             Plan                                Express Highway, Sahar Road

                                                           - 78 -
 S. No       Name of holder                      Address                                    Number of          Aggregate
                                                                                           instrument         Amount (Rs. In
                                                                                                              lacs)
                                                 Junction, Vile Parle-East, Mumbai –
                                                 400057.

      4      HDFC Trustee Company Limited        HDFC Bank Limited, Custody                             501           5,010.00
             A/C HDFC Cash Management            Services, Lodha - I, Think Techno
             Fund Treasury Advantage Plan        Campus Office, 8th Floor, Next to
                                                 Kanjurmarg Station, Kanjurmarg East,
                                                 Mumbai – 400042.
      5      Reliance Capital Trustee Co         Deutsche Bank, AGDB House,                             500           5,000.00
             Limited A/C Reliance money          Hazarimal Somani Marg, Post Box No.
             Manager Fund                        1142, Fort, Mumbai – 400001.

      6      ICICI Prudential Real Estate        HSBC Securities Services,2nd Floor                     450           4,500.00
             Securities Fund                     "Shiv", Plot No 139-140, B Western
                                                 Express Highway, Sahar Road
                                                 Junction, Vile Parle-East, Mumbai –
                                                 400057.
      7      HDFC Trustee Company Limited        HDFC Bank Limited, Custody                             345           3,450.00
             A/C HDFC Fixed Maturity Plan        Services. Lodha - I, Think Techno
             22M September 2008                  Campus Office, 8th Floor, Next To
                                                 Kanjurmarg Station, Kanjurmarg East,
                                                 Mumbai – 400042.
      8      Kotak Mahindra Trustee              Deutsche Bank, AGDB House,                             330           3,300.00
             Company Limited A/C Kotak           Hazarimal Somani Marg, Post Box No.
             Flexible Debt Scheme                1142, Fort, Mumbai - 400001.
      9      Deutsche Trustee Services (India)   C/O Standard Chartered Bank                            280           2,800.00
             Private Limited A/C DWS Fixed       Securities Services, 23-25 , M.G. Road,
             Term Fund-Series 59                 Fort , Mumbai – 400001.
      10     DSP Blackrock Balanced Fund         CITI Bank N A, Custody Services 3rd                    250           2,500.00
                                                 Floor, Trent House, G Block, Plot No.
                                                 60, Bandra Kurla Complex, Bandra
                                                 East,     Mumbai – 400051.

11.        List of top ten holders of C-series non convertible debentures (Rs.412 Crore) of face value Rs. 10 Lacs per
           debenture, as on April 16, 2010.

 S. No       Name of holder                      Address                                    Number of          Aggregate
                                                                                           instrument         Amount (Rs. In
                                                                                                              lacs)
      1      Life Insurance Corporation of       Investment Department, 6th Floor,                 3,000             30,000.00
             India                               West Wing, Central Office,
                                                 Yogakshema, Jeevan Bima Marg
                                                 Mumbai - 400021.
      2      Life Insurance Corporation of       The Deputy General Manager, UBI                        500           5,000.00
             India                               Investment Fund Management
                                                 Department, Head Office, 4th Floor, 16
                                                 Old Court House Street, Kolkata-
                                                 700001.
      3      Life Insurance Corporation of       Deutsche Bank, AGDB House,                             180           1,800.00
             India                               Hazarimal Somani Marg, Post Box No.
                                                 1142, Fort, Mumbai – 400001.

                                                           - 79 -
 S. No       Name of holder                      Address                                    Number of          Aggregate
                                                                                           instrument         Amount (Rs. In
                                                                                                              lacs)
      4      Life Insurance Corporation of       C/O Standard Chartered Bank                            150           1,500.00
             India                               Securities Services 23-25 , M.G. Road ,
                                                 Fort, Mumbai – 400001.
      5      Life Insurance Corporation of       Suraksha.1 7 0, J. TATA Road, Church                   100            1,000.00
             India                               Gate, Mumbai – 400020.
      6      Life Insurance Corporation of       Deutsche Bank, AGDB House,                              70              700.00
             India                               Hazarimal Somani Marg, Post Box No.
                                                 1142, Fort, Mumbai – 400001.
      7      Life Insurance Corporation of       C/O Standard Chartered Bank                             70              700.00
             India                               Securities Services, 23-25 M .G. Road,
                                                 Fort, Mumbai – 400001.
      8      Life Insurance Corporation of       C/O Standard Chartered Bank                             30              300.00
             India                               Securities Services, 23-25 M .G Road,
                                                 Fort, Mumbai - 400001.
      9      Life Insurance Corporation of       HSBC Securities Services, 2nd Floor                     19              190.00
             India                               "Shiv", Plot No.139-140 B -Western
                                                 Express Highway, Sahar Road,
                                                 Junction, Vile Parle-East, Mumbai –
                                                 400057.
      10     Life Insurance Corporation of       HDFC Bank Limited, Custody                               1               10.00
             India                               Services, Lodha - I, Think Techno
                                                 Campus Office, 8th Floor, Next To
                                                 Kanjurmarg Station, Kanjurmarg East,
                                                 Mumbai – 400042.

12.        List of top ten holders of Subordinate Debts, D-series non convertible debentures (Rs.550.97 Crore) of face value Rs. 1
           Lac per debenture, as on April 16, 2010

 S. No       Name of holder                      Address                                    Number of          Aggregate
                                                                                           instrument         Amount (Rs. In
                                                                                                              lacs)
      1      Central Bank Of India               Central Bank Of India treasury                      9,500            9,500.00
                                                 Department, Chandra mukhi Building,
                                                 Nariman Point, Mumbai – 400021.
      2      UCO Bank                            Treasury Branch, UCO Bank Building                  5,000             5,000.00
                                                 Mezzanine, 359th Floor Dr D. N.
                                                 Road, Fort,         Mumbai – 400001.

      3      Securities Trading Corporation Of   HDFC Bank Limited, Custody                          3,950             3,950.00
             India Limited                       Services, Lodha - I, Think Techno
                                                 Campus Office, 8th Floor, Next To
                                                 Kanjurmarg Station, Kanjurmarg East,
                                                 Mumbai – 400042.
      4      ICICI Bank Limited                  Treasury Middle Office, Group 2nd                   3,920             3,920.00
                                                 Floor, North Tower, East Wing ICICI
                                                 Bank Tower, Bandra Kurla Complex
                                                 Bandra (East) ,       Mumbai –
                                                 400051.




                                                           - 80 -
 S. No       Name of holder                      Address                                    Number of          Aggregate
                                                                                           instrument         Amount (Rs. In
                                                                                                              lacs)
      5      Bank Of Maharashtra                 Treasury And International Banking,                3,000             3,000.00
                                                 2nd Floor, 23 Maker Chamber III,
                                                 Nariman Point,      Mumbai -
                                                 400021.
      6      Air- India Employees Provident      Air India Employees Provident fund                 2,200             2,200.00
             Fund                                Account, Old Air Port Santacruz ,
                                                 Mumbai – 400029.

      7      Bank of Baroda                      Specialized. Integrated treasury                   2,000             2,000.00
                                                 Branch, Kalpataru Heritage Building,
                                                 6th Floor, .Nanik Motwane Marg,
                                                 Mumbai – 400023.
      8      Bank of India                       Treasury Branch, Head Office, Star                 2,000             2,000.00
                                                 House, 7th Floor,C-5, 'G' Block, Bandra
                                                 Kurla Complex, Bandra (East),
                                                 Mumbai -.400051.
      9      Chhattisgarh State Electricity      Shed No.1,Dangania,            Raipur-             2,000             2,000.00
             Board (CSEB) Provident Fund         492013.
             Trust
      10     United India Insurance Company      24,Whites Road, Chennai-600014.                    2,000             2,000.00
             Limited

13.        List of top 10 Holders of Subordinate Debts, D-series non convertible debentures (Rs. 50 Crore) of face
           value Rs. 10 Lacs per debenture, as on April 16, 2010.

 S. No       Name of holder                      Address                                    Number of          Aggregate
                                                                                           instrument         Amount (Rs. In
                                                                                                              lacs)
      1      HVPNL Employees Pension Fund        Shakti Bhawan, Sector 6, Panchkula                     225           2,250.00
             Trust                               (Haryana) -134109.
      2      Food Corporation Of India           Khadya Sadan, 13th Floor, 16 20                        100           1,000.00
             Contributory Provident Fund         Barakhamba Lane,               New
             Trust                               Delhi-110001.
      3      HVPNL Employees Provident           Shakti Bhawan, Sector 6, Panchkula                      75             750.00
             Fund Trust                          (Haryana) – 134109.
      4      Gas Authority Of India Limited      Gas Authority Of India Limited,    16                   30             300.00
             Employees Provident Fund Trust      Bhikaiji Cama Place,            New
                                                 Delhi-110066.
      5      The Jammu And Kashmir Bank          Jammu And Kashmir Bank Corporate                        20             200.00
             Employees Provident Fund Trust      Office, M.A. Road Srinagar-190001.
      6      Gail Employees Superannuation       Gas Authority India Limited, 16                         10             100.00
             Benefit Fund                        Bhikaiji Cama Place,
                                                 New Delhi-110066.
      7      Gujarat Alkalies And Chemicals      Gujarat Alkalies And Chemicals                          10             100.00
             Limited Employees provident         Limited O Petro Chemicals,      Dist-
             Fund Trust                          Vadodara-391346.
      8      Gail (India) Limited Employees      Gail Bhawan 16, Bhikaji Cama Place,                      5              50.00
             Death-Cum-Superannuation            R.K Puram ,                New
             Gratuity Scheme                     Delhi-110066.
      9      Asbestos Cement Limited Staff       Genesis, A-32Mohan Co Operative                          4              40.00
             Provident Fund                      Industrial Estate, Mathura Road, New
                                                           - 81 -
 S. No       Name of holder                      Address                                   Number of          Aggregate
                                                                                          instrument         Amount (Rs. In
                                                                                                             lacs)
                                                 Delhi-110044.

      10     Provident Fund Of Mangalore         Maker Tower, F-16th Floor, Cuffe                        4                  40.00
             Refinery And Petrochemicals         Parade, Mumbai – 400005.
             Limited


14.        List of top 10 holders of Subordinate Debts , S-Series non convertible debentures (Rs.150 Crore) of face
           value Rs. 10 Lacs per debentures, as on April 16, 2010.

 S. No       Name of holder                      Address                                   Number of          Aggregate
                                                                                          instrument         Amount (Rs. In
                                                                                                             lacs)
      1      LIC MF Income Plus Fund             LIC Mutual Fund, Asset Management                     750           7,500.00
                                                 Company Limited, Industrial
                                                 Assurance Building,4th Floor, Opp.
                                                 Churchgate Station, Mumbai – 400020.
      2      Bank Of India                       Treasury Branch, Head Office, Star                    300                3,000.00
                                                 House,7th Floor, C-5, 'G' Block,
                                                 Bandra Kurla Complex, Bandra (East),
                                                 Mumbai - 400051.
      3      UTI - Monthly Income Scheme         UTI Mutual Fund, UTI Asset.                           150                1,500.00
                                                 Management Company Private
                                                 Limited, UTI Tower, 'GN' Blook,
                                                 Bandra Kurla Complex, Bandra (East),
                                                 Mumbai - 400051.
      4      Oriental Bank Of Commerce           Treasury Department, 30 33 A Block,                   100                1,000.00
                                                 Ist Floor, Connaught Place, New Delhi-
                                                 110001.
      5      UCO Bank                            Treasury Branch, UCO Bank Building,                   100                1,000.00
                                                 Mezzanine 359th Floor Dr D. N. Road,
                                                 Fort,          Mumbai – 400001.
      6      UTI-Unit Linked Insurance Plan      UTI AMC Private Limited UTI Tower,                    100                1,000.00
                                                 ‘GN’ Block, Bandra Kurla Complex,
                                                 Bandra (East) ,      Mumbai –
                                                 400051.

15.        List of top 10 holders of Subordinate Debts, E-Series non convertible debentures (Rs.50 Crore) of face value
           Rs. 1 Lacs per debentures, as on April 16, 2010.

 S. No       Name of holder                      Address                                   Number of          Aggregate
                                                                                          instrument         Amount (Rs. In
                                                                                                             lacs)
      1      Kotak Mahindra Trustee              Deutsche Bank, AGDB House,                          1,000           1,000.00
             Company Limited A/C Kotak           Hazarimal Somani Marg, Post Box No.
             Mahindra Income Plus                1142, Fort, Mumbai - 400001.
      2      Kotak Mahindra Trustee              Deutsche Bank, AGDB House,                            500                 500.00
             Company Limited. A/C. Kotak         Hazarimal Somani Marg, Post Box No.
             Mahindra Balance Unit Scheme        1142, Fort, Mumbai – 400001.
             99


                                                           - 82 -
 S. No      Name of holder                      Address                                    Number of          Aggregate
                                                                                          instrument         Amount (Rs. In
                                                                                                             lacs)
      3     Kotak Mahindra Trustee              Deutsche Bank, AGDB House,                          2,000            2,000.00
            Company Limited A/C. Kotak          Hazarimal Somani Marg, Post Box No.
            Mahindra Bond Short Term Plan       1142, Fort, Mumbai - 400001.
      4     Kotak Mahindra Trustee              Deutsche Bank, AGDB House,                          1,500               1,500.00
            Company Limited A/C. Kotak          Hazarimal Somani Marg, Post Box No.
            Mahindra Bond Unit Scheme 99        1142, Fort, Mumbai – 400001.




16.       List of top 10 holders of Commercial paper (Rs. 125 Crore ) of face value Rs. 5 Lacs per instrument, as on
          April 16, 2010

 S. No      Name of holder                      Address                                   Number of          Aggregate
                                                                                          instrument         Amount (Rs. In
                                                                                                             lacs)
      1     UTI-Floating Rate Fund Short        UTI AMC Private Limited UTI Tower,                     300              1500
            Term Plan                           ‘GN’ Block Bandra Kurla Complex,
                                                Bandra (East),  Mumbai – 400051.

      2     Religare Trustee Company            Deutsche Bank, AGDB House,                             200                 1000
            Private Limited - A/C Religare      Hazarimal Somani Marg, Post Box No.
            Short Term Plan                     1142, Fort, Mumbai – 400001.
      3     Kotak Mahindra Trustee              Deutsche Bank, AGDB House,                           2000                 10000
            Company Limited A/C Kotak           Hazarimal Somani Marg, Post Box No.
            Flexible Debt Scheme                1142, Fort,          Mumbai - -
                                                400001.

17.       List of top ten holders of O-Series non convertible debentures (Rs.150 Crore) of face value Rs. 10 Lacs per debenture, as
          on April 16, 2010.

 S. No      Name of holder                      Address                                    Number of          Aggregate
                                                                                          instrument         Amount (Rs. In
                                                                                                             lacs)
      1     Life Insurance Corporation Of       Investment Department6Th Floor, West             1,500.00          15,000.00
            India                               Wing, Central Office, Yogakshema,
                                                Jeevan Bima Marg, Mumbai – 400021.

18.       List of top ten holder of short -term unsecured redeemable non convertible debentures (Rs.25 Crore) of face
          value 10 Lacs per debenture, as on April 16, 2010.

 S. No      Name of holder                     Address                                    Number of          Aggregate
                                                                                          instrument         Amount (Rs. In
                                                                                                             lacs)
      1     UTI - Fixed Maturity Plan -        UTI Mutual Fund, UTI Asset                              250            2500.00
            Yearly Series September 09         Management company Limited,
                                               Department Of Fund accounts ,UTI
                                               Tower, ‘GN’ Block, Bandra Kurla
                                               Complex, Bandra (East),    Mumbai -
                                               400051


                                                          - 83 -
Debt - equity ratio:

The debt-equity ratio prior to this Issue is based on a total outstanding consolidated debt of Rs. 2,255,612.60 lacs and
consolidated shareholder funds amounting to Rs. 306,137.87 lacs as on December 31, 2009. The debt equity ratio post
the Issue, (assuming subscription of NCDs aggregating to Rs.50,000 lacs) would be 7.53 times, is based on a total
outstanding debt of Rs. 2,305,612.60 lacs and shareholders fund of Rs. 306,137.87 lacs as on December 31, 2009.

                                                                                                                 Rs in Lacs
Particulars#                                                 Prior to the Issue                          Post the Issue*
Secured loans as on December 31, 2009                             1,914,975.11                             1,964,975.11
Unsecured loans as on December 31, 2009                             340,637.49                               340,637.49
Total Debt                                                        2,255,612.60                             2,305,612.60
Share capital as on December 31, 2009
                                                                     21,279.86                                  21,279.86
Stock Option outstanding as on December
31, 2009                                                              1,497.93                                   1,497.93

Share Application Money pending
allotments as on December 31, 2009                                       12.97                                     12.97
Reserves as on December 31, 2009
                                                                    286,890.32                                 286,890.32
Less:Misc. expenditure (to the extent not
written off or adjusted) as on December 31,                           3,543.21                                   3,543.21
2009
Total Shareholders Fund
                                                                    306,137.87                                 306,137.87
Debt Equity Ratio (Number of times)
                                                                          7.37                                       7.53
# On a consolidated basis.

* The debt-equity ratio post the Issue is indicative and is on account of assumed inflow of Rs. 50,000 lacs from the
Issue, as on December 31, 2009 and does not include contingent and off-balance sheet liabilities. The actual debt-equity
ratio post the Issue would depend upon the actual position of debt and equity on the date of allotment.

For details on the total outstanding debt of our Company, please refer to page 137 of this Draft Prospectus.




                                                           - 84 -
                                               OBJECTS OF THE ISSUE

The funds raised through this Issue, after meeting the expenditures of and related to the Issue, will be used for our
various financing activities including lending and investments, subject to the restrictions contained in the Foreign
Exchange Management (Borrowing and Lending in Rupee) Regulations, 2000, and other applicable statutory and/or
regulatory requirements, to repay our existing loans and our business operations including for our capital expenditure and
working capital requirements.

The Unsecured NCDs will be in the nature of subordinated debt and will be eligible for Tier II capital and accordingly
will be utilised in acordnce with statutory and regulatory requirements including requirements of RBI.

The Main Objects clause of the Memorandum of Association of our Company permits our Company to undertake the
activities for which the funds are being raised through the present Issue and also the activities which our Company has
been carrying on till date.

Further, in accordance with the Debt Regulations, our Company will not utilize the proceeds of the Issue for providing
loans to or acquisitions of shares of any person who is a part of the same group as our Company or who is under the
same management as our Company.

The Issue proceeds shall not be utilized towards full or part consideration for the purchase or any other acquisition, inter
alia by way of a lease, of any property.

Interim Use of Proceeds

The management of our Company, in accordance with the policies formulated by it from time to time, will have
flexibility in deploying the proceeds received from the Issue. Pending utilization of the proceeds out of the Issue for the
purposes described above, our Company intends to temporarily invest funds in high quality interest bearing liquid
instruments including money market mutual funds, deposits with banks or temporarily deploy the funds in investment
grade interest bearing securities as may be approved by the Board. Such investment would be in accordance with the
investment policies approved by the Board or any committee thereof from time to time.

Monitoring of Utilization of Funds

There is no requirement for appointment of a monitoring agency in terms of the SEBI (Issue and Listing of Debt
Securities) Regulations, 2008. Our Board shall monitor the utilization of the proceeds of the Issue. For the relevant
Financial Years commencing from FY 2011, our Company will disclose in our financial statements, the utilization of the
net proceeds of the Issue under a separate head along with details, if any, in relation to all such proceeds of the Issue that
have not been utilized thereby also indicating investments, if any, of such unutilized proceeds of the Issue.




                                                            - 85 -
                                          STATEMENT OF TAX BENEFITS

The information provided below sets out the possible tax benefits available to the debenture holders of an Indian
company in a summary manner only and is not a complete analysis or listing of all potential tax consequences of the
subscription, ownership and disposal of debenture, under the current tax laws presently in force in India. Several of these
benefits are dependent on the debentureholders fulfilling the conditions prescribed under the relevant tax laws. Hence the
ability of the debenture holders to derive the tax benefits is dependent upon fulfilling such conditions, which based on
business imperatives it faces in the future, it may not choose to fulfil. The following overview is not exhaustive or
comprehensive and is not intended to be a substitute for professional advice. Investors are advised to consult their own
tax consultant with respect to the tax implications of an investment in the debentures particularly in view of the fact that
certain recently enacted legislation may not have a direct legal precedent or may have a different interpretation on the
benefits, which an investor can avail. We are not liable to the Debenture Holder in any manner for placing reliance upon
the contents of this statement of tax benefits.
To our Debenture Holder

A. INCOME-TAX

I To the Resident Debenture Holder

1. Interest on NCD received by Debenture Holders would be subject to tax at the normal rates of tax in accordance with
and subject to the provisions of the I.T. Act. No income tax is deductible at source as per the provisions of section 193 of
the Income Tax Act (IT Act) on interest on debentures in respect of the following:

(a) In case the payment of interest on debentures to resident individual Debenture Holder in the aggregate during the
financial year does not exceed Rs.2,500;

(b) When the Assessing Officer issues a certificate on an application by a Debenture Holder on satisfaction that the total
income of the Debenture holder justifies no/lower deduction of tax at source as per the provisions of Section 197(1) of
the I.T. Act; and that certificate is filed with the Company BEFORE THE PRESCRIBED DATE OF CLOSURE
OF BOOKS FOR PAYMENT OF DEBENTURE INTEREST

(c) When the resident Debenture Holder (not being a company or a firm or a senior citizen) submits a
declaration in the prescribed Form 15G verified in the prescribed manner to the effect that the tax on his estimated total
income of the previous year in which such income is to be included in computing his total income will be nil as per the
provisions of section 197A (1A) of the I.T. Act. HOWEVER Under section 197A (1B) of the I.T. Act, Form 15G
cannot be submitted nor considered for exemption from deduction from tax at source if the aggregate of income of the
nature referred to in the said section, viz. dividend, interest, etc as prescribed therein, credited or paid or likely to be
credited or paid during the Previous year in which such income is to be included exceeds the maximum amount which is
not chargeable to tax, as may be prescribed in each year’s Finance Act. To illustrate, as on 01.04.2009, the maximum
amount of income not chargeable to tax in case of individuals (other than women assessees and senior citizens) and
HUFs is Rs.1,60,000, in case of women assessees is Rs.1,90,000 and senior citizens is Rs. 2,40,000 for Previous Year
2009-10. Senior citizens, who are 65 or more years of age at any time during the financial year, enjoy the special
privilege to submit a self-declaration in the prescribed Form 15H for non deduction of tax at source in accordance with
the provisions of section 197A (1C) of the I.T. Act even if the aggregate income credited or paid or likely to be credited
or paid exceeds the maximum amount not chargeable to tax i.e. Rs. 2,40,000 for FY 2009-10 provided that the tax due on
total income of the person is NIL. In all other situations, tax would be deducted at source as per prevailing provisions of
the I.T. Act; Form No.15G WITH PAN /15H WITH PAN /Certificate issued u/s 197(1) has to be filed with the
Company before the prescribed date of closure of books for payment of debenture interest.

(d) On any securities issued by a company in a dematerialized form and is listed on recognized stock exchange in India.
(w.e.f. 1.06.2008).

2. Under section 2 (29A) of the I.T. Act, read with section 2 (42A) of the I.T. Act, a listed debenture is treated as a long
term capital asset if the same is held for more than 12 months immediately preceding the date of its transfer. Under
                                                           - 86 -
section 112 of the I.T. Act, capital gains arising on the transfer of long term capital assets being listed securities are
subject to tax at the rate of 10% of capital gains calculated without indexation of the cost of acquisition The capital gains
will be computed by deducting cost of acquisition of the debenture and expenditure incurred in connection with
such transfer from the full value of consideration.

In case of an individual or HUF, being a resident, where the total income as reduced by the long term capital gains is
below the maximum amount not chargeable to tax as prescribed by the Finance Act of the relevant year (i.e. as on
01.04.2009, such amount is Rs. 1,60,000 in case of all individuals, other than Women and Senior Citizens to Rs.
1,90,000 in case of women and to Rs.2,40,000 in case of senior citizens), the long term capital gains shall be reduced to
the extent of the difference between the maximum amount chargeable to tax and the total income and only the
balance long term capital gains will be subject to the flat rate of taxation in accordance with and the proviso to sub-
section (1) of section 112 of the I.T. Act read with CBDT Circular 721 dated September 13, 1995.

In addition to the aforesaid tax, in the case of domestic companies where the income exceeds Rs. 10,000,000, a surcharge
of 10% of such tax liability is also payable. A 2% EDUCATION CESS AND 1% SECONDARY AND HIGHER
EDUCATION CESS ON THE TOTAL INCOME TAX (INCLUDING SURCHARGE) IS PAYABLE BY ALL
CATEGORIES OF TAXPAYERS.

3. Short-term capital gains on the transfer of listed debentures, where debentures are held for a period of not more than
12 months would be taxed at the normal rates of tax in accordance with and subject to the provisions of the I.T. Act. The
provisions relating to maximum amount not chargeable to tax, surcharge and education cess described at Para 2 above
would also apply to such short-term capital gains.

4. In case the debentures are held as stock in trade, the income on transfer of debentures would be taxed as business
income or loss in accordance with and subject to the provisions of the I.T. Act.

5. HOWEVER, IN CASE WHERE TAX HAS TO BE DEDUCTED @ SOURCE WHILE PAYING
DEBENTURE INTEREST, THE COMPANY IS NOT REQUIRED TO DEDUCT SURCHARGE, EDUCATION
CESS ; AND SECONDARY AND HIGHER EDUCATION CESS REFERRED TO ABOVE.

6. Further, w.e.f April 1, 2010, as per Section 206AA of the Act, every person who is entitled to receive any sum or
income or amount on which tax is deductible at source, is required to furnish his Permanent Account Number
(PAN) to the person responsible for deducting such tax, failing which tax shall be deducted at the rates as per the
Act or 20% whichever is higher.

II. To the Other Eligible Institutions

All mutual funds registered under Securities and Exchange Board of India or set up by public sector banks or public
financial institutions or authorized by the Reserve Bank of India are exempt from tax on all their income, including
income from investment in Debentures under the provisions of Section 10(23D) of the I.T. Act subject to and in
accordance with the provisions contained therein.

B. WEALTH TAX

Wealth-tax is not levied on investment in debentures under section 2(ea) of the Wealth-tax Act, 1957.

C. GIFT TAX

Gift-tax is not levied on gift of debentures in the hands of the donor as well as the done because the provisions of the
Gift-tax Act, 1958 have ceased to apply in respect of gifts made on or after October 1, 1998. HOWEVER, IF ANY
INDIVIDUAL OR HUF, RECEIVES THESE DEBENTURES OF THE AGGREGATE VALUE OVER
RS.50,000 FROM ANY PERSON OR PERSONS WITHOUT CONSIDERATION OR RECEIVES THESE
DEBENTURES FOR A CONSIDERATION WHICH IS LESS THAN AGGREGATE FAIR MARKET VALUE
OF THE DEBENTURES BY AN AMOUNT EXCEEDING FIFTY THOUSAND RUPEES, THERE WILL BE
LIABILITY TO INCOME TAX TO THE EXTENT PROVIDED IN SEC.56(2)(vii) OF THE INCOME TAX
ACT. 1961 TO SUCH RECEIVER.

                                                            - 87 -
                 SECTION IV : ABOUT THE ISSUER COMPANY AND THE INDUSTRY

                                                       INDUSTRY


The information in this section is derived from various government publications and other industry sources.
Neither we, nor any other person connected with the issue has verified this information. Industry sources and
publications generally state that the information contained therein has been obtained from sources generally believed to
be reliable, but their accuracy, completeness and underlying assumptions are not guaranteed and their reliability cannot
be assured and accordingly, investment decisions should not be based on such information.

In connection with the report by CRISIL Research titled "Retail Finance - Auto Annual Review" (January, 2010), CRISIL
Limited has used due care and caution in preparing the aforementioned report. Information has been obtained by
CRISIL from sources it considers reliable. However, CRISIL does not guarantee the accuracy, adequacy or
completeness of any information and is not responsible for any errors or omissions or for the results obtained from the
use of such information. No part of the aforementioned report may be published / reproduced in any form without
CRISIL’s prior written approval. CRISIL is not liable for any investment decisions which may be based on the views
expressed in the aforementioned report. CRISIL Research operates independently of, and does not have access to
information obtained by CRISIL’s Rating Division, which may, in its regular operations, obtain information of a
confidential nature that is not available to CRISIL Research.

Indian Economy

India is the world’s largest democracy by the population size, and one of the fastest growing economies in the world. It
has grown at an average rate of 7.5% per annum during the last three years. According to CIA World Factbook, India’s
estimated population was 1.16 billion people in July 2009. India had an estimated GDP of approximately US$ 3,548.0
billion in 2009, which makes it the fourth largest economy in the world after the United States of America, China and
Japan, in purchasing power parity terms. The following table presents a comparison of India’s real GDP growth rate with
the real GDP growth rate of certain other countries:

Countries*                                              2007                           2008                            2009
Australia                                             4.00%                           2.40%                           0.80%
Brazil                                                6.10%                           5.10%                           0.10%
China                                                13.00%                           9.00%                           8.40%
Germany                                               2.50%                           1.30%                         (5.00)%
India                                                 9.00%                          7.40%                            6.10%
Japan                                                 2.30%                         (0.70)%                         (5.70)%
South Korea                                           5.10%                           2.20%                         (0.80)%
Malaysia                                              6.20%                           4.60%                         (2.80)%
Russia                                                8.10%                           5.60%                         (8.50)%
Thailand                                              4.90%                           2.60%                         (3.50)%
United Kingdom                                        2.60%                           0.70%                         (4.30)%
United States                                         2.10%                           0.40%                         (2.40)%
* Represents calendar year growth rates
(Source: CIA World Factbook, website: www.cia.gov/library/publications/the-world-factbook/index.htm, accessed on
March 23, 2010)

Structure of India’s Financial Services Industry

The RBI is the central regulatory and supervisory authority for the Indian financial system. SEBI and the Insurance
Regulatory and Development Authority (IRDA) regulate the capital markets and insurance sector, respectively. A
variety of financial intermediaries in the public and private sectors participate in India’s financial sector, including the
following:

     •      Commercial banks;
     •      NBFCs ;

                                                           - 88 -
     •      Specialized financial institutions like the National Bank for Agriculture and Rural Development
            (NABARD), the Export-Import Bank of India (EXIM Bank), the Small Industries Development Bank of
            India (SIDBI) and the Tourism Finance Corporation of India (TFCI);
     •      Securities brokers;
     •      Investment banks;
     •      Insurance companies;
     •      Mutual funds; and
     •      Venture capital funds.


Non-Banking Finance Companies (NBFCs)

Non-Banking Finance Companies (NBFCs) are an integral part of the country’s financial system, catering to a large
market of niche customers, and have emerged as one of the major purveyors of retail and SME credit in India. It is a
heterogeneous group of institutions (other than commercial and co-operative banks) performing financial intermediation
in a variety of ways, such as accepting deposits, making loans and advances, providing leasing/hire purchase services,
among others. There are over 12,000 NBFCs in India, (Source: Reserve Bank of India, Annual Report, August 2009)
mostly in the private sector.

The RBI defines an NBFC as a company registered under the Companies Act, 1956 and engaged in the business of loans
and advances, acquisition of shares, stock, bonds, debentures, and securities issued by the GoI or local government
authorities, or other securities of like marketable nature, leasing, hire-purchase, insurance business, chit business.
However, this excludes institutions whose principal business is in the agricultural or industrial sector, or in the sale,
purchase and construction of immovable property. A non-banking entity that has as its principal line of business the
receipt of deposits, under any scheme or arrangement, or the extension of loans, in any manner, is also considered an
NBFC.

Gradually, NBFCs have become recognized as complementary to the banking sector due to their customer-oriented
services, simplified procedures, attractive rates of return on deposits, flexibility and timeliness in meeting the credit
needs of specified sectors, among other reasons. NBFCs have traditionally extended credit across the country through
their widespread geographical presence, with NBFCs supplying credit in segments such as equipment leasing, hire
purchase, and consumer finance. These are areas which warrant infusion of financing due to the existing demand-supply
gap. NBFCs have provided a more flexible source of financing and have been able to disburse funds to a gamut of
clientele, from local individual customers to a variety of corporate clientele. NBFCs can be divided into deposit taking
NBFCs, i.e., those which accept deposits from the public and non-deposit taking NBFCs being those which do not accept
deposits from the public.

The activities carried out by NBFCs in India can be grouped as follows:




                                                          - 89 -
                                    NBFC




   Fund Based Activities                              Fee based Activities
   • Equipment Leasing                                • Investment Banking
   • Hire Purchase                                    • Portfolio
   • Bill Discounting                                   Management
   • Loans / Investments                              • Wealth Management
   • Venture Capital                                  • Corporate
   • Factoring                                          Consulting
   • Equity Participation                             • Project Consulting
   • Short Term Loans                                 • Loan / Lease
   • Inter Corporate                                    Syndication
     Loans                                            • Advisory Services




Even though NBFCs perform functions similar to those of banks, there are a few differences:

(i)      NBFCs cannot accept demand deposits;
(ii)     NBFCs are not a part of the payment and settlement system and as such cannot allow their customers to operate
         accounts through the issuance of cheques; and
(iii)    Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available for NBFC
         depositors.

Initially, the NBFCs registered with the RBI could only operate as equipment leasing companies, hire purchase
companies, loan companies and investment companies. However, effective December 6, 2006, NBFCs registered with
the RBI have been reclassified as (i) asset finance companies (“AFCs”); (ii) investment companies (“IC”); and (iii) loan
companies (“LC”). Efforts have been made to integrate NBFCs into the mainstream financial sector by strengthening
the prudential guidelines relating to income recognition, asset classification and provisioning. A number of measures to
enhance the regulatory and supervisory standards of NBFCs in order to put them on par with commercial banks were
undertaken by the RBI over a period of time including the alignment of interest rates, allowing diversification of
businesses e.g. issuance of co-branded cards and distribution of mutual fund and insurance products, regulation of
systemically important NBFCs and introduction of a fair practices code and corporate governance.

Automotive Industry and Commercial Vehicles Overview

In terms of global scale, the Indian automotive industry is the second largest two-wheeler market in the world, the fourth
largest heavy commercial market in the world, and the eleventh largest passenger vehicle market in the world. As one of
the largest industrial sectors in India, turnover of the automotive industry represents roughly 5.0% of India’s GDP, while
contributing nearly 17.0% to total indirect taxes. Although the automotive industry provides direct and indirect
employment to over 13 million people, the penetration levels for vehicles in India are among the lowest in the world.
[Source: SIAM]

The commercial vehicle industry is segmented into “light commercial vehicles” (for vehicles with gross vehicle weight
of less than 7.5 tons) and “medium and heavy commercial vehicles” (for vehicles weighing more than 7.5 tons). The
performance of the medium and heavy commercial vehicle industry bears a high correlation with industrial growth, and
is driven by economic development, improved road infrastructure (such as the Golden Quadrilateral) for long haulage
transportation, and a favorable regulatory environment (in this regard, demand created in the years 2006-2007 was
                                                          - 90 -
attributable to the strict enforcement of overloading restrictions and age norms). In turn, the performance of the light
commercial vehicle industry tends to be less cyclical in nature, and is driven by GDP growth and demand for last mile
distribution. The market share of light commercial vehicles increased rapidly - the introduction of a sub-one ton carrier
by certain players created a new segment typically occupied by three-wheelers and similar forms of intra-city transport,
resulting in significant growth in the commercial vehicle market as a whole.

Total domestic sales in the commercial vehicle industry reached 490,494 units in 2007-08. From 2003-04 to 2007-08,
domestic sales had grown at a healthy CAGR of 17.8%, dipping to 4.9% in 2007-08 from 33.3% in 2006-07. The
reduction in domestic sales was attributed to the slowdown in economic development, credit availability and costs, an
increase in fuel prices, in addition to the base effect due to the one-time demand created in 2006-07 by the strict
enforcement of overloading restrictions. [Source: SIAM]

Domestic Commercial Vehicle Sales Volumes


                                                                                 4.9%
                          CAGR 17.8%                         33.3%
                                                                            490,494
                                                          467,765
                                                                                                  (21.7%)
                                          10.2%                                                   384,122
                         22.4%           351,041
                        318,430
       260,114




       2003-04          2004-05          2005-06          2006-07           2007-08               2008-09

    Numbers in italics represent change over previous year

Source: Society of Indian Automobile Manufacturers ("SIAM")
After a stable second quarter in fiscal 2009, the automotive sector in India suffered severe contraction in demand in the
third quarter of fiscal 2009, arising from major financial and other market upheavals. This, along with contraction in
freight movement in many segments of the industry, led to a massive drop in the medium and heavy commercial vehicle
segment demand. High interest rates and peak commodity prices also affected the industry and the supply chain. In the
third quarter of fiscal 2009, industry commercial vehicle sales were down 44.0% and passenger vehicle sales dropped by
as much as 16.5% against the comparable quarter of the previous year. The economy grew 5.3% in the December 2008
quarter from a year earlier, below forecasts of 6.2% and the previous quarter's 7.6% as the global economic crisis cut
demand and exports. As a result, 2008-2009 volumes declined 21.7%.



Commercial Vehicle Domestic Sales 2003 to 2009

         Category                 2003-04          2004-05           2005-06        2006-07           2007-08     2008-09
Light commercial                     161,395         198,561           207,446        275,600           271,045    183,541
vehicles
Medium and heavy                       98,719        119,877          143,237           247,040         250,361    200,581
commercial vehicles
Total Sales                           260,114        318,438          350,683           522,640         521,406    384,122

Source: Society of Indian Automobile Manufacturers



                                                          - 91 -
Through a series of coordinated and successive measures, the GoI announced an economic stimulus package which
included, inter alia, reductions in interest rates, stepping up of plan expenditure by up to US$5.00 billion by March
2009, easing the flow of credit, among other measures. There have also been announcements directly favoring the
automobile industry, including:

    •   an across-the-board cut of 4.0% in excise duties, allowing manufacturers to offer price cuts to consumers
        thereby stimulating demand. A further 2% cut in excise duties was announced on February 24, 2009;

    •   accelerated depreciation of 50.0% for commercial vehicles to be purchased on or after January 1, 2009 to March
        31, 2009. This was subsequently extended to September, 2009; and

    •   assistance to states under the GoI scheme (under the the Jawaharlal Nehru National Urban Renewal Mission
        (JNNURM) of the Ministry of Urban Development) for the purchase of buses for their urban transport systems
        as a one-time measure to June 30, 2009.

The impact of both the monetary and fiscal measures of the GoI has positively impacted volumes and there have been
encouraging signs of revival in demand since January, 2009. The overall commercial vehicle segment registered positive
growth at 5.4% during April-October 2009 as compared to the same period the previous year. While medium and heavy
commercial vehicle registered negative growth at (11.3%), the light commercial vehicle segment climbed to 22.7%.
(Source: Society of Indian Automobile Manufacturers)

Over the long term, the commercial vehicle industry and consequently, commercial vehicle financing, is expected to
continue to show growth in light of the following factors:

Modernization of trucking industry. A replacement boom is likely to be triggered by stricter enforcement of regulations
banning trucks beyond 15 years and overloading, as well as the introduction by transport associations of a voluntary
retirement scheme for old trucks with better financing options. An anticipated replacement demand for 1.1 million new
as well as pre-owned trucks will require financing of Rs.1,078.00 billion.

Structural shift to hub-and-spoke model and improving road infrastructure. All commercial vehicle segments are
expected to experience a boost from the fast-evolving hub- and spoke-structure of the freight industry. Long-distance
haulage between hubs is typically serviced by heavy commercial vehicle on highways which continue to benefit from the
Golden Quadrilateral and road development projects, with freight distribution from the hub to the local warehouse at the
end of the spoke requiring medium commercial vehicles and distribution over the last mile requiring small commercial
vehicles.

Stricter emission norms expected to generate huge demand for 5-12 year old trucks: Currently, Bharat Stage IV norms
(equivalent to Euro IV norms) are in force for four-wheelers in thirteen cities in India, while Bharat Stage III norms
(equivalent to Euro III norms) are in force in rest of India. A revision in emission regulations is expected to be
implemented by fiscal 2010, when the eleven major cities currently subject to Bharat Stage III norms are expected to
move to Bharat Stage IV norms (equivalent to Euro IV norms), with the rest of India to adopting Bharat Stage III norms.

Growing freight capacity. GDP growth rate continues to drive incremental freight capacity, which is estimated to
increase at 1.25 times of GDP growth.

Growth of construction industry. The share of the construction industry in GDP has increased from 6.1% in 2002-03 to
6.9% in 2006-07. This increase has been largely propelled by government spending. Because a substantial portion of
construction investment is spent on equipment, this construction boom heralds a similar expansion in the need for
construction vehicles. The Indian construction industry is dominated by small contractors that perform over 90.0% of
projects. These local players often lack adequate access to institutional finance, creating enormous opportunities in the
area of construction equipment financing. (Source: Government of India Planning Commission Eleventh Five Year Plan)

Government investments in the roads and highways sector

Government investments in the roads and highways sector may also be expected to support growth in the commercial
vehicle industry. According to the NHAI, India has the second largest road network in the world, aggregating
approximately 3.3 million kilometers. Approximately 65.0% of freight and 80.0% of passenger traffic is carried by the
                                                      - 92 -
road network. The national highways, which carry approximately 40.0% of total road traffic, constitute only about 2.0%
of the total road network. Moreover, the number of vehicles has been increasing at an average pace of 10.2% per annum
over the last five years. (Source: NHAI, http://www.nhai.org/roadnetwork.htm)

The table below sets forth information pertaining to India's road network.

   Indian Road Network                        Approximate Length (in km)                     Percentage of Total
   Expressways                                                         200                                  0.0%
   National highways                                                70,548                                  2.1%
   State highways                                                  131,899                                  4.0%
   Major district roads                                            467,763                                 14.1%
   Village and other roads                                       2,650,000                                 79.8%
   Total                                                         3,320,410                               100.0%
[Source: http://www.nhai.org/roadnetwork.htm, National Highways Authority of India (NHAI); as of October 29, 2009;
percentage computations added.]

Moreover, the GoI has recently announced plans for the proposed launch by NHAI of six significant projects in the roads
and highways sector, estimated at project costs in excess of U.S.$1.00 billion each. (Source: http://www.nhai.org, NHAI)

Commercial Vehicles Financing Overview

From 1995 to 1997, the commercial vehicle finance market was highly fragmented, with NBFCs dominating the
commercial vehicle finance market. Steady consolidation took place, with larger players like Sundaram Finance, Ashok
Leyland Finance, Citicorp Finance, GE Capital and others increasing their market position and share. In 2000 to 2001,
the new commercial vehicle finance market was estimated at around Rs.52.00 billion. The market became less
fragmented, as weaker NBFCs exited the market due to increasing pressure on margins. Private banks, capitalizing on
market opportunities, made an aggressive entry into the market. (Source: Report of CRISIL Research –“Retail Finance –
Auto – Annual Review”, January, 2010)

From 2003 to 2006, organized players began focusing on the used vehicle and refinance markets, which had traditionally
been serviced by the unorganized sector. NBFCs, such as Tata Finance, Sundaram Finance, Citicorp Finance, and
Cholamandalam Investment and Finance Company, accounted for about 34% of the market. In turn, banks like ICICI
Bank, HDFC Bank and Kotak Mahindra Bank emerged as strong players in the private bank segment, capturing about
57.0% of the market. State Bank of India, which expanded its operations in this market in 2003-2004, and other public-
sector and cooperative banks, accounted for the remaining 9%. To increase their market share, players required a sound
origination and distribution network, due to the market distribution across national and state highways. In 2005 to 2006,
the total organized commercial vehicle finance market was estimated at Rs.303.00 billion, with new commercial vehicle
market contributing Rs.196.00 billion and the used commercial vehicle market contributing Rs.107.00 billion. (Source:
Report of CRISIL Research –“Retail Finance – Auto – Annual Review”, January, 2010)

In the year 2007, two major deals between international truck makers and Indian companies were signed including
agreement to manufacture and sell light commercial vehicles between Nissan Motor Co. Limited and Ashok Leyland and
Eicher Motor’s joint venture with AB Volvo. During 2008-09, commercial vehicle was the worst hit segment in
automobile sector on account of reduction in freight availability and unfavourable credit environment. Rising defaults led
to deterioration in asset quality, with players curtailing their exposure to SFOs and FTUs. Government took several
initiatives to increase demand including reduction in excise duty and service tax by 2 percent and special credit line for
NBFCs. In 2009-10, our Company acquired Rs. 12 billion worth of commercial vehicle and construction equipment
assets from GE Capital’s transport finance business. (Source: Report of CRISIL Research –“Retail Finance – Auto –
Annual Review”, January, 2010)

Slowdown in industrial activity, unfavourable credit scenario and strained profitability for transporters had adversely
affected the commercial vehicle market. Lower growth in industrial production led to a reduction in freight availability
and capacity utilization levels which deteriorated transporters’ repayment capability and eventually, asset quality.
However, in 2009-10 interest rates for commercial vehicle finance fell by around 150 bps resulting into improved
liquidity in the financial system leading to a fall in cost of funds for the financiers and ultimately benefiting the

                                                          - 93 -
customers in the form of lower interest rates. (Source: Report of CRISIL Research –“Retail Finance – Auto – Annual
Review”, January, 2010)

Although yield to financiers increased in 2008-09, gross spreads came down, as the cost of funds increased for a larger
extent. However, in 2009-10, yield to financier is estimated to have declined by 150-200 bps, which is more than the
reduction in cost of funds, due to decline in risk aversion and increase in competition among financiers. (Source: Report
of CRISIL Research –“Retail Finance – Auto – Annual Review”, January, 2010)

The new commercial vehicle financing market is estimated at Rs.232.00 billion in 2009-10 and is projected to grow by
12.4 percent in 2010-11, primarily led by boost in business and consumer confidence levels, revival in commercial
vehicle sales volume and decline in risk aversion among financiers. During 2008-09 to 2013-14, the industry is forecast
to grow at a 5-year CAGR of 13.2 percent, driven by economic growth and infrastructure development in the country.
(Source: Report of CRISIL Research –“Retail Finance – Auto – Annual Review”, January, 2010)

Apart from the Company, HDFC Bank, Kotak Mahindra Bank and Sundaram Finance are some of the key organized
players in the new vehicle financing segment. Some of the large players in the commercial vehicle financing industry,
e.g. Citi Financial, Centuria Bank of Punjab and GE Money, as also numerous small-sized players, have exited the
market, which has eased competitive intensity for other players like the Company.




                                                          - 94 -
                                                                OUR BUSINESS


Overview

We are one of the largest asset financing NBFCs in India with a primary focus on financing pre-owned commercial
vehicles. We are among the leading financing institutions in the organized sector for the commercial vehicle industry in
India for FTUs and SRTOs. We also provide financing for passenger commercial vehicles, multi-utility vehicles, three
wheelers, tractors and construction equipment. In addition, we provide ancillary equipment and vehicle parts finance,
such as loans for tyres and engine replacements, and provide working capital facility for FTUs and SRTOs. We also
provide ancillary financial services targeted at commercial vehicle operators such as freight bill discounting and also
market co-branded credit cards targeted at commercial vehicle operators in India, thereby providing comprehensive
financing solutions to the road logistics industry in India.

Our Company was established in 1979 and we have a long track record of over three decades in the commercial vehicle
financing industry in India. The Company has been registered as a deposit-taking NBFC with the RBI since September
4, 2000 under Section 45IA of the Reserve Bank of India Act, 1934. We are a part of the Shriram group of companies
which has a strong presence in financial services in India, including commercial vehicle financing, consumer finance,
life and general insurance, stock broking, chit funds and distribution of financial products such as life and general
insurance products and mutual fund products, as well as a growing presence in other businesses such as property
development, engineering projects and information technology.

Our widespread network of branches across India has been a key driver of our growth over the years. As of December
31, 2009 we had 482 branches across India, including at most of the major commercial vehicle hubs along various road
transportation routes in India. We have also strategically expanded our marketing network and operations by entering
into partnership and co-financing arrangements with private financiers in the unorganized sector involved in commercial
vehicle financing. As of December 31, 2009 our total employee strength was approximately 12,823.

We have demonstrated consistent growth in our business and in our profitability. Our Assets Under Management*
includes loan assets in the books of the Company, assets that have been securitized / assigned by us and portfolio
managed by the Company under portfolio management arrangements with banks and other institutions from which we
receive fee income for the provision of client sourcing and collection activities. Our Assets Under Management* has
grown by a compounded annual growth rate, or CAGR*, of 38.85 % from Rs. 1,208,828.79 lacs (comprising Assets
Under Management in the books of the Company of Rs. 842,456.87 lacs, loan assets securitized/assigned of Rs.
314,054.92 lacs and portfolio managed by the Company* of Rs. 52,317.00 lacs) as of March 31, 2007 to
Rs.2,330,415.12 lacs (comprising Assets Under Management in the books of the Company of Rs. 1,794,701.61 lacs, loan
assets securitized/assigned of Rs. 531,092.91 lacs and portfolio managed by the Company* of Rs. 4,620.60lacs) as of
March 31, 2009. Our Assets Under Management as of December 31, 2009*, was Rs. 2,816,300.15 lacs (comprising
Assets Under Management in the books of the Company of Rs. 2,153,649.48 lacs, loan assets securitized /assigned of
Rs. 662,623.83 lacs and portfolio managed by the Company* of Rs. 26.84 lacs). Our capital adequacy ratio as of March
31, 2009 and December, 2009 was 16.35% and 17.07 %, respectively, compared to the RBI stipulated minimum
requirement of 12.00%. Our Tier 1 capital as of December 31, 2009 was Rs. . 285,727.21lacs. Our Gross NPAs as a
percentage of Total Loan Assets were 2.14% and 2.43 % as of March 31, 2009 and December 31, 2009 respectively. Our
Net NPAs as a percentage of Net Loan Assets was 0.83% and 0.67% as of March 31, 2009 and December 31, 2009,
respectively.

* Please note these figures are based on certificates provided by the management.

Our total income increased from Rs. 142,138.60 lacs in fiscal 2007 to Rs. 373,112.97 lacs in fiscal 2009, at a CAGR of
62.02%. Our net profit after tax increased from Rs. 19,039.71 lacs in fiscal 2007 to Rs. 61,240.21 lacs in fiscal 2009, at a
CAGR of 79.34%. In the nine months ended December 31, 2009, our total income and net profit after tax were Rs.
327,039.34 lacs and Rs. 60,868.68 lacs, respectively. A summary of our assets under management, total income and
Net profit after tax for the corresponding periods specified below are as follows*:




                                                                        - 95 -
Particulars              As at the Financial Year      As at Financial Year       As at Financial Year     As at Nine months ended
                          ended March 31, 2007        ended March 31, 2008       ended March 31, 2009      December 31, 2009
                                                            Rs. In Lacs
Assets       Under                     1,208,828.79               1,954,383.01              2,330,415.12               2,816,300.15
Management
Net Non performing                       11,015.70                  13,553.78                  14,746.53                 14,274.45
assets
                           For the Financial Year     For the Financial Year     For the Financial Year    For the Nine months
                           ended March 31, 2007       ended March 31, 2008       ended March 31, 2009      ended December 31, 2009
Total Income                           142,138.60                  250,902.68                 373,112.97                327,039.34
Net Profit after Tax                    19,039.71                   38,982.65                  61,240.21                 60,868.68

Recent Developments

Allotment of Equity Shares pursuant to our Company’s ESOP scheme

On March 26, 2010 our Company has issued and allotted 1,084,700 Equity Shares at a price of Rs. 35 per Equity Share
pursuant to the exercise of stock options issued under our ESOP scheme. Our Company has made separate applications
all dated April 13, 2010, to MSE, NSE, and BSE in connection with obtaining approval therefrom, for trading of the
aforementioned Equity Shares. The said listing approvals in connection with the trading of the aforementioned Equity
Shares from all the exchanges are awaited.

Allotment of Equity Shares pursuant to Chapter VIII of the Securities and Exchange Board of India (Issue of Capital and
Disclosure Requirements) Regulations, 2009

On January 28, 2010, our Company issued and allotted 11,658,552 Equity Shares of at a price of Rs.500.80 per such
Equity Share, aggregating to Rs. 58,386.03 lacs to Qualified Institutional Buyers pursuant to the provisions of Chapter
VIII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as
amended.

Incorporation of a subsidiary of our Company

Shriram Automall India Limited, a subsidiary of our Company was incorporated pursuant to a certificate of incorporation
dated February 11, 2010 issued by the Registrar of Companies, Chennai, Tamil Nadu and is having its registered office
situated at 123, Angappa Naickan Street, Chennai 600001,Tamil Nadu, India.

Acquisition of Receivables Portfolio

Pursuant to the terms of an Assignment Agreement dated December 22, 2009 (the “Assignment Agreement”) between
the Company, GE Capital Services India and GE Capital Financial Services (collectively, the “GE Entities”), we have
acquired with effect from December 24, 2009 from the GE Entities, on a non-recourse basis, a certain portfolio of
receivables in connection with certain loan facilities relating to commercial vehicle loans and construction equipment
loans (the “GE Receivables”), together with all right, title and interest therein under the relevant underlying loan and
security documents relating to the GE Receivables as of November 28, 2009.

Our Strengths

We believe that the following are our key strengths:

One of the largest asset financing NBFCs in India

We believe that we are one of the largest asset financing NBFCs in India, with particular focus on financing pre-owned
commercial vehicles. We primarily cater to FTUs and SRTOs and we believe we are among the leading financing
institutions in the organized sector in this particular segment. Our widespread network of 482 branches across India as of
December 31, 2009 enables us to access a large customer base including in most major and minor commercial vehicle
hubs along various road transportation routes in India. We believe that our widespread branch network enables us to
service and support our existing customers from proximate locations which provide customers easy access to our
services. We have also strategically expanded our marketing and customer origination network by entering into
                                                             - 96 -
partnership and co-financing arrangements with private financiers involved in commercial vehicle financing. We believe
our relationship with these partners is a critical factor in sourcing new customers and enhancing reach and penetration at
low upfront capital cost. The relationships we have developed with our customers provide us with opportunities for
repeat business and to cross sell our other products as well as derive benefit from customer referrals.

Our Assets Under Management as of December 31, 2009*, was Rs. 2,816,300.15 lacs (comprising Assets Under
Management in the books of the Company of Rs. 2,153,649.48 lacs, loan assets securitized /assigned of Rs. 6,62,623.83
lacs and portfolio managed by the Company* of Rs. 26.84 lacs). This is supported by a strong capital base, with share
capital of Rs. 21,279.86 lacs and reserves and surplus of Rs. 286,716.43 lacs as of December 31, 2009. Our capital
adequacy ratio as of December 31, 2009 was 17.07%, compared to the RBI stipulated minimum requirement of 12.00%.
Our Tier 1 capital as of December 31, 2009 was Rs. 285,727.21 lacs.

* Please note these figures are based on certificates provided by the management.



Access to a range of cost effective funding sources

We fund our capital requirements through a variety of sources. Our fund requirements are currently predominantly
sourced through term loans from banks, issue of redeemable non-convertible debentures, and cash credit from banks
including working capital loans. We access funds from a number of credit providers, including nationalized banks,
private Indian banks and foreign banks, and our track record of prompt debt servicing has allowed us to establish and
maintain strong relationships with these financial institutions. We also place commercial paper and access inter-
corporate deposits. As a deposit-taking NBFC, we are also able to mobilize retail fixed deposits at competitive rates. We
have also raised subordinated loans eligible for Tier II capital. We undertake securitization/assignment transactions to
increase our capital adequacy ratio, increase the efficiency of our loan portfolio and as a cost effective source of funds.

In relation to our long-term debt instruments, we currently have ratings of CARE AA+ from Credit Analysis and
Research Ltd. (“CARE”) and AA (Ind) from FITCH. In relation to our short-term debt instruments, we have also
received ratings of F1+ from FITCH and P1+ from CRISIL. The Secured NCDs proposed to be issued under this Issue
have been rated ‘CARE AA+’ and the Unsecured NCDs proposed to be issued under this Issue have been rated ‘CARE
AA’ by CARE vide their letters dated April 19, 2010. We believe that we have been able to achieve a relatively stable
cost of funds despite the difficult conditions in the global and Indian economy in fiscal 2008 and 2009 and the resultant
reduced liquidity and an increase in interest rates, primarily due to our improved credit ratings, effective treasury
management and innovative fund raising programs. We believe we are able to borrow from a range of sources at
competitive rates.

The RBI currently mandates domestic commercial banks operating in India to maintain an aggregate of 40.00% (32.00%
for foreign banks) of their advances or credit equivalent amount of off-balance sheet exposure, whichever is higher as
“priority sector advances”. These include advances to agriculture, small enterprises (including SRTOs, which constitute
the largest proportion of our loan portfolio), exports and similar sectors where the Government seeks to encourage flow
of credit for developmental reasons. Banks in India that have traditionally been constrained or unable to meet these
requirements organically, have relied on specialized institutions like us that are better positioned to or exclusively focus
on originating such assets through on-lending or purchase of assets or securitized/assigned pools to comply with these
targets. Our securitized/assigned asset pools are particularly attractive to these banks as such transactions provide them
with an avenue to increase their asset base through low cost investments and limited risk. Majority of our loan portfolio
being classified as priority sector lending also enables us to negotiate competitive interest rates with banks and other
financial institutions. In fiscal 2008 and 2009, the total book value of loan assets securitized/assigned was Rs. 211822.17
lacs and Rs. 312,498.40 lacs, respectively. In the nine months ended December 31, 2009, the total book value of loan
assets securitized/assigned was Rs. 326,229.88 lacs.

Unique business model and a track record of strong financial performance

We primarily cater to FTUs and SRTOs and we believe we are the only financing institution in the organized sector
providing finance to FTUs and SRTOs in the pre-owned commercial vehicle finance segment. Most of our customers are
not a focus segment for banks or other NBFCs as these customers lack substantial credit history and other financial
documentation on which many of such financial institutions rely to identify and target new customers. As the market for
commercial vehicle financing, especially the pre-owned commercial vehicle financing, is fragmented, we believe our
                                                                        - 97 -
credit evaluation techniques, relationship based approach, extensive branch network and strong valuation skills make our
business model unique and sustainable as compared to other financiers. In particular, our internally-developed valuation
methodology requires deep knowledge and practical experience developed over a period of time, and we believe this is a
key strength that is difficult to replicate. We provide finance to pre-owned commercial vehicle operators at favourable
interest rates and repayment terms as compared to private financiers in the unorganized sector.

Our retail focus, stringent credit policies and relationship based model has helped us maintain relatively low NPA levels.
Our Gross NPAs as a percentage of Total Loan Assets were 2.14% and 2.43% as of March 31, 2009 and December 31,
2009 respectively. Our Net NPAs as a percentage of Net Loan Assets was 0.83% and 0.67% as of March 31, 2009 and
December 31, 2009, respectively.

Strong brand name

We believe that the "Shriram" brand is well established in commercial vehicle financing throughout India. We believe
that we are the only organized sector financing company with particular focus on the pre-owned commercial vehicle
financing segment to FTUs and SRTOs in India. Our targeted focus on and the otherwise fragmented nature of this
market segment, our widespread branch network, particularly in commercial vehicle hubs across India, as well as our
large customer base has enabled us to build a strong brand. Our efficient credit approval procedures, credit delivery
process and relationship-based loan administration and monitoring methodology have also aided in increasing customer
loyalty and earn repeat business and customer referrals.

Extensive experience and expertise in credit appraisal and collection processes

We have developed a unique business model that addresses the needs of a specific market segment with increasing
demand. We focus on closely monitoring our assets and borrowers through product executives who develop long-term
relationships with commercial vehicle operators, which enables us to capitalize on local knowledge. We follow stringent
credit policies, including limits on customer exposure, to ensure the asset quality of our loans and the security provided
for such loans. Further, we have nurtured a culture of accountability by making our product executives responsible for
loan administration and monitoring as well as recovery of the loans they originate.

Extensive expertise in asset valuation is a pre-requisite for any NBFC providing loans for pre-owned assets. Over the
years, we have developed expertise in valuing pre-owned vehicles, which enables us to accurately determine a
recoverable loan amount for commercial vehicle purchases. We believe a tested valuation technique for these assets is a
crucial entry barrier for others seeking to enter our market segment. Furthermore, our entire recovery and collection
operation is administered in-house and we do not outsource loan recovery and collection operations. We believe that our
loan recovery procedure is particularly well-suited to our target market in the commercial vehicle financing industry, as
reflected by our high loan recovery ratios compared to others in the financial services industry, and we believe that this
knowledge and relationship based recovery procedure is difficult to replicate in the short to medium term.

Experienced senior management team

Our Board consists of 10 Directors, including representatives of Newbridge India Investments II Ltd (TPG Group) , with
extensive experience in the automotive and/or financial services sectors. Our senior and middle management personnel
have significant experience and in-depth industry knowledge and expertise. Most of our senior management team has
grown with the Company and have more than 15 years of experience with us. Our management promotes a result-
oriented culture that rewards our employees on the basis of merit. In order to strengthen our credit appraisal and risk
management systems, and to develop and implement our credit policies, we have hired a number of senior managers who
have extensive experience in the Indian banking and financial services sector and in specialized lending finance firms
providing loans to retail customers.. We believe that the in-depth industry knowledge and loyalty of our management and
professionals provide us with a distinct competitive advantage.

Our Strategies

Our key strategic priorities are as follows:

Further expand operations by growing our branch network and increasing partnership and co-financing
arrangements with private financiers
                                               - 98 -
We intend to continue to strategically expand our operations in target markets that are large commercial vehicle hubs by
establishing additional branches. Our marketing and customer origination and servicing efforts strategically focus on
building long term relationships with our customers and address specific issues and local business requirements of
potential customers in a particular region. We also intend to increase our operations in certain regions in India where we
historically had relatively limited operations, such as in eastern and northern parts of India, and to further consolidate our
position and operations in western and southern parts of India.

The pre-owned commercial vehicle financing industry in India is dominated by private financiers in the unorganized
sector. We intend to continue to strategically expand our marketing and customer origination network by entering into
partnership and co-financing arrangements with private financiers across India involved in commercial vehicle financing.
In view of the personnel-intensive requirements of our operations, we continue to focus on growing our business by
increasingly relying on partnership arrangements to effectively leverage the local knowledge, infrastructure and
personnel base of our partners.

Introduce innovative marketing and sales initiatives and build our brand to further grow market share

We continue to develop innovative marketing and customer origination initiatives specifically targeted at FTUs and
SRTOs. For example, we organize "Truck Bazaars" in several commercial vehicle hubs in India every month.
Customarily the sale and purchase of pre-owned commercial vehicles is made through brokers or intermediaries, with
limited transparency and access to information and suitable opportunities. At our Truck Bazaars, we provide a
comprehensive platform for access to information about pre-owned commercial vehicles available for purchase and sale,
a venue for transporters to buy and sell pre-owned commercial vehicles directly without the intervention of brokers, and
a facility for providing advisory services for a fee on such transactions, together with access to our financing products.
This initiative enables us to develop long standing relationships with repeat customers, and provides us with
opportunities to generate new business. These programs provide a platform to increase our brand awareness and enable
us to promote our financing products.

We also intend to develop pre-owned commercial vehicle hubs across India called "Automalls", through a wholly-owned
subsidiary incorporated for this purpose, designed to provide a trading platform for the sale of pre-owned commercial
vehicles, showrooms for branded new and refurbished pre-owned commercial vehicles manufactured by various
manufacturers, as well as commercial vehicles repossessed by financing companies. Through our Automalls, we intend
to set up a one-stop shop catering to the various needs of commercial vehicle owners, including through the provision of
workshop facilities. We intend to provide electronic advertising and trading infrastructure in these Automalls, such as
touch-screen kiosks, through which customers will be able to access real-time information on pre-owned vehicles
available for sale. These electronic touch-screen kiosk facilities, which will also be installed in our branches, will
eventually replace our physical Truck Bazaar events. We intend to utilize our Automall platform for marketing of our
financial products and develop new customers. We intend to commence operation of such "Automalls" during the first
quarter of 2011, and to gradually expand to between 50 and 60 Automalls in the next 12 to 15 months.

Diversify our product portfolio

We intend to further develop our equipment finance business, particularly construction equipment. We believe that
infrastructure development and construction businesses are likely to benefit from the significant investment in
infrastructure by the Government of India and state governments and as well as by the private sector. Many of our
customers have upgraded themselves and have become a sub-contractor and we believe that the construction equipment
business segment will be a logical extention of our product portfolio for our existing customer base and with the global
meltdown many of the existing equipment financiers have stopped funding the construction equipment and vacuum is
being created in the market so to tap the existing customer base and a new set of customers, we believe that the
construction equipment finance segment provides significant growth opportunity, and intend to increasingly focus on
construction equipment finance as a distinct business segment through our wholly owned subsidiary Shriram Equipment
Finance Company Limited. We are in the process of recruiting senior management and other personnel for this business
segment.

We are focused on leveraging our leadership in truck financing to expand our product portfolio, which now also includes
financing for passenger commercial vehicles, multi-utility vehicles, three-wheelers, tractors, and construction equipment.
We expect this will enable us to offer new products to existing customers and expand our customer base. These products
                                                           - 99 -
have strong synergies with the truck financing sector which is our primary business line. Further, by offering additional
downstream products, such as vehicle parts and other ancillary loans, credit cards and freight bill discounting, we
maintain contact with the customer throughout the product lifecycle and increase our revenues. The relationships we
have developed with our customers provide us with opportunities for repeat business and to cross sell our other products
and products of our affiliates.

Continue to implement advanced processes and systems

We have invested in our technology systems and processes to create a stronger organization and ensure good
management of customer credit quality. Our information technology strategy is designed to increase our operational and
managerial efficiency. We aim to increasingly use technology in streamlining our credit approval, administration and
monitoring processes to meet customer requirements on a real-time basis. We continue to implement technology led
processing systems to make our appraisal and collection processes more efficient, facilitate rapid delivery of credit to our
customers and augment the benefits of our relationship based approach. We also believe deploying strong technology
systems that will enable us to respond to market opportunities and challenges swiftly, improve the quality of services to
our customers, and improve our risk management capabilities.

Our Financial Products

Commercial Vehicle Finance

We are principally engaged in the business of providing commercial vehicle financing to FTUs and SRTOs. FTUs are
principally former truck drivers who purchase trucks for use in commercial operations and SRTOs are principally small
truck operators owning between one and four used commercial vehicles. Our financing products are principally targeted
at the financing of pre-owned trucks and other commercial vehicles, although we also provide financing for new
commercial vehicles. Pre-owned commercial vehicles financed by us are typically between five and 12 years old. We
also provide financing for other kinds of pre-owned and new commercial vehicles, including passenger vehicles, multi-
utility vehicles, tractors and three wheelers.

Ancillary Equipment and Vehicle Parts Finance

Our customers also require financing for the purchase of equipment and vehicle parts in connection with the operation of
their trucks and other commercial vehicles. We also offer financing for the acquisition of new and pre-owned vehicle
equipment and accessories, such as tyres, engines, chassis, and other vehicle parts.

Construction Equipment Finance

We provide finance for the purchase of construction equipments that are used in construction projects. Many of our FTU
and SRTO customers are increasingly entering the construction equipment business, and we believe that the construction
equipment business segment will be a logical extension of our product portfolio to our existing customer base. We
believe that this equipment finance segment provides significant growth opportunity and intend to increasingly focus on
construction equipment finance as a distinct business segment through our wholly-owned subsidiary Shriram Equipment
Finance Company Limited. We are in the process of recruiting senior management and other personnel for this business
segment. The majority of such customers will not be from our existing customer base.

Freight Bill Discounting

As an extension of our product portfolio, we offer freight bill discounting services to our customers, including the
purchase of trucking invoices of our customers at a discount, thereby providing immediate cash relief to small truck
operators. Freight bill discounting provides our customers with their cash flow requirements without creating any debt,
which otherwise may restrict the ability of our customers from obtaining other necessary loans for vehicle or asset
financing. In addition, freight bill discounting frees truck operators from the need to attend to billing, collection and
settlement. With freight bill discounting, our decision to purchase receivables is based on the creditworthiness of the
freight customers and not that of the truck operators. Our industry experience and access to market intelligence enable us
to operate successfully in this business segment.

Credit Cards
                                                          - 100 -
We have entered into an agreement with Axis Bank (formerly UTI Bank Limited) to market co-branded Visa credit cards
to commercial vehicle operators for use in India and Nepal. We provide marketing assistance for the sourcing of
prospective customers for such credit cards as well as assist in customer verification procedures. Axis Bank however
retains the right to approve the application by any such customer. Access to such additional credit enables our customers
to meet their short term financial requirements, including working capital requirements.

Our Operations

Customer Origination

Customer Base

Our customer base is predominantly FTUs and SRTOs and other commercial vehicle operators, and smaller construction
equipment operators. We also provide trade finance to commercial vehicle operators. These customers typically have
limited access to bank loans for commercial vehicle financing and limited credit history. Our loans are secured by a
hypothecation of the asset financed.

Branch Network

As of December 31, 2009, we had a wide network of 482 branches across India and approximately 12,823 employees.
We have established branches at most major commercial vehicle hubs along various road transportation routes across
India. A typical branch comprises nine to 10 employees, including the branch manager. As of December 31, 2009, all of
our branch offices were connected to servers at our corporate office to enable real time information with respect to our
loan disbursement and recovery administration. Our customer origination efforts strategically focus on building long
term relationships with our customers, addresses specific issues and local business requirements of potential customers
in a specific region.

Partnership and Co-financing Arrangements with Private Financiers

SRTOs and FTUs generally have limited banking habits and credit history and inadequate legal documentation for
verification of credit worthiness. In addition, because of the mobile nature of the hypothecated assets, SRTOs and FTUs
have limited access to bank financing for pre-owned and new commercial vehicle financing. As a result, the pre-owned
truck financing market in India is dominated by private financiers in the unorganized sector. We have strategically
expanded our marketing and customer origination network by entering into partnership and co-financing arrangements
with private financiers across India involved in commercial vehicle financing.

We enter into strategic partnership agreements with private financiers ranging from individual financiers to small local
private financiers, including other NBFCs. We have established a stable relationship with our partners through our
extensive branch network. In view of the personnel-intensive requirements of our business model, we rely on
partnership arrangements to effectively leverage the local knowledge, infrastructure and personnel base of our partners.

Our partners source applications for pre-owned and new commercial vehicle financing based on certain assessment
criteria specified by us, and is generally responsible for ensuring the authenticity of the customer information and
documentation. The decision to approve a loan is, however, at our discretion. In the event that an application is rejected
by us, our partners are permitted to directly arrange financing for such customer or approach another financier in
connection with such proposed financing.

Our partner sourcing a customer is responsible for obtaining all necessary documentation in connection with the loan
proposal. The partner is responsible for collection of installments and penalties for all customers originated through him.
The partner is also responsible for any repossession of vehicles and equipment in the event of a default of a loan by a
customer sourced by such partner.

A typical co-financing or partnership agreement stipulates the revenue-sharing ratio, amounts payable as quarterly
advance payments to our partner, and details related to the retention of earnest money. Specifically, we typically
stipulate a certain income-sharing arrangement on the interest on the loan, net of our cost of funding. Since the partner's
share of income is only determined upon settlement of the individual loan contracts, we typically release quarterly
                                                         - 101 -
advance payments to our partner. These payments are net of the earnest money deposit, which represents a pre-agreed
percentage of the partner's revenue share. We allocate the earnest money towards a loan loss pool, as well as for
business expansion purposes. Loan loss is typically calculated as our loss on principal and reimbursed expenses on loans
from customers sourced by the partner, with interest at the rate of our cost of funds. The loss is shared between the
parties in the same proportion as income. The parties usually stipulate that the amount available as earnest money deposit
in excess of a certain percentage of future receivables and may be withdrawn by the partner.

Other Marketing Initiatives

We continue to develop innovative marketing and customer origination initiatives specifically targeted at FTUs and
SRTOs. For example, we organize "Truck Bazaars" in several major commercial vehicle hubs in India every month.
Customarily the sale and purchase of pre-owned commercial vehicles is made through brokers or intermediaries, with
limited transparency and access to information and suitable opportunities. At our Truck Bazaars, we provide a
comprehensive platform for access to information about pre-owned commercial vehicles available for purchase and sale,
a venue for transporters to buy and sell pre-owned commercial vehicles directly without the intervention of brokers, as
well as a facility for providing advisory services for a fee on such transactions, together with access to our financing
products. This initiative enables us to develop long standing relationships with repeat customers, and provides us with
opportunities to generate new business. These programs provide us a platform to increase our brand awareness and
enable us to promote our financing products.

We also intend to develop pre-owned commercial vehicle hubs across India called "Automalls", through a wholly-owned
subsidiary which has been incorporated for this purpose, designed to provide a trading platform for the sale of pre-owned
commercial vehicles, showrooms for branded new and refurbished pre-owned commercial vehicles manufactured by
various manufacturers as well as commercial vehicles repossessed by financing companies.

Selling of refurbished repossessed vehicles will be undertaken by our Company under the brand name of ‘SHRIRAM
NEW LOOK’, for which company has made an application for registration. Through our Automalls, we intend to set up
one-stop shop facilities catering to the various needs of commercial vehicle owners, including through the provision of
workshops. We intend to provide electronic advertising and trading infrastructure in these Automalls, such as touch-
screen kiosks, through which customers will be able to access real-time information on pre-owned vehicles available for
sale. These electronic touch-screen kiosk facilities, which will also be installed in our branches, will eventually replace
our physical Truck Bazaar events. We intend to utilize this platform for marketing of our financial products and develop
new customers. We intend to commence operation of such "Automalls" during the first quarter of 2011, and to gradually
expand to between 50 and 60 Automalls in the next 12 to 15 months.

At present, second hand vehicles are being sold through the brokers and market is being controlled by them, our
Company intends to engage in auction of vehicles in an organized manner.

Branding/ advertising

We use the brand name “Shriram Transport Finance” for marketing our products pursuant to a license and user
agreement with Shriram Capital Limited (formerly Shriram Financial Services Holdings Private Limited), an affiliate
company which is valid until March 31, 2011. Our brand is well recognized in India given its association with the brand
of our promoter Shriram and our own efforts of brand promotion. We have launched various publicity campaigns
through print and other media specifically targeted at our target customer profile, FTUs and SRTOs, to create awareness
of our product features, including our speedy loan approval process with the intention of creating and enhancing our
brand identity. We believe that our emphasis on brand promotion will be a significant contributor to our results of
operations in future.

Customer Evaluation, Credit Appraisal and Disbursement

Due to our customer profile, in addition to a credit evaluation of the borrower, we rely on guarantor arrangements, the
availability of security, referrals from existing relationships and close client relationships in order to manage our asset
quality. All customer origination and evaluation, loan disbursement, loan administration and monitoring as well as loan
recovery processes are carried out by our product executives. We do not utilize or engage direct selling or other
marketing and distribution agents or appraisers to carry out these processes. We follow certain procedures for the
evaluation of the creditworthiness of potential borrowers. The typical credit appraisal process is described below:
                                                            - 102 -
Initial Evaluation

When a customer is identified and the requisite information for a financing proposal is received, a branch manager or
product executive meets with such customer to assess the loan requirements and creditworthiness of such customer. The
proposal form requires the customer to provide information on the age, address, employment details and annual income
of the customer, as well as information on outstanding loans and the number of commercial vehicles owned. The
applicant is required to provide proof of identification and residence for verification purposes. In connection with the
loan application, the applicant is also required to furnish a guarantor, typically another commercial vehicle owner, and
preferably an existing or former customer. Detailed information relating to such guarantor is also required to be
provided.

For pre-owned commercial vehicles or equipment, a vehicle inspection and evaluation report is prepared by our
executives to ascertain, among other matters, the registration details of the vehicle, as well as its condition and market
value. A field investigation report is also prepared relating to the place of residence and of various movable and
immovable properties of the applicant and the guarantor. Each application also requires two independent references to
be provided.

Credit policies

We follow stringent credit policies to ensure the asset quality of our loans and the security provided for such loans. Any
deviation from such credit policies in connection with a loan application requires prior approval. Our credit policies
include the following:

    •    Vehicle type. We only finance vehicles that are used for commercial purposes. As these are income-generating
         assets, we believe that this asset type reduces our credit risk.

    •    Guarantor requirement. Loans must be secured by the personal guarantee of the borrower as well as at least
         one third party guarantor. The guarantor must be a commercial vehicle owner, preferably our existing or former
         customer, and preferably operating in the same locality as the borrower.

    •    Loan approval guidelines. From time to time, our management lays down loan approval parameters which are
         typically linked to the value of the vehicle/s.

    •    Age limit for used vehicles. We only extend loans to vehicles that are less than 12 years old.

    •    Period. In case of pre-owned commercial vehicles, the repayment term ranges between 24 and 48 months. For
         new commercial vehicles, the repayment term ranges between 36 and 60 months.

    •    Prepayment charges. The borrower is charged prepayment charges in the event of termination of the loan by
         prepayment.

    •    Release of documents on full repayment. Security received from the borrower, including unutilized post-dated
         cheques, if any, is released on repayment of all dues or on collection of the entire outstanding loan amount,
         provided no other existing right or lien for any other claim exists against the borrower.

    •    RTO records. In case of used vehicle financing, Regional Transport Office (“RTO”) records must be inspected
         for non-payment of road tax, pending court cases, and other issues, and the records retained as part of the loan
         documentation.

    •    Physical inspection and trade reference. In case of all pre-owned vehicle financing, the branch manager must
         physically inspect the vehicle and assess its value. The branch manager’s determination regarding the condition
         of the vehicle is recorded in the evaluation report of the vehicle. The branch manager must also conduct contact
         point verification as well as a trade reference check of the borrower before an actual disbursement is made, and
         such determination is recorded in the proposal evaluation records.


                                                          - 103 -
Approval Process

The branch manager evaluates the loan proposal based on supporting documentation and various other factors. The
primary criterion for approval of a loan proposal is based on the guarantee provided by another commercial vehicle
operator, preferably an existing or previous customer, as well as the valuation of the asset to be secured by the loan. In
addition, our branch managers may also consider other factors in the approval process such as length of residence, past
repayment record and income sources.

The branch manager is authorized to approve a loan if the proposal meets the criterion established for the approval of a
loan. The applicant is intimated of the outcome of the approval process, as well as the amount of loan approved, the
terms and conditions of such financing, including the rate of interest (annualized) and the application of such interest
during the tenure of the loan.

Disbursement

Margin money and other charges are collected prior to loan disbursements. The disbursing officer retains evidence of the
applicant’s acceptance of the terms and conditions of the loan as part of the loan documentation. A chassis print of the
vehicle is also obtained and maintained in the loan file. The relevant RTO endorsement forms are also required to be
executed by the borrower prior to the disbursement of the loan. Prior to the loan disbursement, the loan officer ensures
that a Know Your Customer checklist is completed by the applicant. The loan officer verifies such information provided
and includes such records in the relevant loan file. The loan officer is also required to ensure that the contents of the loan
documents are explained in detail to the borrower either in English or in the local language of the borrower, and a
statement to such effect is included as part of the loan documentation. The borrower is provided with a copy of the loan
documents executed by him. Although our customers have the option of making payments by cash or cheque, we may
require the applicant to submit post-dated cheques covering an initial period prior to any loan disbursement. For used
vehicles, an endorsement of the registration certificate as well as the insurance policy must be executed in our favor.

Loan administration and monitoring

The borrower and the relevant guarantor are required to execute a standard form of Loan cum Hypothecation Agreement
setting out the terms of the loan. A loan repayment schedule is attached as a schedule to the Loan cum Hypothecation
Agreement, which generally sets out monthly repayment terms. The Loan cum Hypothecation Agreement also requires a
promissory note to be executed containing an unconditional promise of payment to be signed by both the borrower and
the relevant guarantor. A power of attorney authorizing, among others, the repossession of the hypothecated vehicle
upon loan payment default, is also required to be executed.

We provide three payment options: cash, cheques or demand drafts. Repayments are made in monthly installments.
Loans disbursed are recovered from the customer in accordance with the loan terms and conditions agreed with the
customer. As a service to our customers our product executives offer to visit the customers on the payment date to collect
the installments due. We track loan repayment schedules of our customers, on a monthly basis, based on the outstanding
tenure of the loans, the number of installments due and defaults committed, if any. This data is analyzed based on the
vehicles financed and location of the customer.

Our MIS department and centralized operating team monitors compliance with the terms and conditions for credit
facilities. We monitor the completeness of documentation, creation of security etc. through regular visits to the branches
by our regional as well as head office executives and internal auditors. All borrower accounts are reviewed at least once
a year, with a higher frequency for the larger exposures and delinquent borrowers. The branch managers review
collections regularly, and personally contact borrowers that have defaulted on their loan payments. Branch managers are
assisted by a set of product executives in the day-to-day operations, who are typically responsible for the collection of
installments from 150 to 200 borrowers each, depending on territorial dispersal. Each branch customarily limits its
commercial vehicle financing loans to approximately 1,000 customers, which enables closer monitoring of receivables.
A new branch is opened to handle additional customers beyond such limit to ensure appropriate risk management. Close
monitoring of debt servicing efficiency enables us to maintain high recovery ratios.

Collection and Recovery


                                                           - 104 -
We believe that our loan recovery procedure is particularly well-suited to our target market in the commercial vehicle
financing industry, as reflected by our high loan recovery ratios compared to the average in the financial services
industry. The entire collection operation is administered in-house and we do not outsource loan recovery and collection
operations. In case of default, the reasons for the default are identified by the local product executive and appropriate
action is initiated, such as requiring partial repayment and/or seeking additional guarantees or collateral.

In the event of a default on three loan installments, the branch manager is required to make a personal visit to the
borrower to determine the gravity of the loan recovery problem and in order to exert personal pressure on the borrower.

We may initiate the process for repossession of the vehicle in the event of a default. Branch managers are trained to
repossess vehicles and no external agency is involved in such repossession. Repossessed vehicles are held at designated
secured facilities for eventual sale. The notice to the customer specifies the outstanding amount to be paid within a
specified period, failing which the vehicle may be disposed of through auction. In the event there is a short fall in the
recovery of the outstanding amount from the sale of the vehicle, legal proceedings against the customer may be initiated.
Our loan asset reconstruction department co-ordinates with our legal team and external lawyers to initiate and monitor
legal proceedings wherever appropriate.

The laws governing the registration of motor vehicles in India effectively establish vehicle ownership, as well as the
claims of lenders. As a result, vehicle repossession in the event of default is a relatively uncomplicated procedure, such
that the possibility of repossession provides an effective deterrent against default.

Asset Quality

We maintain our asset quality through the establishment of prudent credit norms, the application of stringent credit
evaluation tools, limiting customer and vehicle exposure, and direct interaction with customers. In addition to our credit
evaluation and recovery mechanism, our asset-backed lending model and adequate asset cover has helped maintain low
gross and net NPA levels. We provide finance to pre-owned commercial vehicle operators at a lower interest rate
compared to that provided by private financiers, making repayment more manageable for FTUs and SRTOs.

Classification of Assets

The Prudential Norms Directions, 2007, read with the NBFC Acceptance of Public Deposits Directions, 1998, as
amended, prescribed by the RBI, among other matters, require us to observe the classification of our asset; treatment of
NPAs; and provisioning against NPAs.

Each deposit-accepting NBFC is required to classify its lease/hire purchase assets, loans, advances and other forms of
credit into the following classes, namely:

Standard assets. An asset in respect of which no default in repayment of principal or payment of interest is perceived and
which does not disclose any problem nor carry more than normal risk attached to the business.

Sub-standard assets. An asset will be classified as an NPA for a period not exceeding 18 months or where the terms of
the agreement regarding interest and / or principal have been renegotiated or rescheduled after commencement of
operations, until the expiry of one year of satisfactory performance under the renegotiated or rescheduled terms.

Doubtful assets. An asset which remains a sub-standard asset for a period exceeding 18 months.

Loss assets. An asset which has been identified as loss asset by the NBFC or its internal or external auditor or by the RBI
during the inspection of the NBFC, to the extent that it is not written off by the NBFC; and (b) an asset which is
adversely affected by a potential threat of non-recoverability due to either erosion in the value of security or non
availability of security or due to any fraudulent act or omission on the part of the borrower.

For further information on the Prudential Norms Directions, 2007, see “Regulations and Policies”.

Provisioning and Write-offs


                                                          - 105 -
The Company is required, after taking into account the time lag between an account becoming non-performing, and its
recognition as such, the realization of the security, and the erosion of over time in value of the security charged, to make
provisions against sub-standard, doubtful and loan assets as per the directions issued by RBI. We also consider field
reports and collection patterns at regular intervals to anticipate the need of higher provisioning. Set out below is a brief
description of applicable RBI Guidelines on provisioning and write-offs for loans, advances and other credit facilities
including bills purchased and discounted:

Loans, advances and other credit facilities

Sub-standard assets: A general provision of 10.0% of the total outstanding assets is required to be made.

Doubtful assets: 100.0% provision to the extent to which the advance is not covered by the realizable value of the
security to which the NBFC has a valid recourse is required to be made. The realizable value is to be estimated on a
realistic basis. In addition to the foregoing, depending upon the period for which the asset has remained doubtful,
provision is required to be made as follows:

     •      if the asset has been considered doubtful for up to one year, provision to the extent of 20.0% of the secured
            portion is required to be made;

     •      if the asset has been considered doubtful for one to three years, provision to the extent of 30.0% of the secured
            portion is required to be made; and

     •      if the asset has been considered doubtful for more than three years, provision to the extent of 50.0% of the
            secured portion is required to be made.

Loss assets: The entire asset is required to be written off. If the assets are permitted to remain in the books for any
reason, 100.0% of the outstanding assets should be provided for.

Lease and hire purchase assets: In respect of hire purchase assets, the total dues (overdue and future installments taken
collectively) as reduced by (i) the finance charges not credited in our profit and loss account and carried forward as
unmatured finance charges, and (ii) the depreciated value of the underlying asset, are required to be provided for.

Our Audit Committee has constituted a policy for making provisions in excess of the amounts prescribed by RBI and we
may make further provisions if we determine that it is prudent for a known and identified risk. Based on our policy our
provisions as of December 31, 2009 stood at Rs. 38,059.42 lacs as compared to the RBI required provision of Rs.
23,011.53 lacs.


The following table sets forth, as of the dates indicated, data regarding our NPAs:
         Period          Gross NPA (Rs.       Net NPA (Rs. in       Total Loan Assets        Net Loan         % of Gross    % of Net NPA
                            in lacs)               lacs)               (Rs. in lacs)        Assets(1) (Rs.   NPA to Total   to Net Loan
                                                                                              in lacs)       Loan Assets       Assets

March 31, 2007                  17,404.19             11,015.70                841,136.17      834,747.68           2.07%          1.32%
March 31, 2008                  23,843.32             13,553.78              1,514,012.86    1,503,723.32           1.57%          0.90%
March 31, 2009                  38,411.39             14,746.53              1,794,461.93    1,770,797.07           2.14%          0.83%
December 31, 2009               52,303.87             14,274.45              2,153,641.55    2,115,612.13           2.43%          0.67%
Note: The information above excludes securitized/assigned assets.
(1) Net Loan Assets means Total Loan Assets as adjusted for provisions made.

Our Gross NPAs as a percentage of Total Loan Assets were 2.14% and 2.43% as of March 31, 2009 and December 31,
2009 respectively. Our Net NPAs as a percentage of Net Loan Assets was 0.83% and 0.67% as of March 31, 2009 and
December 31, 2009, respectively. We believe that our eventual write-offs are relatively low because of our relationship
based customer origination and customer support, prudent loan approval processes, including adequate collateral being
obtained and our ability to repossess and dispose of such collateral in a timely manner.

Funding Sources
                                                                     - 106 -
We have expanded our sources of funds in order to reduce our funding costs, protect interest margins and maintain a
diverse funding portfolio that will enable us to achieve funding stability and liquidity. Our sources of funding comprise
term loans including term loans from banks and financial institutions, cash credit from banks, redeemable non-
convertible debentures, subordinated bonds, short term commercial paper, public deposits, and inter-corporate deposits,.

Borrowings

The following table sets forth the principal components of our secured loans as of the dates indicated:

                                                                                    As of March 31,                                As of Dcember 31

Secured loans                                                    2007                   2008                   2009                      2009

                                                                                               (Rupees in lacs)

Redeemable non-convertible debentures                            183,799.02            312,255.20                  482,679.34            553,229.53

Term loans:
- Term loans from banks                                          259,825.48            505,329.28                  833,363.58            972,557.48
- Term loans from financial institutions, foreign institutions
and corporates                                                    82,272.73            111,263.73                   44,792.69              40,277.57

Cash credit from banks including working capital demand          104,118.36            225,646.66                  316,623.70            348,910.53
loans




The following table sets forth the principal components of our unsecured loans as of the dates indicated:

                                                                                      As of March 31,                                    As of
                                                                                                                                      December 31,
                                                                                                (Rupees in lacs)
Unsecured loans                                                    2007                        2008                   2009                 2009

                                                                                               (Rupees in lacs)

Fixed deposits                                                           1,105.73                  342.00                 488.44           8,290.59
Inter-corporate deposits                                                    30.00                  120.64               4,657.16              24.95
Subordinated debt                                                       68,443.43               98,959.81             154,776.25         191,682.41
Redeemable non-convertible debentures                                   13,000.00                3,800.00               2,500.00           2,500.00
Commercial paper                                                        34,000.00               21,695.00              48,250.00           2,500.00
Term loans:
- Term loans from banks                                                 75,750.00              151,890.38              53,000.00         100,639.54
- Term loans from corporates                                             47166.10               46,000.00              71,000.00          35,000.00

Increasingly, we have depended on term loans from banks and the issue of redeemable non-convertible debentures as the
primary sources of our funding. We believe that we have developed stable long term relationships with our lenders, and
established a track record of timely servicing of our debts, and have been able to secure fixed rate long term loans of
three to five years tenure to stabilize our cost of borrowings. We have gradually decreased our dependence on public
deposits as a source of funds in order to lower our cost of funds.

In fiscal 2008 and 2009, proceeds from bank borrowings (net of repayments) was Rs. 443,172.48 lacs and Rs.
320,120.96 lacs, respectively. In the nine months ended December 31, 2009, proceeds from bank borrowings was Rs
219,120.27lacs. As of March 31, 2009, secured loans from banks aggregated Rs. 833,363.58 lacs, as compared to Rs.
505,329.28 lacs as of March 31, 2008, while as of December 31, 2009, total secured loans from banks was Rs.
972,557.48 lacs.

In fiscal 2008 and 2009, proceeds from issuance of redeemable non-convertible debentures (net of redemptions) was Rs.
119,111.61 lacs and Rs. 169,124.14 lacs, respectively. In the nine months ended December 31, 2009, proceeds from
issuance of redeemable non-convertible debentures (net of redemptions) was Rs. 67,006.98 lacs. As of March 31, 2009,
                                                                  - 107 -
secured redeemable non-convertible debentures was Rs. 482,679.34 lacs as compared to Rs. 312,255.20 lacs as of March
31, 2008, while as of December 31, 2009, secured redeemable non-convertible debentures outstanding was Rs.
553,229.53 lacs.

Our short term fund requirements are primarily funded by cash credit from banks including working capital loans. Cash
credit from banks including working capital loans outstanding as of March 31, 2008 and 2009 was                   Rs.
2,25,646.66 lacs and Rs. 3,16,623.70 lacs. As of December 31, 2009, cash credit from banks including working capital
loans outstanding was Rs. 348,910.53 lacs.

As of December 31, 2009, our outstanding subordinated debt amounted to Rs. 191,682.41 lacs, compared to Rs.
98,959.81 lacs and Rs. 154,776.25 lacs as of March 31, 2008 and 2009, respectively. The debt is subordinated to our
present and future senior indebtedness. Based on the balance term to maturity, as of December 31, 2009, Rs. 123,705.81
lacs of the discounted book value of subordinated debt is considered as Tier II under the guidelines issued by the RBI for
the purpose of capital adequacy computation.

As of December 31, 2009, outstanding commercial paper amounted to Rs. 2,500 lacs as compared to Rs. 21695.00 lacs
and Rs. 48,250.00 lacs as of March 31, 2008 and 2009, respectively.

We are registered as a deposit-taking NBFC with the RBI under Section 45IA of the Reserve Bank of India Act, 1934,
which authorizes us to accept deposits from the public. We do not, however, depend on deposits as our primary source
of funding. As of November 30, 2009, our deposits were rated tAA(Ind) by Fitch. As of December 31, 2009, we had
fixed deposits outstanding of Rs. 8290.59 lacs, compared to Rs. 342.00 lacs and Rs. 488.44 lacs as of March 31, 2008
and 2009, respectively.

We also avail inter-corporate deposits from time to time. As of December 31, 2009, outstanding inter-corporate deposits
amounted to Rs. 24.95 lacs as compared to Rs. 120.64 lacs and Rs.4,657.16 lacs as of March 31, 2008 and 2009,
respectively.

Securitization/assignment of Portfolio against financing activities

We also undertake securitization/assignment transactions to increase our capital adequacy ratio, increase the efficiency
of our loan portfolio and as a cost effective source of funds. We sell part of our portfolio under financing activities from
time to time through securitization/assignment transactions as well as direct assignment. Our securitization/assignment
transactions involve provision of additional collateral and deposits or bank/ corporate guarantee. We carried out our first
securitization/assignment transaction of Rs. 443.12 lacs in February 2000 and since then we have completed 149 more
transactions with an aggregate value of Rs. 1,277,711.75 lacs. In fiscal 2008 and 2009, total book value of loan assets
securitized/assigned was Rs. 211,822.17 lacs and Rs. 312,498.40 lacs, respectively. In the nine months ended December
31, 2009, the total book value of loan assets securitized/assigned was Rs. 326,229.88 lacs.

We continue to provide administration services for the securitized/assigned portfolio, the expenses for which are
provided for, at the outset of each transaction. The gains arising out of securitization/assignment, which vary according
to a number of factors such as the tenor of the securitized/assigned portfolio, the yield on the portfolio
securitized/assigned and the discounting rate applied, are treated as income.

The following tables set forth certain information with respect to our securitization/assignment transactions:

                                                              For the Year ended March 31,                  For the Nine months ended
                                                                                                                  December 31,

                                                       2007                2008                2009                    2009

                                                                                       (Rupees in lacs)

Total number of loan assets securitized/assigned          68,204             65,020               149,860                       140,532
Total book value of loan assets securitized/assigned
                                                       285,979.49         211,822.17           312,498.40                     326,229.88
Sale consideration received for securitized/assigned
assets                                                 311,095.04         248,140.60           338,334.83                     372,295.43
Gain on account of securitization/assignment            29,070.05          36,318.39            41,816.19                      79,562.73
                                                                - 108 -
                                                                                                                           As of March 31,                                     As of
                                                                                                                                                                            December 31,

                                                                                                  2007                            2008                       2009               2009

                                                                                                                                        (Rupees in lacs)

Outstanding credit enhancement                                                                      31,095.67                      56,687.05                    97,459.32     152,736.05
Outstanding liquidity facility                                                                       2,236.77                       7,127.85                    17,137.30      25,976.51
Outstanding subordinate contribution                                                                 6,199.80                       5,159.40                     3,301.71       3,145.49

We are required to provide a credit enhancement for the securitization/assignment transactions by way of either fixed
deposits or corporate guarantees and the aggregate credit enhancement amount outstanding as on December 31, 2009
was Rs. 152,736.05 lacs. In the event a relevant bank or institution does not realize the receivables due under such loan
assets, such bank or institution would have recourse to such credit enhancement.

Treasury Operations

Our treasury operations are mainly focused on meeting our funding requirements and managing short term surpluses.
Our fund requirements are currently predominantly sourced through loans and by issue of debentures to banks, financial
institutions and mutual funds. We also place commercial paper and mobilize retail fixed deposits and inter-corporate
deposits. We have also raised subordinated loans eligible for Tier II capital. We believe that through our treasury
operations, we maintain our ability to repay borrowings as they mature and obtain new loans at competitive rates.

Our treasury department undertakes liquidity management by seeking to maintain an optimum level of liquidity and
complying with the RBI requirement of asset liability management. The objective is to ensure the smooth functioning of
all our branches and at the same time avoid the holding of excessive cash. Our treasury maintains a balance between
interest-earning liquid assets and cash to optimize earnings.

Our treasury department also manages the collection and disbursement activities from our head office in Mumbai. We
actively manage our cash and funds flow using various cash management services provided by banks. As part of our
treasury activities, we also invest our surplus fund in fixed deposits with banks, liquid debt-based mutual funds and
government securities. Our investments are made in accordance with the investment policy approved by the Board.

Our investments are predominantly in government securities and certificates of deposits with banks.

Capital Adequacy

We are subject to the capital adequacy ratio (“CAR”) requirements prescribed by the RBI. We are currently required to
maintain a minimum CAR of 12.00%, as prescribed under the Prudential Norms Directions, 2007, based on our total
capital to risk-weighted assets. As a part of our governance policy, we ordinarily maintain capital adequacy higher than
the statutorily prescribed CAR. As of December 31, 2009, our capital adequacy ratio was 17.07%, compared to the
minimum capital adequacy requirement of 12.00%stipulated by the RBI.

The following table sets out our capital adequacy ratios as of the dates indicated:

                                                                                                                                                                               As of
                                                                                                                                              As of March 31,               December 31,


                                                                                                                                       2007           2008          2009        2009


                                                                                                                                         13.63%
Capital adequacy ratio......................................................................................................................        12.71%      16.35%             17.07%
Tier 1 capital…………………………………………………………………                                                                                                  10.25%     9.84%       11.13%             12.15%




                                                                                                   - 109 -
Competition

We believe that we do not face any significant competition from organized players in our principal business line, the pre-
owned commercial vehicle financing sector. Most of our customers are not a focus segment for banks or large NBFCs, as
these customers lack substantial credit history and other financial documentation on which many of such financial
institutions rely to identify and target new customers. Our experience-based valuation methodology, our expanding
product portfolio, growing customer base and relationship-based approach are key competitive advantages against new
market entrants. Our primary competition is presented by private unorganized financiers that principally operate in the
local market. These private operators have significant local market expertise, but lack brand image and organizational
structure. The small private financiers also have limited access to funds and may not be able to compete with us on
interest rates extended to borrowers, which we are able to maintain at competitive levels because of our access to a
variety of comparatively lower cost of funding sources and operational efficiencies from our scale of operations.
However, private operators may attract certain clients who are unable to otherwise comply with our loan requirements,
such as the absence of an acceptable guarantor or failure of the commercial vehicle to meet our asset valuation
benchmarks. For new commercial vehicle financing, we compete with more conventional lenders, such as banks and
other NBFCs.

Given the relatively minimal scale of our present operations in our other business lines, we do not directly compete with
others in these segments. However, as our operations in our other business lines expand, we may face significant
competition in these segments in future.

Credit Rating

The following table sets forth certain information with respect to our credit ratings as of April 15, 2010:

                                                                      Rating                         Limit in Rs. lacs
Fitch                        Fixed Deposit                           tAA(Ind)                              588
Fitch                        Non-convertible Debenture               AA (Ind)                           450,000
CARE                         Non-convertible Debenture                 AA+                              205,000
Fitch                        Short term                              F1+(Ind)                           150,000
CRISIL                       Short term                                P1+                              200,000
CARE                         Subordinated Debt                         AA                               110,000
Fitch                        Subordinated Debt                       AA (Ind)                           120,000

The Secured NCDs proposed to be issued under this Issue have been rated ‘CARE AA+’ and the Unsecured NCDs
proposed to be issued under this Issue have been rated ‘CARE AA’ by CARE vide their letters dated April 19, 2010.

Risk Management

We have developed a strong risk-assessment model in order to maintain healthy asset quality. The key risks and risk-
mitigation principles we apply to address these risks are summarized below:

Interest Rate Risk

Our results of operations are dependent upon the level of our net interest margins. Net interest income is the difference
between our interest income and interest expense. Since our balance sheet consists of rupee assets and predominantly
rupee liabilities, movements in domestic interest rates constitute the primary source of interest rate risk. We assess and
manage the interest rate risk on our balance sheet through the process of asset liability management. We borrow funds at
fixed and floating rates of interest, while we extend credit at fixed rates. In the absence of proper planning and in a
market where liquidity is limited, our net interest margin may decline, which may impact our revenues and ability to
exploit business opportunities.

We have developed stable long term relationships with our lenders, and established a track record of timely servicing our
debts. This has enabled us to become a preferred customer with most of the major banks and financial institutions with
whom we do business. Moreover, our valuation capabilities enable us to invest in good quality assets with stable,
attractive yields. Significantly, our loans are classified as priority sector assets by the RBI, such that these loans, when
securitized, find a ready market with various financial institutions, including our lenders.

                                                           - 110 -
Liquidity Risk

Liquidity risk arises due to non-availability of adequate funds or non-availability of adequate funds at an appropriate
cost, or of appropriate tenure, to meet our business requirements. This risk is minimized through a mix of strategies,
including asset securitization/assignment and temporary asset liability gap.

We monitor liquidity risk through our asset liability management (“ALM”) function with the help of liquidity gap
reports. This involves the categorization of all assets and liabilities into different maturity profiles, and evaluating these
items for any mismatches in any particular maturities, especially in the short-term. The ALM policy has capped the
maximum mismatches in the various maturities in line with RBI guidelines and ALCO guidelines.

To address liquidity risk, we have developed expertise in mobilizing long-term and short-term funds at competitive
interest rates, according to the requirements of the situation. For instance, we structure our indebtedness to adequately
cover the average three-year tenure of loans we extend. As a matter of practice, we generally do not deploy funds raised
from short term borrowing for long term lending.

Credit risk

Credit risk is the risk of loss that may occur from the default by our customers under the loan agreements with us. As
discussed above, borrower defaults and inadequate collateral may lead to higher NPAs.

We minimize credit risk by requiring that each loan must be guaranteed by another commercial vehicle operator in the
same locality as the borrower, preferably by an existing or former borrower. Furthermore, we lend on a relationship-
based model, and our high loan recovery ratios indicates the effectiveness of this approach for our target customer base.
We also employ advanced credit assessment procedures, which include verifying the identity and checking references of
the proposed customer thoroughly at the lead generation stage. Our extensive local presence also enables us to maintain
regular direct contact with our customers. In this regard, we assign personal responsibility to each member of the lead
generation team for the timely recovery of the loans they originate, closely monitoring their performance against our
Company's standards, and maintain client and truck-wise exposure limits.

Cash management risk

Our branches collect and deposit approximately two-thirds of our customers' payments in cash. Lack of proper cash
management practices could lead to losses. To address cash management risks, we have developed advanced cash
management checks that we employ at every level to track and tally accounts. Moreover, we conduct regular audits to
ensure the highest levels of compliance with our cash management systems.

Employees

As of December 31, 2009 our total employee strength was approximately 12,823.

We have built a highly capable workforce primarily by recruiting and hiring fresh graduates. As our business model
does not require extensive background in banking or the financial services industry, we prefer to hire and train fresh
graduates in the particular operational aspects of our business. Moreover, we prefer to hire our workforce from the
locality in which they will operate, in order to benefit from their knowledge of the local culture, language, preferences
and territory. We emphasize both classroom training and on-the-job skills acquisition. Post recruitment, an employee
undergoes induction training to gain an understanding of the Company and our operations. Our product executives are
responsible for customer origination, loan administration and monitoring as well as loan recovery and this enables them
to develop strong relationships with our customers. We believe our transparent organizational structure ensures efficient
communication and feedback and drives our performance-driven work culture.

In a business where personal relationships are an important driver of growth, product executive attrition may lead to loss
of business. We therefore endeavor to build common values and goals throughout our organization, and strive to ensure
a progressive career path for promising employees and retention of quality intellectual capital in the Company. We
provide a performance-based progressive career path for our employees. For instance, we introduced an employee stock
option plan (“ESOP”) in 2005 for eligible employees at branch manager level and above. We believe our attrition rates
are among the lowest in the industry at managerial levels.
                                                           - 111 -
Intellectual Property

Pursuant to a License and User Agreement dated November 28, 2003 between our Company and SCL (formerly Shriram
Financial Services Holdings Private Limited), we are licensed to use the name "Shriram" and the associated mark for
which we pay certain royalties in the amount of 0.25% of the Company's gross income to Shriram Capital Limited, as
well as an annualized fee equivalent to 0.1% of the total gross funds mobilized by SCL for access to the database of
agents and Chit subscribers. The License and User Agreement which was valid until November 27, 2008, has been
extended until March 31, 2011.

We have also applied for registration of the trademark "AUTOMALL", “NEW LOOK” and “ONE STOP”with the
Registrar of Trademarks in India.

Technology

We use information technology as a strategic tool in our business operations to improve our overall productivity. We
believe that our information systems enable us to manage our nationwide operations network well, as well as to
effectively monitor and control risks.

All our branches are online, connected through VPN (Virtual Private Network) with our Central Server located at
Chennai Data Center and our Disaster Recovery Site located at Mumbai.

Property

Our registered office is at 123, Angappa Naicken Street, Chennai 600 001, Tamil Nadu, India. Our corporate office is at
Wockhardt Towers, Level 3, West Wing, C-2, G Block, Bandra - Kurla Complex, Bandra (East) Mumbai 400 051, India.
As of December 31, 2009, we had 482 branches across India. We typically enter into lease agreements for these strategic
business unit and branch locations.

Collaborations

Except as disclosed herein, our Company has not entered into any collaboration, any performance guarantee or assistance
in marketing by any collaborators.




                                                        - 112 -
                              HISTORY, MAIN OBJECTS AND KEY AGREEMENTS

Brief background of our Company

Our Company was incorporated as a public limited company under the provisions of the Act, by a certificate of
incorporation dated June 30, 1979, issued by the ROC, Tamil Nadu, Chennai. Our Company commenced its operations,
pursuant to a certificate of commencement of business dated October 9, 1979. Subsequently, our Company has obtained
a certificate of registration dated September 4, 2000 bearing registration no. A-07-00459 issued by the RBI to carry on the
activities of a NBFC under section 45 IA of the RBI Act, 1934, which has been renewed on April 17, 2007, (bearing
registration no. 07-00459). The registered office of our Company is 123, Angappa Naicken Street, Chennai-600 001.

Amalgamation of Shriram Investments Limited and Shriram Overseas Finance Limited with our Company

The Hon’ble High Court of Madras vide its order dated November 25, 2005, approved the scheme of arrangement and
amalgamation of the erstwhile SIL, with our Company, (“SIL Scheme of Merger”). The appointed date for the SIL
Scheme of Merger was April 1, 2005 and the record date for the purposes of re-organisation and issue of shares was
December 21, 2005.

The Hon’ble High Court of Madras vide its order dated December 1, 2006, approved the scheme of arrangement and
amalgamation of the erstwhile SOFL with our Company, (“SOFL Scheme of Merger”). The appointed date for the
SOFL Scheme of Merger was April 1, 2005 and the record date for the purposes of re-organisation and issue of shares
was February 9, 2007.

Main objects of our Company

The main objects of our Company as contained in our Memorandum of Association are:

•        To carry on and undertake business as Financiers and Capitalists, to finance operations of all kinds such as
         managing, purchasing, selling, hiring, letting on hire and dealing in all kinds of vehicles, motor cars, motor
         buses, motor lorries, scooters and all other vehicles;

•        To undertake and carry on all operations and transactions in regard to business of any kind in the same way as
         an individual capitalist may lawfully undertake and carry out and in particular the financing Hire Purchase
         Contracts relating to vehicles of all kinds;

•        To carry on and undertake business as Financier and Capitalists to finance operations of all kinds such as
         managing, purchasing, selling, hiring, letting on hire and dealing in all kinds of property, movable or
         immovable goods, chattels, lands, bullion;

•        To undertake and carry on all operations and transactions in regard to business of any kind in the same manner
         as an individual capitalist may lawfully undertake and carryout and in particular financing hire purchase
         contracts relating to property or assets of any description either immovable or movable such as houses, lands,
         stocks, shares, Government Bonds;

•        To carry on and become engaged in financial, monetary and other business transactions that are usually and
         commonly carried on by Commercial Financing Houses, Shroffs, Credit Corporations, Merchants, Factory,
         Trade and General Financiers and Capitalists;

•        To lend, with or without security, deposit or advance money, securities and property to, or with, such persons
         and on such terms as may seem expedient;

•        To purchase or otherwise acquire all forms of immovable and movable property including Machinery,
         Equipment, Motor Vehicles, Building, Cinema Houses, Animals and all consumer and Industrial items and to
         lease or otherwise deal with them in any manner whatsoever including resale thereof, regardless of whether the
         property purchased, and leased be new and/or used;

                                                          - 113 -
•   To provide a leasing advisory counselling service to other entities and/or form the leasing arm for other entities;

•   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 on shore)/ 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, administrators, liquidators, receivers, treasurers, attorneys, nominees and
    agents; and 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, units, 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 of Registrar to Public issue/various investment schemes
    and to act as Brokers to Public Issue;

•   Without prejudice to the generality of the foregoing to acquire any share, stocks, debentures, debenture-stock,
    bonds, units 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 participating
    in syndicates, tender, purchase, (through any stock exchange, OTC exchange or privately), exchange or
    otherwise and to subscribe for the same whether or not fully paid up, either conditionally or otherwise, to
    guarantee the subscription thereof and to exercise and to enforce all rights 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;

•   To engage in Merchant Banking activities, Venture Capital, acquisitions, amalgamations and all related
    merchant banking activities including loan syndication;

•   To carry on the business as manufacturers, Exporters, Importers, Contractors, Sub-contractors, Sellers, Buyers,
    Lessors 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 for others either 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);

•   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,
    bonds or debentures or securities of any Government or Public Authority or Company, gold and silver and
    bullion and to form, promote and 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 advances, 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;



                                                      - 114 -
•      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;

•      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 and 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, local authorities, public sector
       undertakings, companies corporations, co-operative societies, and other similar organizations at national and
       international levels;

•      To carry on the business of buying, selling of trucks and other CVs and reconditioning, repairing, remodelling,
       redesigning of the vehicles and also acting as dealer for the said vehicles, for all the second hand commercial
       and other vehicles and to carry on the business of buying, selling, importing, exporting, distributing,
       assembling, repairing and dealing in all types of vehicles including re-conditioned and re-manufactured
       automobiles, two and three wheelers, tractors, trucks and other vehicles and automobile spares, replacement
       parts, accessories, tools, implements, tyres and tubes, auto lamps, bulbs, tail light and head light bulbs,
       assemblies and all other spare parts and accessories as may be required in the automobile industry.

Key terms of our Material Agreements


(1)    Share subscription agreement dated February 2, 2006 & Amendment Agreement dated September 12,
       2008 with Newbridge India Investments II Limited (“New Bridge”), our Promoter, Sri R. Thyagarajan,
       Sri T Jayaraman, Sri AVS Raja and Shriram Financial Services Holdings Private Limited, (collectively
       “Founders”), Shriram Recon Trucks Limited, Shriram Holdings (Madras) Private Limited and SOFL

       Pursuant to the aforesaid agreement New Bridge has subscribed to 49.00% of the paid-up share capital of our
       Promoter, and our Promoter has subscribed to 244,78,681 (two hundred and forty four lac seventy eight
       thousand six hundred and eighty one) Equity Shares and 160,00,000 (one hundred and sixty lac) warrants of our
       Company. The salient features of the aforesaid agreement are as follows:

(i)    Board of Directors: Under the terms of the aforesaid agreement, our Board shall constitute of 12 (twelve)
       Directors of which two shall be nominees of New Bridge, two shall be nominees of Founders, two shall be
       nominees of UNO Investments and one nominee each of Citicorp and IREDA and the rest shall be independent
       directors. As on the date of this Draft Prospectus, UNO Investments, Citicorp and IREDA do not hold any
       equity shares in the paid up equity share capital of our Company, and consequently are not entitled to appoint
       any nominee on the board of directors of our Company. The Founders shall appoint the Managing Director.
       New Bridge and the Founders shall agree on a panel of not more than 10 (ten) independent directors, to be
       reconstituted every year. The directors nominated by New Bridge and the Founders shall have equal rights and
       privileges. Both New Bridge and Founders shall be entitled to nominate equal number of nominees on each
       committee of our Board. In the event that the size of the Board is increased beyond 12 directors, New Bridge
       and the Founders will each be entitled to appoint three directors on the Board. In the event that any shareholder
       having a right to nominate a director ceases to have such right, then the resulting vacancy shall be filled by the
       appointment of independent directors. In addition, New Bridge, on the one hand, and the Founders, on the other
       hand, are entitled to nominate an equal number of nominees on any committee of the Board.


                                                        - 115 -
(ii)    Quorum: The quorum for any meeting of the committee formed to take decisions on certain reserved matters,
        which require the specific consent of the respective nominees of New Bridge and the Founders shall be 2 (two)
        Directors, of which, one shall be the nominee of the New Bridge or the Founders, or both, as the case may be.

(iii)   Fundamental Issues: Certain reserved matters require the affirmative vote and/or prior consent of the directors
        nominated by New Bridge and the Founders on our Board or any committee thereof. These matters include,
        among others, any further issuance of any Equity Shares by the Company; acquisition of the assets of any other
        business; creation of a joint venture or partnership, or merger, demerger and consolidation or any other business
        combination; disinvestment in any subsidiary; appointment, removal and revision of the compensation of key
        personnel; capital expenditure in excess of Rs.30 lacs; any amendment to the memorandum or articles of
        association of the Company; any amendment in the annual business plan of the Company; commencement of a
        new line of business; any changes to material accounting or tax policies; recommendation of or declaration of
        dividend or distribution of any kind; removal of the statutory or internal auditor; any bankruptcy, dissolution,
        insolvency, recapitalization, reorganization, assignment to creditors, winding up and/or liquidation; an increase
        or reorganization in the issued, subscribed or paid up equity or preference share capital; any connected person
        transaction; any amendment, modification or cancellation of the trademark license agreement (license and user
        agreement) between Shriram Financial Services Holdings Private Limited, as licensor, and the Company for the
        use of the "Shriram" brand and associated logos. In the event that the beneficial ownership of New Bridge in
        the Company, indirectly through our Promoter or directly, becomes greater than that of the Founders, then the
        number of reserved matters requiring the affirmative vote of the directors nominated by the Founders would be
        reduced; moreover, in such event, New Bridge shall also be entitled to appoint and remove the managing
        director (whether designated as managing director, CEO, COO or otherwise) and other key employees of the
        Company and of our Promoter.

(iv)    Exit: As an exit mechanism, New Bridge may, at any time after expiry of two years from September 12, 2008,
        require our Promoter to distribute the shares held by our Promoter in the Company amongst the Founders and
        New Bridge in proportion to their respective holdings in our Promoter; in the alternative, New Bridge may
        require the merger of our Promoter with the Company in order to effect such distribution. Moreover, within
        two years from September 12, 2008, New Bridge is entitled to acquire controlling interest in our Promoter from
        the Founders, subject to the payment of a call option price plus a control premium. The Company, the Founders
        and our Promoter Shriram Holdings (Madras) Private Limited have agreed to jointly and severally indemnify
        New Bridge in the event of any breach of the terms of such Share Subscription Agreement.

(v)     Drag along rights: Drag along rights are also provided for in the Share Subscription Agreement. New Bridge is
        entitled, at any time after March 11, 2011 to require the Founders to sell all or part of the latter's shares or
        warrants in the Company or in our Promoter. In the event that New Bridge does not accept the purchase offer
        of a proposed purchaser as communicated by the Founders, New Bridge may in turn present the Founders with
        the terms of another purchase offer, which shall not provide for a lower purchase price.

        Certain rights enjoyed by New Bridge and the Founders under the aforesaid agreement shall extinguish upon
        sale and/or transfer, (other than to affiliates), of more than 50% of the fully diluted percentage beneficial
        ownership held by New Bridge or the Founders, as the case may be, in our Company.

(2)     Share Purchase Agreement dated March 28, 2007, with Ashley Transport Services Limited (“ATSL”),
        Ashok Leyland Limited and INDUSIND Bank and Shareholders Agreement dated March 28, 2007 with
        Ashok Leyland Limited, Ashley Investments Limited Ashley Holdings Limited (“AL Group”) and Ashley
        Transport Services Limited (“ATSL”), (collectively “Joint Venture Agreements”)
.

        Pursuant to the Joint Venture Agreements, our Company had acquired 4,00,000 (four lac) equity shares of Rs.
        100/- each of ATSL (at Rs 45 per share), representing 40% (forty per cent) of the paid-up share capital of ATSL
        from the Sellers. However current holding of our Company in ATSL has reduced to 15% on account of transfer
        of shares to an associate company. The salient features of the Joint Venture Agreements are as follows:

(i)     Board Composition: The board of directors of ATSL shall have 5 (five) members, of which 2 (two) members
        shall be the nominees of our Company and 3 (three) members shall be the nominees of the AL Group. AL
        Group shall be entitled to appoint the chairman of the board of directors of ATSL.
                                                         - 116 -
(ii)    Prior Consent of Sellers: The day to day affairs of ATSL shall be exercised by the chief executive officer to be
        appointed by AL Group with the consent of the board of directors of ATSL. No decision on certain fundamental
        issues relating to ATSL, as contemplated in the Joint Venture Agreements, shall be taken except with the
        affirmative vote of at least one nominee of our Company and/or its affiliates and one nominee of the AL group,
        respectively, on the board of directors of ATSL. Such fundamental issues inter-alia relate to change of name,
        amendment to memorandum and articles of association, changes in the capital structure, declaration of
        dividend, appointment of functional heads, any proposal for merger/ consolidation / reconstruction/ liquidation,
        change of auditors, change of accounting principles and policies, and approval of employment policies.

(iii)   Transfer of Rights: For a period of 3 (three) years neither party can transfer or assign its shares held in ATSL to
        any person other than an affiliate of such party. Thereafter, the party intending to sell shall give the other parties
        the right of first refusal with respect to the shares of ATSL proposed to be transferred.

(iv)    Non-Compete: Neither our Company nor the AL Group shall compete with the business of ATSL in India,
        during the term of the Joint Venture Agreement, and 3 (three) years from the time they cease to be a party
        thereto. However, the aforesaid restriction shall not apply to investments upto 24% (twenty four percent) of the
        capital of any company.

(3)     License and User Agreement, dated November 28, 2003 with Shriram Chits and Investments Private
        Limited, (now SCL), (“Brand License Agreement”):

        Our Company has entered into the Brand License Agreement with SCL, for the use of the brand name
        “Shriram” and the associated logo of a “man carrying a suit carrying a bag in one hand and the index finger of
        the other raised hand pointing towards a direction with the name “Shriram” inscribed in it”, (collectively
        referred to as the “Shriram Brand”). The salient features of the Brand License Agreement are as follows:

(i)     Permitted Uses and Restrictions on use of the Shriram Brand: Our Company is allowed to use the Shriram
        Brand for carrying on business in the fields of finance and investment, including (a) hire purchase and leasing
        of transport vehicles, (b) hire purchase and leasing of consumer durables, (c) inter-corporate and other means of
        lending, and (d) investment in financial assets in the form of shares, debentures and bonds etc, (“Permitted
        Businesses”). However, we are not entitled to use the Shriram Brand for any business involving (a) speculation,
        (b) lending for film production or distribution, or (c) lending for stock market operations. Further, in the event
        our Company decides to carry on any business other than the Permitted Businesses, we must seek prior
        permission of SCL for the use of the Shriram Brand in connection therewith.

(ii)    Assignment: The Company is not entitled to (a) assign the Brand License Agreement to any third person, or (b)
        to authorize or transfer the right to use the Shriram Brand under the Brand License Agreement in favour of any
        third party.

(iii)   Consideration: In consideration for the rights granted by SCL in connection with the Shriram Brand pursuant to
        the Brand License Agreement, our Company must pay royalty equivalent to 0.25% of the total business of the
        Company, payable at the end of each quarter.

(iv)    Term and termination: The Brand License Agreement is valid for a period of five years from the date thereof,
        and may be renewed by the parties on such terms and conditions as may be mutually agreed. During the
        subsistence of the Brand License Agreement, if any party commits a breach of any obligation or covenant
        contained therein, the other party shall serve a notice of two moths to rectify such breach, and on expiry of the
        aforesaid period of two moths, if such breach is not rectified or is incapable of being rectified, the party serving
        the notice shall be entitled to terminate the Brand License Agreement. Further, the Brand License Agreement
        shall stand terminated in the event (a) our Company is declared insolvent or is in the process of being wound
        up, (b) a receiver is appointed for the management of any of the assets of our Company, and (c) there is any
        change in control vis-à-vis the management of our Company. The Brand License Agreement is valid till March
        31, 2011.

(4)     Agreement dated September 8, 2006 and Supplemental Agreement dated July 20, 2007 with UTI Bank
        Limited, (now known as Axis Bank Limited), (“Axis Bank”), in connection with Co-branded Credit
        Cards, (collectively referred to as “Credit Card Agreement”):

                                                           - 117 -
        Our Company has executed the Credit Card Agreement with Axis Bank, for jointly establishing a co-branded
        credit card programme for the issue of co branded credit cards, (“Card”), issued by Axis Bank which would
        bear trademarks, service marks and emblems, of (a) Axis Bank, (b) our Company, (c) VISA International, and
        (d) any other names, marks and/or logos which the parties may mutually agree upon. The salient features of the
        Credit Card Agreement are as follows:

(i)     Co-branded Card Programme: The Card shall be in an agreed form which will conform to Axis Bank’s card
        design standards and the guidelines issued by VISA International from time to time. The design of the Card
        shall be subject to the prior approval of Axis Bank and shall conform to guidelines formulated by VISA
        international.

(ii)    Issue of the Card: The Cards shall be produced by Axis Bank at its own cost and expenses and shall be issued
        and owned by Axis Bank during the pendency of the Credit Card Agreement.

(iii)   Marketing and distribution: Our Company shall be primarily responsible for implementing the marketing plan
        and for sourcing of the new Card. The marketing plan shall be reviewed once in a year by both parties jointly to
        consider such improvements as may be necessary. Our Company shall be liable to bear all costs in connection
        with marketing of the Card.


(5)     Agreement dated March 25, 2009, as amended by an Amendment Agreement dated September 22, 2009,
        with NuPower Renewables Limited, (“NU Power”) for the sale and transfer of our wind power
        generation turbines, (“NuPower Slump Sale Agreement”)

        Our Company had executed the NuPower Slump Sale Agreement for the sale of our wind power generation
        turbines together with all assets and liabilities thereof as a going concern, (“Wind Power Turbines”). The
        salient features of the NuPower Slump Sale Agreement are as follows:

(i)     Conditions Precedent: Consummation of the NuPower Slump Sale Agreement is subject to certain conditions
        precedent, (“CPs”) inter-alia including:

        •       Our Company shall have received necessary consents to (a) own and operate the Wind Power
                Turbines, and (b) transfer the Wind Power Turbines to NU Power on terms and conditions no more
                onerous than those granted to our Company and no such consent shall have been revoked;

        •       Our Company shall have received the permission of the assessing officer as required under Section 281
                of the IT Act permitting the sale of Wind Power Turbines to NU Power and shall have delivered the
                permission obtained to NU Power;

        •       Our Company shall have repaid the entire loan and/or financial assistance availed by us from banks
                and/or financial institutions with respect to the Wind Power Turbines and shall have provided certified
                true copies of the letters of satisfaction procured in this regard with the release letters releasing all the
                encumbrances on the Wind Power Turbines to NU Power.

(ii)    Part Consideration and refund thereof: Upon execution of the NuPower Slump Sale Agreement, NU Power
        has paid a certain amount as part consideration to our Company. In the event the transaction as contemplated by
        the NuPower Slump Sale Agreement is not consummated by October 31, 2009 or such other date as may be
        extended by NU Power, either due to non fulfilment of the CPs or due to wilful negligence or default by our
        Company, our Company shall forthwith refund and pay the entire amount of the aforesaid part consideration to
        NU Power along with the specified interest thereon and a certain amount of liquidated damages as detailed in
        the NuPower Slump Sale Agreement. Until such time as our Company refunds NU Power, the entire aforesaid
        part consideration along with the interest and liquidated damages, NU Power shall have a charge on the assets
        relating to the Wind Power Turbines.




                                                         - 118 -
(iii)   Direct payments to the Indian Renewable Energy Development Agency Limited, (“IREDA”) and the Bank of
        Maharashtra, (“BOM”): As part consideration to our Company, NU Power is required to make direct
        payments to IREDA and BOM respectively. However, the payments to IREDA and BOM is subject to certain
        CPs, one of which requires our Company to provide NU Power with letters, from all the relevant authorities
        with whom power purchase agreements have been entered into in relation to the Wind Power Turbines,
        approving in principal the assignment of such power purchase agreements in favour of NU Power on the same
        terms and conditions.

(iv)    Part Consideration held in escrow: Our Company had entered into an escrow agreement dated
        September 22, 2009 with NU Power and the State Bank of Patiala (“SBP”) whereunder monies were deposited
        into an escrow account maintained with State Bank of India to be released to our Company, subject to the
        fulfilment of certain CPs.

(v)     Deposit of income generated from the Wind Power Business in escrow: Our Company had entered into another
        escrow agreement dated September 22, 2009 with NU Power and SBP for the deposit of all amounts accrued
        and/or received by our Company from operating the Wind Power Turbines on and from an agreed date up to
        the date of conclusion of the sale, after deducting the expenses incurred by our Company towards the renewal of
        operation and maintenance contracts, insurance contracts for the Wind Power Turbines and such other expenses
        as may be approved by NU Power up to the date of the transfer of the power purchase agreements to NU Power
        (“Escrow Amount”).

(vi)    Register of sale of immoveable property in favour of NU Power: : Our Company had executed and registered
        sale of land admeasuring an aggregate of 79 acres 65 cents in Tamil Nadu in favour of NU Power.

(6)     Agreement dated September 03, 2009, with Bilahari Enterprises Private Limited, (“Bilahari”) for the sale
        and transfer of three wind power generation turbines, (“Bilahari Slump Sale Agreement”)

        Our Company had executed the Bilahari Slump Sale Agreement for sale of three wind power generation
        turbines together with all assets and liabilities thereof as a going concern, (“Wind Power Turbines”). The
        salient features of the Bilahari Slump Sale Agreement are as follows:

(i)     Conditions Precedent: Consummation of the Bilahari Slump Sale Agreement was subject to certain CPs inter-
        alia including:

        •       Our Company shall have received necessary consents to (a) own and operate the Wind Power
                Turbines, and (b) transfer the Wind Power Turbines to Bilahari on terms and conditions no more
                onerous than those granted to our Company and no such consent shall have been revoked;

        •       Our Company shall have received the permission of the assessing officer as required under Section 281
                of the IT Act permitting the sale of Wind Power Turbines to Bilahari and shall have delivered the
                permission obtained to Bilahari;

        •       Our Company shall have received from various purchasers of power and the counterparties to the
                insurance contracts and operation and maintenance contracts entered into by it in relation to its wind
                power generation business, letters confirming that they have no dues pending against our Company.

(ii)    Maintenance of the Wind Power Turbines prior to conclusion of the sale: Our Company had maintained and
        operated the three Wind Power Turbines till the conclusion of the sale and received the income generated on
        and from the date of the Bilahari Slump Sale Agreement till the date of conclusion of the sale. The income
        received was kept in trust for the exclusive benefit of Bilahari. Our Company passed on the income received by
        it to Bilahari after deducting necessary expenses incurred by our Company towards the maintenance of the
        Wind Power Turbines.


                                                        - 119 -
(7)    Agreement dated September 03, 2009, with Hymavathi Enterprises Private Limited, (“Hymavathi”) for
       the sale and transfer of four wind power generation turbines, (“Hymavathi Slump Sale Agreement”)

       Our Company had executed the Hymavathi Slump Sale Agreement for sale of four Wind Power Turbines. The
       salient features of the Hymavathi Slump Sale Agreement are as follows:

(i)    Conditions Precedent: Consummation of the Hymavathi Slump Sale Agreement was subject to certain CPs
       inter-alia including:

       •        Our Company shall have received necessary consents to (a) own and operate the Wind Power
                Turbines, and (b) transfer the Wind Power Turbines to Hymavathi on terms and conditions no more
                onerous than those granted to our Company and no such consent shall have been revoked;

       •        Our Company shall have received the permission of the assessing officer as required under Section 281
                of the IT Act permitting the sale of Wind Power Turbines to Hymavathi and shall have delivered the
                permission obtained to Hymavathi;

       •        Our Company shall have received from various purchasers of power and the counterparties to the
                insurance contracts and operation and maintenance contracts entered into by it in relation to its wind
                power generation business, letters confirming that they have no dues pending against our Company.

(ii)   Maintenance of the Wind Power Turbines prior to conclusion of the sale: Our Company had maintained and
       operated the four Wind Power Turbines till the conclusion of the sale and received the income generated on and
       from the date of the Hymavathi Slump Sale Agreement till the date of conclusion of the sale. The income
       received was kept in trust for the exclusive benefit of Hymavathi. Our Company passed on the income received
       to Hymavathi after deducting necessary expenses incurred by our Company towards the maintenance of the four
       Wind Power Turbines.

(8)    Assignment Agreement dated December 22, 2009 between GE Capital Services India and GE Capital
       Financial Services (collectively, the “GE Entities”) and our Company; (“Assignment Agreement”)

       Pursuant to the terms of an Assignment Agreement our Company has acquired with effect from December 24,
       2009 from the GE Entities, on a non-recourse basis, a certain portfolio of receivables in connection with certain
       loan facilities relating to commercial vehicle loans and construction equipment loans (the “GE Receivables”),
       together with all right, title and interest therein under the relevant underlying loan and security documents
       relating to the GE Receivables as of November 28, 2009




                                                       - 120 -
                                               OUR MANAGEMENT

Board of Directors

The general superintendence, direction and management of our affairs and business are vested in our Board of Directors.
We have not appointed any ‘manager’ within the meaning thereof under the provisions of the Act. Currently, we have 10
(ten) Directors on our Board.

Details relating to Directors

Name, Designation,     Nationality       Date of              Address                    Other Directorships
   Age and DIN                        Appointment
Mr. Arun Duggal        Indian/U.S.    September 9,     A-4, 3rd Floor,         (i) Zuari Industries Limited
Non Executive          citizen        2005             West End,               (ii) Patni Computers Systems Limited
Chairman               (Dual-                          New Delhi – 110021.     (iii) Manipal Acunova Limited
Age: 63                citizenship                                             (iv) Info Edge (India) Limited
                       holder)                                                 (v) Jubilant Energy Limited, Canada
DIN: 00024262                                                                  (vi) Shriram Properties Limited
                                                                               (vii) Dish TV India Limited
                                                                               (viii) Shriram City Union Finance
                                                                               Limited
                                                                               (ix) Mundra Port and Special Economic
                                                                               Zone Limited
                                                                               (x) Shriram EPC Limited
                                                                               (xi) Motrice Limited
                                                                                (xii) FIL Fund Management Private
                                                                               Limited
                                                                               (xiii) Carzonrent (India) Private Limited
                                                                               (xiv) Bellwether Microfinance Fund
                                                                               Private Limited
                                                                               (xv) International Asset Reconstruction
                                                                               Co. Limited
                                                                               (xvi) Blackstone Investment Company
                                                                               Private Limited
                                                                               (xvii) Tanglewood Financial Advisors
                                                                               Private Limited
                                                                               (xviii) Mobile NXT Teleservices
                                                                               (xix)Bank of Bhutan
                                                                               (xx) Shriram Capital Limited

Mr. R. Sridhar         Indian         September 14,    Bungalow No. 33,        (i) Shriram Chits Maharashtra Limited
Managing Director                     2000             Atur Park,              (ii) Ashley Transport Services Limited
Age: 51                                                VN Purav Marg,          (iii) Shriram Holdings (Madras) Private
                                                       Chembur,                Limited
DIN: 00136697                                          Mumbai – 400071.

Mr. S.                 Indian         July 28, 2000    34, Oliver Road,        (i) Galada Finance Limited
Venkatakrishnan                                        Mylapore,               (ii) Shriram City Union Finance Limited
Non Executive                                           Chennai – 600004,      (iii) Shriram Powergen Limited
Director                                               Tamil Nadu.             (iv) Shriram Non-Conventional Energy
Age: 80                                                                        Limited
                                                                               (v) Shriram Housing Finance &
DIN: 00136608                                                                  Development Company Limited
                                                                               (vi) Novochem Laboratories Limited
                                                                               (vii) Madras Shoe Fabric Company
                                                                               Limited

                                                        - 121 -
Name, Designation,     Nationality     Date of             Address                     Other Directorships
  Age and DIN                        Appointment
                                                                            (viii) Shriram Credit Company Limited
                                                                            (ix) Shriram Trade Finance Limited
                                                                            (x) Shriram Industrial Holdings Private
                                                                            Limited
                                                                            (xi) Shriram Exports Private Limited
                                                                            (xii) Ranjani Enterprises Private Limited
                                                                            (xv) Charukesi Investments Private
                                                                            Limited
                                                                            (xvi) Road Safety Club Private Limited
                                                                            (xvii) Rambal Properties Private Limited.
                                                                            (xviii) Dhanashri Investment Private
                                                                            Limited
Mr. S. M. Bafna        Indian        September 9,   22, Gobind Mahal,       (i) Seva Finance Limited
Non-Executive and                    2005           86– B, Marine Drive,    (ii) Isuta Electronics (India) Limited
Independent Director                                Mumbai – 400020.        (iii) Bafna Motors (Mumbai) Private
Age: 48                                                                     Limited
                                                                            (iv) Bafna Motors (Ratnagiri) Private
DIN: 00162546                                                               Limited
                                                                            (v) Bafna Motors Private Limited
                                                                            (vi) Kishor Transport Sevices Private
                                                                            Limited
                                                                            (vii)Rushabh Motors Private Limited
                                                                            (viii)Bafna Aviation Private Limited
                                                                            (ix)BNB Containers Private Limited
                                                                            (x)Urjayant Estate Private Limited
                                                                            (xi)Bafna Health Care Private Limited
                                                                            (xii) Panchavati Automobiles Private
                                                                            Limited.
Mr. M. S. Verma        Indian        October 26,    A – 55, Belvedere       (ii) PTC India Limited
Non-Executive and                    2006           Park, DLF City,         (iii) Visa Steel Limited
Independent Director                                Phase III,              (iv) Jammu & Kashmir Bank Limited
Age: 71                                             Gurgaon – 122002,       (v) Visa Power Limited
                                                    Haryana.                (vi) T.K. International Limited
DIN: 00115431                                                               (vii) Asian Heart Institute and Research
                                                                            Centre Private Limited
                                                                            (viii) International Asset Reconstruction
                                                                            Company Limited.
Mr. Adit Jain          Indian        October 26,    Kachnar House,           (i)International Market Assessment India
Non-Executive and                    2006           F – 63, Radhe Mohan     Private Limited
                                                    Drive,                  (ii)IMA Corporate Advisory Services
Independent Director
                                                    Gadaipur Bund Road,     Private Limited;
Age: 49
                                                    Chattarpur, Mehrauli,   (iii)EIU India Private Limited
                                                    New Delhi – 110030.     (iv)PR Pundit Public Relations Private
DIN: 00835144
                                                                            Limited
                                                                            (v) Mahanagar Telephone Nigam

                                                     - 122 -
Name, Designation,     Nationality      Date of               Address                    Other Directorships
  Age and DIN                         Appointment
                                                                               Limited
                                                                               (vi) Indosolar Limited
Mr. M. M. Chitale      Indian        October 26,      4/46, Vishnu Prasad      (i) Asrec (India) Limited
Non-Executive and                    2006             Society,                 (ii) Larsen & Toubro Limited
                                                      Vile Parle (East),       (iii) Ram Ratna Wires Limited
Independent Director
                                                      Mumbai – 400057.         (iv) ITZ Cash Card Limited
Age: 60
                                                                               (v) ONGC Mangalore Petrochemicals
                                                                               Limited
DIN: 00101004
                                                                               (vi) ONGC Petroadditions Limited
                                                                               (vii) Essel Propack Limited
                                                                               (viii) Foseco India Limited
                                                                               (ix) Principal PNB Asset Management
                                                                               Company Private Limited
Mr. Puneet Bhatia      Indian        October 26,      214 B Aralias             (i) TPG Capital India Private Limited
Non-Executive                        2006             Apartments, DLF PH-      (ii) Shriram Holdings (Madras) Private
Director and                                          V Old Golf Club,         Limited.
Nominee of                                            Gurgaon,
Newbridge India                                       Haryana – 122 009.
Investments II
Limited
Age: 43

DIN: 00143973
Mr S                   Indian        September 22,    33 Paschimi Marg         (i) SUN Group Enterprises Private
Lakshminarayanan                     2009             First Floor, Vasant      Limited
Non-Executive and                                     Vihar, New Delhi -       (ii) Biopure Health Care Private Limited
Independent Director                                  110057                   (iii) ELCOM Systems Private Limited
Age: 63

DIN: 02808698
Mr. Ranvir Dewan       Foreign       October 26,      41,Ewe Boon Road,        (i) PT Bank Tabunean Pensiunan
Non-Executive                        2006             # 11-41, Crystal         Nasional (Indonesia)
Director                                              Tower, Singapore-
Age: 56                                               259335.

DIN: 01254350


Profile of Directors

Mr. Arun Duggal - Chairman

Mr. Arun Duggal is the non-executive Chairman of our Board. Mr. Duggal holds a bachelor’s degree in mechanical
engineering from the Indian Institute of Technology, Delhi and a master’s degree in business administration from the
Indian Institute of Management, Ahmedabad. Mr. Duggal is an experienced international banker and has an experience
of approximately 33 years in the banking and finance industry. He has advised companies on financial strategy, mergers
and acquisitions and on various means of capital raising. He is also a member of the Investment Committee of Axis
Private Equity. He was a member on the Board of Governors of the National Institute of Bank Management. He had a
distinguished career with Bank of America for 26 years and was the Chief Executive of Bank of America in India from
1998 to 2001. He spent ten years with New York corporate office of Bank of America handling multinational
relationships. From 2001 to 2003, he was the Chief Financial Officer of HCL Technologies, India. Currently, he is a
visiting faculty at the Indian Institute of Management, Ahmedabad and teaches banking & finance.

                                                        - 123 -
Mr. R. Sridhar – Managing Director

Mr. R. Sridhar is the Managing Director of our Company. Mr. Sridhar holds a bachelor’s degree in Science and is a
qualified chartered accountant and a fellow member of the Institute of Chartered Accountants of India. Mr. Sridhar has
been associated with the Shriram group since 1985. Mr. Sridhar was appointed as the Managing Director of our
Company for the first time in the year 2000 and was reappointed in the year 2005. Mr. Sridhar has over twenty years of
experience in the financial services sector, especially in commercial vehicle financing. He is also the General Secretary
of the Western India Hire Purchase Association and Vice President of Federation of Indian Hire Purchase Association.
He is also a member of the managing committee of the Finance Industry Development Council.
.
Mr. Puneet Bhatia

Mr. Puneet Bhatia is a non-executive Director on our Board. Mr. Bhatia holds a degree in commerce and masters of
business administration from the Indian Institute of Management, Kolkata. Mr. Bhatia has an experience of
approximately 19 years in the finance and investment sector. Mr. Bhatia represents Newbridge India Investments II
Limited (TPG Group) on our Board. He is currently a partner in TPG Capital, India as well as the Managing Director and
the country head - India for TPG’s Asian business. Prior to joining the TPG group, he was the Chief Executive of GE
Capital India. From 1990 to 1995, he was associated with ICICI Bank in the Project and Corporate Finance group and
thereafter worked as a senior analyst with Crosby Securities from 1995 to 1996.

Mr. S. M. Bafna

Mr. S. M. Bafna is a non-executive Director on our Board. Mr. Bafna is a science graduate from Bombay and began his
career in the year 1984. Mr. Bafna has over 25 years of experience in the automobile industry. He thereafter started
independent dealership of Tata Motors at Ratnagiri, Maharastra in the year 1995 and Mumbai dealership in the year
2001. His company has been one of the leading dealers for Tata Motors Limited. He also holds dealerships of vehicles
manufactured by Honda, Hyundai and Maruti Udyog Limited.
.
Mr. M. S. Verma

Mr. M. S. Verma is a non-executive Director on our Board. A career banker, with over fifty years of experience in
banking and finance, Mr. Verma retired as the Chairman of India’s largest commercial bank, State Bank of India in 1998
and has since then served as advisor to the RBI, non-executive Chairman, IDBI Bank and Chairman of the Country’s
Telecommunication Regulatory Body, the Telecom Regulatory Authority of India (TRAI). Currently, he is on the Board
of Directors of several public and private limited companies and is a member of governing board/council of educational
and research institutions of national and international importance like the National Council of Applied Economic
Research (NCAER), Institute of Economic Growth (IEG) and Jawaharlal Nehru University (JNU).

Mr. M. M. Chitale

Mr. M. M. Chitale is a non-executive Director on our Board. Mr. Chitale holds a bachelor’s degree in Commerce and is a
qualified chartered accountant and a fellow member of the Institute of Chartered Accountants of India. Mr. Chitale has
over 35 years of experience as a practicing chartered accountant. He was the president of the Institute of Chartered
Accountants of India during 1997-98 and a member of “International Auditing Practices Committee” of the International
Federation of Accountants from January 1998 to June 2000. He was nominated by SEBI as a public representative
director on the BSE from October 1998 to July 2000. Currently, Mr. Chitale is a partner in Mukund M. Chitale & Co.

Mr. S. Venkatakrishnan

Mr. S. Venkatakrishnan is a non-executive Director on our Board. Mr. Venkatakrishnan holds a bachelor’s degree in
Mathematics from Madras University and a post graduate degree in Mathematics from Madras University. Mr.
Venkatakrishnan is a member of the Indian Audit and Accounts Service, Government of India, where he has held senior
positions in the Finance, Audit & Accounts department of the Government and other Public Undertakings. He also
functioned as BIFR Director in several companies for a period of five years. He has been an advisor to the Company for
over ten years.

Mr. Ranvir Dewan
                                                         - 124 -
Mr. Ranvir Dewan is a non-executive Director on our Board. Mr. Dewan holds a B.Com (Hons) degree from Shriram
College of Commerce, Delhi University, India. He is a fellow member of the Institute of Chartered Accountants in
England & Wales and a member of the Canadian Institute of Chartered Accountants. Mr. Dewan represents Newbridge
India Investments II Limited on our Board. He has over 30 years of experience in the finance and investment sector. Mr.
Dewan joined TPG-Newbridge Capital in July 2006 and is currently the Head of Financial Institutions Group
Operations. Previously he was Executive Vice President and Chief Financial Officer of Standard Chartered First Bank in
Seoul, Korea. He has also spent over thirteen years at Citibank in various senior positions in its international businesses.
He has also held senior positions with KPMG in Canada and England where he specialized in the audits of financial
institutions.

Mr. Adit Jain

Mr. Adit Jain is the Chairman of IMA India. Previously, Mr. Jain worked with Lazard India, an investment bank as Vice
President and Head of M & A. He has advised several multinational corporations towards the development of their India
strategy and has deposed as an expert witness at commercial litigations in the United States and in Parliamentary
proceedings in India and Australia. He provides briefings to Boards of major international corporations and is a frequent
speaker at emerging market seminars. Mr. Jain has over the years authored over five hundred articles and papers in the
domain of politics, international affairs, foreign policy, the environment and business practices and is a leading
commentator on the economic role of governments. He is the Editor of IMA’s Quarterly India Update, CFO Connect
magazine and the firm’s principal economic commentator. Mr. Jain chairs IMA India’s CEO and CFO forums which
together have over 1,200 corporations on a retainer relationship. He is a non-executive director on the Board of Directors
of Shriram Transport Finance Company Limited, PR Pundit Public Relations and EIU India Private Limited. He is a
member of the Board of Trustees of the Centre for Civil Society and the Adit Jain Foundation. Previously, he worked in
the United Kingdom with Wild Barnsley Engineering and Stag Holdings Plc.

Mr. Jain has a bachelor’s degree in mechanical engineering from the Birla Institute of Technology, India and a master’s
degree in business administration from the Henley Management College, UK. As a keen wildlife photographer, he has
travelled extensively in the Indian Himalayas and spends time in National Parks in India and in East Africa.

Mr. S. Lakshminarayanan

Mr. S. Lakshminarayanan is a non-executive Director on our Board. He holds master’s degree in Science in Chemistry
and post graduate diploma from University of Manchester (U.K.) in Advanced Social & Economic Studies. Mr.
Lakshminarayanan is a member of the Indian Administrative Service (IAS-retired) and as such held several senior
positions in the Ministry of Home Affairs, Ministry of Communications and Information Technology, Ministry of
Information and Broadcasting of the Government of India and in the Department of Tourism, Culture and Public
Relations, Department of Mines, Mineral Resources, Revenue and Relief and Rehabilitation of the Government of
Madhya Pradesh. He has served as the Managing Director of the State Apex Cooperative Bank and Cooperative Oilseed
Growers Federation Limited and has served as Director on the Board of Directors of several Public Sector Undertakings
in the State of Madhya Pradesh. Currently, he is on the Board of Sun Group Enterprises Private Limited and Biopure
Health Care Private Limited.

Remuneration of the Directors

The independent directors are paid sitting fees for attending the various meetings of the Board and of the Committees of
the Board as under:

Meeting                                                                 Overall limit per director (Rs.per meeting)
Meetings of the Board                                                   20,000/-
Meetings of any committee of the Board                                  15,000/-

Appointment and Remuneration of the Managing Director



                                                          - 125 -
Mr. R. Sridhar, has been re-appointed as the managing director of our Company for a period of 5 (five) years with effect
from September 15, 2005, pursuant to a resolution of the shareholders of our Company passed at their AGM held on
September 09, 2005. The current remuneration payable to our managing director, as authorised by an ordinary resolution
passed by the shareholders of our Company at their general meeting held on July 31, 2008, is as follows:

A.        Remuneration:

(i)       Salary: Subject to the provisions of the Act, our managing director shall be entitled to a salary of Rs. 2,00,000/-
          (Rupees two lac only) per month, with an annual increase of 10% (ten per cent);

(ii)      Commission: Our managing director is entitled to such percentage of commission (in addition to salary and
          perquisites) calculated with reference to the net-profits of our Company, in accordance with section 349 and
          section 350 of the Act for each Financial Year, as may be fixed by our Board of Directors, which together with
          the salary and monetary value of the perquisites shall not exceed the ceiling as provided in section 309 of the
          Act;

B.        Perquisites:

(i.)      Housing- Rent free accommodation owned/leased/rented by the Company or housing allowance in lieu thereof
          as per the rules of the Company.

(ii.)     Payment of water, gas, electricity and furnishing charges for residence, to be valued in accordance with Income
          Tax Rules, subject to a maximum of 10% of the salary.

(iii.)    Medical Reimbursement- Reimbursement of medical, surgical and hospitalisation expenses for the Managing
          Director and family subject to a maximum of Rs. 25,000/- per annum.

(iv.)     Leave travel concession for the Managing Director and family, subject to a maximum of Rs. 75,000/- per
          annum.

(v.)      Personal accident/ Group Insurance- The annual premium not to exceed Rs. 4,000/-

(vi.)     Club fees- Subscription limited to a maximum of two clubs. No life membership or admission fees shall be paid
          by the Company. All official expense in connection with such membership incurred would be reimbursed by the
          Company.

(vii.)    Expenditure on official entertainment would be on the Company’s account.

(viii.)   Contribution to Provident Fund, Superannuation Fund or Annuity Fund- As per the rules of the Company.
          These will not be considered or included for the computation of ceiling on perquisites to the extent these either
          singly or put together are not taxable under the Income Tax Act, 1961.

(ix.)     Gratuity not exceeding half a months’s salary for each completed year of service.

(x.)      Encashment of leave at the end of the tenure- As per the rules of the Company.

(xi.)     Company’s car with driver for use on Company’s business and maintenance expenses thereon.

(xii.)    Free telephone at residence.



                                                           - 126 -
(xiii.)   Employees Stock Option- As may be decided by the Remuneration Committee/ Board of Directors from time to
          time according to the ESOP Scheme of the Company.

(xiv.)    Leave as per the Company’s Rules.

(xv.)     Newspaper and periodicals- As per the company’s rules.

(xvi.)    Other terms- As per the company’s Rules, and as may be agreed to by the Board from time to time.

For further details refer to the Section titled “Material Contracts and Documents for Inspection” on page 223 this Draft
Prospectus.

Borrowing Powers of the Board

Pursuant to resolution passed by the shareholders of our Company at their AGM held on July 24, 2009 and in
accordance with provisions of Section 293 (1)(d) of the Companies Act, the Board has been authorised to borrow sums
of money as they may deem necessary for the purpose of the business of our Company upon such terms and conditions
and with or without security as the Board of Directors may think fit, provided that money or monies to be borrowed
together with the monies already borrowed by our Company (apart from temporary loans (including working capital
facilities) obtained from our Company’s bankers in the ordinary course of business) shall not exceed Rs.
300,000,000,000 (Rupees Three Hundred Thousand Million only).

Interest of the Directors

All the directors of our Company, including our independent directors, may be deemed to be interested to the extent of
fees, if any, payable to them for attending meetings of the board or a committee thereof as well as to the extent of other
remuneration and reimbursement of expenses payable to them All the non-executive independent directors of our
Company are entitled to sitting fees for every meeting of the board or a committee thereof. The managing director of
our Company is interested to the extent of remuneration paid for services rendered as an officer or employee of our
Company.

All the directors of our Company, including independent directors, may also be deemed to be interested to the extent of
Equity Shares, if any, held by them or by companies, firms and trusts in which they are interested as directors, partners,
members or trustees and also to the extent of any dividend payable to them and other distributions in respect of the said
Equity Shares.

All our directors may be deemed to be interested in the contracts, agreements/arrangements entered into or to be
entered into by our Company with any company in which they hold directorships or any partnership firm in which they
are partners as declared in their respective declarations. Except as otherwise stated in this Draft Prospectus and
statutory registers maintained by our Company in this regard, our Company has not entered into any contract,
agreements or arrangements during the preceding two years from the date of this Draft Prospectus in which the
directors are interested directly or indirectly and no payments have been made to them in respect of these contracts,
agreements or arrangements which are proposed to be made with them.

Our Company’s directors have not taken any loan from our Company.

Changes in the Directors of our Company during the last three years:

The Changes in the Board of Directors of our Company in the three years preceding the date of this Draft Prospectus are
as follows:

 Name of the Director                  Date of Change        Reason

 Mr. Sanjay Kukreja                    March 30, 2009        Resigned as a Director
                                                          - 127 -
    Mr. Ravindra Bhal                  November      19,     Resigned as Director
                                       2009
    Mr. T.S. Sethurathnam              November      11,     Resigned as Director
                                       2009
    Mr. S Lakshminarayanan             September 22,         Appointed as Director
                                       2009

Shareholding of Directors, including details of qualification shares held by Directors

As per the provisions of our MOA and AOA, Directors are not required to hold any qualification shares. Details of the
shares held in our Company by our Directors, as on April 16, 2010 are provided in the table given below:

Sr.      Name of Director                                             No. of shares       Percentage of the
No.                                                                   held                total paid-up
                                                                                          capital (%)
1        Mr. R. Sridhar                                                    130,176               0.06
2.       Mr. S M. Bafna                                                     1,200                0.00
3.       Mr. S.Venkatakrishnan                                              4448                 0.00

Corporate Governance

Our Company has been complying with the requirements of the applicable regulations, including the listing agreement
with the Stock Exchanges where our securities are listed and the SEBI Regulations, in respect of corporate governance
including constitution of the Board and Committees thereof. The corporate governance framework is based on an
effective independent Board, separation of the Board’s supervisory role from the executive management team and
constitution of the Board Committees, as required under law.

The Board is constituted in compliance with the Companies Act , the listing agreement with Stock Exchanges where our
securities are listed and in accordance with best practices in corporate governance. The Board functions either as a full
Board or through various committees constituted to oversee specific operational areas. The executive management of our
Company provides the Board detailed reports on its performance periodically.

Details of various committees of the Board

Our Company has constituted the following committees:

A.        Audit Committee

The members of the Audit Committee as on March 31, 2010 are:

1.    Mr. M. S. Verma - Chairman
2.    Mr. Puneet Bhatia
3.    Mr. M. M. Chitale
4.    Mr. S. M. Bafna

The terms of reference of the Audit Committee, inter alia, include:

•         Overseeing the financial reporting process.
•         To ensure proper disclosure in the quarterly, half yearly and Annual Financial Statements.
•         To recommend appointment of Auditors and their remuneration.
•         Reviewing, with the management, the Financial Statements before submission to the Board.
•         Reviewing, with the management, performance of Statutory and Internal Auditors, adequacies of the internal
          control systems.

                                                         - 128 -
•        Reviewing the adequacy of internal audit function including the structure of the internal audit department,
         staffing and seniority of the official heading the department, reporting structure, coverage and frequency of
         internal audit.
•        Discussing with Internal Auditors on any significant findings and follow up there on.
•        Reviewing the findings of any internal examinations by the Internal Auditors into matters where there is
         suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the
         matter to the Board.
•        Discussing with Statutory Auditors before the audit commences, about the nature and scope of audit as well as
         post-audit discussion to ascertain any area of concern.
•        To discuss with management, the senior internal audit executives and the Statutory Auditor/s the Company's
         major risk exposures and guidelines and policies to govern the processes by which risk assessment and risk
         management is undertaken by the Company, including discussing the Company’s major financial risk
         exposures and steps taken by management to monitor and mitigate such exposures and from time to time
         conferring with another Committee/s of the Board about risk exposures and policies within the scope of such
         other Committee’s oversight.
•        To look into the reasons for substantial defaults in the payment to the depositors, debenture holders,
         shareholders (in case of non payment of declared dividends) and creditors, if any.
•        To review the functioning of the Whistle Blower Mechanism.
•        Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

B.       Remuneration Committee

The members of the Remuneration Committee as on March 31, 2010 are:

1.   Mr. Adit Jain - Chairman
2.   Mr. Puneet Bhatia
3.   Mr. M. M. Chitale
4.   Mr. S. M. Bafna

The terms of reference of the Remuneration Committee, inter alia, include:

The Committee is responsible for assisting the Board of Directors in the Board’s overall responsibilities relating to
determination on their behalf and on behalf of the shareholders with agreed terms of reference, our Company’s policy on
specific remuneration packages and any compensation payment for Managing Director, Whole-time Directors and
Executive Directors. The role of the Committee includes:

•        To provide independent oversight of and to consult with management regarding the Company’s compensation,
         bonus, pension, and other benefit plans, policies and practices applicable to the Company’s executive
         management.

•        To develop guidelines for and annually review and approve (a) the annual basic salary, (b) the annual incentive
         and bonus, including the specific goals and amount, and (c) equity compensation for the Managing Director and
         the other executive officers of the Company.

•        To review and approve (a) employment agreements, severance arrangements and change in control
         agreements/provisions, and (b) any other benefits, compensation or arrangements, for the Managing Director
         and the other executive officers of the Company.

Further, the Committee is responsible for assisting the Board of Directors in the Board’s overall responsibilities relating
to the ESOP including, administration of our Company’s stock incentive plans, and other similar incentive plans, and
interpret and adopt rules for the operation thereof. The Committee’s responsibility also covers establishment of
guidelines for and approval of the grant of stock options to key employees, officers and directors of our Company,
including determination of the number of shares to be covered by each option, whether the option will be an incentive
stock option or otherwise, and the vesting schedule for such options.

C.       Shareholders’ and Investors’ Grievance Committee
                                                          - 129 -
The members of the Shareholders’ and Investors’ Grievance Committee as on March 31, 2010 are:

1.   Mr. M. M. Chitale - Chairman
2.   Mr. R. Sridhar

The Committee is responsible for assisting the Board of Directors in the Board’s overall responsibilities relating to
attending to and redressal of the grievances of the shareholders and the investors of our Company. The Committee in
particular looks in to:

•        The listing of securities on stock exchanges.

•        The shareholders' and investors' complaints on matters relating to transfer of shares, non-receipt of annual
         report, non-receipt of dividends and matters related thereto.

•        The matters that can facilitate better investor services and relations.

•        Attending to investors' queries and complaints regarding transfer, dividend, annual reports, etc

•        Attending to complaints of investors routed by SEBI/Stock Exchanges/RBI.

•        The amounts transferable to Investor Education and Protection Fund.

•        The profile of investors.

•        Taking decisions in connection with issue of global depository receipts, and

•        The secretarial audits.

D.       Asset liability Management Committee

The members of the Asset liability Management Committee as on March 31, 2010 are:


1.   Mr. R. Sridhar - Chairman
2.   Mr. Ranvir Dewan
3.   Mr. Parag Sharma

Terms of Reference: The committee is responsible for assisting the Board of Directors in Balance Sheet planning from
risk return perspective including the strategic management of interest and liquidity risk. Its functions include:

•        Liquidity risk management

•        Management of market risk

•        Funding and capital planning

•        Profit planning and growth projection

•        Forecasting and analysing future business environment and preparation of contingency plans

E.       Banking and Finance Committee

The members of the Banking and Finance Committee as on March 31, 2010 are:

1.       Mr. R. Sridhar - Chairman
                                                            - 130 -
2.      Mr. V. N. Kelkar
3.      Mr. Parag Sharma

Terms of Reference: The Banking and Finance Committee has been formed to monitor resources mobilisations and to
ensure efficient and timely decisions on the matters relating to banking and finance activities of our Company. The
Committee meets regularly to discharge its functions.

Payment of benefits and profit-share to Employees

Except entitlement to stock options under the ESOP, and payments in accordance with the terms of appointment of our
employees, we have not paid or granted any amounts or benefits to our employees, in the two years preceding the date of
this Draft Prospectus. Our employees are not entitled to any share in the profits of our Company.




                                                        - 131 -
                                                   OUR PROMOTER

Profile of our Promoter

Our Promoter is Shriram Holdings (Madras) Private Limited.

Shriram Holdings (Madras) Private Limited was incorporated as a private limited company under the Act, with the name
Rambal Holdings Private Limited, vide a certificate of incorporation dated April 19, 1993 issued by the ROC, Tamil
Nadu. Subsequently, the name of our Promoter was changed to Shriram Holdings (Madras) Private Limited and a fresh
certificate of incorporation dated February 11, 1994 was issued by the Registrar of Companies, Tamil Nadu. The
registered office of our Promoter is located at Mookambika Complex, No.4, Lady Desika Road, Mylapore, Chennai 600
004. Our Promoter is primarily engaged in the business of holding shares and investments in our Company. Our
Promoter has not been named or set out as a promoter of any other company in any offer document, filing with stock
exchange(s) or with any regulatory and/or statutory authorities. Further, besides holding shares of our Company, our
Promoter does not directly or indirectly hold shares in the share capital of any company. There are no common pursuits
between our Company and our Promoter.

Interest of Promoter in our Company

Except as stated under the section titled “Financial Information” beginning on page 136 of this Draft Prospectus and to
the extent of their shareholding in our Company, the Promoter does not have any other interest in our Company’s
business. Further, our Promoter has no interest in any property acquired by our Company in the last two years from the
date of this Draft Prospectus, or proposed to be acquired by our Company.

Our Promoter does not propose to subscribe to this Issue.

Other than the payment of dividend on the shares held by our Promoter in the share capital of our Company, and issue of
the following Equity Shares and warrants convertible into Equity Shares, interest paid on Inter-corporate Deposit, we
have not paid or granted any amounts or benefits, in the two years preceding the date of this Draft Prospectus.

Details of Shares allotted to our Promoter during the last two FY


 Sr.                                                            Date of
 No.                  Nature of Transaction                    allotment        No. of Securities   Issue Price (Rs.)
           Conversion of Warrants issued on December
     1.    14, 2007                                         June 12, 2009              80,00,000         300/-

Shareholding Pattern of our Promoter as on April 16, 2010:

Sr.       Name of Shareholder                                         No. of Shares             Percentage
No.                                                                                        Shareholding(%)
1.        Shriram Capital Limited                                       1,86,56,419                   50.17
2.        Newbridge India Investments II Limited                        1,82,22,639                   49.00
3.        Tanglewood Financial Advisors Private                            3,10,000                    0.83
          Limited
Total                                                                   3,71,89,058                   100.00

     Board of directors of our Promoter as on March 31, 2010



1.        Mr. D.V. Ravi

                                                            - 132 -
2.      Mr. G.V. Raman

3.      Mr. R. Sridhar

4.      Mr. Amol Jain

5.      Mr. Daniel A. Carroll

6.      Mr. Puneet Bhatia

Changes in the board of directors

There have been no changes in the board of directors of our Promoter in the last three years preceding the date of this
Draft Prospectus.

Financial Performance of our Promoter for the last three financial years
                                                                                                           Rs. in Lacs
Particulars                                             FY 2007                FY 2008                FY 2009
Balance Sheet

SOURCES OF FUNDS
Shareholder Funds:
Share Capital                                                       2,969.29               3,138.11           3,138.91

Reserves and Surplus                                              71,894.22              79,266.66           83,754.73

Total                                                             74,863.51              82,404.77           86,893.64

APPLICATION OF FUNDS
Investments                                                       72,936.01              82,291.21           82,291.21
Deferred Tax Asset (Net)                                              43.31                  44.40               51.79
Current Assets
Cash and Bank Balances                                             1,850.28                 159.49              180.44
Loans & Advances                                                      36.24                  43.82            4,387.50
Less: Current Liabilities                                              2.33                 134.15               17.30
Net Current Assets                                                 1,884.19                  69.16            4,550.64
Total                                                             74,863.51              82,404.77           86,893.64

Profit and Loss Account

INCOME
Dividend Income                                                     1,808.93               2,561.15           4,355.06
Interest Received                                                     110.46                  47.36             150.09
Total                                                               1,919.39               2,608.51           4,505.15

EXPENDITURE
Interest Paid                                                           0.00                131.70                1.70

Administrative Expenses                                              365.80                    1.07              31.02
                                                        - 133 -
Particulars                               FY 2007              FY 2008               FY 2009
Audit Fees                                              0.07                  0.10              0.17
Total                                                 365.87                132.87             32.89
Net Profit Before Tax                               1,553.52              2,475.64          4,472.26
Add: Provision for Deferred Tax                        53.66                  1.08              7.39
Less : Provision for -Taxation                             -                     -             14.77
Net Profit After Tax                                1,607.18              2,476.72          4,464.88
Balance brought down from Previous Year                75.13             1682.31        4,159.03
Surplus carried over to Balance Sheet               1,682.31              4,159.03           8623.91




                                          - 134 -
                                                OUR SUBSIDIARIES


As on the date of this Draft Prospectus our Company has the following two subsidiaries:

1.      Shriram Equipment Finance Company Limited, (“SEFCL”):

        SEFCL was incorporated pursuant to a certificate of incorporation dated December 15, 2009 issued by the
        Registrar of Companies, Chennai, Tamil Nadu, and having its registered office situated at 123, Angappa
        Naickan Street, Chennai 600001, Tamil Nadu, India.

        Shareholding Pattern:

        As on the date of this Draft Prospectus our Company holds 100% of the paid-up equity share capital of SEFCL,
        comprising of 2,100,000 shares of Rs. 10/- each.

        Board of Directors:

        The board of directors of SEFCL comprises of the following persons:

        1.       Mr.Umesh Revankar;
        2.       Mr. V.N. Kelkar and
        3.       Mr. Parag Sharma.

2.      Shriram Automall India Limited, (“SAIL”):

        SAIL was incorporated pursuant to a certificate of incorporation dated February 11, 2010 issued by the
        Registrar of Companies, Chennai, Tamil Nadu and having its registered office situated at 123, Angappa
        Naickan Street, Chennai 600001,Tamil Nadu, India.

        Shareholding Pattern:

        As on the date of this Draft Prospectus our Company holds 100% of the paid-up equity share capital of SAIL,
        comprising of 50,000 shares of Rs. 10/- each.

        Board of Directors:

        The board of directors of SAIL comprises of the following persons:

        1.       Mr. C.V.T Chari;
        2.       Mr. Raymond Rebello; and
        3.       Ms. Reena Mehra.




                                                        - 135 -
                             SECTION V : FINANCIAL INFORMATION

Sl No. Particulars                                                               Page No.
1.     Joint examination report on Reformatted Unconsolidated Summary            F-1
       Financial Statements as of and for the financial years ended March 31,
       2005, 2006, 2007, 2008 and 2009 and for the nine months ended
       December 31, 2009 of S. R. Batliboi & Co. and G. D. Apte & Co.
2.     Reformatted Unconsolidated Summary Financial Statements as of and for     F-4
       the years ended March 31, 2005, 2006, 2007, 2008 and 2009 and for the
       nine months ended December 31, 2009
3.     Joint examination report on Reformatted Consolidated Summary Financial    F-158
       Statements as of and for the nine months ended December 31, 2009 of S.
       R. Batliboi & Co. and G. D. Apte & Co.
4.     Reformatted Consolidated Summary Financial Statements as of and for the   F-161
       nine months ended December 31, 2009




                                                      - 136 -
S.R.BATLIBOI & Co.                                                                    G. D. Apte & Co.
Chartered Accountants                                                                 Chartered Accountants
6th Floor, Express Tower                                                              Dream Presidency
Nariman Point                                                                         202 / 17E Shivajinagar
Mumbai – 400 021                                                                      Off Apte Road
                                                                                      Pune - 411 004


                                                         Auditors' report


To
The Board of Directors
Shriram Transport Finance Company Limited
3rd Floor, West Wing
Wockhardt Tower
Bandra Kurla Complex
Bandra – East
Mumbai – 400051

Dear Sirs,

1. We S.R.Batliboi & Co. (“SRB”) and G.D.Apte & Co. (“GDA”) have jointly examined the attached unconsolidated
   financial information of Shriram Transport Finance Company Limited (‘Company’) for the nine months period
   ended December 31, 2009 and as at March 31, 2009, 2008, 2007, 2006 and 2005 approved by an authorized
   delegate of the Board of Directors and prepared by the Company in accordance with the requirements of:
     a.        paragraph B(1) of Part II of Schedule II to the Companies Act, 1956 ('the Act') and
     b.        the Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 ('the
               Regulations') issued by the Securities and Exchange Board of India ('SEBI'), as amended from time to time in
               pursuance of Section 11 of the Securities and Exchange Board of India Act, 1992 (the “SEBI Act”).
     SRB and GDA are collectively referred to as the "Joint Auditors" and the references to the Joint Auditors as "we",
     "us" or "our", in this letter, shall be construed accordingly.
2.   We have examined such unconsolidated financial information taking into consideration:
     a.        the terms of reference dated April 2, 2010 received from the Company and statement of joint responsibilities of
               auditors dated April 2, 2010, requesting us to carry out the assignment, in connection with the Offer Document
               (‘OD’) being issued by the Company for its proposed public offer of non-convertible debentures (‘NCDs’),
               having a face value and issue price of Rs. 1,000 each (referred to as the 'Offering') and
     b.        The Guidance Note on Reports in Company Prospectuses (Revised) issued by the Institute of Chartered
               Accountants of India.


Unconsolidated Financial information as per audited unconsolidated financial statements:
3.   The unconsolidated financial information of the Company has been extracted by the management from:

          a.       the Unconsolidated balance sheet of the Company as at December 31, 2009, and the related
                    Unconsolidated profit and loss account and Unconsolidated cash flow statement for the period April 1,
                    2009 to December 31, 2009, the Unconsolidated balance sheet as at March 31, 2009, 2008 and 2007 and
                    the related Unconsolidated profit and loss account and Unconsolidated cash flow statement for the year
                    ended March 31, 2009, 2008 and 2007 (Collectively referred to as the “Audited Unconsolidated Financial
                    Statements”) jointly audited by us;

          b.        Unconsolidated balance sheet of the Company as at March 31, 2006 and 2005 and the related
                    Unconsolidated profit and loss account and Unconsolidated cash flow statement for the years ended
                                                                F-1
              March 31, 2006 and 2005 (the “Audited Prior Year Unconsolidated Financial Statements”) solely audited
              by GDA.


    These audited unconsolidated financial statements and the audited prior year unconsolidated financial statements
    have been approved by an authorized delegate of the Board of Directors. For the year ended March 31, 2006 and
    March 31, 2005 financial statements has been solely audited by GDA and accordingly reliance has been placed by
    SRB on the financial statements for the said years. For the purpose of placing reliance on audit reports of GDA,
    SRB has not performed any additional procedures to assess adequacy or otherwise of procedures carried out by
    GDA for issuing these audit reports.

4. In accordance with the requirements of Paragraph B of Part II of Schedule II of the Act, the SEBI Regulations, terms
    of our engagement agreed with you and statement of joint responsibilities of auditors, we further report that:
    a)   The Reformatted Unconsolidated Summary Statement of Assets and Liabilities and the schedules forming part
         thereof, Reformatted Unconsolidated Summary Statement of Profit and Loss and the schedules forming part
         thereof and the Reformatted Unconsolidated Summary Statement of Cash Flow (‘Reformatted Unconsolidated
         Summary Statements’) of the Company, including:
         (i) as at and for the years ended March 31, 2006 and March 31, 2005 are solely examined and reported by
         GDA on which no audit or procedures are performed by SRB and reliance is placed by SRB;
         (ii) and as at and for the nine months period ended December 31, 2009 and as at and for the years ended March
         31, 2009, 2008 and 2007, jointly examined by us;
         have been set out in Annexure I to V to this report. These Reformatted Unconsolidated Summary Statements
         are after regrouping in our opinion are appropriate and more fully described in Significant Accounting Policies
         and Notes (Refer Annexure XIII)
    b) Based on the above and also as per the reliance placed by SRB on the audit reports submitted by the GDA for
       the respective years we state that:
             the Reformatted Unconsolidated Summary Statements have to be read in conjunction with the notes given
             in Annexure XIII;
             the figures of earlier periods have been regrouped (but not restated retrospectively for change in
             accounting policy), wherever necessary, to confirm to the classification adopted for the Reformatted
             Unconsolidated Summary Statement as at/for the year ended December 31, 2009;
             there are no extraordinary items which need to be disclosed separately in the reformatted unconsolidated
             summary statements; and
             there are no qualifications in the auditors’ reports, which require any adjustments to the reformatted
             unconsolidated summary statements.

    5.   We have not jointly audited any unconsolidated financial statements of the Company as of any date or for any
         period subsequent to December 31, 2009. Accordingly, we express no opinion on the financial position, results
         of operations or cash flows of the Company as of any date or for any period subsequent to December 31, 2009.

    Other unconsolidated Financial Information:

    6.   At the Company’s request, we have also examined the following unconsolidated financial information
         proposed to be included in the OD prepared by the management and approved by an authorized delegate of the
         Board of Directors of the Company and annexed to this report relating to the Company for the nine months
         period ended December 31, 2009 and for the years ended March 31, 2009, 2008, 2007, 2006 and 2005. In
         respect of the years ended March 31, 2006 and 2005 this information have been included based on the audit
         reports submitted by the GDA and relied upon by SRB:

         i. Statement of contingent liabilities, enclosed as Annexure VI
         ii. Statement of dividend paid/proposed, enclosed as Annexure VII
         iii. Statement of accounting ratios relating to earnings per share, net asset value, return on networth, enclosed
              as Annexure VIII
         iv. Statement of Secured and Unsecured Loans including terms and conditions, enclosed as Annexure IX & X
                                                           F-2
        v. Capitalization Statement as at March 31, 2009, enclosed as Annexure XI
        vi. Statement of tax shelters, enclosed as Annexure XII

   7.   In our opinion, the unconsolidated financial information as disclosed in the annexures to this report, read with
        the respective significant accounting policies and notes disclosed in Annexure XIII, and after making re-
        groupings as considered appropriate and disclosed, has been prepared in accordance with Paragraph B(1) of
        Part II of Schedule II of the Act and the Regulations.
   8.   This report should not be in any way construed as a reissuance or redating of any of the previous audit reports
        issued by us or by other firm of Chartered Accountants, nor should this report be construed as a new opinion on
        any of the unconsolidated financial statements referred to herein.
   9.   We have no responsibility to update our report for events and circumstances occurring after the date of the
        report for the financial position, results of operations or cash flows of the Company as of any date or for any
        period subsequent to December 31, 2009.
   10. This report is intended solely for your information and for inclusion in the OD in connection with the Offering
       of the Company, and is not to be used, referred to or distributed for any other purpose without our prior written
       consent.




For S.R.BATLIBOI & Co.                                                 For G.D.Apte & Co.
Firm registration number: 301003E                                      Firm registration number: 100515W
Chartered Accountants                                                  Chartered Accountants



per Shrawan Jalan                                                      per U. S. Abhyankar
Partner                                                                Partner
Membership No.: 102102                                                 Membership No.: 113053
Mumbai, April 16, 2010                                                 Mumbai, April 16, 2010




                                                         F-3
                      Reformatted summary of Assets and Liabilities                                                                Annexure I

                                                                                                                                   (Rs. in lacs)
                                                  As at December
                 Particulars           Schedule                                                     As at March 31,
                                                         31,
                                                        2009          2009             2008               2007          2006         2005

        Assets

A       Fixed Assets and Intangible       1             4,899.34       13,426.57       14,264.44          16,746.53    15,722.12      4,912.41
        Assets (Net) (including
        CWIP)

B       Investments                       2           125,493.97       65,476.33      138,512.02          22,457.16      915.42         407.49

C       Deferred Tax Asset (Net)                        5,404.50          2,639.48              -                 -            -             -

D       Current Assets                    3          2,661,783.68   2,377,211.62     1,654,704.81      1,023,399.87   572,319.69    181,788.15

E       Other Loans & Advances            4            64,898.28       40,219.23       19,379.58          20,931.89    17,945.76      9,458.96


F       Total (A+B+C+D+E)                            2,862,479.77   2,498,973.23     1,826,860.85      1,083,535.45   606,902.99    196,567.01

        Liabilities


G       Secured Loans                     5          1,914,975.11   1,677,459.31     1,154,494.87        630,015.59   374,201.79    129,998.95


H       Unsecured Loans                   6           340,637.49      334,671.85      322,807.83         239,495.26    65,279.01     16,115.93


I       Deferred tax Liability (Net)                            -                -       3,592.21          8,661.98    13,368.85      5,349.98

J       Current Liabilities               7           247,519.34      211,907.94      137,279.30          81,430.61    61,279.78     20,189.65


K       Provisions                        8            53,383.85       43,270.53       27,050.74          15,304.49     8,924.98      2,611.34


L       Total (G+H+I+J+K)                            2,556,515.79   2,267,309.63     1,645,224.95        974,907.93   523,054.41    174,265.85


M       Net Worth (F-L)                               305,963.98      231,663.60      181,635.90         108,627.52    83,848.58     22,301.16

        Represented By
(i)     Share Capital                     9            21,279.86       20,353.56       20,315.94          18,418.27    16,921.05      9,073.50
(ii)    Share application money
        pending allotment                                   12.97            13.80          21.37                 -           -              -
(iii)   Stock Option Outstanding                         1,497.93         2,138.90       1,826.64          1,227.38      353.49              -
(iv)    Optionally Convertible
        warrants                                               -        2,400.00        2,400.00             772.80     1,992.03        103.81
(v)     Reserves and Surplus             10           286,716.43      206,757.34      157,071.95          88,222.80    64,623.18     13,168.28
(vi)    Less : Miscellaneous
        Expenditure (to the extent
        not written off or adjusted)     11              3543.21               -               -              13.73        41.17         44.43
        Total (i+ii+iii+iv+v-vi)                      305,963.98      231,663.60      181,635.90         108,627.52    83,848.58     22,301.16




                                                                    F-4
The accompanying statement of Significant Accounting Policies and Notes to Accounts on Summary Financial
Statements are integral part of this statement.




As per our report of even date

For S. R. BATLIBOI & Co.         For G. D. Apte & Co.     For and on behalf of the Board of Directors
Chartered Accountants            Chartered Accountants    Shriram Transport Finance Company Limited




per Shrawan Jalan                U. S. Abhyankar          R Sridhar               S. Venkatakrishnan
Partner                          Partner                  Managing Director       Director
Membership No. 102102            Membership No. 113053



Mumbai                                                    K. Prakash
                                                          Vice President (Corporate Affairs) & Company
                                                          Secretary




                                                    F-5
                     Reformatted Summary of Profit and Loss Account
                                                                                                                           Annexure II

                                                                                                                           (Rs. in lacs)

                                                               For the
                                                               period
                                                              April 01,
                                                                                          For the year ended March 31,
                     Particulars                   Schedule    2009 to
                                                              December
                                                                 31,
                                                                2009        2009         2008         2007         2006         2005

A     Income

i     Income from Operations                          12      323,209.53   365,978.05   245,328.68   140,299.54    88,534.58   33,831.76

ii    Other Income                                    13        3,829.81     7,134.92     5,574.00     1,839.06     2,095.93     737.08

      Total Income                                            327,039.34   373,112.97   250,902.68   142,138.60    90,630.51   34,568.84


B     Expenditure


i     Interest & Other Charges                        14      167,377.84   197,767.21   129,661.64    73,833.11    41,913.24   16,561.34
ii    Raw Material Consumed                           15               -       687.17       258.06            -            -           -
iii   Personnel Expenses                              16       16,396.29    20,053.60    12,547.76     7,263.39     4,776.62    1,421.88
iv    Operating & Other Expenses                      17       20,031.75    27,925.50    19,476.96    13,815.54    13,201.72    6,101.76
v     Depreciation                                              1,196.22     3,480.59     3,705.97     1,281.85       969.02      352.03
vi    Impairment loss/(Reversal) on Fixed assets
      & stock                                                          -       560.87            -     (296.72)         9.97      119.63
vii   Provisions & Write offs (net)                   18       30,842.97    30,574.92    24,668.99    17,319.01     8,143.07    2,225.31

      Total Expenditure                                       235,845.07   281,049.86   190,319.38   113,216.18    69,013.64   26,781.95


C     Net Profit Before Taxation (A-B)                         91,194.27    92,063.11    60,583.30    28,922.42    21,616.87    7,786.89


D     Provision for taxation
      Current tax                                              33,090.61   34,998.86     26,387.42    14,445.62     5,984.29    1,464.23
      Deferred tax                                            (2,765.02)   (4,477.15)   (5,069.77)    (4,706.87)    1,345.26    1,390.28
      Fringe Benefit Tax                                              -       301.19       283.00        143.96       123.22           -

      Total Tax                                                30,325.59    30,822.90    21,600.65     9,882.71     7,452.77    2,854.51


E     Net Profit after Taxation (C-D)                          60,868.68    61,240.21    38,982.65    19,039.71    14,164.10    4,932.38

      Balance in Profit & Loss Account brought
      forward                                                  58,309.25   27,486.21    12,248.92     5,322.65     3,396.32     1,914.29
          on amalgamation of SIL                                       -           -            -            -     3,387.15            -
          on amalgamation of SOFL                                      -           -            -            -       106.96            -

      Provision for Dividend no longer required                        -            -           -             -            -        4.76

F     Balance Available for Appropriations                    119,177.93    88,726.42   51,231.57    24,362.36     21,054.53    6,851.43




                                                                 F-6
    Reformatted Summary of Profit and Loss Account
                                                                                                                                       Annexure II

                                                                                                                                   (Rs. in lacs)

                                                               For the
                                                             periodApril
                                                             01, 2009 to                    For the year ended March 31,
                   Particulars                    Schedule    December
                                                                 31,
                                                                2009          2009        2008              2007        2006              2005
G   Appropriations

    Dividend - Cumulative Redeemable
    Preference Shares                                                  -             -               -              -     423.67           228.21
    Equity Shares - Interim dividend                            4,254.76      2,035.03    2,031.35         1,749.01     4,271.43           519.50
    Equity Shares - Final dividend                                325.18         10.52      138.85
    Equity Shares - Proposed final dividend                            -      8,140.46    8,125.42         3,683.17       559.38           981.43
    Tax on dividend                                               778.36      1,731.16    1,749.74           871.26       736.95           225.97
    Short Provision for Dividend Tax of
    previous Year                                                      -             -            -                -       18.09                 -
    Transfer to statutory reserve                                      -     12,300.00    7,800.00         3,810.00     2,834.01          1,000.00
    Transfer to general reserve                                        -      6,200.00    3,900.00         2,000.00     1,500.00           500.00
    Transfer to Capital Redemption Reserve                                           -            -                -    5,388.35                -
    Transfer to debenture redemption reserve                     6802.27             -            -                -               -            -

    Total Appropriations                                       12,160.57     30,417.17    23,745.36        12,113.44    15,731.88         3,455.11


H   Balance carried to Balance Sheet (F-G)                    107,017.36     58,309.25    27,486.21       12,248.92     5,322.65          3,396.32




    The accompanying Statement of Significant Accounting Policies and Notes to accounts on Summary Financial
    Statements are integral part of this statement.

    As per our report of even date

    For S. R. BATLIBOI & Co.                  For G. D. Apte & Co.         For and on behalf of the Board of Directors
    Chartered Accountants                     Chartered Accountants        Shriram Transport Finance Company Limited


    per Shrawan Jalan                         U. S. Abhyankar              R Sridhar                     S. Venkatakrishnan
    Partner                                   Partner                      Managing Director             Director
    Membership No. 102102                     Membership No. 113053



    Mumbai                                                                 K. Prakash
                                                                           Vice President (Corporate Affairs) & Company
                                                                           Secretary




                                                                 F-7
                                                                                                                                Annexure III
 Reformatted Summary of Cash Flow Statement
                                                                                                                                 (Rs in lacs)

                                                      For the                             For the year ended March 31,
                                                    periodApril
                  Particulars                       01, 2009 to
                                                   December 31,       2009            2008           2007           2006             2005
                                                       2009

A. Cash flow from operating activities
Net Profit before taxation                            91,194.27      92,063.11       60,583.30      28,922.42      21,616.87         7,786.89
Depreciation                                           1,196.22       3,480.59        3,705.97       1,281.85         969.02           352.03
Depreciation netted off against income on Sale
of windmill                                                19.04              -              -              -              -                -
Share and debenture issue expenses written off                 -              -          13.74          27.44          39.35            22.85
(Profit) / loss on sale of fixed assets (net)            (88.78)          87.77          17.39         231.02          33.00             7.63
(Profit) / loss on sale of current and long term
investments (net)                                       (822.32)       (512.62)        (717.70)        (11.65)        (19.06)           (6.84)
Interest and dividend income on current and
long term investments and interest on fixed
deposits                                              (2,449.62)     (3,254.35)      (3,487.19)      (419.80)        (349.91)        (121.13)
Employees Stock option compensation cost                  292.00         580.57          653.95        987.16          353.49               -
Provision for impairment of windmill                           -         560.87               -      (248.28)               -           70.15
Provision for impairment - others                              -              -               -       (48.44)            9.97           49.48
Provision for hedging contracts                                -       (705.44)          690.42         15.02               -               -
Provision for credit loss on securitisation             3,317.30       4,464.01        2,009.30      1,640.19               -               -
Provisions for non performing assets and bad
debts written off                                     27,901.02      26,794.90       21,875.36      15,742.63       8,322.05         2,217.12
Provision for gratuity                                   119.91         141.16          148.45          22.92          19.67             6.40
Provision for leave encashment                           119.59         227.65          120.73          (0.82)         12.50             5.00
Provision for diminution in value of
investments                                               21.67           81.14          60.67        (167.60)         11.79            19.85
Operating profit before working capital
changes                                              120,820.30     124,009.36       85,674.39      47,974.06      31,018.74        10,409.43
Movements in working capital:
(Increase) / decrease in current assets:
(Increase) / decrease in inventories                     126.81          (60.28)        (66.53)              -              -               -
(Increase) / decrease in portfolio under
financing activities                                (372,706.08)   (293,889.32)    (692,459.86)   (308,228.67)   (248,606.35)      (68,774.96)
(Increase) / decrease in sundry debtors                   399.24       (151.13)          100.56         402.91       (556.59)                -
(Increase) / decrease in lease assets - net of
sales                                                          -               -              -          0.56            1.16            5.77
(Increase) / decrease in other current assets        (55,995.04)               -              -             -               -               -

(Increase) / decrease in other loans and
advances                                             (24,681.54)    (22,834.07)       1,803.88      (3,369.91)      5,980.88           (64.36)

Increase / (decrease) in current liabilities           37,303.06      73,274.91       57,152.49      22,311.54      18,306.00         6,437.64
Cash generated from operations                      (294,733.25)   (119,650.53)    (547,795.07)   (240,909.51)   (193,856.16)      (51,986.48)
Direct taxes paid (net of refunds)                   (33,095.56)    (35,067.48)     (26,899.61)    (14,205.81)     (6,480.97)       (1,832.63)
Net cash used in operating activities (A)           (327,828.81)   (154,718.01)    (574,694.68)   (255,115.32)   (200,337.13)      (53,819.11)

B. Cash flows from investing activities
Investment in Fixed deposits (net)                   (62,129.42)    (47,214.27)     (33,178.65)    (32,445.92)       9,179.84       (1,331.52)
Purchase of fixed assets and intangibles                (544.02)     (3,369.47)      (5,252.92)     (1,622.25)     (1,075.00)         (127.29)
Change in capital work in progress (fixed and                  -              -        3,986.91     (1,414.06)     (2,244.05)           (4.05)
intangible assets)



                                                                   F-8
                                                                                                                                 Annexure III
 Reformatted Summary of Cash Flow Statement
                                                                                                                                     (Rs in lacs)

                                                        For the                            For the year ended March 31,
                                                     periodApril
                  Particulars                         01, 2009 to
                                                    December 31,        2009           2008           2007           2006                2005
                                                         2009
Proceeds from sale of fixed assets                        7,944.77          78.10          24.70         746.91        302.00                2.41
Purchase of Investment                              (1,418,400.94)    (64,790.83)   (776,661.44)    (21,364.74)             -                   -
Investment in associate company                                   -             -        (30.00)       (180.00)             -                   -
Investment in subsidiary company                           (214.99)             -              -          (4.99)            -                   -
Proceeds from sale of investments in subsidiary
company                                                       5.00              -           4.99               -             -                  -
Proceeds from sale of investments in associate
company                                                         -              -         112.50               -             -                   -
Proceeds from sale of investments                    1,359,415.61     138,339.14     661,221.69           19.63         78.58                6.84
Interest and dividend received on current and
long term investments and interest on fixed
deposits                                                   514.12       2,477.27        1,381.20        (32.93)      1,838.48              137.50
Net cash used in investing activities (B)            (113,409.87)      25,519.94    (148,391.02)    (56,298.35)      8,079.85          (1,316.11)

C. Cash Flows from financing activities
Proceeds from issue of equity share capital
including securities premium & Share
application                                             22,041.21         124.09      43,003.42      11,028.07      30,687.67           6,107.40
Redemption of preference shares                                 -              -              -              -      (5,388.35)                 -
Proceeds from issue of share warrants                           -              -       2,400.00              -        1,792.00            103.81
Increase / (decrease) in bank borrowings (net)         219,120.27     320,120.96     443,172.48     278,640.26     116,255.06          18,849.14
Increase / (decrease) in long term borrowings
from others (net)                                      (40,515.12)    (41,471.04)     27,824.90      85,438.50      18,041.38          12,430.57
Increase / (decrease) in fixed deposits (net)            7,802.15         146.45       (763.73)       (342.36)      (1,325.98)           (219.51)
Increase / (decrease) in subordinate debts (net)        36,906.16      55,816.44      30,577.18      29,924.71      13,225.78            9,401.10
Increase / (decrease) in redeemable non
convertible debentures (net)                            67,006.98     169,124.14     119,111.61       2,368.94      10,126.91          14,433.61
Increase / (decrease) in inter corporate deposits
and commercial papers (net)                            (50,382.21)      31,091.52    (12,214.36)     34,000.00        (331.71)            (15.00)
Dividend paid                                          (12,720.40)    (10,170.97)      (5,853.38)    (5,320.67)     (3,575.25)         (1,528.17)
Tax on dividend                                         (2,161.83)     (1,728.56)        (994.78)      (746.23)       (519.52)           (198.32)
Net cash from financing activities (C)                 247,097.21     523,053.03      646,263.34    434,991.22     178,987.99           59,364.63
Net increase / (decrease) in cash and cash
equivalents (A + B + C)                              (194,141.47)     393,854.96     (76,822.36)    123,577.55     (13,269.29)           4,229.41
Cash and Cash Equivalents at the beginning
of the year                                            461,054.26      67,199.30     144,021.66      20,444.11      33,713.40    *     13,420.96
Cash and Cash Equivalents at the end of the
year                                                   266,912.79     461,054.26      67,199.30     144,021.66      20,444.11          17,650.37




                                                                      F-9
                                                                                                                                Annexure III
 Reformatted Summary of Cash Flow Statement
                                                                                                                                 (Rs in lacs)

Components of Cash and Cash Equivalents               As at
                                                    December                                    As at March 31,
                                                       31,
                                                      2009          2009             2008            2007            2006            2005
Cash on hand                                            2469.68     7,062.48         5,639.48        2,281.08        1,756.21         563.37
Cheques on hand                                         2614.89     1,490.15           856.52          215.76           54.65          80.15
Remittances in transit                                   144.00          10.16         193.69        2,375.05          829.39          66.20
With Banks – in Current Account
           - in unpaid dividend accounts $           163,186.32     95,601.30       45,275.37      26,253.34        15,584.83       16,800.73
            - in fixed deposits (Original                294.26        165.70          109.36         160.05           125.48          139.92
              maturity being three months or
              less)                                   98,203.64    356,724.47       15,124.88     112,736.38         2,093.55               -
                                                     266,912.79    461,054.26       67,199.30     144,021.66        20,444.11       17,650.37



     Note:
     *Cash and Cash Equivalents at the beginning of the year for the year 2006 includes cash and cash equivalents of M/s.
     Shriram Investments Limited Rs. 15,792.04 Lacs and of M/s. Shriram Overseas Finance Limited Rs. 270.99 Lacs. The
     same is not included in Cash and cash equivalents at the end of the year 2005.
     $ These balance are not available for use by they represent corresponding unpaid dividend liability.

     As per our report of even date



      For S. R. BATLIBOI & Co.                 For G. D. Apte & Co.              For and on behalf of the Board of Directors
      Chartered Accountants                    Chartered Accountants             Shriram Transport Finance Company Limited


      per Shrawan Jalan                        U. S. Abhyankar                   R Sridhar                        S. Venkatakrishnan
      Partner                                  Partner                           Managing Director                Director
      Membership No. 102102                    Membership No. 113053



      Mumbai                                                                     K. Prakash
                                                                                 Vice President (Corporate Affairs) & Company Secretary




                                                                  F-10
                                                                                                                   Annexure IV
 Schedules to the Reformatted Statement of Assets and Liabilities
                                                                                                                  (Rs. in lacs)

                                                 As at
Schedule 1 - Fixed Assets and Intangible       December                             As at March 31,
Assets (Net) (including CWIP)                     31,
                                                 2009           2009         2008         2007         2006            2005

ASSETS FOR OWN USE
Tangible Fixed Assets
Building                                            394.38        396.91      193.58       197.65        313.16        164.13
Leasehold Improvements                            1,450.25      1,883.74    1,061.60            -             -             -
Furniture & Fixtures                                712.50        705.39      443.95     1,726.49      1,266.88        390.62
Vehicles                                             91.68        143.78      320.12       374.90        357.64         11.02
Land – Freehold                                      10.18        153.96      153.96       153.96        222.99          2.05
Land – Leasehold                                         -             -           -            -        452.24             -
Plant and Machinery                               1,922.74     *9,869.96   11,602.71     9,917.46     10,102.55      4,166.55

Intangible Fixed Assets
Software                                             78.85        28.40       243.53      138.90        171.84                -


Capital Work In Progress (including Capital
Advances)                                                 -            -            -    3,986.91      2,572.85          21.53

TOTAL (A)                                         4,660.58     13,182.14   14,019.45    16,496.27     15,460.15      4,755.90

ASSETS GIVEN ON LEASE
Plant and Machinery                                     -             -            -        1.71          9.86              -
Vehicles                                                -             -            -           -             -           1.14
Land                                                69.75         69.75        69.75       69.75         69.75              -
Building                                           169.01        174.68       175.24      178.80        182.36         155.37
TOTAL (B)                                          238.76        244.43       244.99      250.26        261.97         156.51

TOTAL (A+B)                                       4,899.34     13,426.57   14,264.44    16,746.53     15,722.12      4,912.41


 * Includes Rs. 5,314.67 lacs towards windmills held for sale for which MOU is executed with a buyer and sale will be
 subject to satisfactory completion of the technical due diligence.




                                                        F-11
                                                                                                                        Annexure IV
 Schedules to the Reformatted Statement of Assets and Liabilities
                                                                                                                            (Rs. in lacs)

                                                        As at
                                                      December                                 As at March 31,
    Schedule 2 - Investments
                                                         31,
                                                        2009           2009             2008         2007        2006           2005

    LONG TERM (at cost)
    Trade
    Shares : Fully paid up
    Unquoted - Preference Share                             10.00        10.00                 -            -           -              -

    Other Than Trade
      Quoted :
      Government Securities                              3,053.81       283.00           427.44      592.29      597.34         277.78
      Equity Shares (Fully paid up)
        - Associates                                             -            -          240.00      240.00      240.00         120.00
        - Others                                                 -            -               -        0.71        3.62              -
      Investment in Debentures                                   -            -               -           -        0.03              -

       Unquoted :
       Equity Shares (Fully paid up)
         - Subsidiary                                      209.99            -                -           -           -               -
         - Associates                                           -            -                -      180.00           -               -
         - Others                                          207.50       207.50           162.50       74.36       74.36            9.71
       Investment in Pass Through Certificates                  -     2,322.01           750.00      750.00           -               -
       Investment in NSC                                        -            -                -        0.07        0.07               -

    CURRENT INVESTMENTS (at lower of
    cost and market value)
    Other than trade
       Quoted :
       Equity Shares (Fully paid up)
         - Associates                                      240.00       240.00                 -            -           -              -

       Unquoted :
       Equity Shares (Fully paid up)
         - Subsidiary                                            -            -                -        4.99            -              -
       Investment in Units of Mutual Funds                       -            -                -   20,614.74            -              -
       Investment in Certificate of deposits
       with Banks                                     121,772.67     62,413.82    136,932.08               -          -              -
                                                      125,493.97     65,476.33    138,512.02       22,457.16     915.42         407.49

         Book value of Quoted investments               3,293.81        523.00        667.44          833.00     840.99         397.78
         Market value of Quoted investments             3,573.63        535.42        913.90          937.49     934.08         323.12
         Book value of Unquoted investments           122,200.16     64,953.33    137,844.58       21,624.16      74.43           9.71

Details of investments may be referred from the annual report of the respective years




                                                         F-12
                                                                                                                        Annexure IV
 Schedules to the Reformatted Statement of Assets and Liabilities
                                                                                                                         (Rs. in lacs)

                                              As at
                                            December                                    As at March 31,
Schedule 3 - Current Assets                    31,
                                              2009                2009          2008           2007          2006            2005
Inventories- Raw Materials (at lower
of cost and net realisable value)                      -           126.81          66.53               -            -                -

Portfolio under financing activities
(considered good unless stated
otherwise)
Secured*
Stock under Hire Purchase agreement                   -               -                 -      5,721.72     27,473.86      28,703.54
Asset given on Financial lease                        -               -          7,042.41     21,691.52     39,086.19      25,425.18
Hypothecation loans                        2,135,133.58    1,790,311.88      1,500,224.10    793,068.46    464,717.20     100,579.10
Other loans                                    1,246.77        1,330.35          2,100.27      4,328.29      5,142.99       3,105.38
Advance - Hypothecation loans/Hire               343.63          412.81          2,699.85     16,326.18      9,677.97       1,932.18
purchase/Lease Assets
Unsecured
Unsecured Loans                               16,917.57        2,406.89          1,946.23             -         31.07          35.00
                                           2,153,641.55    1,794,461.93      1,514,012.86    841,136.17    546,129.28     159,780.38

*includes non performing assets              52,303.87        38,411.39        23,843.32      17,404.19      6,705.74       2,280.80

Sundry Debtors
(Unsecured, considered Good)
Debts outstanding for a period exceeding
six months                                             -                -              -         262.21       367.55           89.51
Other debts                                            -           399.24         248.11          86.46       384.03          105.48
                                                       -           399.24         248.11         348.67       751.58          194.99
Cash & Bank Balances
i) Cash on hand                               2,469.68            7,062.48       5,639.48       2,281.08     1,756.21         563.37
ii) Cheques on hand                           2,614.89            1,490.15         856.52         215.76        54.65          80.15
iii) Remittances in transit                     144.00               10.16         193.69       2,375.05       829.39          66.20
iv) Balances with scheduled banks in:
    Current accounts                        163,480.58        95,767.00        45,384.73      26,413.39     15,710.31      16,940.65
    Fixed Deposit Accounts*                 277,768.49       474,159.90        85,346.03     149,778.88      6,690.13       4,034.12
                                            446,477.64       578,489.69       137,420.45     181,064.16     25,040.69      21,684.49

Other current assets
Interest accrued on investments                  93.45              222.00        255.70          46.26        21.38            9.48
Interest accrued on fixed deposits and        5,576.00            3,511.95      2,701.16         804.61       376.76          118.81
other loans and advances
Lending through Collateralised
Borrowing and Lending Obligation             55,995.04                   -              -              -            -                -

                                           2,661,783.68    2,377,211.62      1,654,704.81   1,023,399.87   572,319.69     181,788.15

*Includes Fixed deposits pledged with
 Banks as margin for securtisation          178,712.56       114,596.62        63,537.58      33,008.45      4,054.25       3,327.09
*Includes Fixed deposits pledged with

                                                           F-13
Banks as lien against loans taken   415.53          775.42   1,252.86   3,629.44   1,974.42   1,092.61




                                             F-14
                                                                                                                  Annexure IV
 Schedules to the Reformatted Statement of Assets and Liabilities

                                             As at
Schedule 4 – Other Loans and               December                                 As at March 31,
Advances                                      31,
                                             2009              2009         2008          2007         2006           2005

Unsecured, Considered Good

Advances recoverable in cash or in kind
or for value to be received                 54,609.09      24,869.40        13,052.19     12,793.59    9,260.21      2,947.68
Service tax credit (input) receivable          863.37       1,099.54         1,489.39      1,651.74      635.24        148.96
Advance tax (net of provisions for tax)        375.17         377.66         2,372.02      2,120.47    2,425.57        646.44
Advance fringe benefit tax (net of
provision)                                          -              -                -             -       78.68              -
Prepaid expenses                             8,368.94      13,086.96         1,589.87      2,776.53      594.96         182.76
Security deposits**                            681.71         785.67           876.11      1,589.56    4,951.10       5,533.12

                                            64,898.28      40,219.23        19,379.58     20,931.89   17,945.76       9,458.96

** includes deposit pledged as margin on
   securitisation                                 Nil                 Nil     277.32        323.98          Nil              Nil
** includes deposit pledged as lien
   against loan taken                             Nil           110.00         55.00        131.85      247.00               Nil




                                                        F-15
                                                                                                                                  Annexure IV
  Schedules to the Reformatted Statement of Assets and Liabilities
                                                                                                                                   (Rs. in lacs)

                                        As at
                                                                                          As at March 31,
Schedule 5 - Secured Loans           December 31,
                                         2009                 2009             2008               2007               2006            2005

Redeemable       non   convertible        553,229.53        482,679.34       312,255.20         183,799.02         184,430.08       86,558.36
debentures
refer note                           2(1)(a)(i)(ii)(iii)     1(a)(i)(ii)   1(a)(i)(ii)(iii)   1(a)(i)(ii)(iii)   A(1)(a)(i)(ii)          1(a)

Term loans
i) From Financial institutions /
Foreign institutions / Corporates           40,277.57        44,792.69       111,263.73          82,272.73          43,557.74       19,250.29
refer note                                  2(1)(b)(i)       1(b)(i)(ii)      1(b)(i)(ii)        1(b)(i)(ii)     A(1)(b)(i)(ii)     1(b)(i)(ii)

ii) From banks                            972,557.48        833,363.58       505,329.28         259,825.48         91,282.84        21,032.39
refer note                                 2(1)(b)(ii)        1(b)(iii)         1(b)(iii)          1(b)(iii)      A(1)(b)(iii)        1(b)(iii)

Cash credit from banks                    348,910.53        316,623.70       225,646.66         104,118.36          54,820.74        3,157.91
refer note                                    2(1)(c)             1(c)             1(c)               1(c)           A(1)(c)             1(c)

HP refinance loan                                      -               -                  -                  -         110.39                   -
refer note                                                                                                            A(1)(d)

                                        1,914,975.11       1,677,459.31    1,154,494.87         630,015.59         374,201.79      129,998.95




                                                               F-16
                                                                                                                     Annexure IV
Schedules to the Reformatted Statement of Assets and Liabilities
                                                                                                                      (Rs. in lacs)

                                               As at
                                                                                       As at March 31,
  Schedule 6 - Unsecured Loans              December 31,
                                                2009               2009         2008          2007        2006           2005

  Fixed deposits                                  8,290.59           488.44       342.00      1,105.73    1,448.09      1,175.15

  Inter corporate deposits                           24.95          4,657.16      120.64        30.00       30.00           15.00

  Subordinated debts                            191,682.41     154,776.25       98,959.81    68,443.43   38,518.72     12,425.78

   Redeemable non-convertible debentures          2,500.00          2,500.00     3,800.00    13,000.00   10,000.00      2,500.00

  Commercial papers                               2,500.00         48,250.00    21,695.00    34,000.00           -               -

  Term loan :
  i) From banks                                 100,639.54         53,000.00   151,890.38    75,750.00   14,950.00               -
  ii) From corporates                            35,000.00         71,000.00    46,000.00    47,166.10      332.20               -

                                                340,637.49     334,671.85      322,807.83   239,495.26   65,279.01     16,115.93




                                                          F-17
                                                                                                             Annexure IV
   Schedules to the Reformatted Statement of Assets and Liabilities
                                                                                                              (Rs. in lacs)

                                               As at
                                             December                          As at March 31,
Schedule 7 - Current Liabilities                31,
                                               2009         2009        2008          2007         2006         2005

Sundry creditors other than Micro and
Small Enterprises                             19,979.89    20,901.00     7,086.46    3,013.79     1,912.72        415.91
Caution and lease deposits                                         -            -       10.21       365.57        267.98
Interest accrued but not due on loans         82,446.07    77,718.04    55,751.58   34,759.79    34,691.29     13,954.75
Unclaimed Redeemable Preference Shares                -            -       102.64      149.25       163.58             -
Application money on Redeemable non
convertible debentures                         1,005.19     1,030.19      895.21     1,039.78      102.10            1.64
Application money on Subordinated debts           25.91     2,942.35      437.17       376.37       25.82               -
Investor Education and Protection Fund
shall be credited by the following amounts
(as and when due)
- Unclaimed Matured Deposits                      68.30        65.30        52.00       64.36       108.10         92.51
- Unclaimed Matured Debentures                 6,029.85     4,503.36     5,381.81    2,314.19     3,293.18      1,609.45
- Unclaimed Matured Subordinated
   Debts                                          68.21       816.45
- Interest accrued and due on above            1,495.70     1,591.38     1,940.80      537.81       599.30        372.96
- Unclaimed dividend                             289.10       166.26       126.11      108.81       126.05         57.98
Temporary credit balance in bank accounts     31,931.95    41,990.51    12,394.79    5,930.09    10,099.25        723.77
Securitization deferred income                94,410.58    51,334.24    44,092.11   24,133.29       488.09             -
Other liabilities                              9,768.59     8,848.86     9,018.62    8,992.87     9,304.73      2,692.70

                                             247,519.34   211,907.94   137,279.30   81,430.61    61,279.78     20,189.65




                                                          F-18
                                                                                                             Annexure IV
Schedules to the Reformatted Statement of Assets and Liabilities
                                                                                                              (Rs. in lacs)

                                              As at
                                            December                            As at March 31,
Schedule 8 – Provisions
                                               31,
                                              2009           2009        2008         2007         2006         2005

Non-performing assets                         38,059.42     23,684.86   10,330.21    6,540.36     4,365.42      1,332.15
Credit loss on securitisation                 13,949.42      8,940.46    5,830.18    4,098.52            -             -
Fringe benefit tax (net of advance tax)            7.67         15.11       22.36           -            -             -
Diminution in value of investments               248.70        227.03      145.89      100.31       267.91        103.85
Hedging contracts                                     -             -      705.44       15.02            -             -
Leave encashment                                 534.81        415.22      187.57       66.85        67.67         24.43
Gratuity                                         583.83        463.92      322.76      174.31       151.39         41.20
Proposed dividend                                     -      8,140.46    8,125.42    3,683.17     3,570.19        981.43
Dividend on preference shares                         -             -           -           -         1.47          0.02
Corporate dividend tax                                -      1,383.47    1,380.91      625.95       500.93        128.26

                                              53,383.85     43,270.53   27,050.74   15,304.49     8,924.98      2,611.34




                                                     F-19
                                                                                                                                 Annexure IV
      Schedules to the Reformatted Statement of Assets and Liabilities
                                                                                                                                 (Rs. in lacs)
                                          As at
                                        December                                          As at March 31,
Schedule 9 - Share Capital
                                           31,
                                          2009          2009              2008                2007             2006                  2005

Authorised
Equity Share Capital                      33,500.00     33,500.00         33,500.00          33,500.00         33,500.00             7,500.00
Preference Share Capital                  20,000.00     20,000.00         20,000.00          20,000.00         20,000.00             5,000.00
                                          53,500.00     53,500.00         53,500.00          53,500.00         53,500.00            12,500.00
No. of equity Shares of Rs.10/-
each                                    335,000,000   335,000,000       335,000,000        335,000,000       335,000,000           75,000,000
No. of preference Shares of
Rs.100/- each                            20,000,000    20,000,000        20,000,000         20,000,000        20,000,000            5,000,000

Issued, Subscribed & Fully Paid up

Equity Shares                            21,277.46*     20,351.16   *     20,313.54   *      18,415.87   *     15,054.06    **       6,542.85

No. of equity shares of Rs. 10/- each   212,774,566   203,511,616       203,135,416        184,158,716       169,186,466           65,428,549

Add : Share Forfeiture                         2.40          2.40              2.40               2.40              2.40                     -

Equity Share Capital Suspense
Account                                                         -                 -                  -          1,864.59   ***               -

Preference Share Capital                                        -                 -                  -                 -             2,530.65

                                          21,279.86     20,353.56         20,315.94          18,418.27         16,921.05             9,073.50




      * Includes 79,279,236 equity shares of Rs. 10/- each allotted for consideration other than cash pursuant to the scheme of
      amalgamation.
      ** Includes 60,633,350 equity shares of Rs. 10/- each allotted to the equity shareholders of the amalgamating company,
      Shriram Investment Limited, for consideration other than cash pursuant to the scheme of amalgamation.
      *** Represents 18,645,886 equity shares of Rs. 10/- each to be allotted to the equity shareholders of the amalgamating
      company, Shriram Overseas Finance Ltd., pursuant to the scheme of amalgamating sanctioned by the Hon’ble High
      Court of Madras.




                                                                F-20
                                                                                                                       Annexure IV
   Schedules to the Reformatted Statement of Assets and Liabilities
                                                                                                                        (Rs. in lacs)

                                                        As at                            As at March 31,
                                                      December
Schedule 10 - Reserves and Surplus
                                                         31
                                                        2009         2009         2008         2007         2006           2005

Reserves and Surplus

Capital Reserve
Balance as per last account                               17.03        17.03        17.03        17.03          0.73           0.73
Add: On Amalgamation of Shriram Overseas Finance
Limited                                                       -            -            -            -        16.30               -
                                                          17.03        17.03        17.03        17.03        17.03            0.73

Capital Redemption Reserve                              5,388.35     5,388.35     5,388.35    5,388.35      5,388.35              -

Securities Premium Account
Balance as per last account                            91,689.29    91,326.94    49,415.08   38,551.73      5,250.62        124.86
Add: On Amalgamation of Shriram Investments Limited            -            -            -           -      4,952.64             -
Add: On Amalgamation of Shriram Overseas Finance
     Limited                                                   -            -            -           -      3,380.22              -
Add: Amount received during the year                   24,448.71       362.35    41,911.86   10,863.35     24,968.25       5,125.76
                                                      116,138.00    91,689.29    91,326.94   49,415.08     38,551.73       5,250.62
Statutory Reserve
Balance as per last account                            33,899.79    21,599.79    13,799.79    9,989.79      3,262.00       2,262.00
Add: On Amalgamation of Shriram Investments Limited            -            -            -           -      3,561.49              -
Add: On Amalgamation of Shriram Overseas Finance
     Limited                                                   -            -            -           -        332.29              -
Add: Transfer from Profit & Loss Account                       -    12,300.00     7,800.00    3,810.00      2,834.01       1,000.00
                                                       33,899.79    33,899.79    21,599.79   13,799.79      9,989.79       3,262.00
Debenture Redemption Reserve
Balance as per last account                                   -             -            -      100.00        50.00           50.00
Add: On Amalgamation of Shriram Investments Limited           -             -            -           -        50.00               -
Add: Transfer from Profit & Loss Account                6802.27             -            -           -            -               -
Less: Transfer to General Reserve                             -             -            -      100.00            -               -
                                                        6802.27             -            -           -       100.00           50.00
General Reserve
Balance as per last account                            17,453.63    11,253.63     7,353.63    5,253.63      1,208.61        708.61
Add: On Amalgamation of Shriram Investments Limited            -            -            -           -      1,301.96             -
Add: On Amalgamation of Shriram Overseas Finance
     Limited                                                   -            -            -           -      1,243.06              -
Add: Transfer from Debenture Redemption Reserve                -            -            -      100.00             -              -
Add: Transfer from Profit & Loss Account                       -     6,200.00     3,900.00    2,000.00      1,500.00         500.00
                                                       17,453.63    17,453.63    11,253.63    7,353.63      5,253.63       1,208.61

Balance in Profit & Loss Account                      107,017.36    58,309.25    27,486.21   12,248.92      5,322.65       3,396.32


                                                      286,716.43   206,757.34   157,071.95   88,222.80     64,623.18     13,168.28



                                                          F-21
                                                                                                                   Annexure IV
     Schedules to the Reformatted Statement of Assets and Liabilities

                                                                                                                     (Rs. in lacs)

Schedule 11 - Miscellaneous Expenditure (to the extent     As at                          As at March 31,
not written off or adjusted)                             December
                                                            31          2009       2008        2007         2006        2005
                                                           2009

Share issue expenses                                              -            -          -     11.34        20.25         5.56
Public issue expenses for non convertible debentures       3,543.21            -          -      2.39        17.70        38.87
Deferred revenue expenses                                         -            -          -         -         3.22            -

                                                           3,543.21            -          -     13.73        41.17        44.43




                                                          F-22
Schedules to the Reformatted Statement of Profit and Loss Account
                                                                                                        Annexure V

                                                                                                                 (Rs. in lacs)

                                                 For the
                                               periodApril                  For the year ended March 31,
 Schedule 12 - Income from Operations          01, 2009 to
                                                December       2009         2008         2007         2006           2005
                                                 31, 2009

 Finance & service charges                     280,481.59    324,463.72   224,782.81   136,784.70   80,649.87      28,715.21
 Fees from reconditioning/exchange of trucks            -             -            -       141.75      463.03              -
 Interest on other loans                           261.72        666.99       407.78       709.74      790.18         296.17
 Interest on margin money on securitisation      7,967.54      6,951.61     3,553.78       571.84      326.49          73.30
 Income on securitisation                       34,498.68     33,895.73    16,584.31     2,091.51    6,305.01       4,747.08


                                               323,209.53    365,978.05   245,328.68   140,299.54   88,534.58      33,831.76


                                                                                                                (Rs. in lacs)
                                                 For the
                                                                            For the year ended March 31,
                                               periodApril
 Schedule 13 - Other Income                    01, 2009 to
                                                December       2009         2008         2007        2006           2005
                                                 31, 2009

 Interest on deposits with banks                 1,132.64      1,749.56     2,436.50      313.68      286.84          93.73
 Income from operating lease                      445.78          31.22        31.74       34.56       34.15          12.83
 Sale of electricity                                    -      3,265.26     1,290.12    1,130.66    1,117.99         491.73
 Profit on sale of assets                           88.78             -            -           -           -               -

 Income from Long Term Investments (non
 trade)
 - Profit on sale of investments (net)              66.55            -          1.74       11.65       19.06            6.84
 - Dividend                                          0.25         0.25             -        0.42        2.13            0.06
 - Interest on government securities                40.57        24.20         41.27       60.01       60.94           27.34
 - Interest on Pass Through Certificates           114.01       146.02         75.21       25.27           -               -

 Income from Current Investments (non
 trade)
 - Profit on sale of investments                   755.77       514.17       715.96            -           -              -
 - Dividend                                        874.46       486.66       519.33        20.42           -               -
 - Interest on Certificate of Deposits             287.69       693.09       414.88            -           -               -
 - Interest on Commercial Paper                         -        10.49            -            -           -               -
 - Interest on Debentures                               -       144.33            -            -           -               -
 Commission Received                                    -            -            -       191.20      542.02          86.80
 Miscellaneous Income                               23.31        69.67        47.25        51.19      32.80           17.75

                                                 3,829.81      7,134.92     5,574.00    1,839.06    2,095.93         737.08




                                                     F-23
Schedules to the Reformatted Statement of Profit and Loss Account
                                                                                                    Annexure V
                                                                                                              (Rs. in lacs)

                                                  For the                    For the year ended March 31,
                                                periodApril
 Schedule 14 - Interest & Other Charges         01, 2009 to
                                                 December       2009         2008        2007          2006        2005
                                                  31, 2009

 Interest & Other Charges on :
 Debentures                                      49,635.34     50,682.12    34,120.26   26,585.50    26,443.48    12,217.80
 Subordinated debts                              16,741.25     15,851.15    10,161.50    5,439.59     3,231.78       746.33
 Fixed deposits                                     228.19         31.05       101.85      150.73       277.49       154.18
 Loans from banks                                78,276.88     93,513.23    56,804.74   26,613.91     6,645.59     1,089.76
 Loans from institutions and others              11,177.26     17,706.49    17,848.72    6,623.57     3,145.87       860.04
 Commercial paper                                 2,149.41      4,281.04     2,225.29    1,653.33            -            -
 Bank charges                                     1,851.92      1,816.71       735.44      581.99       341.28       172.11
 Professional charges - resource mobilisation     3,063.13      6,897.31     3,575.02    1,440.91       407.31       281.70
 Processing charges on loans/securitization       2,650.84      4,787.16     2,991.00    4,740.42     1,420.44     1,039.42
 Fees / Loss on sale of second loss credit /
 liquidity facilities                             1,603.62      2,200.95     1,097.82        3.16             -           -



                                                167,377.84    197,767.21   129,661.64   73,833.11    41,913.24    16,561.34




                                                      F-24
Schedules to the Reformatted Statement of Profit and Loss Account
                                                                                                 Annexure V

                                                                                                          (Rs. in lacs)
                                               For the                 For the year ended March 31,
                                             periodApril
 Schedule 15 - Raw Material Consumed         01, 2009 to
                                              December       2009      2008        2007        2006           2005
                                               31, 2009

 Opening Stock                                    126.81       66.53         -            -           -               -
 Add : Purchases                                       -      747.45    324.59            -           -               -
 Less : Transferred to Lessee                   (126.81)           -         -            -           -               -
 Closing Stock                                         -      126.81     66.53            -           -               -

                                                       -      687.17    258.06            -           -               -




                                                    F-25
Schedules to the Reformatted Statement of Profit and Loss Account
                                                                                              Annexure V

                                                                                                           (Rs. in lacs)
                                               For the
                                             periodApril               For the year ended March 31,
 Schedule 16 - Personnel Expenses            01, 2009 to
                                              December       2009       2008       2007          2006          2005
                                               31, 2009

 Salaries & other allowances                   15,317.90   18,724.57   11,558.30   6,683.63     4,220.34      1,226.20
 Gratuity expenses                                141.06      154.91      212.96      42.61        33.98         21.25
 Contribution to provident and other funds        710.59      897.40      523.10     254.66       230.95         92.01
 Staff welfare expenses                           226.74      276.72      253.40     282.49       291.35         82.42

                                               16,396.29   20,053.60   12,547.76   7,263.39     4,776.62      1,421.88




                                                    F-26
Schedules to the Reformatted Statement of Profit and Loss Account
                                                                                                Annexure V

                                                                                                             (Rs. in lacs)
                                                For the                  For the year ended March 31,
                                              periodApril
 Schedule 17 - Operating and other
                                              01, 2009 to
 Expenses                                      December      2009        2008        2007          2006          2005
                                                31, 2009

 Rent                                           2,598.20     2,636.98    1,475.33     987.91        679.77        244.41
 Electricity expenses                             369.11       460.22      303.53     244.13        210.32         84.48
 Repairs & Maintenance
    - Plant & machinery                            13.06       168.89       63.69      148.24       111.97         36.67
    - Building                                      0.46         0.61        1.58           -            -             -
    - Others                                    1,736.50     2,337.15    1,264.83      896.47       700.61        257.33
 Rates & taxes                                    138.11       509.04      170.07      175.05        51.53         68.69
 Printing & stationery                            973.15     1,618.08    1,191.84    1,038.17       604.73        237.68
 Travelling & conveyance                        2,416.95     3,162.68    1,939.13    1,390.59     1,128.66        441.06
 Advertisement                                     93.06        84.36       93.85      747.04        96.89         23.00
 Brokerage and discount                         4,593.85     8,668.83    6,528.13    4,322.12     6,207.59      3,159.93
 Data Sourcing & collection commission paid
 to others                                         20.89        87.35       57.95       44.61      115.96         501.44
 Royalty                                          901.81     1,036.45      623.54      356.35      212.35          81.30
 Directors' sitting fees                           10.80        15.70       17.80        9.78        2.31           0.23
 Insurance                                        106.78       100.70      107.29       54.45       47.44          11.60
 Communication expenses                         1,877.83     2,617.80    1,583.40    1,140.46      916.36         365.11
 Auditor's remuneration
    - Audit fees                                   39.71        71.36      53.20       45.14         14.47          5.46
    - Tax audit fees                                   -         2.21       2.55        2.53          3.34          1.44
    - Other services                                1.10         8.49      12.75        5.06          3.44          4.17
    - Out of pocket                                 3.67         7.82       4.36        2.86          2.17          1.52
 Legal & professional charges                   1,469.77     1,194.13     848.69      581.47        839.07        138.61
 Donations                                         51.49       106.55      75.26       75.14         85.37         56.39
 Loss on sale of assets (Net)                          -        87.77      17.39      231.02         33.00          7.63
 Loss on sale of Long Term Investments (non
 trade)                                                -         1.56           -           -            -             -
 Shares/Debenture public issue expenses           394.28            -       13.74       27.44        39.35         22.85
 Miscellaneous expenses                         2,221.17     2,940.77    3,027.06    1,289.51     1,095.02        350.76

                                               20,031.75    27,925.50   19,476.96   13,815.54    13,201.72      6,101.76




                                                    F-27
Schedules to the Reformatted Statement of Profit and Loss Account
                                                                                                 Annexure V

                                                                                                               (Rs. in lacs)
                                                 For the                 For the year ended March 31,
                                               periodApril
 Schedule 18 - Provisions & Write offs         01, 2009 to
                                                December      2009        2008        2007          2006            2005
                                                 31, 2009

 Provision for non performing assets            14,374.56    13,354.65    3,789.85    3,142.42      1,357.58        372.42
 Provision for credit loss on securitisation     3,317.30     4,464.01    2,009.30    1,640.19             -             -
 Provision for diminution in value of
 investments                                        21.67        82.43       60.67    (167.60)         11.79         19.85
 Bad debts written off                          13,526.46    13,440.25   19,583.17   13,270.07      6,964.47      1,844.70
 Bad debt recovery                               (397.02)     (766.42)    (774.00)    (566.07)      (190.77)       (11.66)

                                                30,842.97    30,574.92   24,668.99   17,319.01      8,143.07      2,225.31




                                                     F-28
                                                                                                   Annexure VI

Statement of Contingent Liabilities

                                                                                                       (Rs in lacs)
                                             As at
                                           December                      As at March 31,
                   Particulars
                                              31,
                                             2009      2009       2008         2007         2006           2005

 Disputed Income Tax/Interest Tax demand
 contested in appeals not provided for       164.76    164.76     3,381.70    5,754.90      5,318.72      2,693.26


 Guarantees issued by the Company and
 Outstanding                                 700.00    901.97     1,991.58    4,101.12      1,752.68       771.37

 Demand in respect of Service tax            312.00    299.00      284.00       230.24             -              -

 Income tax penalty u/s 271(1)(c)            349.86           -          -            -            -              -

 In respect of Portfolio Management               -           -          -      356.67      1,123.63      1,846.28

 In respect of securitised assets                 -           -          -            -    29,742.84    11,994.20




                                                F-29
                                                                                                               Annexure VII
Statement of Dividend

Statement of Dividend in respect of Preference Shares
                                                                                                                (Rs in lacs)

                                                                         No. of Shares
                                      For Nine
                                       months
               Rates                   ended                            Year ended As at 31st March
                                      December
                                         31,
                                        2009            2009           2008          2007           2006           2005

 6.00%                                           -              -             -              -       481,930            3,960

 8.00%                                           -              -             -              -        25,270             260

 9.00%                                           -              -             -              -     4,548,880      2,417,850

 10.00%                                          -              -             -              -        23,590

 12.00%                                          -              -             -              -        15,680           15,530

 12.50%                                          -              -             -              -        41,340           25,940

 14.00%                                          -              -             -              -        81,850           30,600

 15.00%                                          -              -             -              -       169,810           36,510

 Total Shares                                    -              -             -              -     5,388,350      2,530,650
 Amount of Dividend                              -              -             -              -        423.67         228.21
 Dividend Distribution Tax                       -              -             -              -         59.43          29.82

Note : The Preference shares outstanding as on 31st March 2005 were redeemed in financial year 2005-06 and were paid
pro-rata dividend at coupon rates prevailing in financial year 2004-05.




                                                        F-30
                                                                                                              Annexure VII
Statement of Dividend

Statement of Dividend in respect of Equity Shares


                                                                                                                (Rs in lacs)

                                      For Nine
                                       months
                                       ended
            Particulars
                                      December
                                         31,                            Year ended As at 31st March
                                        2009            2009          2008         2007          2006             2005

 Interim
 Rate of Dividend                        20%            10%           10%           10%           10%             10%
 Number of Equity Shares on which
 Interim Dividend paid                212,737,916    203,502,416   203,135,416   174,901,466   126,061,899     51,949,549
 Amount of Interim Dividend              4,254.76       2,035.03      2,031.35      1,749.01      4,271.43         519.50
 Dividend Distribution Tax                 723.08         345.85        345.23        245.30        176.80          67.89

 Rate of Dividend                                -             -             -             -          20%                -
 Number of Equity Shares on which
 Interim Dividend paid                           -             -             -             -   150,540,580               -
 Amount of Interim Dividend                      -             -             -             -      3,010.81               -
 Dividend Distribution Tax                       -             -             -             -        422.27               -

 Final Dividend for the previous
 year
 Rate of Dividend                        40%            40%           20%                  -              -              -
 Number of Equity Shares on which
 Final dividend paid                    8,129,550       263,100      6,942,500             -              -              -
 Amount of Final Dividend                  325.18         10.52         138.85             -              -              -
 Dividend Distribution Tax                  55.28          1.79          23.60             -              -              -

 Proposed Final Dividend for the
 current year
 Rate of Dividend                                -      40%           40%           20%          30%**            15%
 Number of Equity Shares on which
 dividend paid                                   -   203,511,616   203,135,416   184,158,716    18,645,886     65,428,549
 Amount of Final Dividend                        -      8,140.46      8,125.42      3,683.17        559.38         981.43
 Dividend Distribution Tax                       -      1,383.52      1,380.92        625.95         78.45         128.26


** Represents Dividend of 30% for Shareholders of M/s Shriram Overseas Finance Limited pursuant to Amalgamation




                                                     F-31
                                                                                                                     Annexure VIII

                                                                                                                        Page 1 of 3

Statement of Accounting Ratios
[Calculation of Earning Per shares (EPS)]

Earnings per share calculation are done in accordance with Accounting Standard – 20 “Earning Per Share”, notified
under Accounting standards (‘AS’) under Companies Accounting Standard Rules, 2006, as amended


                                                                                                            (Rs in lacs)

                                                    As at
                                                  December                             As at 31st March
                 Particulars
                                                   31, 2009
                                                     2009         2009          2008         2007          2006            2005

 Net profit after tax (Rs. in Lacs)                60,868.86     61,240.21    38,982.65    19,039.71    14,164.10          4,932.38

 Less: Preference dividend including tax
 on dividend (Rs. in Lacs)                                 -              -            -            -       483.10          258.03

 Net profit attributable to equity
 shareholders (Rs. in Lacs)                   a    60,868.86     61,240.21    38,982.65    19,039.71    13,681.00          4,674.35

 Weighted average number of equity
 shares outstanding during the year/period.
 (for Basic EPS ) (Lacs)                      b     2,097.17     2,033.80     1,924.01     1,729.59       1,461.41          515.72

 (i) Equity shares arising on conversion
     of optionally convertible warrants
     (Lacs)                                   c            -         80.00        23.83       69.00          82.58            3.58

 (ii) Equity shares for no consideration
      arising on grant of stock options
      under ESOP (Lacs)                       d        18.80         24.49        29.92       13.48           3.39                -

 Weighted average number of equity
 shares outstanding during the year/period.
 (for Diluted EPS) (b+c+d) (Lacs)             e     2,115.97      2,138.29     1,977.76     1,812.07      1,547.38          519.30

 Earnings per share (Basic) (Annualised)               29.02         30.11        20.26       11.01           9.36             9.06
 (Rs.) (a/b)

 Earnings per share (Diluted) (Annualised)             28.77         28.64        19.71       10.51           8.84             9.00
 (Rs.) (a/e)




                                                        F-32
                                                                                                    Annexure VIII


                                                                                                               Page 2 of 3
     Statement of Accounting Ratios
     [Calculation of Return on Net Worth (RONW)]

                                                                                                               (Rs in lacs)
                                               As at
                                             December                           As at 31st March
                Particulars
                                              31, 2009
                                               2009         2009         2008          2007          2006       2005

SHAREHOLDERS FUNDS

Share Capital                                 21,279.86    20,353.56    20,315.94     18,418.27    16,921.05    9,073.50
Share application money pending allotment         12.97        13.80        21.37             -            -           -
Stock Option Outstanding                       1,497.93     2,138.90     1,826.64      1,227.38       353.49           -
Optionally Convertible warrants                       -     2,400.00     2,400.00        772.80     1,992.03      103.81
Reserves and Surplus (Refer Annexure IV -
Schedule 10)                                 268,716.43   206,757.34   157,071.95     88,222.80    64,623.18   13,168.28
Less : Miscellaneous Expenditure
       (not written off)                       3,543.21            -             -       13.73        41.17         44.43

Net worth as at the end of the year/period   305,963.98   231,663.60   181,635.90    108,627.52    83,848.58   22,301.16


Net profit after tax                          60,868.68    61,240.21    38,982.65     19,039.71    14,164.10    4,932.38

Return on Net Worth (Annualised) (%)           26.53%        26.43%      21.46%        17.53%       16.89%       22.12%




                                                          F-33
                                                                                                                      Annexure VIII

                                                                                                                            Page 3 of 3
  Statement of Accounting Ratios
  [Calculation of Net Asset Value (NAV) Per Equity Share]

                                                                                                                        (Rs in lacs)
                                              As at
                                            December                                   As at 31st March
               Particulars
                                               31,
                                              2009           2009          2008            2007            2006               2005

SHAREHOLDERS FUNDS
Equity Share Capital                          21,279.86      20,353.56     20,315.94       18,418.27      16,921.05           9,073.50
Share application money pending allotment         12.97          13.80         21.37               -              -                  -
Stock option outstanding                       1,497.93       2,138.90      1,826.64        1,227.38         353.49                  -
Optionally Convertible warrants                       -       2,400.00      2,400.00          772.80       1,992.03             103.81
Reserves and Surplus (Refer Annexure IV –
Schedule 10)                                 286,716.43     206,757.34    157,071.95       88,222.80      64,623.18          13,168.28

Less: Miscellaneous Expenditure
      (not written off)                        3,543.21              -             -           13.73         41.17              44.43


Net Asset Value                             3,05,963.98     231,663.60    181,635.90      108,627.52      83,848.58          22,301.16



Number of Equity shares outstanding at
the end of the year/period                  212,774,566   203,511,616    203,135,416     184,158,716   169,186,466      *   65,428,549



Net Asset Value per Equity Share(Rs.)           143.80         113.83          89.42           58.99         49.56              34.08




  Note:
  * Number of shares as at 31st March 2006 include 18,645,886 equity shares which were pending to be allotted to the
  equity shareholders of the amalgamating company, Shriram Overseas Finance Limited, which have since been allotted.




                                                          F-34
                                                                                                  Annexure IX
    Secured Loans
    Term Loans

A   Term Loan from banks                                                                            ( Rs in Lacs )
    Particulars                     Date of    Disbursed Amount       As at December       Repayment Terms
                                  disburseme                              31, 2009
                                       nt
    ABN Amro Bank                 21/03/2007           18,000.00              1,500.00   36 Monthly installments
    Allahabad Bank                26/09/2007            3,000.00              1,649.90   20 quarterly installments
    Andhra Bank                   30/11/2009           20,000.00             20,000.00   16 quarterly installments
    Andhra Bank                   16/03/2009           10,000.00              8,125.00   16 quarterly installments
    Axis Bank                     18/02/2008           10,000.00             10,000.00   Bullet-17/02/2011
    Axis Bank                     20/10/2008           20,000.00             20,000.00   Bullet-19/10/2010
    Axis Bank                     24/03/2009           50,000.00             25,000.00   6 quarterly installments
    Bank Of India                 05/11/2007           10,000.00              4,791.50   48 monthly installments
    Bank Of Rajasthan             30/06/2009            2,500.00              2,083.33   12 quarterly installments
    Bank Of Tokyo                 24/12/2009           11,000.00             11,000.00   Bullet-24/12/2010
    Barclays Bank                 03/08/2009            3,000.00              3,000.00   Bullet-03/08/2010
    Barclays Bank                 24/04/2009            4,100.00              4,100.00   Bullet -24/01/2010
    Barclays Bank                 30/10/2009            4,500.00              4,500.00   Bullet-30/10/2010
    Barclays Bank                 29/09/2009            3,400.00              3,400.00   Bullet -29/09/2010
    Calyon Bank                   16/11/2007            5,000.00              5,000.00   Bullet-15/11/2010
    Calyon Bank                   24/03/2008            2,000.00              2,000.00   Bullet-24/03/2011
    Calyon Bank                   28/04/2008            3,000.00              3,000.00   Bullet-27/04/2011
    Canara Bank                   26/06/2009           25,000.00             21,875.00   16 quarterly installments
    Canara Bank                   25/11/2009           50,000.00             50,000.00   16 equal quarterly installments
    Canara Bank                   31/03/2009           25,000.00             20,312.50   16 quarterly installments
    Canara Bank                   17/10/2008           20,000.00             15,000.00   16 quarterly installments
    Canara Bank                   05/11/2008           20,000.00             15,000.00   16 quarterly installments
    Central Bank Of India         30/06/2009           20,000.00             17,500.00   16 quarterly installments
    China Trust Commercial Bank   18/11/2009            1,500.00              1,500.00   Bullet 18/11/2011
    Citi Bank                     23/06/2009            5,000.00              5,000.00   Bullet-23/06/2010
    Citi Bank                     07/05/2009           10,000.00             10,000.00   Bullet -07/05/2010
    Citi Bank                     17/08/2009           10,000.00             10,000.00   Bullet-17/8/2010
    Corporation Bank              26/03/2009            2,500.00              2,031.25   16 quarterly installments
    Development Bank of           22/06/2009            5,000.00              5,000.00   3 installments
    Singapore
    Development Bank of           23/09/2009               4,830.00           4,830.00   Bullet- 23/09/2011
    Singapore
    Development Bank of           05/03/2009               2,650.00           2,650.00   Bullet-05/09/2010
    Singapore
    Development Bank of           18/09/2008               6,210.00           6,210.00   Bullet-18/03/2010
    Singapore
    Development Bank of           23/03/2007               5,000.00            380.00    36 monthly installments
    Singapore
    Development Bank of           27/09/2007               7,500.00           7,500.00   Bullet-27/09/2010
    Singapore
    Dena Bank                     23/09/2008           20,000.00             11,666.67   36 monthly installments
    Dena Bank                     31/07/2009           20,000.00             18,750.00   16 equal quarterly installments
    Deutsche Bank                 22/09/2009            7,500.00              7,500.00   Bullet 22/09/2011
    Deutsche Bank                 30/05/2008           10,000.00             10,000.00   Bullet-30/05/2011



                                                    F-35
                                                                                                     Annexure IX
    Secured Loans
    Term Loans


A   Term Loan from banks                                                                       ( Rs in Lacs )
    Particulars                   Date of    Disbursed Amount    As at December       Repayment Terms
                                disburseme                           31, 2009
                                     nt
    Deutsche Bank               30/05/2008           10,000.00          10,000.00   Bullet-30/05/2010
    Federal Bank                18/03/2009            5,000.00           5,000.00   Bullet-18/03/2010
    HDFC Bank                   25/07/2008            7,500.00           5,892.86   14 equal quarterly installments
    HDFC Bank                   04/03/2009            6,000.00           6,000.00   Bullet-04/03/2010
    HDFC Bank                   03/10/2009           10,000.00          10,000.00   14 quarterly installments
    HDFC Bank                   19/01/2007            6,000.00             322.00   36 monthly installments
    HSBC Bank                   29/05/2009            4,770.00           4,770.00   Bullet-31/05/2011
    HSBC Bank                   29/04/2008           10,000.00          10,000.00   Bullet-29/04/2010
    HSBC Bank                   23/10/2009            9,332.00           8,554.33   24 Equal Monthly installments
    HSBC Bank                   04/08/2009           10,000.00          10,000.00   Bullet-04/08/2010
    HSBC Bank                   25/03/2009            9,250.00           9,250.00   Bullet-26/04/2010
    HSBC Bank                   18/09/2009            4,850.00           4,850.00   Bullet-16/09/2011
    ICICI Car Loan              10/02/2006                9.77               2.41   60 equated monthly
                                                                                    installments
    ICICI Car Loan              05/06/2006                4.90               1.60   59 equated monthly
                                                                                    installments
    ICICI Bank                  28/04/2008           25,000.00          12,500.00   12 equal quarterly installments
    ICICI Bank                  29/03/2007            5,000.00             416.67   36 equated monthly
                                                                                    installments
    IDBI Bank                   29/09/2009           20,000.00          20,000.00   42 monthly equal installments
    IDBI Bank                   24/03/2009           15,000.00          11,785.71   14 equal quarterly installments
    IDBI Bank                   03/03/2008            7,500.00           3,750.26   14 equal quarterly installments
    IDBI Bank                   24/10/2008            5,000.00           3,928.57   14 equal quarterly installments
    IDBI Bank                   10/12/2008           10,000.00           7,857.14   14 equal quarterly installments
    Indian Bank                 30/06/2009           10,000.00           8,182.00   33 monthly installments
    Indian Bank                 28/09/2007            5,000.00           1,029.20   33 monthly installments
    Indian Bank                 05/03/2009           10,000.00           7,272.73   33 monthly installments
    Indian Bank                 25/03/2008            5,000.00           1,992.62   33 monthly installments
    Indian Overseas Bank        18/02/2009           20,000.00          20,000.00   Bullet-18/02/2010
    Indusind Bank               14/09/2007            5,000.00           1,493.00   30 monthly installments
    Indusind Bank               23/12/2009            3,900.00           3,900.00   Bullet 05/07/2010
    ING Vysya Bank              31/12/2007            6,500.00           2,166.67   36 monthly installments
    ING Vysya Bank              02/12/2008            3,500.00           2,333.33   36 monthly installments
    ING Vysya Bank              30/10/2009            3,800.00           3,588.89   36 equal monthly installments
    J P Morgan Chase Bank       16/03/2009            4,700.00           4,700.00   Bullet-06/04/2010
    Karur Vysya Bank            09/11/2006            1,000.00             250.00   4 annual installments
    Karur Vysya Bank            31/07/2009            2,000.00           1,875.00   16 equal quarterly installments
    Kotak Mahindra Bank         16/12/2009            5,000.00           5,000.00    Bullet -27/03/2010
    Laxmi Vilas Bank            12/09/2009            4,500.00           4,500.00    Bullet -12/09/2010
    Mizuho Bank                 10/12/2009            5,000.00           5,000.00    Bullet -09/12/2010
    Oriental Bank Of Commerce   24/08/2009           20,000.00          17,777.78   36 equated monthly
                                                                                    installments



                                                  F-36
                                                                                                          Annexure IX
    Secured Loans
    Term Loans
                                                                                                        ( Rs in Lacs )
A   Term Loan from banks
    Particulars                        Date of    Disbursed Amount    As at December       Repayment Terms
                                     disburseme                           31, 2009
                                          nt
    Oriental Bank Of Commerce        28/02/2008           20,000.00          11,927.73   48 equated monthly
                                                                                         installment
    Oriental Bank Of Commerce        22/11/2007           10,000.00           3,596.25   36 equated monthly
                                                                                         installments
    Punjab & Sind Bank               16/04/2008            5,000.00           5,000.00   Bullet-15/04/2011
    Punjab & Sind Bank               19/11/2009            5,000.00           5,000.00   36 monthly installment
    Punjab National Bank             15/10/2008           20,000.00          11,999.98   35 monthly installment
    Punjab National Bank             30/06/2009           20,000.00          20,000.00   Bullet-05/01/2010
    Punjab National Bank             27/07/2009           20,000.00          17,058.75   34 equal monthly installment
    Ratnakar Bank                    20/12/2007            2,500.00           1,249.85   48 Monthly installments
    State Bank Of Patiala            29/09/2009           20,000.00          20,000.00   13 quarterly installments
    State Bank Of Travancore         29/09/2009           10,000.00           9,444.00   36 equal monthly installment
    State Bank Of Hyderabad          23/03/2007           10,000.00             836.67   12 quarterly installments
    Shinhan Bank                     09/02/2009            2,800.00           2,800.00   Bullet-09/02/2010
    Society General Bank             14/08/2009            2,000.00           1,666.67   24 Monthly installments
    Society General Bank             24/12/2009            1,200.00           1,200.00   24 equal Monthly installments
    Society General Bank             29/10/2007            6,000.00           1,750.00   36 monthly installments
    Society General Bank             14/03/2008            1,180.00             442.50   36 monthly installments
    South Indian Bank                17/12/2009            5,000.00           5,000.00   16 equal quarterly installments
    South Indian Bank                18/08/2008            5,000.00           3,437.50   16 quarterly installments
    South Indian Bank                20/03/2009            2,500.00           2,031.25   16 quarterly installments
    Standard Chartedred Bank         07/12/2009           12,500.00          12,500.00   Bullet-07/12/2010
    Standard Chartedred Bank         04/03/2009            8,700.00           5,093.45   24 Monthly installments
    Standard Chartedred Bank         06/05/2008           13,000.00           2,600.00   24 Monthly installments
    State Bank Of Bikaner & Jaipur   08/11/2007            5,000.00           1,672.00   12 quarterly installments
    State Bank Of Bikaner & Jaipur   09/04/2009            5,000.00           4,060.00   16 quarterly installments
    State Bank Of Bikaner & Jaipur   31/03/2009            2,500.00           2,500.00   16 quarterly installments
    State Bank Of Hyderabad          05/11/2009           25,000.00          25,000.00    16 quarterly installments
    State Bank Of Hyderabad          21/01/2008           15,000.00           8,436.90   16 quarterly installments
    State Bank Of Mauritius Bank     19/01/2009            2,250.00           1,687.50   12 Quarterly installments
    State Bank Of Mysore Bank        29/09/2006            2,500.00             471.86   48 monthly installments
    State Bank Of Mysore Bank        22/06/2007           10,000.00           3,529.54   48 monthly installments
    State Bank Of Mysore Bank        05/03/2009           10,000.00           8,124.97   48 monthly installments
    State Bank Of Mysore Bank        26/11/2007           10,000.00           4,799.58   48 monthly installments
    State Bank Of Mysore Bank        19/09/2008           15,000.00          10,620.86   48 monthly installments
    State Bank Of Patiala Bank       28/02/2007            5,000.00             413.00   12 quarterly installments
    State Bank Of Patiala Bank       05/10/2007           10,000.00           4,000.00   10 quarterly installments
    State Bank Of Patiala Bank       30/07/2008           20,000.00          15,710.00   14 quarterly installments
    State Bank Of Saurashtra Bank    31/07/2007            7,500.00           1,864.94   12 quarterly installments
    State Bank Of Travancore         28/06/2007            5,000.00             833.35   12 quarterly installments
    State Bank Of Travancore         29/01/2009            7,500.00           5,625.00   12 quarterly installments
    Syndicate Bank                   29/09/2009           15,000.00          14,062.50   48 monthly installments



                                                       F-37
                                                                                                           Annexure IX
    Secured Loans
    Term Loans

A   Term Loan from banks                                                                             ( Rs in Lacs )
    Particulars                      Date of    Disbursed Amount       As at December       Repayment Terms
                                   disburseme                              31, 2009
                                        nt
    Tamilnad Merchantile Bank      22/06/2009               5,000.00           4,375.00   48 Monthly installments
    Limited
    Tamilnad Merchantile Bank      29/09/2006               2,500.00            468.69    48 Monthly installments
    Limited
    UCO Bank                       25/09/2009           15,000.00             14,062.50   16 equal quarterly installments
    UCO Bank                       18/03/2009           10,000.00             10,000.00   Bullet-18/03/2010
    Union Bank                     31/12/2009           30,000.00             30,000.00   16 equal quarterly installments
    Union Bank                     20/03/2009           10,000.00             10,000.00   Bullet-20/03/2010
    United Bank                    25/09/2009           10,000.00              9,375.00   16 quarterly installments
    United Bank                    03/06/2008            5,000.00              3,125.00   16 quarterly installments
    United Bank                    31/12/2008           10,000.00              8,125.00   16 quarterly installments
    United Bank                    13/03/2009           15,000.00             12,187.50   16 quarterly installments
    Vijaya Bank                    28/09/2006            5,000.00                937.50   16 quarterly installments
    Vijaya Bank                    28/02/2008            5,000.00              2,812.48   16 quarterly installments
    Yes Bank                       04/10/2005            2,437.87              1,244.29   20 quarterly installments

    Total                                             1,251,874.54          972,557.48

B   Term Loan from others
    Particulars                      Date of    Disbursed Amount       As at December       Repayment Terms
                                   disburseme                              31, 2009
                                        nt
    L&T Finance Limited            02/03/2005            2,500.00                627.05   72 monthly installments
    L&T Finance Limited            29/06/2005            2,500.00                744.84   72 monthly installments
    L&T Finance Limited            02/01/2006            2,500.00              1,010.68   72 monthly installments
    IDFC                           31/03/2005            5,000.00                250.00   5 annual installments
    IDFC                           30/12/2005            2,500.00                125.00   5 annual installments
    IDFC                           07/03/2006           10,000.00              7,000.00   5 annual installments
    IDFC                           31/01/2007           20,000.00             12,000.00   5 annual installments
    Life Insurance Corporation     14/06/2006            7,500.00              3,000.00   5 annual installments
    Small Industries Development   02/01/2006            2,000.00                446.00   54 monthly installments
    Bank of India
    Small Industries Development   15/03/2007               5,000.00            324.00    30 monthly installments
    Bank of India
    Small Industries Development   31/12/2007               5,000.00           1,850.00   33 monthly installments
    Bank of India
    Small Industries Development   29/09/2008           10,000.00              6,400.00   33 monthly installments
    Bank of India
    SICOM                          10/06/2009               6,500.00           6,500.00   Bullet-09/06/2012


    Total                                               81,000.00             40,277.57




                                                     F-38
    Secured Loans

C   Cash Credit from Banks#
                                                                                           (Rs in lacs)

    Particulars                         Date of        Disbursed Amount     As at December 31, 2009
                                     disbursement

    Indian Overseas Bank             18/02/2009                 10,000.00                     8,971.83
    United Bank Of India             09/03/2009                 15,000.00                    14,526.39
    Yes Bank                         30/12/2008                  7,500.00                     6,902.30
    Canara Bank                      12/01/2009                  7,500.00                     6,670.01
    Axis Bank                        16/11/2009                 15,000.00                    11,912.63
    South Indian Bank                30/11/2009                  5,000.00                     4,619.09
    Federal Bank                     19/09/2007                  5,000.00                     3,935.77
    Abu Dhabi Commercial Bank        03/02/2009                  1,500.00                       902.79
    Bank Of Ceylon                   21/11/2008                    600.00                       590.43
    State Bank Of Travancore         29/09/2008                  7,500.00                     5,953.73
    Dena Bank                        30/01/2009                 17,500.00                    17,144.10
    Union Bank Of India              01/11/2008                 22,175.00                    21,809.32
    Bank Of India                    04/06/2009                 27,500.00                    27,178.25
    Corporation Bank                 16/01/2008                  5,000.00                     3,790.30
    UCO Bank                         04/08/2008                 15,000.00                    14,543.56
    SBI Commercial & International   01/05/2009                  1,182.00                       982.30
    Bank Of Baroda                   19/11/2007                  4,000.00                         0.10
    City Union Bank                  13/10/2008                  5,000.00                     4,632.67
    Bank Of Rajasthan                22/06/2009                  2,500.00                     2,471.77
    State Bank Of Indore             26/08/2008                 10,000.00                     9,819.70
    The Lakshmi Vilas Bank           17/03/2009                  2,500.00                     2,455.61
    Karnataka Bank                   05/12/2007                 10,000.00                     9,823.06
    Central Bank Of India            21/08/2009                 30,000.00                    27,398.82
    IDBI Bank                        19/11/2007                  5,000.00                     4,004.45
    State Bank Of India              16/11/2009                 47,000.00                    45,658.89
    Bank Of Maharashtra              22/12/2008                 10,000.00                     9,505.48
    State Bank Of Patiala            24/09/2008                  5,000.00                     4,146.25
    Bahrain & Kuwait                 22/07/2008                  1,000.00                       451.91
    Ratnakar                         11/08/2008                  1,000.00                       899.54
    Oriental Bank Of Commerce        03/08/2009                 20,000.00                    18,398.78
    IDBI Bank                        03/10/2008                  5,000.00                     4,901.63
    Karur Vysya Bank Wcdl            30/06/2009                  1,500.00                     1,512.12
    Bank Of India Wcdl               28/08/2009                 20,000.00                    19,865.75
    State Bank Of Mysore             26/09/2009                 10,000.00                     9,519.45
    State Bank Of Bikaner & Jaipur   30/12/2009                  5,000.00                     4,502.71
    Andhra Bank                      30/12/2009                 15,000.00                    15,009.04
    DCB Bank                         31/10/2009                  3,500.00                     3,500.00


    TOTAL                                                      375,957.00                   348,910.53



                                                    F-39
                                                                                                              Annexure IX
    Secured Loans
                                                                                                              ( Rs in Lacs )
D   Privately placed Redeemable Non Convertible Debenture of Rs 1,000,000 each

    Particulars                        Date of         Disbursed          As at December         Repayment Terms
                                     Allotment         Amount                 31, 2009
    Kotak Mahindra Trustee           05/07/2007             5,000.00                5,000.00   Bullet-05/07/2010
    Company Limited. A/C Kotak
    Flexible Debt Scheme
    HDFC Trustee Company             09/07/2007                1,590.00            1,590.00    Bullet-09/07/2010
    Limited - A/C HDFC Fixed
    Maturity Plan 36 M June 2007
    Kotak Mahindra Trustee           09/07/2007                1,500.00            1,500.00    Bullet-09/07/2010
    Company Limited. A/C Kotak
    Flexible Debt Scheme
    UTI - Fixed Maturity Plan -      09/07/2007                1,500.00            1,500.00    Bullet-09/07/2010
    Yearly Series Sep 09
    HDFC Standard Life Insurance     09/07/2007                1,000.00            1,000.00    Bullet-09/07/2010
    Company Limited
    Reliance General Insurance Co    09/07/2007                 500.00               500.00    Bullet-09/07/2010
    Limited
    HDFC Trustee Company             09/07/2007                 500.00               500.00    Bullet-09/07/2010
    Limited A/C HDFC Fixed
    Maturity Plan 17 M November
    2008 (1)
    HDFC Trustee Company             09/07/2007                 200.00               200.00    Bullet-09/07/2010
    Limited A/C HDFC Fixed
    Maturity Plan 20 M August
    2008
    HDFC Trustee Company             09/07/2007                 200.00               200.00    Bullet-09/07/2010
    Limited A/C HDFC Cash
    Management Fund Treasury
    Advantage Plan
    HDFC Trustee Company             09/07/2007                  10.00                10.00    Bullet-09/07/2010
    Limited A/C HDFC Fixed
    Maturity Plan 16 M December
    2008 (1)
    Fortis Money Plus Fund           25/07/2007                2,000.00            2,000.00    Bullet-25/07/2010
    Fortis Fixed Term Plan-Series    25/07/2007                  500.00              500.00    Bullet-25/07/2010
    15 Plan A
    ICICI Prudential Flexible        25/07/2007             10,000.00             10,000.00    Bullet-25/07/2010
    Income Plan
    HDFC Standard Life Insurance     11/07/2007                1,000.00            1,000.00    Bullet-09/07/2010
    Company Limited
    Kotak Mahindra Trustee           25/07/2007                2,500.00            2,500.00    Bullet-25/07/2010
    Company Limited. A/C Kotak
    Flexible Debt Scheme
    UTI-Unit Linked Insurance Plan   10/09/2007                1,000.00            1,000.00    Bullet-10/09/2010
    UTI-Floating Rate Fund-Short     10/09/2007                1,350.00            1,350.00    Bullet-10/09/2010
    Term Plan
    UTI - Childrens Career Plan      10/09/2007                 150.00               150.00    Bullet-10/09/2010
    Advantage Fund




                                                        F-40
                                                                                                              Annexure IX
    Secured Loans
                                                                                                              ( Rs in Lacs )
D   Privately placed Redeemable Non Convertible Debenture of Rs 1,000,000 each

    Particulars                         Date of        Disbursed          As at December         Repayment Terms
                                      Allotment        Amount                 31, 2009
    Kotak Mahindra Trustee            21/09/2007            2,500.00                2,500.00   Bullet-21/09/2010
    Company Limited. A/C Kotak
    Flexible Debt Scheme
    Kotak Mahindra Trustee Co.        15/10/2007               2,000.00            2,000.00    Bullet-15/10/2010
    Limited. A/C Kotak Fixed
    Maturity Plan 370 Days Series 1
    ICICI Prudential Short Term       18/10/2007               2,500.00            2,500.00    Bullet-18/10/2010
    Plan
    UTI - Retirement Benefit          18/10/2007               2,500.00            2,500.00    Bullet-18/10/2010
    Pension Fund
    Kotak Mahindra Trustee Co.        18/10/2007               2,000.00            2,000.00    Bullet-18/10/2010
    Limited. A/C Kotak Fixed
    Maturity Plan 370 Days Series 1
    UTI-Liquid Cash Plan              19/10/2007             2,500.00              2,500.00    Bullet-19/10/2010
    UTI - Treasury Advantage Fund     19/10/2007             2,360.00              2,360.00    Bullet-19/10/2010
    UTI-Money Market Fund             19/10/2007               140.00                140.00    Bullet-19/10/2010
    Life Insurance Corporation Of     02/05/2008            15,000.00             15,000.00    Bullet-02/05/2011
    India
    UTI-Unit Linked Insurance Plan    20/06/2008               3,500.00            3,500.00    Bullet-20/06/2011
    UTI-Unit Scheme For               20/06/2008               2,500.00            2,500.00    Bullet-20/06/2011
    Charitable And Religioustrusts
    And Registered Societies
    UTI - Childrens Career            20/06/2008               2,500.00            2,500.00    Bullet-20/06/2011
    Balanced Plan
    UTI - Retirement Benefit          20/06/2008               1,500.00            1,500.00    Bullet-20/06/2011
    Pension Fund
    Reliance Capital Trustee Co       18/08/2008               7,650.00            7,650.00    Bullet-06/03/2010
    Limited- Reliance Fixed
    Horizon Fund -IX
    Citicorp Capital Markets          18/08/2008               5,000.00            5,000.00    Bullet-06/03/2010
    Limited
    Reliance Capital Trustee Co       18/08/2008               3,350.00            3,350.00    Bullet-06/03/2010
    Limited A/C Reliance Floating
    Rate Fund
    HDFC Trustee Company              18/08/2008               3,000.00            3,000.00    Bullet-06/03/2010
    Limited A/C HDFC Cash
    Management Fund Treasury
    Advantage Plan
    Templeton India Short-Term        18/08/2008               2,500.00            2,500.00    Bullet-06/03/2010
    Income Plan
    Franklin Templeton Mutual         18/08/2008               2,500.00            2,500.00    Bullet-06/03/2010
    Fund A/C Templeton Floating
    Rate Income Fund Long Term
    Plan
    ICICI Prudential Flexible         18/08/2008               2,500.00            2,500.00    Bullet-06/03/2010
    Income Plan
    Fortis Money Plus Fund            18/08/2008               2,500.00            2,500.00    Bullet-06/03/2010


                                                        F-41
                                                                                                              Annexure IX
    Secured Loans
                                                                                                              ( Rs in Lacs )
D   Privately placed Redeemable Non Convertible Debenture of Rs 1,000,000 each

    Particulars                         Date of        Disbursed          As at December         Repayment Terms
                                      Allotment        Amount                 31, 2009
    Principal Trustee Company         04/09/2008            1,500.00                1,500.00   Bullet-04/04/2010
    Private Limited A/C Principal
    Mutual Fund-Principal Floating
    Rate Fund-Flexible Maturity
    Plan (Fixed Maturity Plan)
    Principal Trustee Company         04/09/2008               1,000.00            1,000.00    Bullet-04/04/2010
    Private Limited A/C Principal
    Mutual Fund Principal Income
    Fund Short Term Plan
    Templeton Fixed Horizon Fund      04/09/2008                600.00               600.00    Bullet-04/04/2010
    - Series XI - Plan H
    Templeton India Short-Term        04/09/2008                160.00               160.00    Bullet-04/04/2010
    Income Plan
    Templeton Fixed Horizon Fund      04/09/2008                140.00               140.00    Bullet-04/04/2010
    - Series IV - Plan A
    Franklin Templeton Fixed          04/09/2008                100.00               100.00    Bullet-04/04/2010
    Tenure Fund - Seriesi- 60 Month
    Templeton Fixed Horizon Fund-     04/09/2008               1,500.00            1,500.00    Bullet-20/02/2010
    Series IX-Plan E
    Reliance Capital Trustee Co       04/09/2008               5,000.00            5,000.00    Bullet-04/09/2010
    Limited- Reliance Fixed
    Horizon Fund -IX
    HDFC Trustee Company              04/09/2008               4,300.00            4,300.00    Bullet-04/09/2010
    Limited A/C HDFC Fixed
    Maturity Plan 20 M August
    2008
    HDFC Trustee Company              04/09/2008                600.00               600.00    Bullet-04/09/2010
    Limited A/C HDFC Fixed
    Maturity Plan 22 M September
    2008
    HDFC Trustee Company              04/09/2008                100.00               100.00    Bullet-04/09/2010
    Limited-HDFC Floating Rate
    Income Fund A/C Short Term
    Plan
    Deutsche Trustee Services         08/09/2008               2,800.00            2,800.00    Bullet-08/09/2010
    (India) Private Limited A/C
    Dws Fixed Term Fund-Series 59
    Religare Trustee Company          08/09/2008                110.00               110.00    Bullet-08/09/2010
    Private Limited - A/C Religare
    Long Term Fixed Maturity Plan
    - Series I - Plan A
    Religare Trustee Company          08/09/2008                 80.00                80.00    Bullet-08/09/2010
    Private Limited - A/C Religare
    Ultra Short Term Fund
    Religare Trustee Company          08/09/2008                 10.00                10.00    Bullet-08/09/2010
    Private Limited - A/C Religare
    Short Term Plan
    Axis Bank Limited                 15/09/2008               1,500.00            1,500.00    Bullet-15/09/2011



                                                        F-42
                                                                                                             Annexure IX
    Secured Loans
                                                                                                             ( Rs in Lacs )
D   Privately placed Redeemable Non Convertible Debenture of Rs 1,000,000 each
    Particulars                       Date of          Disbursed         As at December         Repayment Terms
                                    Allotment          Amount                31, 2009
    Kotak Mahindra Trustee          15/09/2008               1,500.00              1,500.00   Bullet-15/09/2010
    Company Limited. A/C Kotak
    Flexible Debt Scheme
    Templeton Fixed Horizon Fund    15/09/2008               1,650.00              1,650.00   Bullet-15/03/2010
    - Series XI - Plan G
    Franklin Templeton Mutual       15/09/2008                 850.00                850.00   Bullet-15/03/2010
    Fund A/C Templeton Floating
    Rate Income Fund Long Term
    Plan
    Kotak Mahindra Trustee          15/09/2008               2,500.00              2,500.00   Bullet-15/09/2010
    Company Limited. A/C Kotak
    Flexible Debt Scheme
    Axis Bank Limited               16/09/2008               2,500.00              2,500.00   Bullet-16/09/2011
    Reliance Capital Trustee Co     15/09/2008               2,400.00              2,400.00   Bullet-15/03/2010
    Limited A/C-Reliancemoney
    Manager Fund
    Reliance Capital Trustee Co     15/09/2008                 100.00                100.00   Bullet-15/03/2010
    Limited- Reliance Fixed
    Horizon Fund -IX
    UTI Fixed Term Income Fund      15/09/2008               1,500.00              1,500.00   Bullet-30/04/2010
    Series V Plan II ( 20 Mts )
    ICICI Prudential Fixed Maturity 17/09/2008               8,000.00              8,000.00   Bullet-01/09/2011
    Plan - Series 45 - Three Years
    Plan
    HDFC Trustee Company            24/09/2008               2,500.00              2,500.00   Bullet-24/09/2010
    Limited A/C HDFC Fixed
    Maturity Plan 22 M September
    2008
    HDFC Trustee Company            26/09/2008                 700.00                700.00   Bullet-26/09/2010
    Limited A/C High Interest Fund
    Short Term Plan
    HDFC Trustee Company            26/09/2008                 600.00                600.00   Bullet-26/09/2010
    Limited A/C HDFC Fixed
    Maturity Plan 17 M November
    2008 (1)
    HDFC Trustee Company            26/09/2008                 550.00                550.00   Bullet-26/09/2010
    Limited HDFC MF Monthly
    Income Plan Short Term Plan
    HDFC Trustee Company            26/09/2008                 350.00                350.00   Bullet-26/09/2010
    Limited A/C HDFC Fixed
    Maturity Plan 22 M September
    2008
    HDFC Trustee Company            26/09/2008                 190.00                190.00   Bullet-26/09/2010
    Limited A/C HDFC Fixed
    Maturity Plan 18 M October
    2008 (2)




                                                         F-43
                                                                                                             Annexure IX
    Secured Loans
                                                                                                             ( Rs in Lacs )
D   Privately placed Redeemable Non Convertible Debenture of Rs 1,000,000 each
    Particulars                      Date of           Disbursed         As at December         Repayment Terms
                                   Allotment           Amount                31, 2009
    HDFC Trustee Company           26/09/2008                  110.00                110.00   Bullet-26/09/2010
    Limited A/C HDFC Fixed
    Maturity Plan 16 M December
    2008 (1)
    UTI - Fixed term income fund   26/09/2008                1,300.00              1,300.00   Bullet-10/09/2010
    Series V Plan III (24 Mts)
    UTI-Unit Linked Insurance Plan 26/09/2008                  200.00                200.00   Bullet-10/09/2010
    Sundaram BNP Paribas Mutual    08/10/2008                  700.00                700.00   Bullet-06/04/2010
    Fund A/C Sundaram BNP
    Paribas Fixeed term Plan - 18
    Months Series L
    Sundaram BNP Paribas Mutual    08/10/2008                  300.00                300.00   Bullet-06/04/2010
    Fund A/C Sundaram BNP
    Paribas Ultra Short Term Fund
    ICICI Prudential Fixed Maturity   08/10/2008                 190.00             190.00    Bullet-06/04/2010
    Plan - Series 45 - Twenty
    Months Plan
    ICICI Prudential Ultra Short      08/10/2008                  10.00              10.00    Bullet-06/04/2010
    Term Fund
    ICICI Prudential Real Estate      24/10/2008                5,000.00           5,000.00   Bullet-10/12/2010
    Securities Fund
    Life Insurance Corporation Of     03/11/2008             30,000.00           30,000.00    Bullet-03/11/2013
    India
    General Insurance Corporation     26/11/2008                1,000.00           1,000.00   Bullet-26/11/2013
    Of India
    United Bank Of India              28/03/2009                5,000.00           5,000.00   Bullet-28/12/2012
    Principal Trustee Company         20/04/2009                2,000.00           2,000.00   Bullet-20/04/2011
    Private Limited A/C Principal
    Mutual Fund Principal Income
    Fund Short Term Plan
    Principal Trustee Company         20/04/2009                 500.00             500.00    Bullet-20/04/2011
    Private Limited A/C Principal
    Mutual Fund Principal Income
    Fund
    Fortis Money Plus Fund            20/04/2009             10,000.00           10,000.00    Bullet-20/04/2011
    Franklin Templeton Mutual         13/04/2009              5,000.00            5,000.00    Bullet-13/04/2011
    Fund A/C Templeton floating
    Rate Income Fund Long Term
    Plan
    Templeton India Ultra-Short       13/04/2009                5,000.00           5,000.00   Bullet-13/04/2011
    Bond Fund
    Kotak Mahindra Trustee            08/06/2009                7,500.00           7,500.00   Bullet-08/12/2010
    Company Limited. A/C Kotak
    Flexible Debt Scheme
    Kotak Mahindra Trustee            17/06/2009                2,500.00           2,500.00   Bullet-17/06/2011
    Company Limited. A/C Kotak
    Flexible Debt Scheme



                                                         F-44
                                                                                                              Annexure IX
    Secured Loans
                                                                                                              ( Rs in Lacs )
D   Privately placed Redeemable Non Convertible Debenture of Rs 1,000,000 each
    Particulars                      Date of           Disbursed         As at December          Repayment Terms
                                   Allotment           Amount                31, 2009
    Standard Chartered Bank        30/06/2009               25,000.00             25,000.00    Bullet-30/06/2011
    (Mauritius) Limited -Debt
    Tata Trustee Company Private   14/09/2009                1,500.00              1,500.00    Bullet-05/04/2011
    Limited A/C Tata Mutual Fund
    A/C Tata Fixed Maturity Plan -
    Series 25 Scheme A
    Morgan Stanley India Capital   12/10/2009                6,500.00              6,500.00    Bullet-12/04/2011
    Private Limited
    Kotak Mahindra Trustee Co.     12/10/2009                1,400.00              1,400.00    Bullet-12/04/2011
    Limited. A/C Kotak Fixed
    Maturity Plan18 M Series 2
    Kotak Mahindra Trustee         12/10/2009                1,100.00              1,100.00    Bullet-12/04/2011
    Company Limited. A/C. Kotak
    Mahindra Bond Short Term Plan
    CMNK Consultancy & Services 25/03/2009                   2,400.00              2,400.00    Bullet-25/03/2010
    Private Limited-B 26
    Take Solutions Limited -B24    24/03/2009                2,400.00              2,400.00    Bullet-24/03/2010
    Take Solutions Limited - B25   25/03/2009                  200.00                200.00    Bullet-25/03/2010

                                                            263,200.00           263,200.00

E     Privately placed Redeemable Non Convertible Debenture of Rs 1,000 each
                                                                                                              Rs in Lacs
    Particulars                                                           As at December         Repayment Terms
                                                                              31, 2009
    Retail Debentures                                                            190,029.57       Redeemable at par over a
                                                                                               period 12 to 160 months

F   Secured Redeemable Non Convertible Debentures -Debt Issue 2009
    Particulars                                                           As at December         Repayment Terms
                                                                              31, 2009
    Option -I                                                                      10,268.88   August 2012 –August 2014
    Option -II                                                                      7,896.60   August 2012 –August 2014
    Option -III                                                                    11,241.88   August 2014
    Option -IV                                                                      2,274.12   August 2014
    Option -V                                                                      68,318.48   August 2012
    Total                                                                          99,999.96

    Total Secured Loans (A+B+C+D+E+F)                                          1,914,975.11




                                                         F-45
                                                                                                         Annexure IX
Secured Loans


Notes:
1. Security

a.   Loans aggregating to Rs. 1,360,497.29 lacs are secured by loan Receivables.
b.    Loans aggregating to Rs. 1,244.29 lacs are secured by biomass plant. The biomass plant has been sold by the
     company. The formalities for transfer of the said loan to the buyer and satisfaction of the charge are under
     progress.
c.   Loans aggregating to Rs. 4.01 lacs are secured by Vehicles.
d.   Redeemable Non convertible Debentures aggregating to Rs. 290,029.53 lacs are secured by equitable mortgage of
     title deeds of immovable property and secured by charge on fixed assets and hypothecation of loan receivables.
e.   Privately Placed Redeemable Non convertible Debentures aggregating to Rs. 263,200.00 lacs are secured by
     equitable mortgage of title deeds of immovable property and hypothecation of loan receivables.
2.   Terms as regards Interest/Pre-payment:
a.   The Fixed Interest bearing Loans/CC/Non-convertible debentures aggregate to Rs. 894,801.48 Lacs and the
     floating interest bearing Loans/CC/Non-convertible debentures aggregate to Rs. 1,020,173.63 Lacs. Out of fixed
     interest bearing loans Rs. 27,424.33 lacs are hedged.

b.   Out of the above, Loans/CC/Non-convertible debentures aggregating to Rs. 347,694.30 lacs have an interest reset
     option.
c.   Loans/CC/Non-convertible debentures aggregating to Rs. 808,731.07 lacs have a Pre-payment option upon
     payment of stipulated charges.
d.   Loans/Non-convertible debentures aggregating to Rs. 86,806.61 Lacs have a Pre-payment option without payment
     of charges.
3.   Redeemable Non convertible Debentures issued under NCD Public Issue 2009 aggregating to Rs. 13,516.00 lacs
     have both Call and Put option.
4.   Privately Placed Redeemable Non convertible Debentures aggregating to Rs. 22,500.00 lacs have both Call & Put
     option.
5.    Privately Placed Redeemable Non convertible Debentures - retail aggregating to Rs. 11,985.60 lacs have Put
     option and Rs. 190,029.57 lacs have Call option

6.   Loans aggregating to Rs. 15,000.00 lacs have Put call option.
7.   The bankers have a right to appoint a nominee director in case of loans aggregating to Rs. 233,354.45 Lacs.

8.   The Redeemable Non Convertible Debentures may be bought back subject to applicable statutory and/or
     regulatory requirements, upon the terms and conditions as may be decided by the company.

9.   The company may grant loan against the security of NCDs upon the terms and conditions as may be decided by
     the company.




                                                         F-46
                                                                                                         Annexure X
    Unsecured Loans
                                                                                                       ( Rs in Lacs )
    Name of Financer / Bank                            Date of      Disbursed     As at December    Repayment Terms
                                                    disbursement/   Amount /         31, 2009
                                                      allotment       Face
                                                                      value
A   Redeemable non-convertible debentures
    UTI - Fixed Maturity Plan - Yearly Series Sep   25/09/2007        2,500.00           2,500.00   Bullet-25/09/2010
    09

                                                                      2,500.00           2,500.00
B   Commercial Papers
    Reliance Capital Trustee Co limited A/C-        04/08/2009        1,500.00                      Bullet-03/08/2010
    Reliance Money Manager Fund                                                          1,500.00
    Religare Trustee Company Private Limited -      04/08/2009                                      Bullet-03/08/2010
    A/C Religare Ultra Short Term Fund                                1,000.00           1,000.00

                                                                      2,500.00           2,500.00
C   Subordinated debts
    Oriental Bank Of Commerce                       30/11/2007        1,000.00                      Bullet-31/05/2013
                                                                                         1,000.00
    UTI - Monthly Income Scheme                     29/01/2008         1,500.00          1,500.00   Bullet-29/07/2013
    UTI-Unit Linked Insurance Plan                  29/01/2008       1,000.00        1,000.00       Bullet-29/07/2013
    Bank Of India                                   01/02/2008       1,500.00        1,500.00       Bullet-01/05/2013
    Bank Of India                                   17/03/2008       1,500.00        1,500.00       Bullet-17/09/2013
    LIC MF Liquid Fund                              24/03/2008       5,000.00        5,000.00       Bullet-24/06/2013
    UCO Bank                                        27/03/2008       1,000.00        1,000.00       Bullet-27/06/2013
    LIC MF Liquid Fund                              02/05/2008       1,700.00        1,700.00       Bullet-03/10/2013
    LIC MF Income Plus Fund                         02/05/2008        800.00          800.00        Bullet-03/10/2013
    Hvpnl Employees Pension Fund Trust              04/08/2008       2,250.00        2,250.00       Bullet-04/08/2018
    Food Corporation Of India Cpf Trust             04/08/2008       1,000.00        1,000.00       Bullet-04/08/2018
    Hvpnl Employees Provident Fund Trust            04/08/2008        750.00          750.00        Bullet-04/08/2018
    Gas Authority Of India Limited Employees        04/08/2008        300.00          300.00        Bullet-04/08/2018
    Provident Fund Trust
    The Jammu And Kashmir Bank Employees            04/08/2008       200.00          200.00         Bullet-04/08/2018
    Provident Fund Trust
    Gail Employees Superannuation Benefit Fund      04/08/2008       100.00          100.00         Bullet-04/08/2018
    Gujarat Alkalies And Chemicals limited          04/08/2008       100.00          100.00         Bullet-04/08/2018
    Employees Provident Fund Trust
    Gail (India) Limited Employees Death-Cum-       04/08/2008        50.00           50.00         Bullet-04/08/2018
    Superannuation Gratuity Scheme
    Asbestos Cement Limited Staff Provident         04/08/2008        40.00           40.00         Bullet-04/08/2018
    Fund
    Provident Fund Of Mangalore Refinery And        04/08/2008        40.00           40.00         Bullet-04/08/2018
    Petrochemicals Limited
    Mother Dairy Employees Provident Fund           04/08/2008        30.00           30.00         Bullet-04/08/2018
    Trust
    GSFC limited - Fibre Unit Employees P F         04/08/2008        30.00           30.00         Bullet-04/08/2018
    Trust
    Trustees Provident Fund Of The Employees        04/08/2008        30.00           30.00         Bullet-04/08/2018
    Of The Ugar Sugar Works limited
    British High Commission India Staff             04/08/2008        20.00           20.00         Bullet-04/08/2018
    Provident fund
    Asbestos Cement Limited Employees               04/08/2008        20.00           20.00         Bullet-04/08/2018
    Provident Fund



                                                          F-47
                                                                                                       Annexure X
    Unsecured Loans
                                                                                                      ( Rs in Lacs )
    Name of Financer / Bank                     Date of          Disbursed      As at December    Repayment Terms
                                             disbursement/       Amount /          31, 2009
                                               allotment         Face value
C   Subordinated debts
    L & T Niro Staff Provident Fund          04/08/2008                 10.00            10.00    Bullet-04/08/2018
    Alembic Limited Provident Fund Trust     04/08/2008                 10.00            10.00    Bullet-04/08/2018
    Atlas Cycle Industries Provident Fund    04/08/2008                 10.00            10.00    Bullet-04/08/2018
    Trust
    Lubrizol India Limited Employees         04/08/2008                 10.00            10.00    Bullet-04/08/2018
    Provident Fund
    Chhattisgarh State Electricity Board     05/11/2008              2,000.00          2,000.00   Bullet-05/11/2018
    (Cseb) Provident Fund Trust
    Delhi Development Authority              05/11/2008              1,000.00          1,000.00   Bullet-05/11/2018
    Chhattisgarh State Electricity Board     07/11/2008              1,500.00          1,500.00   Bullet-07/11/2018
    Gratuityand Pension Fund Trust
    Jacobs H And G Private Limited           26/11/2008                 10.00            10.00    Bullet-26/02/2014
    Employees Provident Fund
    UCO Bank                                 26/11/2008              5,000.00          5,000.00   Bullet-26/02/2014
    Bank Of Maharashtra                      11/12/2008              2,000.00          2,000.00   Bullet-11/03/2014
    Bank Of Baroda                           11/12/2008              2,000.00          2,000.00   Bullet-11/03/2014
    The Indian Iron And Steel Co limited     11/12/2008                500.00            500.00   Bullet-11/03/2014
    Provident Institution
    Durgapur Steel Plant Provident Fund      11/12/2008                200.00           200.00    Bullet-11/03/2014
    Ashok Leyland Senior Executives          11/12/2008                100.00           100.00    Bullet-11/03/2014
    Provident Fund
    Rameshwara Jute Mills Workers            11/12/2008                100.00           100.00    Bullet-11/03/2014
    Provident Fundtrust
    Gujarat Alkalies And Chemicals limited   11/12/2008                 50.00            50.00    Bullet-11/03/2014
    Employeesprovident Fund Trust
    Shivani Kumar                            11/12/2008                 13.00            13.00    Bullet-11/03/2014
    Russell Reynolds Associates India        11/12/2008                  5.00             5.00    Bullet-11/03/2014
    Employees Provident Fund
    Frank Ross limited Employees'            11/12/2008                  5.00              5.00   Bullet-11/03/2014
    Provident Fund
    D S Savant And Sons Employees            11/12/2008                  5.00              5.00   Bullet-11/03/2014
    Provident Fund
    Paushak limited Provident Fund           11/12/2008                  5.00              5.00   Bullet-11/03/2014
    Rai And Sons Private Limited             11/12/2008                  4.00              4.00   Bullet-11/03/2014
    Employees Provident Fund
    Afco Fincon Private limited.             11/12/2008                  3.00              3.00   Bullet-11/03/2014
    Mehta And Padamsey Private Limited       11/12/2008                  2.00              2.00   Bullet-11/03/2014
    Employees Provident Fund
    Mehta And Padamsey Surveyors Private     11/12/2008                  2.00              2.00   Bullet-11/03/2014
    Limitedstaff Provident Fund
    Hirabai Vithaldas Shubh Trust            11/12/2008                  2.00              2.00   Bullet-11/03/2014
    The Metal Rolling Works Limited          11/12/2008                  1.00              1.00   Bullet-11/03/2014
    Employees Educational Welfare Trust
    Falguni Atul Oza                         11/12/2008                  1.00              1.00   Bullet-11/03/2014
    Sarvodaya Welfare Trust                  11/12/2008                  1.00              1.00   Bullet-11/03/2014
    Hakamchand Vakhatram Philanthropic       11/12/2008                  1.00              1.00   Bullet-11/03/2014
    Trust
    Bangiya Gramin Vikash Bank               15/12/2008                300.00           300.00    Bullet-15/03/2014




                                                          F-48
                                                                                                         Annexure X
    Unsecured Loans
                                                                                                        ( Rs in Lacs )
    Name of Financer / Bank                       Date of          Disbursed      As at December    Repayment Terms
                                               disbursement/       Amount /           31, 2009
                                                 allotment         Face value
C   Subordinated debts
    Life Insurance Corporation Of India        23/12/2008                100.00           100.00    Bullet-23/03/2014
    Karnataka Power Corporation limited        23/12/2008                100.00           100.00    Bullet-23/03/2014
    Emp Contributory Provident Fund Trust
    Century Textiles And Industries limited.   29/12/2008                  7.00              7.00   Bullet-29/12/2018
    (Cementdivisions) Superannuation Fund
    Manikgarh Cement Employees                 29/12/2008                  4.00              4.00   Bullet-29/12/2018
    Superannuation Welfare Trust
    Maihar Cement Employees Provident          29/12/2008                 30.00            30.00    Bullet-29/12/2018
    Fund
    LIC Of India - Gratuity Plus               17/01/2009                500.00            500.00   Bullet-17/04/2014
    Bank Of India                              02/04/2009              2,000.00          2,000.00   Bullet-02/07/2014
    Air- India Employees Provident Fund        02/04/2009                500.00            500.00   Bullet-02/07/2014
    Hero Honda Motors limited                  18/04/2009              1,300.00          1,300.00   Bullet-18/07/2014
    The Indian Iron And Steel Co limited       18/04/2009                500.00            500.00   Bullet-18/07/2014
    Provident Institution
    Durgapur Steel Plant Provident Fund        18/04/2009                200.00           200.00    Bullet-18/07/2014
    Rkm Provident Fund                         18/04/2009                133.00           133.00    Bullet-18/07/2014
    Rameshwara Jute Mills Workers              18/04/2009                100.00           100.00    Bullet-18/07/2014
    Provident Fundtrust
    Radha Govind Samiti                        18/04/2009                100.00           100.00    Bullet-18/07/2014
    Rkm Gratuity Fund                          18/04/2009                 67.00            67.00    Bullet-18/07/2014
    Megna Jute Mills Provident Fund            18/04/2009                 27.00            27.00    Bullet-18/07/2014
    Hakamchand Vakhatram Philanthropic         18/04/2009                 10.00            10.00    Bullet-18/07/2014
    Trust
    Snehal Baid                                18/04/2009                 10.00            10.00    Bullet-18/07/2014
    Bijay Singh Baid                           18/04/2009                 10.00            10.00    Bullet-18/07/2014
    Sanjay Kumar Baid                          18/04/2009                 10.00            10.00    Bullet-18/07/2014
    Wander Limited Employees Provident         18/04/2009                  7.00             7.00    Bullet-18/07/2014
    Fund
    Ramprakash Podar Charitable Trust          18/04/2009                  7.00              7.00   Bullet-18/07/2014
    Orient Ceramics Provident Fund             18/04/2009                  7.00              7.00   Bullet-18/07/2014
    Institution
    Burns Philp India Private Limited          18/04/2009                  6.00              6.00   Bullet-18/07/2014
    Employees Provident Fund
    Eskaps (India) Private. limited.           18/04/2009                  5.00              5.00   Bullet-18/07/2014
    Employees Providend fund
    A. K. Capital Services limited.            18/04/2009                  1.00              1.00   Bullet-18/07/2014
    The Hongkong And Shanghai Banking          15/07/2009              4,000.00          4,000.00   Bullet-10/10/2014
    Corp.limited.
    Chhattisgarh State Electricity Board       15/07/2009                440.00           440.00    Bullet-10/10/2014
    Gratuityand Pension Fund Trust
    ICICI Bank limited                         15/07/2009                350.00           350.00    Bullet-10/10/2014
    Cheviot Agro Industries Limited            15/07/2009                 30.00            30.00    Bullet-10/10/2014
    R S R Mohota Spg And Wvg Mills             15/07/2009                 20.00            20.00    Bullet-10/10/2014
    Limited Employeesprovident Fund Trust
    Hinganghat
    Sunderdevi Baid                            15/07/2009                 20.00            20.00    Bullet-10/10/2014
    Bela Anil Dalal                            15/07/2009                 15.00            15.00    Bullet-10/10/2014
    Meenakshi Baid                             15/07/2009                 15.00            15.00    Bullet-10/10/2014

                                                            F-49
                                                                                                      Annexure X
    Unsecured Loans
                                                                                                     ( Rs in Lacs )
    Name of Financer / Bank                    Date of          Disbursed      As at December    Repayment Terms
                                            disbursement/       Amount /          31, 2009
                                              allotment         Face value
C   Subordinated debts
    Aditya Share Dealings And Trading       15/07/2009                 15.00            15.00    Bullet-10/10/2014
    Private Limited
    Cheviot Company Limited Employees       15/07/2009                 10.00            10.00    Bullet-10/10/2014
    Gratuity Trust Fund
    Amrish A Dalal                          15/07/2009                 10.00             10.00   Bullet-10/10/2014
    Bijay Singh Baid                        15/07/2009                 10.00             10.00   Bullet-10/10/2014
    Ganpati Share Cap Private Limited       15/07/2009                 10.00             10.00   Bullet-10/10/2014
    Mikasa Cosmetics Limited                15/07/2009                 30.00             30.00   Bullet-10/10/2014
    Anil Vipin Dalal Huf                    15/07/2009                 10.00             10.00   Bullet-10/10/2014
    Nikhil Anil Dalal                       15/07/2009                 15.00             15.00   Bullet-10/10/2014
    Central Bank Of India                   27/10/2009              5,000.00          5,000.00   Bullet-27/01/2015
    Welspun Gujarat Stahl Rohren Limited    27/10/2009              1,780.00          1,780.00   Bullet-27/01/2015
    Nps Trustees - LIC Pension Fund         27/10/2009              1,310.00          1,310.00   Bullet-27/01/2015
    Scheme 1
    A.K.Capital Services Limited            27/10/2009                637.00           637.00    Bullet-27/01/2015
    Dombivli Nagari Sahakari Bank Limited   27/10/2009                500.00           500.00    Bullet-27/01/2015
    AIR- India Employees Provident Fund     27/10/2009                400.00           400.00    Bullet-27/01/2015
    NPS Trust - A/C LIC Pension Fund - Sg   27/10/2009                200.00           200.00    Bullet-27/01/2015
    Scheme1
    Gujarat Alkalies And Chemicals          27/10/2009                 60.00            60.00    Bullet-27/01/2015
    Limited Employees Provident Fund
    Trust
    Sushilkumar N Trivedi                   27/10/2009                 50.00            50.00    Bullet-27/01/2015
    Ashok Leyland Employees Hosur           27/10/2009                 30.00            30.00    Bullet-27/01/2015
    Provident Fundtrust
    Centre For Development Of Telematics    27/10/2009                 30.00            30.00    Bullet-27/01/2015
    Employees Provident Fund Trust
    Orient Ceramics Provident Fund          27/10/2009                  3.00              3.00   Bullet-27/01/2015
    Institution
    United India Insurance Company          31/10/2009              2,000.00          2,000.00   Bullet-31/10/2019
    Limited
    Bank Of India Provident Fund            31/10/2009                500.00           500.00    Bullet-31/10/2019
    AIR- India Employees Provident Fund     31/10/2009                400.00           400.00    Bullet-31/10/2019
    The Kalyan Janata Sahakari Bank         24/11/2009                500.00           500.00    Bullet-22/11/2019
    Limited
    The Zoroastrian Co-Operative Bank       24/11/2009                500.00           500.00    Bullet-22/11/2019
    Limited
    Engineers India Limited Employees       24/11/2009                300.00           300.00    Bullet-22/11/2019
    Provident Fund
    The Jammu And Kashmir Bank              24/11/2009                400.00           400.00    Bullet-22/11/2019
    Employee Pension Fund Trust
    The Jammu And Kashmir Bank              24/11/2009                200.00           200.00    Bullet-22/11/2019
    Employees Provident Fund Trust
    Darashaw & Company Private Limited      24/11/2009                180.00           180.00    Bullet-22/11/2019
    Hooghly Docking Works Provident         24/11/2009                 10.00            10.00    Bullet-22/11/2019
    Fund
    Intervet India Private Limited          24/11/2009                 10.00            10.00    Bullet-22/11/2019
    Employees Provident Fund Trust
    Manju Pande                             31/12/2009                 10.00            10.00    Bullet-31/12/2019
    Allianz Biosciences Private Limited     31/12/2009                100.00           100.00    Bullet-31/12/2019
    Caress Beauty Care Products Private     31/12/2009                 50.00            50.00    Bullet-31/12/2019
    Limited.
    Milan A Shah - Huf                      31/12/2009                 10.00            10.00    Bullet-31/12/2019
                                                         F-50
                                                                                                        Annexure X
    Unsecured Loans
                                                                                                       ( Rs in Lacs )
    Name of Financer / Bank                      Date of          Disbursed      As at December    Repayment Terms
                                              disbursement/       Amount /          31, 2009
                                                allotment         Face value
C   Subordinated debts
    Lotus Beauty Care Products Private.       31/12/2009                100.00           100.00    Bullet-31/12/2019
    Limited.
    Cool Cosmetics Private Limited.           31/12/2009                 50.00            50.00    Bullet-31/12/2019
    Guljit Chaudhri                           31/12/2009                 10.00            10.00    Bullet-31/12/2019
    Youth Development Co-Operative Bank       31/12/2009                100.00           100.00    Bullet-31/12/2019
    Limited.
    Ashish Navin Shah                         31/12/2009                 20.00            20.00    Bullet-31/12/2019
    East Commercial Private Limited.          31/12/2009                 10.00            10.00    Bullet-31/12/2019
    Orient Ceramics Provident Fund            31/12/2009                  4.00             4.00    Bullet-31/12/2019
    Institution
    Raja S                                    31/12/2009                  5.00             5.00    Bullet-31/12/2019
    Keki M Mistry & Arnaaz K Mistry           31/12/2009                 30.00            30.00    Bullet-30/06/2015
    The Mathrubhumi Employees                 31/12/2009                 10.00            10.00    Bullet-30/06/2015
    Superannuation Fund
    All Bank Finance Limited.                 31/12/2009                100.00            100.00   Bullet-30/06/2015
    Securities Trading Corporation Of India   31/12/2009              3,950.00          3,950.00   Bullet-30/06/2015
    Limited.
    Usha Modani                               31/12/2009                  2.00             2.00    Bullet-30/06/2015
    Ritu Modani                               31/12/2009                  3.00             3.00    Bullet-30/06/2015
    Anu Khattar                               31/12/2009                  1.00             1.00    Bullet-30/06/2015
    Associated Capsules Private Limited.      31/12/2009                100.00           100.00    Bullet-30/06/2015
    Virendra Ratilal Sangharajkas Chandra     31/12/2009                  5.00             5.00    Bullet-30/06/2015
    Rashmi
                                                                     65,221.00         65,221.00
D   Term Loan from Banks
    ICICI Bank                                29/09/2009             20,000.00         20,000.00   Bullet-31/03/2010
    ICICI Bank                                11/09/2009             10,000.00         10,000.00   Bullet-11/03/2011
    HSBC Bank                                 21/09/2007             22,500.00          8,000.00   3 unequal
                                                                                                   installment
    ICICI Bank                                12/10/2009              9,992.33          9,992.33   Bullet-15/04/2010
    HSBC Bank                                 29/10/2009             52,647.21         52,647.21   Various dt from
                                                                                                   26/07/10 to
                                                                                                   26/07/12
                                                                    115,139.54        100,639.54
E   Term Loan from Institution
    Kotak Mahindra Prime Limited              20/03/2007              7,500.00          7,500.00   Bullet-22/09/2010
    Kotak Mahindra Prime Limited              16/03/2007             11,000.00         11,000.00   Bullet-16/06/2010
    Kotak Mahindra Prime Limited              30/03/2007             16,500.00         16,500.00   Bullet-30/06/2010
                                                                     35,000.00         35,000.00
F   Inter corporate Deposits
    Shakti Finance                            13-Feb-08                 31.68              7.21    12 Quarterly
                                                                                                   installments
    Shakti Finance                            26-Feb-08                 88.97             17.74    16 Quarterly
                                                                                                   installments

                                                                       120.65             24.95




                                                           F-51
                                                                                                                    Annexure X
      Unsecured Loans
                                                                                                                   ( Rs in Lacs )
      Name of Financer / Bank                         Date of            Disbursed          As at December     Repayment Terms
                                                   disbursement/         Amount /              31, 2009
                                                     allotment           Face value
G     Fixed Deposits - Retail Investors                                                                         Redeemable at
                                                                                                    8,290.59   par over a period
                                                                                                               12 to 60 months
H     Subordinated Debts - Retail Investors                                                                     Redeemable at
                                                                                                  126,461.41   par over a period
                                                                                                               61 to 88 months
      Total Unsecured Loans(A+B+C+D+E+F+G+H)
                                                                                                  340,637.49




Notes:

1.   Terms as regards Interest/Pre-payment:

a.   The Fixed Interest bearing Loans/Commercial Paper/Non-convertible debentures/Subordinated Debt/Fixed Deposit/Inter
     corporate Deposits aggregate to Rs. 245,490.28 Lacs and the floating interest bearing Loans/Subordinated Debts aggregate to
     Rs. 95,147.21 Lacs.

b.   Loans aggregating to Rs. 35,000.00 Lacs have an interest reset option.

c.   Loans aggregating to Rs. 53,000 Lacs have a Pre-payment option upon payment of stipulated charges.

2.   Fixed Deposits aggregating to Rs. 2,756.32 lacs have Put option.

3.   The Public Deposits may be foreclosed subject to applicable statutory and/or regulatory requirements.

4.   The company may, subject to applicable statutory and/or regulatory requirements, grant loan against the security of Public
     Deposits upon the terms and conditions as may be decided by the company.




                                                                F-52
                                                                                         Annexure XI
Capitalization Statement

                                                                                         (Rs. In lacs)
                                                              Pre issue as at
                           Particulars                         December 31      As adjusted for issue
                                                              2009 (Audited)

Debt

Short Term Debt                                                    582,520.78              582,520.78

Long Term Debt                                                   1,673,091.82            1,723,091.82

Total                                                            2,255,612.60            2,305,612.60

Share holders Fund

Share Capital                                                       21,279.86               21,279.86
Share application money pending allotment                               12.97                   12.97
Stock Option Outstanding                                             1,497.93                1,497.93
Optionally Convertible warrants                                             -                       -
Reserves & Surplus (Refer Annexure IV – Schedule 10)               286,716.43              286,716.43
Less : Miscellaneous Expenditure                                     3,543.21                3,543.21

Total of Share holders Fund                                        305,963.98              305,963.98

Long Term Debt /Equity Ratio                                             5.47                    5.63




                                                       F-53
                                                                                                                          Annexure XII
 Statement of Tax Shelter
                                                                                                                           (Rs in Lacs)
                                               For Nine
                                                months
                Particulars                      ended                          For the year ended 31st March
                                               December
                                                   31,
                                                  2009            2009          2008          2007             2006           2005
 Profit as per accounting books                  91,191.27       92,063.11    60,583.30      28,922.42       21,616.87        7,786.89
 Tax Rate                                       33.99%           33.99%       33.99%         33.66%           33.66%         36.59%

 Tax on Accounting Profit                        30,996.93       31,292.25    20,592.26       9,735.29        7,276.24        2,849.42

 Permanent Differences

 Donation                                             25.75          52.80         49.91          49.84          42.68            28.19
 Exempt Dividend Income                            (874.71)       (486.91)      (519.33)        (20.84)          (2.12)          (0.06)
 Disallowance u/s 14A                                322.39          50.00         51.54              -               -               -
 Capital gains on sale of fixed assets             5,975.27
 Others                                              296.10       2,981.77       976.23         (60.50)         406.94           18.52
 Sub Total (A)                                     5,744.80       2,597.66       558.35         (31.50)         447.50           46.65

 Temporary Differences

 Disallowances U/s 43B                              119.59          227.65       120.73               5.66        5.24                -
 Principle recovery on assets given on
 lease offered to tax                                      -      5,161.30    11,789.49       9,740.08       (4,266.00)       5,808.89
 Depreciation and other items relating to
 fixed assets                                        394.58       2,171.77     1,360.28         445.81       (4,716.21)     (10,084.97)
 Depreciation and Lease adjustments                6,369.85       7,333.07    13,149.77      10,185.89       (8,982.21)      (4,276.08)
 Additional finance charges (offered to
 Income tax on cash basis)                                -               -           -              -                -           87.09
 Deferred Revenue Expenses                       (3,543.21)               -       92.88          98.95           193.14          163.73
 Service tax write off                                    -        1,303.34    1,777.35       2,721.92         1,756.60          171.91
 Delinquency Provision for Securitisation          3,324.03        4,464.01      511.64         970.33                -               -
 Others                                              119.91      (5,020.77)      838.87          42.61         2,741.49           21.25
 Sub Total (B)                                       414.90        8,307.30   16,491.24      14,025.36       (4,285.74)      (3,832.10)

 Net Adjustments (A+B)                             6,159.70      10,904.96    17,049.59      13,993.86       (3,838.24)      (3,785.45)

 Tax Impact on Net Adjustments                     2,093.68       3,706.60     5,795.16       4,710.33       (1,291.95)      (1,385.19)

 Total Taxation                                  33,090.61       34,998.86    26,387.42      14,445.62        5,984.29        1,464.23

 Current Tax Provision for the year              33,090.61       34,998.86    26,387.42      14,445.62        5,984.29        1,464.23


Notes:

1. Profits after tax are often affected by the tax shelters which are available.
2. Some of these are of a relatively permanent nature while others may be limited in point of time.
3. Tax provisions are also affected by timing differences which can be reversed in future.



                                                          F-54
                                                                                               Annexure XIII
Schedules forming part of the Reformatted Summary Statements

1.    Significant Accounting Policies
(a)     Basis of preparation
        The financial statements have been prepared in conformity with generally accepted
        accounting principles to comply in all material respects with the notified Accounting
        Standards (‘AS’) under Companies Accounting Standard Rules, 2006, as amended, the
        relevant provisions of the Companies Act, 1956 (‘the Act’) and the guidelines issued by the
        Reserve Bank of India (‘RBI’) as applicable to a Non Banking Finance Company (‘NBFC’).
        The financial statements have been prepared under the historical cost convention on an
        accrual basis. The accounting policies have been consistently applied by the Company and
        are consistent with those used in the previous year.
        Upto the year ended March 31, 2005
        The financial statements have been prepared in conformity with generally accepted
        accounting principles to comply in all material respects with mandatory Accounting
        Standards (‘AS’) issued by the Institute of Chartered Accountants of India (‘ICAI’), the
        relevant provisions of the Companies Act, 1956 (‘the Act’) and the guidelines issued by the
        Reserve Bank of India (‘RBI’) as applicable to a Non Banking Finance Company (‘NBFC’).
        The financial statements have been prepared under the historical cost convention on an
        accrual basis. The accounting policies have been consistently applied by the Company and
        are consistent with those used in the previous year.


(b)     Use of estimates
        The preparation of financial statements in conformity with generally accepted accounting
        principles requires management to make estimates and assumptions that affect the reported
        amounts of assets and liabilities and disclosure of contingent liabilities at the date of the
        financial statements and the results of operations during the reporting period end. Although
        these estimates are based upon management’s best knowledge of current events and actions,
        actual results could differ from these estimates. Any revisions to the accounting estimates are
        recognized prospectively in the current and future periods.


(c)     Fixed assets, Depreciation/Amortisation and Impairment of assets

        Fixed Assets

        Fixed assets include the assets given on operating lease. Fixed assets are stated at cost less
        accumulated depreciation/amortisation and impairment losses, if any. Cost comprises the
        purchase price and any attributable cost of bringing the asset to its working condition for its
        intended use. Borrowing costs relating to acquisition of fixed assets which takes substantial
        period of time to get ready for its intended use are also included to the extent they relate to
        the period till such assets are ready to be put to use.
        Depreciation/Amortisation
        Depreciation/Amortisation is provided on Straight Line Method (‘SLM’), which reflect the
        management’s estimate of the useful lives of the respective fixed assets and are greater than
        or equal to the corresponding rates prescribed in Schedule XIV of the Act. The assets for
        which rates higher used are as follows :

                                                     F-55
         Particulars                     Rates (SLM)             Schedule XIV rates (SLM)

 Windmills                                   10%                             5.28%

 Computer software                          33.33%                          16.67%

Windmills are amortised over the remaining life of the asset, the life of windmills are
estimated to be 10 years.
Leasehold improvement is amortised over the primary period of lease subject to a maximum
of 60 months.

All fixed assets individually costing   Rs. 5,000 or less are fully depreciated in the year of
installation.

Depreciation on assets sold during the period is recognized on a pro-rata basis to the profit
and loss account till the date of sale.

Impairment of Assets
The carrying amount of assets is reviewed at each balance sheet date if there is any indication
of impairment based on internal/external factors. An impairment loss is recognized wherever
the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is
the greater of the assets, net selling price and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value at the weighted average cost
of capital.
After impairment, depreciation is provided on the revised carrying amount of the asset over
its remaining useful life.
A previously recognized impairment loss is increased or reversed depending on changes in
circumstances. However the carrying value after reversal is not increased beyond the carrying
value that would have prevailed by charging usual depreciation if there was no impairment.
Upto the year ended March 31, 2007

Depreciation
Depreciation is provided using the straight line method (‘SLM’) at the rates prescribed under
Schedule XIV of the act, which is management’s estimate of useful lives of the assets.
   • On the assets acquired up to December 15, 1993 at the rates applicable to said assets
       till that date;

    •   On the assets acquired on or after December 16, 1993 at revised rates prescribed in
        the said Schedule XIV;

    •   Fixed assets having an original cost less than or equal to Rs.5,000 individually are
        fully depreciated in the year of purchase or installation;

    •   The depreciation for the year includes the difference between the book value of the
        leased assets and the value realized in respect of the termination of the leased assets
        during the year. In respect of the leased assets, lease equalization / adjustment
        accounts are created for the shortfall in capital recovery and adjusted in depreciation /
        fixed assets.
                                               F-56
      Intangible Assets
      Costs relating to acquisition and development of computer software are capitalized in
      accordance with the AS 26 ‘Intangible Assets’ issued by the ICAI and are amortised on a
      straight line method basis over a period of six years, which is managements estimate of its
      useful life.
      The carrying value of computer software is reviewed for impairment annually when the asset
      is not yet in use, and otherwise when events or changes in circumstances indicate that the
      carrying value may not be recoverable.
(d)   Investments
      Investments intended to be held for not more than a year are classified as current investments.
      All other investments are classified as long-term investments. Current investments are carried
      at lower of cost and market value /realizable value determined on an individual investment
      basis. Long-term investments are carried at cost. However, provision for diminution in value
      is made to recognise a decline, other than temporary, in the value of the investments.
(e)    Provisioning / Write-off of assets
      Loan and lease receivables are written off / provided for, as per management estimates,
      subject to the minimum provision required as per Non- Banking Financial (Deposit Accepting
      or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007. Delinquencies on
      assets securitized are provided for based on management estimates of the historical data.

      Upto the year ended March 31, 2007
      Loans, hire purchase and lease receivables are written off / provided for, as per management
      estimates, subject to the minimum provision required as per Non- Banking Financial
      Companies Prudential Norms (Reserve Bank) Directions, 1998. Delinquencies on assets
      securitized are provided for based on management estimates of the historical data.

(f)   Hypothecation loans
      Hypothecation loans are stated at the amount advanced including finance charges accrued and
      expenses recoverable, as reduced by the amounts received up to the balance sheet date and
      loans securitized.
(g)   Leases
          Where the Company is the lessor
      Assets given under a finance lease are recognised as a receivable at an amount equal to the
      net investment in the lease. Lease rentals are apportioned between principal and interest on
      the internal rate of return (‘IRR’). The principal amount received reduces the net investment
      in the lease and interest is recognised as revenue. Initial direct costs are recognised
      immediately in the Profit and Loss Account.
      Assets given on operating lease are included in fixed assets. Lease income is recognised in
      the Profit and Loss Account on a straight-line basis over the lease term. Costs, including
      depreciation are recognised as an expense in the Profit and Loss Account. Initial direct costs
      such as legal costs, brokerage costs, etc. are recognised immediately in the Profit and Loss
      Account.
      Where the Company is the lessee
      Leases where the lessor effectively retains substantially all the risks and benefits of
      ownership of the leased term, are classified as operating leases. Operating lease payments are
      recognized as an expense in the Profit and Loss account on a straight-line basis over the lease
      term.

                                                   F-57
(h)   Foreign currency translation
      Initial recognition
      Transactions in foreign currency entered during the period are recorded at the exchange rates
      prevailing on the date of the transaction.
      Conversion
      Monetary assets and liabilities denominated in foreign currency are translated in to rupees at
      exchange rate prevailing on the date of the Balance Sheet.
      Exchange differences
      All exchange differences are dealt with in the profit and loss account.
(i)   Inventories
      Inventories are valued as follows:
      Raw materials, components, stores and spares:
      Lower of cost and net realizable value. Cost is determined on a weighted average basis. Net
      realizable value is the estimated selling price in the ordinary course of business, less estimated
      costs of completion and estimated costs necessary to make the sale.
(j)   Revenue recognition
      Revenue is recognized to the extent that it is probable that the economic benefits will flow to
      the Company and the revenue can be reliably measured.
      i.    Finance and service charges on financial lease/ loans is recognised on the basis of
            internal rate of return.

      ii.     Income recognized and remaining unrealized after installments become overdue for six
              months or more in case of secured loans and twelve months or more in case of
              financial lease transactions are reversed and are accounted as income when these are
              actually realized.

      iii.    Additional finance charges / additional interest are treated to accrue only on
              realization, due to uncertainty of realization and are accounted accordingly.

      iv.     Gains arising on securitization/direct assignment of assets is recognized over the tenure
              of agreements as per guideline on securitization of standard assets issued by RBI, loss,
              if any is recognised upfront.
              Upto the year ended March 31, 2006

              Gain or loss arising on securitization/direct assignment up to January 31, 2006 is
              recognized upfront on the transfer of such assets.

      v.      Income from power generation is recognized as per the terms of the Power Purchase
              Agreements with State Electricity Boards and on supply of power to the grid.
      vi.     Income from services is recognized as per the terms of the contract on accrual basis.

      vii.    Interest income on fixed deposits/margin money, call money(CBLO) certificate of
              deposits and pass through certificates is recognized on a time proportion basis taking
              into account the amount outstanding and the rate applicable.
      viii.   Dividend is recognized as income when right to receive payment is established by the
              date of balance sheet.
      ix.     Profit/loss on the sale of investments is recognized at the time of actual
              sale/redemption.

                                                    F-58
      x.     Income from operating lease is recognized as rentals, as accrued on straight line basis
             over the period of the lease.
(k)   Employee benefits
      Provident Fund
      All the employees of the Company are entitled to receive benefits under the Provident Fund, a
      defined contribution plan in which both the employee and the Company contribute monthly at
      a stipulated rate. The Company has no liability for future Provident Fund benefits other than
      its annual contribution and recognizes such contributions as an expense in the period it is
      incurred.
      Gratuity
      The Company provides for the gratuity, a defined benefit retirement plan covering all
      employees. The plan provides for lump sum payments to employees at retirement, death
      while in employment or on termination of employment. The Company accounts for liability
      of future gratuity benefits based on an external actuarial valuation on projected unit credit
      method carried out for assessing liability as at the reporting date.
      Leave Encashment
      Short term compensated absences are provided for based on estimates. Long term
      compensated absences are provided for based on actuarial valuation. The actuarial valuation
      is done as per projected unit credit method as at the reporting date.
      Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.

(l)   Income tax
      Tax expense comprises of current, deferred and fringe benefit tax. Current income tax and
      fringe benefit tax is measured at the amount expected to be paid to the tax authorities in
      accordance with the Indian Income Tax Act, 1961. Deferred income taxes reflects the impact
      of current period timing differences between taxable income and accounting income for the
      period and reversal of timing differences of earlier periods.
      Deferred tax is measured based on the tax rates and the tax laws enacted or substantively
      enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that
      there is reasonable certainty that sufficient future taxable income will be available against
      which such deferred tax assets can be realized. In situations where the Company has
      unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized
      only if there is virtual certainty supported by convincing evidence that they can be realized
      against future taxable profits.

      The un-recognized deferred tax assets are re-assessed by the Company at each balance sheet
      date and are recognized to the extent that it has become reasonably certain or virtually certain,
      as the case may be that sufficient future taxable income will be available against which such
      deferred tax assets can be realized.

      The carrying cost of the deferred tax assets are reviewed at each balance sheet date. The
      Company writes down the carrying amount of a deferred tax asset to the extent that it is no
      longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable
      income will be available against which deferred tax asset can be realized. Any such write
      down is reversed to the extent that it becomes reasonably certain or virtually certain, as the
      case may be, that sufficient future taxable income will be available.




                                                    F-59
(m)   Segment reporting policies
      Identification of segments:
      The Company’s operating businesses are organized and managed separately according to the
      nature of products and services provided, with each segment representing a strategic business
      unit that offers different products and serves different markets. The analysis of geographical
      segments is based on the areas in which major operating divisions of the Company operate.
      Unallocated items:
      Unallocated items include income and expenses which are not allocated to any reportable
      business segment.
       Segment Policies :
       The company prepares its segment information in conformity with the accounting policies
       adopted for preparing and presenting the financial statements of the company as a whole.
(n)   Earnings per share
      Basic earnings per share is calculated by dividing the net profit or loss for the period
      attributable to equity shareholders (after deducting attributable taxes) by the weighted
      average number of equity shares outstanding during the period.

      For the purpose of calculating diluted earnings per share, the net profit or loss for the period
      attributable to equity shareholders and the weighted average number of shares outstanding
      during the period are adjusted for the effects of all dilutive potential equity shares.
(o)   Provisions
      A provision is recognised when the company has a present obligation as a result of past
      event; it is probable that outflow of resources will be required to settle the obligation, in
      respect of which a reliable estimate can be made. Provisions are not discounted to its present
      value and are determined based on best estimate required to settle the obligation at the
      balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the
      current best estimates.

(p)   Cash and cash equivalents
      Cash and cash equivalents in the cash flow statement comprise cash at bank and in hand,
      cheques on hand, remittances in transit and short term investments with an original maturity
      of three months or less.

(q)   Public issue expenses on issue of Equity shares/Debentures
      Public issue expenses incurred on issue of equity shares, preference shares and convertible
      debentures are charged on a straight line basis over a period of 10 years.
      Public issue expenses incurred on issue of non convertible debentures are charged off on a
      straight line basis over the weighted average tenor of underlying debentures.


(r)   Ancillary cost of borrowings
      Ancillary cost of borrowings are charged to Profit & Loss account in the period in which they
      are incurred.
      Upto the year ended March 31,2007
      Expenses on mobilization of deposit/debentures have been charged to profit and loss account
      in the year in which they are incurred. However, expenses incurred upto March 31, 2003 have
                                                   F-60
      been charged to profit and loss account on the basis of duration of deposit/debenture.


(s)   Derivative instruments

      The Company uses derivative financial instruments of interest rate swaps to hedge its risks
      associated with fluctuations in the interest rate.
      As per the Institute of Chartered Accountants of India (ICAI) Announcement, accounting for
      derivative contracts, other than those covered under AS-11, are marked to market and the net
      loss after considering the offsetting effect on the underlying hedge item is charged to the
      income statement. Net gains are ignored.
      For the year ended March 31, 2007
      Interest rate swap
      Swap contracts are initially recognized at fair value on the date on which a derivative contract
      is entered into and subsequently remeasured at fair value. Any gain or loss arising from
      change in fair value is taken directly to net profit or loss for the year.

(t)   Employee stock compensation costs
      Measurement and disclosure of the employee share-based payment plans is done in
      accordance with SEBI (Employee Stock Option Scheme and Employee Stock Purchase
      Scheme) Guidelines, 1999 and the Guidance Note on Accounting for Employee Share-based
      Payments, issued by ICAI. The Company measures compensation cost relating to employee
      stock options using the intrinsic value method. Compensation expense is amortized over the
      vesting period of the option on a straight line basis.




                                                   F-61
2. Notes to Accounts for the period ended on 31st December, 2009
1.     Secured Loans

a) (i) Privately placed Redeemable Non-convertible Debentures of Rs.1,000/- each
                                                                          As at December 31, 2009
Number                                                                                       19,002,957
Amount Rs in lacs                                                                            190,029.57



Secured by equitable mortgage of title deeds of immovable property. Further secured by charge on plant and
machinery, furniture and other fixed assets of the Company, charge on Company’s hypothecation loans,
other loans, advances and other investments of the Company subject to prior charges created or to be created
in favour of the Company’s bankers, financial institutions and others.

Debentures are redeemable at par over a period of 12 months to 160 months from the date of
allotment depending on the terms of the agreement. The earliest date of redemption is 01.01.2010.

   (ii) Privately Placed Redeemable Non-Convertible Debenture of Rs.1,000,000/- each

     Date of Allotment/renewal                 Amount (Rs. in lacs)             Redeemable at par on
                                              As at December 31, 2009

                          05.07.2007
                                                                     5,000.00                       05.07.2010

                          09.07.2007                                 7,000.00                       09.07.2010

                          11.07.2007                                 1,000.00                       09.07.2010

                          25.07.2007                                12,500.00                       25.07.2010

                          25.07.2007                                 2,500.00                       25.07.2010

                          10.09.2007                                 2,500.00                       10.09.2010

                          21.09.2007                                 2,500.00                       21.09.2010

                          15.10.2007                                 2,000.00                       15.10.2010

                          18.10.2007                                 7,000.00                       18.10.2010

                          19.10.2007                                 5,000.00                       19.10.2010

                          02.05.2008                                15,000.00                       02.05.2011

                          20.06.2008                                10,000.00                       20.06.2011


                                                   F-62
Date of Allotment/renewal        Amount (Rs. in lacs)          Redeemable at par on

                                As at December 31, 2009

                   18.08.2008                      29,000.00                    06.03.2010

                   04.09.2008                       3,500.00                    04.04.2010

                   04.09.2008                       1,500.00                    20.02.2010

                   04.09.2008                      10,000.00                    04.09.2010

                   08.09.2008                       3,000.00                    08.09.2010

                   15.09.2008                       1,500.00                    15.09.2011

                   15.09.2008                       1,500.00                    15.09.2010

                   15.09.2008                       2,500.00                    15.03.2010

                   15.09.2008                       2,500.00                    15.09.2010

                   15.09.2008                       2,500.00                    15.03.2010

                   15.09.2008                       1,500.00                    30.04.2010

                   16.09.2008                       2,500.00                    16.09.2011

                   17.09.2008                       8,000.00                    01.09.2011

                   24.09.2008                       2,500.00                    24.09.2010

                   26.09.2008                       2,500.00                    26.09.2010

                   26.09.2008                       1,500.00                    10.09.2010

                   08.10.2008                       1,200.00                    06.04.2010

                   24.10.2008                       5,000.00                    10.12.2010

                   03.11.2008                      30,000.00                    03.11.2013

                   26.11.2008                       1,000.00                    26.11.2013

                                    F-63
     Date of Allotment/renewal               Amount (Rs. in lacs)            Redeemable at par on
                                            As at December 31, 2009

                         24.03.2009                               2,400.00                     24.03.2010

                         25.03.2009                               2,600.00                     25.03.2010
                         28.03.2009                               5,000.00                     28.03.2012
                       **13.04.2009                              10,000.00
                                                                                               13.04.2011

                      ***20.04.2009                              10,000.00                     20.04.2011

                    ****20.04.2009                                2,500.00                     20.04.2011
                         08.06.2009                               7,500.00                     08.12.2010

                         17.06.2009                               2,500.00                     17.06.2011

                         30.06.2009                              25,000.00                     30.06.2011

                         14.09.2009                               1,500.00                     05.04.2011

                         12.10.2009                               9,000.00                     12.04.2011

                           TOTAL                               263,200.00

Secured by specific assets covered under hypothecation loan agreements by way of exclusive charge and
equitable mortgage of title deeds of immovable property.
*Put/call option on July 25, 2009
**Put/call option on Jan 13, 2010
***Put/call option on March 20, 2010
****Put/call option on Jan 20, 2010

(iii) Public issue of Redeemable Non-convertible Debentures of Rs.1,000/- each
                              Amount (Rs. in lacs)

        Date of                                     Redeemable at par
   Allotment/renewal     As at December 31, 2009    on                           Put and Calloption
              Option -I                    4,107.55     26.08.2012                        -
              Option -I                    4,107.55     26.08.2013                        -
              Option -I                    2,053.78     26.08.2014                        -
              Option -II                   3,158.64     26.08.2012                        -
              Option -II                   3,158.64     26.08.2013                        -
              Option -II                   1,579.32     26.08.2014                        -
             Option -III                 11,241.88      26.08.2014                 26.08.2013
             Option -IV                    2,274.12     26.08.2014                 26.08.2013
             Option -V                                  26.08.2012                      -
                                         68,318.48
                  Total                  99,999.96



                                                 F-64
Secured by specific assets covered under hypothecation loan agreements by way of exclusive charge and
equitable mortgage of title deeds of immovable property.

b) Term Loans :
                                                                                          (Rs. in lacs )
                                                                                      As at December 31, 2009

      From Financial Institutions / Corporates :
i.
      (a)        Secured by an exclusive charge by way of hypothecation
                 of specific movable assets being fixed/current assets
                                                                                                            40,277.57
                 relating to hypothecation loans
      Total                                                                                                 40,277.57

                                                                                            (Rs. in lacs)

                                                                                      As at December 31, 2009

ii.   From Banks :
      (a)         Secured by hypothecation of vehicles                                                           4.01
      (b)         Secured by an exclusive charge by way of hypothecation
                  of specific movable assets being fixed / current assets                               971,309.19
                  relating to hypothecation loans*
      (c )        Secured by an exclusive charge by way of
                  hypothecation of specific immovable/ movable assets                                        1,244.28
                  pertaining to the bio mass plant.
                 Total                                                                                  972,557.48


*includes Rs. 51,000.00 lacs the charge in respect of which has since been created.

c) Cash Credit from Banks


                                                                              As at December 31, 2009

Cash Credit from banks                                                                            *348,910.53

Secured by hypothecation of specific assets covered under hypothecation loan agreements.
*includes Rs. 20,000 lacs the charge in respect of which has since been created.




2.     Subordinated Debt
       The Company has raised Tier II capital by issue of subordinated debt bonds amounting to Rs.
       37,898.14 Lacs with coupon rate of 10.50% to 13% per annum which are redeemable over a period
       of 62 months to 120 months.


                                                    F-65
 3.      Final dividend (including tax on dividend) includes an amount of Rs 380.45 lacs in respect of
         dividend paid by the Company for the year ended March 31, 2009 on 81,29,550 equity shares as
         these have been allotted before the record date for declaration of dividend for the year ended March
         31, 2009, and they rank pari-passu with the existing equity shares for dividend.




 4.      Gratuity and other post-employment benefit plans:

         The Company has an unfunded defined benefit gratuity plan. Every employee who has
         completed five years or more of service is eligible for a gratuity on separation from service at 15
         days salary (last drawn salary) for each completed year of service.

         Consequent to the adoption of revised AS 15 ‘Employee Benefits’ issued under Companies
         Accounting Standard Rules, 2006, as amended, the following disclosures have been made as
         required by the standard:

Profit and Loss account


Net employee benefit expense (recognized in employee cost)                                           (Rs. in lacs)
                                                                                                Gratuity
                                                                                        For the period April 01,
 Particulars                                                                           2009 to December 31, 2009

 Current service cost                                                                                           107.72
 Interest cost on benefit obligation                                                                             33.00
 Expected return on plan assets                                                                                    NA
                                                                                                                (13.35)
 Net actuarial (gain) / loss recognised in the period/year

 Past service cost                                                                                                 Nil
 Net benefit expense                                                                                            127.37


Balance sheet
Details of Provision for gratuity                                                                   (Rs. in lacs)
                                                                                                Gratuity
                                                                                            December 31, 2009
 Particulars

 Defined benefit obligation                                                                                     583.83
 Fair value of plan assets                                                                                         NA
                                                                                                                583.83
 Less: Unrecognised past service cost                                                                              Nil
 Plan asset / (liability)                                                                                      (583.83)

                                                       F-66
Changes in the present value of the defined benefit obligation are as follows:

                                                                                                     (Rs. in lacs)
                                                                                                  Gratuity
                                                                                              December 31, 2009
 Particulars

 Opening defined benefit obligation                                                                              463.92
 Interest cost                                                                                                    33.00
 Current service cost                                                                                            107.72
 Benefits paid                                                                                                    (7.46)
 Actuarial (gains) / losses on obligation                                                                        (13.35)
 Closing defined benefit obligation                                                                              583.83

The Company would not contribute any amount to gratuity in 2009-10 as the scheme is unfunded.

The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:
                                                                                       Gratuity
 Particulars                                                                     December 31, 2009

                                                                                          %
 Investments with insurer                                                                 NA

The principal assumptions used in determining gratuity obligations for the Company’s plan are shown below:
                                                                                       Gratuity
 Particulars                                                                     December 31, 2009
 Discount Rate                                                                                                     7.5%
 Increase in compensation cost                                                                                      5%
 Employee Turnover*                                                                                          5% and 10%

The estimates of future salary increases, considered in actuarial valuation, are on account of inflation,
seniority, promotion and other relevant factors, such as supply and demand in the employment market.

*5% in case of employees with service period of more than 5 years and 10% for all other employees.

Amounts for the current period are as follows:

                                                                                                 (Rs. in lacs)
 Particulars                                                                                 December 31, 2009
 Defined benefit obligation                                                                                    583.80
 Plan assets                                                                                                      NA
 Surplus / (deficit)                                                                                        (583.80)
 Experience adjustments on plan liabilities                                                                   (27.95)
 Experience adjustments on plan assets                                                                            NA




                                                       F-67
5.                                                                                       (Rs. in lacs)
                                                               For the period April 01, 2009 to December 31, 2009
                 Particulars
                                                Financing Activities         Unallocated reconciling items          Total
Segment Revenue
                                                                326,620.85                          418.49              327,039.34
Segment Results (Profit before tax and after
interest on Financing Segment)



                                                                 91,282.45                          198.96                  91,481.41
Less: Interest on unallocated reconciling
items                                                                  NA                            287.14                    287.14
Net profit before tax                                            91,282.45                          (88.18)                 91,194.27
Less: Income taxes                                                     NA                               NA                  30,325.59
Net profit                                                             NA                               NA                  60,868.68
                                                                             As at December 31, 2009
                 Particulars
                                                Financing Activities         Unallocated reconciling items          Total
Segment assets                                              2,855,377.66                           1,322.44           2,856,700.10
Unallocated corporate assets                                                                                              5,779.67
Total Assets
                                                            2,855,377.66                          1,322.44            2,862,479.77
Segment liabilities                                         2,555,238.17                          1,269.95            2,556,508.12
Unallocated corporate liabilities                                                                                             7.67
Total Liabilities                                           2,555,238.17                           1,269.95           2,556,515.79
                                                               For the period April 01, 2009 to December 31, 2009
                 Particulars
                                                Financing Activities         Unallocated reconciling items          Total
Capital expenditure                                                544.02                               0.00                   544.02
Depreciation                                                     1,007.26                            188.96                  1,196.22
Other non - cash expenses                                        38,000.60                               0.94               38,001.54

6. Related Party Disclosures

Related party where control exists

Subsidiaries                                        :   Shriram Asset & Equipment Finance Private Limited (formerly
                                                        Shriram Equipment Finance Private Ltd. (SAEFPL)) (from
                                                        June 04, 2009 upto December 14, 2009)
                                                        Shriram Equipment Finance Company Ltd. (SEFCL) (from
                                                        December 15, 2009)


Other Related Parties

Enterprises having significant influence over       :   Shriram Holdings (Madras) Private Limited
the Company                                             Shriram Capital Limited
                                                        Newbridge India Investments II Limited

 Associates                                         :   Shriram Asset Management Company Limited



Key Managerial Personnel                            :   R Sridhar, Managing Director



Relatives of Key Managerial Personnel               :   Mrs. Padmapriya Sridhar (spouse)



                                                         F-68
                                                                                                                                                                        (Rs. in lacs)
                                       Enterprises having
                                                                                                               Key Management              Relatives of Key
                                      significant influence      Subsidiaries           Associates                                                                            Total
                                                                                                                  Personnel              Management Personnel
                                       over the Company
                                      Apr 01, 2009 to Dec     Apr 01, 2009 to Dec   Apr 01, 2009 to Dec      Apr 01, 2009 to Dec 31,   Apr 01, 2009 to Dec 31, 2009   Apr 01, 2009 to Dec 31,
                                             31, 2009              31, 2009              31, 2009                     2009                                                     2009
Payments/Expenses
Employee       benefits   for   key
                                                         -                      -                       -                     41.36                              -                      41.36
management personnel
Royalty                                           901.81*                     -                      -                           -                               -                     901.81
Data Sourcing fees                                 20.89*                     -                      -                           -                               -                       20.89
Service Charges                                   125.34*                     -                      -                           -                               -                     125.34
Equity dividend                                 5,602.29#                     -                      -                        5.58                            2.43                   5,610.30
Interest on subordinate debt                            -                     -                  40.27                           -                               -                       40.27
Interest on Inter Corporate Deposit                 96.66                     -                      -                           -                               -                       96.66
Interest on NCD                                         -                     -                      -                        0.26                               -                        0.26
Investments in shares                                   -             214.99 +&                      -                           -                               -                 214.99 +&
Rent paid                                          44.67*                     -                      -                           -                               -                       44.67
Inter Corporate Deposits                        4,200.00                       -                     -                           -                               -                   4,200.00
Amount recoverable from SAEFPL                          -                3.54 +                      -                           -                               -                      3.54 +
Amount recoverable from SEFCL                           -                2.64 &                      -                           -                               -                     2.64 &
Receipts/Income
Inter Corporate Deposit                                  -                     -                        -                         -                              -                           -
Sale of investment in shares                                              5.00 +                                                                                                        5.00 +
Non Convertible Debenture                                                      -                        -                    26.00                            1.00                       27.00
On conversion of warrants                        2,400.00                      -                         -                       -                               -                    2,400.00
Rent & electricity reimbursed                           -                      -                     4.05                        -                               -                        4.05




                                                                                                             F-69
                                                                                                                                                          (Rs in Lacs)
                                        Enterprises having
                                                                                                     Key Management            Relatives of Key
                                       significant influence   Subsidiaries       Associates                                                             Total
                                                                                                        Personnel            Management Personnel
                                        over the Company
Balance outstanding at the                   Dec 2009           Dec 2009          Dec 2009                Dec 2009                 Dec 2009             Dec 2009
period/year end
Share capital                                    9,337.15#                  -                 -                      11.02                    4.05               9,352.22
Share warrants                                           -                  -                 -                          -                       -                      -
Non Convertible Debenture                                -                  -                 -                          -                       -                       -
Investments in shares                                    -           209.99 &            240.00                          -                       -                 449.99
Outstanding expenses                               170.40*                  -                 -                          -                       -                 170.40
Employee      benefits    for    key
                                                          -                   -                -                         -                          -                    -
management personnel
Inter Corporate Deposits                                  -                  -                -                          -                          -                    -
Rent Deposit given                                   49.00*                  -                -                          -                          -                49.00
Amount recoverable from SAEFPL                            -             3.54 +                -                          -                          -               3.54 +
Amount recoverable from SEFCL                             -             2.64 &                -                          -                          -              2.64 &
Interest payable on NCD                                   -                  -                -                          -                          -                     -
Interest payable on ICD                                   -                  -                -                          -                          -                    -
Subordinated debts                                        -                  -           413.40                          -                          -              413.40
Interest payable on subordinate debt                      -                  -            77.10                          -                          -                77.10




                                                                                                   F-70
*         Denotes transactions with Shriram Capital Limited

#         Denotes transactions with Shriram Holdings (Madras) Private Limited

+         Denotes transactions with Shriram Asset and Equipment Finance Pvt Ltd (SAEFPL)

&         Denotes transactions with Shriram Equipment Finance Company Ltd.


    7.     Leases
           In case of assets given on lease
           The Company has given land and building on operating lease for period ranging 11 months to 60
           months. During the period, the company had also given its biomass plant on operating lease for the
           period 1st April, 2009 to 30th September, 2009. The same was sold on October 1, 2009, hence gross
           carrying cost of and accumulated depreciation of the asset as on the date of balance sheet is nil.

           In case of assets taken on lease
           The Company has taken various office premises, furniture and fixtures, computers and plant and
           machinery under operating lease. The lease payments recognized in the profit & loss account are
           Rs. 2,598.20 lacs). Certain agreements provide for cancellation by either party or certain
           agreements contains clause for escalation and renewal of agreements. . The non-cancellable
           operating lease agreements are ranging for a period 22 to 120 months. There are no restrictions
           imposed by lease arrangements. There are no sub leases.
           The future minimum lease payments in respect of non-cancellable operating lease as at the balance
           sheet date are summarized below :
                                                                                                (Rs. in lacs)
                                                                                 As at December 31, 2009

    Minimum Lease Payments:
    Not later than one year                                                                         1,040.25
    Later than one year but not later than five years                                                 406.05
    Later than five years                                                                              59.98




8.        In accordance with the Reserve Bank of India circular no.RBI/2006-07/ 225 DNBS (PD) C.C No.
         87/03.02.004/2006-07 dated January 4, 2007, the Company has created a floating charge on the
         statutory liquid assets comprising of investment in Government Securities to the extent of Rs.
         3,053.81 lacs in favour of trustees representing the public deposit holders of the Company.




                                                        F-71
9.     Earnings per share

                                                                             For the period April 01, 2009
Particulars                                                                     to December 31, 2009

Net Profit after tax as per profit and loss account (Rs. in lacs) (A)                            60,868.68
Weighted average number of equity shares for calculating Basic EPS (in
                                                                                                  2,097.17
lacs) (B)
Weighted average number of equity shares for calculating Diluted EPS
                                                                                                  2,115.97
(in lacs) (C)
Basic earnings per equity share (in Rupees) (Face value of Rs. 10/- per
                                                                                                      29.02
share) (A) / (B)
Diluted earnings per equity share (in Rupees) (Face value of Rs. 10/- per
                                                                                                      28.77
share) (A) / (C)

                                                                             For the period April 01, 2009
Particulars                                                                     to December 31, 2009

Weighted average number of equity shares for calculating EPS (in lacs)                            2,097.17
Add : Equity shares arising on conversion of optionally convertible
                                                                                                       0.00
warrants (in lacs)
Add : Equity shares for no consideration arising on grant of stock options                            18.80
under ESOP (in lacs)
Weighted average number of equity shares in calculation diluted EPS (in
lacs)                                                                                             2,115.97


10.    Deferred Tax Liabilities/(Asset)(Net)                                                    (Rs. in lacs)

                                                                               As at December 31, 2009
       The break up of deferred tax asset / liabilities is as under:-

           Deferred Tax Liabilities
           Timing difference on account of :
           Differences in depreciation in block of fixed assets as per tax
                                                                                                        Nil
           books and financial books
           Debenture Issue Expenses                                                               1,204.34
           Gross Deferred Tax Liabilities (A)                                                     1,204.34
           Deferred Tax Asset
           Timing difference on account of :
           Differences in depreciation in block of fixed assets as per tax
                                                                                                    220.31
           books and financial books
           Expenses disallowed under Income Tax Act, 1961                                         3,237.53
           Provision for securitization                                                           3,151.00
           Gross Deferred Tax Assets (B)                                                          6,608.84
           Deferred Tax Liabilities /(Assets)(Net) (A-B)                                        (5,404.50)


                                                     F-72
                                                                                           (Rs.in lacs)
                                                                                As at December 31, 2009
11.     Contingent Liabilities not provided for
   a.   Disputed income tax/interest tax demand contested in appeals                                   164.76
        not provided for
        [Against the above, a sum of Rs. 29.66 lacs has been paid under
        protest]
   b.   Demands in respect of Service tax                                                              312.00
        [Amount of Rs.15.00 lacs has been paid under protest ]

   c.   Income Tax penalty u/s 271(1)(c )                                                              349.86
   d.   Guarantees issued by the Company and outstanding                                               700.00

        Future cash outflows in respect of (a) and (b) above are determinable only on receipt of judgements
        /decisions pending with various forums/authorities.

12.     Recovery of service tax on lease and hire purchase transactions is kept in abeyance in view of the
        stay granted by Honourable Madras High Court. If any liability arises it will be recovered from the
        concerned parties. However, on contracts that are terminated, pending decision from the
        Honourable Madras High Court, equivalent service tax is written off. The company has recognized
        the deferred tax asset on the amounts so written off, as in either case service tax liability will be
        paid off or reversed as income.

13.                 Employee Stock Option Plan
                     Series I      Series II    Series III    Series IV       Series V     Series VI
Date of grant        October       April 1,     October 9,    August 17,        July       May 13,
                     31, 2005        2006         2006          2007          15,2008      2009
Date of                                                                                    May 13,
                     October       February     September     August 17,        July
Board/committee                                                                            2009
                     19, 2005      22, 2006      6, 2006        2007          15,2008
Approval
Date of                                                                                    October 13,
                     October       October       October      October 13,     October
Shareholder’s                                                                              2005
                     13, 2005      13, 2005      13, 2005        2005         13, 2005
approval
Number of                                                       109,000
                    2,962,500      832,500       910,000                       77,000         50,000
options granted
Method of
                                                                                              Equity
Settlement            Equity        Equity        Equity        Equity         Equity
(Cash/Equity)
Graded Vesting Period
After 1 year of     10% of        10% of       10% of        10% of         10% of       10% of options
grant date          options       options      options       options        options      granted
                    granted       granted      granted       granted        granted
After 2 years of    20% of        20% of       20% of        20% of         20% of       20% of options
grant date          options       options      options       options        options      granted
                    granted       granted      granted       granted        granted
After 3 years of    30% of        30% of       30% of        30% of         30% of       30% of options
grant date          options       options      options       options        options      granted


                                                   F-73
                     granted      granted         granted    granted        granted
 After 4 years of    40% of       40% of          40% of     40% of         40% of     40% of options
 grant date          options      options         options    options        options    granted
                     granted      granted         granted    granted        granted
 Exercisable         10 years     10 years        10 years   10 years       10 years   10 years from
 period              from         from            from       from           from       vesting date
                     vesting      vesting         vesting    vesting        vesting
                     date         date            date       date           date
 Vesting             On achievement of predetermined targets.
 Conditions

 The details of Series I have been summarized below:
                                                               As at December 31,2009
                                                   Number of Shares       Weighted Average
                                                                          Exercise Price(Rs.)
 Outstanding at the beginning of the period                     1,839,800                  Rs. 35.00
 Add: Granted during the period                                         -                          -
 Less: Forfeited during the period                                      -                          -
 Less: Exercised during the period                                797,850                   Rs.35.00
 Less: Expired during the period                                    3,500                          -
 Outstanding at the end of the period                           1,038,450                   Rs.35.00
 Exercisable at the end of the period                             130,215
 Weighted average remaining contractual life                                                    8.34
 (in years)
 Weighted average fair value of options granted                                              Rs.59.04

The details of Series II have been summarized below:
                                                               As at December 31,2009
                                                   Number of Shares       Weighted Average
                                                                          Exercise Price(Rs.)
 Outstanding at the beginning of the period                       516,500                   Rs.35.00
 Add: Granted during the period                                         -                          -
 Less: Forfeited during the period                                      -                          -
 Less: Exercised during the period                                265,200                   Rs.35.00
 Less: Expired during the period
 Outstanding at the end of the period                             251,300                    Rs.35.00
 Exercisable at the end of the period                              25,250
 Weighted average remaining contractual life                                                      8.74
 (in years)
 Weighted average fair value of options granted                                              Rs.91.75




                                                     F-74
The details of Series III have been summarized below:
                                                               As at December 31,2009
                                                   Number of Shares       Weighted Average
                                                                          Exercise Price(Rs.)
 Outstanding at the beginning of the period                      7,63,600                   Rs.35.00
 Add: Granted during the period                                         -                          -
 Less: Forfeited during the period                                      -                          -
 Less: Exercised during the period                                183,500                   Rs.35.00
 Less: Expired during the period
 Outstanding at the end of the period                              580,100                  Rs.35.00
 Exercisable at the end of the period                               18,000
 Weighted average remaining contractual life                                                     9.26
 (in years)
 Weighted average fair value of options granted                                             Rs.74.85


 The details of Series IV have been summarized below:
                                                               As at December 31,2009
                                                   Number of Shares        Weighted Average
                                                                           Exercise Price(Rs.)
 Outstanding at the beginning of the period                       106,000                    Rs.35.00
 Add: Granted during the period                                          -                          -
 Less: Forfeited during the period                                       -                          -
 Less: Exercised during the period                                   8,700                   Rs.35.00
 Less: Expired during the period                                         -
 Outstanding at the end of the period                               97,300                   Rs.35.00
 Exercisable at the end of the period                                1,900
 Weighted average remaining contractual life                                                    10.13
 (in years)
 Weighted average fair value of options granted                                               136.40


  The details of Series V have been summarized below:
                                                               As at December 31,2009
                                                  Number of Shares         Weighted Average
                                                                           Exercise Price(Rs.)
 Outstanding at the beginning of the period                        77,000                    Rs.35.00
 Add: Granted during the period                                          -
 Less: Forfeited during the period                                       -
 Less: Exercised during the period                                   7,700                   Rs.35.00
 Less: Expired during the period                                         -
 Outstanding at the end of the period                              69,300                    Rs.35.00
 Exercisable at the end of the period                                    -
 Weighted average remaining contractual life                                                    11.03
 (in years)
 Weighted average fair value of options                                                       253.90
 granted




                                                     F-75
  The details of Series VI have been summarized below:
                                                               As at December 31,2009
                                                  Number of Shares         Weighted Average
                                                                           Exercise Price(Rs.)
 Outstanding at the beginning of the period                                                                    -
 Add: Granted during the period                                        50,000                           Rs.35.00
 Less: Forfeited during the period                                          -
 Less: Exercised during the period                                          -
 Less: Expired during the period                                            -
 Outstanding at the end of the period                                  50,000                           Rs.35.00
 Exercisable at the end of the period                                       -
 Weighted average remaining contractual life                                                              11.85
 (in years)
 Weighted average fair value of options                                                                  201.45
 granted

  The weighted average share price for the period over which stock options were exercised was Rs.318.67


  The details of exercise price for stock options outstanding at the end of the period are:
  December 31, 2009

 Series                  Range of           Number of            Weighted average             Weighted
                         exercise prices    options              remaining                    average exercise
                                            outstanding          contractual life of          price
                                                                 options (in years)
 Series I                    Rs.35/-                1,043,750             8.34                     Rs.35/-
 Series II                   Rs.35/-                  251,300             8.74                     Rs.35/-
 Series III                  Rs.35/-                  580,100             9.26                     Rs.35/-
 Series IV                   Rs.35/-                   92,000            10.13                     Rs.35/-
 Series V                    Rs.35/-                   69,300            11.03                     Rs.35/-
 Series VI                   Rs.35/-                   50,000            11.85                     Rs.35/-
Stock Options granted

Series I:

The weighted average fair value of stock options granted was Rs.59.04. The Black Scholes model has
been used for computing the weighted average fair value of options considering the following inputs:

                                                                  Yr 1          Yr 2          Yr 3         Yr 4
 Exercise Price (Rs.)                                              35.00         35.00         35.00       35.00
 Expected Volatility (%)                                           38.44         38.44         38.44       38.44
 Historical Volatility                                                NA           NA            NA          NA
 Life of the options granted (Vesting and exercise period)           1.50         2.50          3.50        4.50
 in years
 Expected dividends per annum (Rs.)                                   3.00        3.00           3.00        3.00
 Average risk-free interest rate (%)                                  5.98        6.33           6.54        6.73
 Expected dividend rate (%)                                           2.31        2.31           2.31        2.31




                                                      F-76
Series II :

The weighted average fair value of stock options granted was Rs.91.75. The Black Scholes model has been
used for computing the weighted average fair value of options considering the following inputs:

                                                             Yr 1           Yr 2      Yr 3      Yr 4
 Exercise Price (Rs.)                                               35.00       35.00     35.00  35.00
 Expected Volatility (%)                                            19.89       19.89     19.89  19.89
 Historical Volatility                                                NA          NA        NA      NA
 Life of the options granted (Vesting and exercise period)           1.50        2.50      3.50    4.50
 in years
 Expected dividends per annum (Rs.)                                  3.00       3.00      3.00     3.00
 Average risk-free interest rate (%)                                 6.64       6.83      6.93     7.26
 Expected dividend rate (%)                                          2.52       2.52      2.52     2.52


Series III :

The weighted average fair value of stock options granted was Rs.74.85. The Black Scholes model has been
used for computing the weighted average fair value of options considering the following inputs:

                                                             Yr 1           Yr 2      Yr 3      Yr 4
 Exercise Price (Rs.)                                               35.00       35.00     35.00  35.00
 Expected Volatility (%)                                            31.85       31.85     31.85  31.85
 Historical Volatility (%)                                            NA          NA        NA      NA
 Life of the options granted (Vesting and exercise period)           1.50        2.50      3.50    4.50
 in years
 Expected dividends per annum (Rs.)                                  3.00       3.00      3.00     3.00
 Average risk-free interest rate (%)                                 6.96       7.10      7.26     7.40
 Expected dividend rate (%)                                          2.52       2.52      2.52     2.52


Series IV :

The weighted average fair value of stock options granted was Rs. 136.40. The Black Scholes model has
been used for computing the weighted average fair value of options considering the following inputs:

                                                             Yr 1           Yr 2      Yr 3      Yr 4
 Exercise Price (Rs.)                                               35.00       35.00     35.00  35.00
 Expected Volatility (%)                                            41.51       41.51     41.51  41.51
 Historical Volatility (%)                                            NA          NA        NA      NA
 Life of the options granted (Vesting and exercise period)           1.50        2.50      3.50    4.50
 in years
 Expected dividends per annum (Rs.)                                  3.00       3.00      3.00     3.00
 Average risk-free interest rate (%)                                 7.68       7.76      7.82     7.87
 Expected dividend rate (%)                                          0.89       0.89      0.89     0.89




                                                    F-77
Series V :

The weighted average fair value of stock options granted was Rs. 253.90. The Black Scholes model has
been used for computing the weighted average fair value of options considering the following inputs:

                                                              Yr 1           Yr 2      Yr 3      Yr 4
 Exercise Price (Rs.)                                                35.00       35.00     35.00  35.00
 Expected Volatility (%)                                             69.22       69.22     69.22  69.22
 Historical Volatility (%)                                             NA          NA        NA      NA
 Life of the options granted (Vesting and exercise period)            1.50        2.50      3.50    4.50
 in years
 Expected dividends per annum (Rs.)                                   3.00       3.00        3.00       3.00
 Average risk-free interest rate (%)                                  9.41       9.36        9.34       9.36
 Expected dividend rate (%)                                           1.63       1.63        1.63       1.63


Series VI :

The weighted average fair value of stock options granted was Rs. 201.45. The Black Scholes model has
been used for computing the weighted average fair value of options considering the following inputs:

                                                              Yr 1           Yr 2      Yr 3      Yr 4
 Exercise Price (Rs.)                                                35.00       35.00     35.00  35.00
 Expected Volatility (%)                                             64.80       64.80     64.80  64.80
 Historical Volatility (%)                                             NA          NA        NA      NA
 Life of the options granted (Vesting and exercise period)            1.50        2.50      3.50    4.50
 in years
 Expected dividends per annum (Rs.)                                   5.00       5.00        5.00       5.00
 Average risk-free interest rate (%)                                  4.03       4.68        5.20       5.64
 Expected dividend rate (%)                                           1.96       1.96        1.96       1.96


The expected volatility was determined based on historical volatility data equal to the NSE volatility rate of
Bank Nifty which is considered as a comparable peer group of the Company. To allow for the effects of
early exercise, it was assumed that the employees will exercise the options within six months from the date
of vesting in view of the exercise price being significantly lower than the market price.
Effect of the employee share-based payment plans on the profit and loss account and on its financial
position:




                                                                                               (Rs. in lacs)
                                                                                     As at December 31, 2009
 Total compensation cost pertaining to employee share-based payment plan                                  292.00
 (entirely equity settled)
 Liability for employee stock options outstanding as at year end                                          1,754.33
 Deferred compensation cost                                                                                 256.40
  *Pertains to the period nine months ending December 31, 2009




                                                     F-78
Since the enterprise used the intrinsic value method the impact on the reported net profit and
earnings per share by applying the fair value based method is as follows:

In March 2005, ICAI has issued a guidance note on “Accounting for Employees Share Based Payments”
applicable to employee based share plan the grant date in respect of which falls on or after April 1, 2005.
The said guidance note requires that the proforma disclosures of the impact of the fair value method of
accounting of employee stock compensation accounting in the financial statements. Applying the fair value
based method defined in the said guidance note, the impact on the reported net profit and earnings per share
would be as follows:



                                                                                       For the period April 01,
                                                                                      2009 to December 31, 2009

 Profit as reported (Rs. in lacs)                                                                        60,868.68
 Add: Employee stock compensation under intrinsic value method (Rs. in lacs)                                292.00
 Less: Employee stock compensation under fair value method (Rs. in lacs)                                    294.65
 Proforma profit (Rs. in lacs)                                                                           60,866.03
 Earnings per share
 Basic (Rs.)
 - As reported                                                                                                 29.02
 - Proforma                                                                                                    29.02
 Diluted (Rs.)
 - As reported                                                                                               28.77
 - Proforma                                                                                                  28.77
 Nominal Value                                                                                            Rs 10.00


          The Company has converted 8,000,000 warrants issued to Shriram Holdings (Madras) Private
  14.
          Limited into equity shares at a premium of Rs. 290/- during the period.


  15.     Securitisation / Direct Assignment

  The Company sells loans through securitisation and direct assignment. The information on securitization
  / direct assignment activity of the Company as an originator is given below:

                                                                                       For the period April 01,
                                                                                      2009 to December 31, 2009

  Total number of loan assets securitized                                                                   140,532
  Total book value of loan assets securitised (Rs. in lacs)                                              326,229.88
  Sale consideration received for the securitised assets (Rs. in lacs)                                   372,295.43
  Gain on account of securitization* (Rs. in lacs)                                                        79,562.73

  * Gain on securitization / direct assignment deals done after February 1, 2006 is amortised over the
  period of the loan.




                                                      F-79
The information on securitisation / direct assignment activity of the Company as an originator as on
December 31, 2009 is given in the table below :
                                                                                        (Rs.in lacs)
                                                                                     As at December 31, 2009
Outstanding credit enhancement                                                                       152,736.05
Outstanding liquidity facility                                                                        25,976.51
Outstanding subordinate contribution                                                                   3,145.49


16.    Supplementary Statutory Information

                                                                                          (Rs. in lacs)
I      Managing Director’s Remuneration
                                                                                   For the period April 01,
                                                                                    2009 to December 31,
                                                                                            2009

       Salaries                                                                                           21.16
       Perquisites                                                                                         4.70
       Contribution to Provident fund                                                                      0.07
       Employee stock option scheme                                                                       15.43
                                                                                                          41.36
       Note: - As the liabilities for gratuity and leave encashment are provided on an actuarial basis for the
       Company as a whole, the amounts pertaining to the Managing Director is not included above
       The computation of profits under section 349 of the Act has not been given as no commission is
       payable to the Directors / Managing Director.

                                                                                             (Rs. in lacs)
II     Expenditure in foreign currency (On cash basis)
                                                                                    For the period April 01,
                                                                                     2009 to December 31,
                                                                                             2009

       Travelling                                                                                            2.95
       Others                                                                                                2.62
                                                                                                             5.57

17     Based on the intimation received by the Company, none of the suppliers have confirmed to be
       registered under “The Micro, Small and Medium Enterprises Development (‘MSMED’) Act,
       2006”. Accordingly, no disclosures relating to amounts unpaid as at the Nine months ended
       together with interest paid /payable are required to be furnished.


18.    During the period, the Company sold its entire investment in the wholly owned subsidiary, Shriram
       Asset and Equipment Finance Private Limited (SAEFPL), which was incorporated on June 22,
       2009. Further, the Company incorporated a wholly owned subsidiary, Shriram Equipment Finance
       Company Limited (SEFCL). SEFCL has still not commenced its operation.
19.    Previous Period/year Comparatives
       The figures for the previous period/year have been regrouped and reclassified, wherever necessary
       to conform to current period’s classification.


                                                 F-80
Notes to Accounts for the year 2008 – 2009
1.    Secured Loans


a) (i) Privately placed Redeemable Non-convertible Debentures of Rs.1,000/- each


                                                         As at March 31,         As at March
                                                               2009                31, 2008
 Number                                                         19,697,934           15,165,476
 Amount Rs in Lacs                                              196,979.34           151,654.76

Secured by equitable mortgage of title deeds of immovable property. Further secured by charge on plant
and machinery, furniture and other fixed assets of the Company, charge on Company’s book debts,
leased assets, loans, advances and other investments of the Company subject to prior charges created
or to be created in favour of the Company’s bankers, financial institutions and others.

Debentures are redeemable at par over a period of 12 months to 160 months from the date of
allotment depending on the terms of the agreement.

   (ii) Privately Placed Redeemable Non-Convertible Debenture of Rs.1,000,000/- each



       Date of                          Amount (Rs. in lacs)                       Redeemable at par
  Allotment/renewal      As at March 31, 2009          As at March 31, 2008              on
          14.12.2006                             -                    5,000.00            18.04.2008
          18.01.2007                             -                   11,000.00            18.07.2008
          21.06.2007                             -                    2,500.00            19.12.2008
          27.06.2007                             -                    2,500.00            27.02.2009
          27.06.2007                            -                     2,500.00            26.12.2008
          04.07.2007                     5,000.00                     5,000.00            04.07.2009
                                                                          5000
          05.07.2007                    15,000.00                    15,000.00            05.07.2010
          09.07.2007                     7,000.00                     7,000.00            09.07.2010
          11.07.2007                     1,000.00                     1,000.00            09.07.2010
          17.07.2007                    10,000.00                    15,000.00            17.07.2009
          25.07.2007                    15,000.00                    15,000.00            25.07.2010
          30.07.2007                     2,500.00                     2,500.00            30.07.2009
          28.08.2007                     2,500.00                     2,500.00            28.04.2009
          07.09.2007                     4,000.00                     4,000.00            04.09.2009
          10.09.2007                     2,500.00                     2,500.00            10.09.2010
          13.09.2007                     1,000.00                     1,000.00            13.09.2009
          13.09.2007                             -                    3,400.00            19.09.2008



                                                F-81
     Date of                     Amount (Rs. in lacs)                 Redeemable at par
Allotment/renewal   As at March 31, 2009     As at March 31, 2008            on
       17.09.2007                        -                 3,800.00         17.09.2010
       21.09.2007                 2,500.00                 2,500.00         21.09.2010
       05.10.2007                 2,000.00                 2,000.00         05.10.2009
      *05.10.2007                 1,500.00                 1,500.00         05.10.2010
       09.10.2007                 2,500.00                 2,500.00         09.10.2009
       12.10.2007                 2,500.00                 2,500.00         28.09.2009
       15.10.2007                 2,000.00                 2,000.00         15.10.2010
       18.10.2007                12,000.00                12,000.00         18.10.2010
       19.10.2007                 5,000.00                 5,000.00         19.10.2010
       19.10.2007                 8,000.00                 8,000.00         18.10.2009
       22.10.2007                 2,500.00                 2,500.00         22.10.2009
       30.10.2007                 5,000.00                 5,000.00         30.10.2009
       02.05.2008                15,000.00                        -         02.05.2011
                                     00.00
       20.06.2008                10,000.00                        -         20.06.2011
       18.08.2008                29,000.00                        -         06.03.2010
       04.09.2008                 3,500.00                        -         04.04.2010
       04.09.2008                 1,500.00                        -         20.02.2010
       04.09.2008                10,000.00                        -         04.09.2010
       05.09.2008                 7,500.00                        -         10.09.2010
       08.09.2008                 3,000.00                        -         08.09.2010
       15.09.2008                 1,500.00                        -         15.09.2011
       15.09.2008                 1,500.00                        -         15.09.2010
       15.09.2008                 2,500.00                        -         15.03.2010
       15.09.2008                 2,500.00                        -         15.09.2010
       15.09.2008                 2,500.00                        -         15.03.2010
       15.09.2008                 1,500.00                        -         30.04.2010
       16.09.2008                 2,500.00                        -         16.09.2011
       17.09.2008                 8,000.00                        -         01.09.2011
       24.09.2008                 2,500.00                        -         24.09.2010
       26.09.2008                 2,500.00                        -         26.09.2010
       26.09.2008                 1,500.00                        -         10.09.2010
       08.10.2008                 1,200.00                        -         06.04.2010
       24.10.2008                       00
                                  5,000.00                        -         10.12.2010
       27.10.2008                30,000.00                        -         27.10.2013
       26.11.2008                 1,000.00                        -         26.11.2013
       17.12.2008                19,000.00                        -         17.12.2009
       24.03.2009                 2,400.00                        -         24.03.2010
       25.03.2009                 2,600.00                        -         25.03.2010
       28.03.2009                 5,000.00                        -         28.03.2012
    TOTAL                      2,85,700.00               146,700.00

                                        F-82
Secured by hypothecation of specific assets covered under loan agreements and equitable mortgage of
title deeds of immovable property.
*Put/call option on April 3, 2009

  (iii) Privately Placed Redeemable Non-Convertible Debenture of Rs.1,000/- each
                                     Amount (Rs. in lacs)
        Date of                                                          Redeemable at
 Allotment/renewal         As at March 31,         As at March 31,            par on
                                 2009                     2008
             18.01.2007                         -                      0.44              18.01.2009
             07.06.2007                         -                 2,500.00               06.05.2008
             20.06.2007                         -                   500.00               18.06.2008
             22.06.2007                         -                 2,500.00               23.06.2008
             07.08.2007                         -                 5,000.00               30.07.2009
             21.09.2007                         -                 3,400.00               19.09.2008
             TOTAL                              -                13,900.44

Secured by equitable mortgage of title deeds of immovable property. Further secured by charge on
plant and machinery, furniture and other fixed assets of the Company, charge on Company’s book
debts, leased assets, loans, advances and other investments of the Company subject to prior charges
created or to be created in favour of the Company’s bankers, financial institutions and others.

b) Term Loans :
                                                                                             (Rs. in lacs)
                                                                  As at March 31,        As at March
                                                                        2009               31, 2008
i.     From Financial Institutions / Corporates :
       (a)         Secured by an exclusive charge by way of
                   hypothecation of specific movable assets               41,893.90          106,342.57
                   being fixed/current assets relating to
                   hypothecation loans
       (b)         Secured by an exclusive charge by way of
                   hypothecation of specific immovable/                       1,420.12         1,785.36
                   movable assets pertaining to the wind farm
       (c)         Secured by an exclusive charge by way of
                   hypothecation of specific immovable/                        754.40            963.00
                   movable assets pertaining to the wind farm
                   and guaranteed by a former Director.
ii.    From Foreign Institution:
      Secured by an exclusive charge by way of Hypothecation
      of specific Loan agreements and all amounts owing to and                 724.27          2,172.80
      received by the Company pursuant to the above
      Agreements
       Total                                                              44,792.69          111,263.73




                                                 F-83
                                                                                                  (Rs. in lacs)
                                                                        As at March 31,      As at March
                                                                              2009             31, 2008

iii.   From Banks :
       (a)        Secured by hypothecation of vehicles                              6.36               10.07
       (b)        Secured by an exclusive charge by way of
                  hypothecation of specific movable assets                   *830,676.33         *502,000.38
                  being fixed / current assets relating to lease,
                  hypothecation loans
       (c)        Secured by an exclusive charge by way of
                  hypothecation of specific immovable/                            969.99            1,202.27
                  movable assets pertaining to the wind farm

       (d)        Secured by an exclusive charge by way of
                  hypothecation of specific immovable/                          1,710.90            2,116.56
                  movable assets pertaining to the bio mass
                  plant.
                 Total                                                        833,363.58         505,329.28


*includes Rs.7,500.00 lacs (March 31, 2008 : Rs 17,065.00 lacs) the charge in respect of which has
since been created.

c) Cash Credit from Banks
                                                                                                 (Rs. in lacs)
                                                                        As at March 31,      As at March
                                                                              2009             31, 2008
Cash Credit from Banks                                                      *316,623.70         *225,646.66
Secured by hypothecation of specific assets covered under Loan Agreements and Book debts.

* includes Nil (March 31, 2008 : Rs 31,500.00 lacs) the charge in respect of which has since been
created.

2.      Subordinated Debt
        The Company has raised Tier II capital by issue of subordinated debt bonds amounting to Rs.
        60,553.56 lacs (March 31, 2008: Rs. 30,516.38 lacs) with coupon rate of 11.50% to 13% per
        annum which are redeemable over a period of 62 months to 121 months.

3.     Cash & Cash Equivalents
                                                                                                   (Rs. in lacs)
 Particulars                                                        Year ended March      Year ended March
                                                                         31, 2009              31, 2008

 Cash & Bank balance                                                        578,489.69             137,420.45
 Less : Fixed deposits having original maturity
 greater than 3 months or pledged with banks or lien                        117,435.43               70,221.15
 marked deposits
 Balance considered as cash & cash equivalents for
                                                                            461,054.26               67,199.30
 cash flow statement


                                                    F-84
 4.      Gratuity and other post-employment benefit plans:

         The Company has an unfunded defined benefit gratuity plan. Every employee who has
         completed five years or more of service is eligible for a gratuity on separation at 15 days salary
         (last drawn salary) for each completed year of service.

         Consequent to the adoption of revised AS 15 ‘Employee Benefits’ issued under Companies
         (Accounting Standards) Amendment Rules, 2008, the following disclosures have been made as
         required by the standard:

Profit and Loss account
Net employee benefit expense (recognized in employee cost)                                (Rs. in lacs)
                                                                               Gratuity
                                                                  March 31, 2009     March 31, 2008
 Particulars
 Current service cost                                                          99.69                  53.25
 Interest cost on benefit obligation                                           33.23                  17.24
 Expected return on plan assets                                                  NA                     NA
 Net actuarial (gain) / loss recognised in the year                            22.48                101.94
 Past service cost                                                               Nil                    Nil
 Net benefit expense                                                          155.40                172.43
 Actual return on plan assets                                                    NA                     NA

Balance sheet
Details of Provision for gratuity                                                          (Rs. in lacs)
                                                                                Gratuity
                                                                   March 31, 2009     March 31, 2008
 Particulars

 Defined benefit obligation                                                   463.92                 322.76
 Fair value of plan assets                                                       NA                     NA
                                                                              463.92                 322.76
 Less: Unrecognised past service cost                                             Nil                   Nil
 Plan asset / (liability)                                                   (463.92)               (322.76)




                                                      F-85
Changes in the present value of the defined benefit obligation are as follows:
                                                                                           (Rs. in lacs)
                                                                                 Gratuity
                                                                    March 31, 2009     March 31, 2008
 Particulars

 Opening defined benefit obligation                                              322.76                 174.31
 Interest cost                                                                    33.23                  17.24
 Current service cost                                                             99.69                  53.25
 Benefits paid                                                                   (14.24)                (23.98)
 Actuarial (gains) / losses on obligation                                         22.48                 101.94
 Closing defined benefit obligation                                              463.92                 322.76

The Company would not contribute any amount to gratuity in 2009-10 as the scheme is unfunded.

The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:
                                                                                    Gratuity
                                                                    March 31, 2009          March 31, 2008
 Particulars
                                                                           %                       %
 Investments with insurer                                                  NA                      NA

The principal assumptions used in determining gratuity obligations for the Company’s plan are shown
below :
                                                                             Gratuity
 Particulars                                                   March 31, 2009      March 31, 2008
 Discount Rate                                                                   7.75%                       8%
 Increase in compensation cost                                                      5%                       5%
 Employee Turnover*                                                       5% and 10%              5% and 10%

The estimates of future salary increases, considered in actuarial valuation, take account of inflation,
seniority, promotion and other relevant factors, such as supply and demand in the employment market.

*5% in case of employees with service period of more than 5 years and 10% for all other employees.

Amounts for the current period are as follows:

                                                                                                (Rs. in lacs)
 Particulars                                                           March 31, 2009       March 31, 2008
 Defined benefit obligation                                                       463.92                322.76
 Plan assets                                                                         NA                      NA
 Surplus / (deficit)                                                             (463.92)            (322.76)
 Experience adjustments on plan liabilities                                         37.57               101.94
 Experience adjustments on plan assets                                               NA                      NA



                                                     F-86
5.      The Company is a primarily engaged in financing activities. It operates in a single business and
        geographical segment. The Company also owns windmills and biomass which generate income from sale
        of electricity and the same has been classified as ‘Unallocated reconciling item’ as per requirements of AS
        – 17 on ‘Segment Reporting’ issued by ICAI.


                                                                                                   (Rs. in lacs)
                              Year ended March 31, 2009                      Year ended March 31, 2008
                                     Unallocated                                    Unallocated
     Particulars        Financing                                       Financing
                                     reconciling      Total                          reconciling     Total
                        Activities                                      Activities
                                        items                                           items
Segment Revenue          369,847.71      3,265.26   373,112.97           249,612.56      1,290.12  250,902.68
Segment       Results
(Profit before tax
                          92,842.16        (183.61)       92,658.55       62,225.82        (956.50)      61,269.32
and after interest on
Financing Segment)
Less: Interest on
unallocated                     N.A.         595.44          595.44            N.A.          686.02         686.02
reconciling items
Net profit before
                          92,842.16        (779.05)       92,063.11       62,225.82      (1,642.52)      60,583.30
tax
Less: Income taxes              N.A.           N.A.       30,822.90            N.A.            N.A.      21,600.65
Net profit                      N.A.           N.A.       61,240.21            N.A.            N.A.      38,982.65
Other Information:
Segment assets          2,486,282.78       9,673.31    2,495,956.09    1,813,703.73      10,785.10    1,824,488.83
Unallocated
                                                           3,017.14                                       2,372.02
corporate assets
Total Assets            2,486,282.78       9,673.31    2,498,973.23    1,813,703.73      10,785.10    1,826,860.85
Segment liabilities     2,261,942.11       5,352.41    2,267,294.52    1,635,520.68       6,089.70    1,641,610.38
Unallocated
                                                              15.11                                       3,614.57
corporate liabilities
Total Liabilities       2,261,942.11       5,352.41    2,267,309.63    1,635,520.68       6,089.70    1,645,224.95
Capital expenditure         3,369.47            Nil        3,369.47        1,266.01            Nil        1,266.01
Depreciation                1,645.69       1,834.90        3,480.59        1,884.86       1,821.11        3,705.97
Other non - cash
                          33,145.16          590.85       33,736.01       29,713.13          13.73       29,726.86
expenses




                                                  F-87
6. Related Party Disclosures

  Related party where control exists

  Subsidiaries                              : Shriram Powergen Limited (upto March 27, 2008)


  Other Related Parties

  Enterprises having significant influence   Shriram Holdings (Madras) Private Limited
  over the Company                         : Shriram Capital Limited
                                             Newbridge India Investments II Limited

  Associates                                : Shriram Asset Management Company Limited
                                              Ashley Transport Services Limited (upto July 3, 2007)


  Key Managerial Personnel                  : R Sridhar, Managing Director



  Relatives of Key Managerial Personnel     : Mrs. Padmapriya Sridhar (spouse)




                                            F-88
                                                                                                                                                                  (Rs. In Lacs)
                                            Enterprises having                                                                            Relatives of Key
                                                                                                                    Key Management
                                         significant influence over   Subsidiaries             Associates                                  Management                   Total
                                                                                                                       Personnel
                                                the Company                                                                                  Personnel
                                            2009           2008       2009       2008       2009        2008        2009       2008       2009        2008       2009           2008
Payments/Expenses
Employee       benefits    for    key
                                                    -             -          -          -          -            -     62.99     66.53           -            -     62.99          66.53
management personnel
Royalty                                    1,036.45*       623.54*           -          -         -          -           -          -          -          -      1,036.45         623.54
Data Sourcing fees                            87.35*        57.95*           -          -         -          -           -          -          -          -         87.35          57.95
Service Charges                              524.10*       347.70*           -          -         -          -           -          -          -          -        524.10         347.70
Equity dividend                            4,268.58#     2,561.15#           -          -         -          -        4.29       2.52       2.03       1.22      4274.90        2,564.89
Interest on subordinate debt                       -             -           -          -    51.19^    101.94^           -          -          -          -         51.19         101.94
Interest on Inter Corporate Deposit          149.52#             -           -          -         -          -           -          -          -          -        149.52              -
Investments in shares                              -             -           -                    -    30.00@            -          -          -          -             -          30.00
Rent paid                                     57.60*        58.80*           -          -         -          -           -          -          -          -         57.60          58.80
Receipts/Income
Sale of investments                                 -            -           -    4.99             -   112.50@             -          -        -             -          -         117.49
Subscription of equity shares                       -    6,955.20#           -       -             -          -            -          -        -             -          -       6,955.20
Subscription        to      optionally
                                                    -    2,400.00#           -          -          -            -          -          -        -             -          -       2,400.00
convertible warrants
Inter Corporate Deposit                       4,200#              -          -          -         -             -          -          -        -             -   4,200.00             -
Rent & electricity                                 -              -          -          -     5.40^         5.40^          -          -        -             -       5.40          5.40
Balance outstanding at the year end
Share capital                              8,537.15#     8,537.15#           -          -         -          -        8.58       8.40       4.05       4.05      8,549.78       8,549.60
Share warrants                             2,400.00#     2,400.00#           -          -         -          -           -          -          -          -      2,400.00       2,400.00
Investments in shares                              -             -           -          -   240.00^    240.00^           -          -          -          -        240.00         240.00
Outstanding expenses                          67.17*        62.18*           -          -         -          -           -      30.00          -          -         67.17          92.18
Inter Corporate Deposits                   4,200.00#             -           -          -                    -           -          -          -          -      4,200.00              -
Rent Deposit given                            49.00*        49.00*           -          -          -         -           -          -          -          -         49.00          49.00
Interest payable on ICD                      149.52#             -           -          -                    -           -          -          -          -        149.52              -
Interest payable on subordinate debt               -             -           -          -    29.36^    233.22^           -          -          -          -         29.36         233.22




                                                                                              F-89
*      Denotes transactions with Shriram Capital Limited

#      Denotes transactions with Shriram Holdings (Madras) Private Limited

^      Denotes transactions with Shriram Asset Management Company Limited

@      Denotes transactions with Ashley Transport Services Limited

7.     Leases
       In case of assets given on operating lease
       The Company has given land and building on operating lease for period ranging 11 months to 60
        months.
       In case of assets given on financial lease
       The company has given vehicles on finance lease. The lease term is for 3 to 5 years. There is no
       escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements.
                                                                                             (Rs. in lacs)
                                                               As at March 31,        As at March 31,
                                                                     2009                   2008
       Total gross investment in the lease                                       -              6,539.13
       Less : Unearned finance income                                            -                 800.06
       Less: Unguaranteed residual value                                         -                       -
       Present value of minimum lease payments                                   -              5,739.07
       Gross investment in the lease for the period :
       Not later than one year [Present value of minimum                         -              6,164.18
       lease payments receivable Rs. Nil as on March 31,
       2009 (March 31, 2008: Rs.5,388.35 lacs)]
       Later than one year but not later than five years                         -                374.95
       [Present value of minimum lease payments Rs. Nil
       as on March 31, 2009 (March 31, 2008 : Rs. 350.72
       lacs)]
       Later than five years [Present value of minimum                           -                       -
       lease payments Nil as on March 31, 2009 (March
       31, 2008: Nil)]

        In case of assets taken on lease
        The Company has taken various office premises, furniture and fixtures, computers and plant and
        machinery under operating lease. The lease payments recognized in the profit & loss account are
        Rs. 2,636.98 lacs (March 31, 2008: Rs.1,475.33 lacs). Certain agreements provide for cancellation
        by either party and certain agreements contains clause for escalation and renewal of agreements.
        There are no sub leases.
        The future minimum lease payments in respect of non-cancellable operating lease as at the balance
        sheet date are summarized below :                                                  (Rs. in lacs)
                                                             Year ended March           Year ended
                                                                   31, 2009           March 31, 2008
Minimum Lease Payments:
Not later than one year                                                     408.16                 334.18
Later than one year but not later than five years                           149.80                 468.61
Later than five years                                                          Nil                    Nil

                                                    F-90
8.    In accordance with the Reserve Bank of India circular no.RBI/2006-07/ 225 DNBS (PD) C.C
     No.87/03.02.004/2006-07 dated January 4, 2007, the Company has created a floating charge on the
     statutory liquid assets comprising of investment in Government Securities to the extent of
     Rs.283.00 lacs (March 31, 2008: Rs. 427.44 lacs) in favour of trustees representing the public
     deposit holders of the Company.

9.     Earnings per share

                                                               Year ended March     Year ended March
Particulars                                                         31, 2009             31, 2008
Net Profit after tax as per profit and loss account (Rs. in
                                                                        61,240.21           38,982.65
lacs) (A)
Weighted average number of equity shares for calculating
                                                                         2,033.80            1,924.01
Basic EPS (in lacs) (B)
Weighted average number of equity shares for calculating
                                                                         2,138.29            1,977.76
Diluted EPS (in lacs) (C)
Basic earnings per equity share (in Rupees) (Face value of
                                                                           30.11                20.26
Rs. 10/- per share) (A) / (B)
Diluted earnings per equity share (in Rupees) (Face value
                                                                           28.64                19.71
of Rs. 10/- per share) (A) / (C)


                                                               Year ended March     Year ended March
Particulars                                                         31, 2009             31, 2008

Weighted average number of equity shares for calculating
                                                                         2,033.80            1,924.01
EPS (in lacs)
Add : Equity shares arising on conversion of optionally
                                                                           80.00                23.83
convertible warrants (in lacs)
Add : Equity shares for no consideration arising on grant of               24.49
                                                                                                29.92
stock options under ESOP (in lacs)
Weighted average number of equity shares in calculation
                                                                         2,138.29            1,977.76
diluted EPS (in lacs)




                                                  F-91
10.    Deferred Tax Liabilities/(Assets) (Net)                                                (Rs in Lacs)
                                                                    As at March 31,     As at March 31,
       The break up of deferred tax asset / liabilities is as
       under:-                                                            2009                2008

          Deferred Tax Liabilities
          Timing difference on account of :
          Differences in depreciation in block of fixed assets as
                                                                           2,482.17             2,755.33
          per tax books and financial books
          Effect of lease accounting                                             Nil            1,753.86
          Gross Deferred Tax Liabilities (A)                               2,482.17             4,509.19
          Deferred Tax Asset
          Timing difference on account of :
          Expenses disallowed under Income Tax Act, 1961                   3,100.49               173.47
          Provision for securitization                                     2,021.16                503.73
          Provision for hedging contracts                                       Nil                239.78
          Gross Deferred Tax Assets (B)                                    5,121.65               916.98


          Deferred Tax Liabilities /(Assets)(Net) (A-B)                   (2,639.48)            3,592.21

                                                                                               (Rs. in lacs)
                                                                    As at March 31,     As at March 31,
11.    Capital Commitments
                                                                          2009                2008

       Estimated amount of contracts remaining to be executed
                                                                                 Nil               100.00
       on capital account and not provided for (net of advances)

                                                                                           (Rs. in lacs)
                                                                    As at March 31,     As at March 31,
12.    Contingent liabilities not provided for
                                                                          2009                2008

  a.   Disputed income tax/interest tax demand contested in                  164.76              3,381.70
       appeals not provided for
       [Against the above, a sum of Rs. 29.66 lacs (March 31,
       2008: Rs. 318.11 lacs) has been paid under protest]
  b.   Demands in respect of Service tax                                     299.00                284.00
       [Amount of Rs.15 lacs (March 31, 2008 : Rs. 15 lacs) has
       been paid under protest ]

  c.   Guarantees issued by the Company and outstanding                      901.97              1,991.58

       Future cash outflows in respect of (a) and (b) above are determinable only on receipt of judgements
       /decisions pending with various forums/authorities.



                                                 F-92
13.     Recovery of service tax on lease and hire purchase transactions is kept in abeyance in view of the
        stay granted by Honourable Madras High Court. If any liability arises it will be recovered from the
        concerned parties. However, on contracts that are terminated, pending decision from the
        Honourable Madras High Court, equivalent service tax is written off. The company has recognized
        the deferred tax asset on the amounts so written off, as in either case service tax liability will be
        paid off or reversed as income.

 14.     Employee stock option plan
                    Series I         Series II             Series III        Series IV          Series V
Date of grant     October 31,                                                August 17,       July 15,2008
                                    April 1, 2006      October 9, 2006
                      2005                                                     2007
Date of Board
                  October 19,       February 22,          September 6,       August 17,
/Committee                                                                                    July 15,2008
                      2005              2006                 2006              2007
Approval
Date of
                  October 13,       October 13,           October 13,       October 13,        October 13,
Shareholder’s
                      2005              2005                 2005              2005               2005
approval
Number of
                   2,962,500          832,500               910,000           109,000
options                                                                                          77,000
granted
Method of
Settlement           Equity            Equity               Equity             Equity            Equity
(Cash/Equity)
Graded Vesting Period
After 1 year of 10% of options    10% of options       10% of options     10% of options     10% of options
grant date      granted           granted              granted            granted            granted
After 2 years   20% of options    20% of options       20% of options     20% of options     20% of options
of grant date   granted           granted              granted            granted            granted
After 3 years   30% of options    30% of options       30% of options     30% of options     30% of options
of grant date   granted           granted              granted            granted            granted
After 4 years   40% of options    40% of options       40% of options     40% of options     40% of options
of grant date   granted           granted              granted            granted            granted

Exercisable     10 years from     10 years from     10 years from         10 years from      10 years from
period          vesting date      vesting date      vesting date          vesting date       vesting date
Vesting         On achievement of pre-determined targets
Conditions




                                                   F-93
        The details of Series I have been summarized below:

                                                          As at March 31, 2009    As at March 31, 2008
                                                         Number of   Weighted Number         Weighted
                                                         Shares      Average     of Shares   Average
                                                                     Exercise                Exercise
                                                                     Price(Rs.)              Price(Rs.)
Outstanding at the beginning of the year                   2,177,000   Rs. 35.00 2,492,750     Rs. 35.00
Add: Granted during the year                                       -           -           -            -
Less: Forfeited during the year                                    -           -           -            -
Less: Exercised during the year                              304,500   Rs.35.00      57,800    Rs. 35.00
Less: Expired during the year                                 32,700           -    257,950             -
Outstanding at the end of the year                         1,839,800   Rs.35.00 2,177,000      Rs. 35.00
Exercisable at the end of the year                           860,540                528,260             -
Weighted average remaining contractual life (in years)                      9.09                   10.09
Weighted average fair value of options granted                         Rs.59.04                Rs. 59.04

The details of Series II have been summarized below:
                                                           As at March 31, 2009      As at March 31, 2008
                                                         Number of     Weighted     Number Weighted
                                                         Shares        Average      of        Average
                                                                       Exercise     Shares    Exercise
                                                                       Price(Rs.)             Price(Rs.)
Outstanding at the beginning of the year                      554,100     Rs.35.00 744,000        Rs.35.00
Add: Granted during the year                                         -            -        -             -
Less: Forfeited during the year                                      -            -        -             -
Less: Exercised during the year                                 31,300    Rs.35.00    18,900      Rs.35.00
Less: Expired during the year                                    6,300               171,000             -
Outstanding at the end of the year                            516,500     Rs.35.00 554,100        Rs.35.00
Exercisable at the end of the year                            116,520                 38,400
Weighted average remaining contractual life (in                               9.49                   10.49
years)
Weighted average fair value of options granted                            Rs.91.75               Rs. 91.75

The details of Series III have been summarized below:
                                                           As at March 31, 2009      As at March 31, 2008
                                                           Number of    Weighted     Number      Weighted
                                                               Shares     Average          of     Average
                                                                          Exercise    Shares      Exercise
                                                                        Price(Rs.)              Price(Rs.)
Outstanding at the beginning of the year                     811,000     Rs.35.00    885,000     Rs.35.00
Add: Granted during the year                                        -            -          -            -
Less: Forfeited during the year                                     -            -          -            -
Less: Exercised during the year                                40,400    Rs.35.00           -            -
Less: Expired during the year                                   7,000            -    74,000             -
Outstanding at the end of the year                           763,600             -   811,000     Rs.35.00
Exercisable at the end of the year                           202,600             -    81,100             -
Weighted average remaining contractual life (in                     -        10.01          -        11.01
years)
Weighted average fair value of options granted                      -     Rs.74.85         -      Rs.74.85




                                                  F-94
   The details of Series IV have been summarized below:
                                                              As at March 31, 2009     As at March 31, 2008
                                                            Number of    Weighted     Number Weighted
                                                            Shares       Average      of        Average
                                                                         Exercise     Shares    Exercise
                                                                         Price(Rs.)             Price(Rs.)
 Outstanding at the beginning of the year                        109,000    Rs.35.00         -             -
 Add: Granted during the year                                          -               109,000      Rs.35.00
 Less: Forfeited during the year                                       -                     -             -
 Less: Exercised during the year                                       -                     -             -
 Less: Expired during the year                                     3,000                     -             -
 Outstanding at the end of the year                              106,000    Rs.35.00 109,000        Rs.35.00
 Exercisable at the end of the year                              106,000                   Nil             -
 Weighted average remaining contractual life (in                                10.88                  11.88
 years)
 Weighted average fair value of options granted                                 136.40                136.40

 The details of Series V have been summarized below:
                                                              As at March 31, 2009      As at March 31, 2008
                                                            Number of     Weighted     Number Weighted
                                                            Shares        Average      of        Average
                                                                          Exercise     Shares    Exercise
                                                                          Price(Rs.)             Price(Rs.)
 Outstanding at the beginning of the year                               -            -        -             -
 Add: Granted during the year                                      77,000    Rs.35.00         -             -
 Less: Forfeited during the year                                        -            -        -             -
 Less: Exercised during the year                                        -            -        -             -
 Less: Expired during the year                                          -            -        -             -
 Outstanding at the end of the year                                77,000    Rs.35.00         -             -
 Exercisable at the end of the year                                     -            -        -             -
 Weighted average remaining contractual life (in                                11.78         -             -
 years)
 Weighted average fair value of options granted                          253.90                       -
The weighted average share price for the period over which stock options were exercised was Rs.242.00
(March 31, 2008: Rs. 270.76)

The details of exercise price for stock options outstanding at the end of the year are:
March 31, 2009

 Series        Range of           Number of             Weighted average          Weighted
               exercise prices    options               remaining                 average exercise
                                  outstanding           contractual life of       price
                                                        options (in years)
 Series I           Rs.35/-                1,839,800             9.09                     Rs.35/-
 Series II          Rs.35/-                  516,500             9.49                     Rs.35/-
 Series III         Rs.35/-                  763,600            10.01                     Rs.35/-
 Series IV          Rs.35/-                  106,000            10.88                     Rs.35/-
 Series V           Rs.35/-                   77,000            11.78                     Rs.35/-




                                                     F-95
 March 31, 2008

 Series       Range of        Number of              Weighted average        Weighted average
              exercise prices options                remaining               exercise price
                              outstanding            contractual life of
                                                     options (in years)
 Series I          Rs.35/-              2,177,000            10.09                  Rs.35/-
 Series II         Rs.35/-                554,100            10.49                  Rs.35/-
 Series III        Rs.35/-                811,000            11.01                  Rs.35/-
 Series IV         Rs.35/-                109,000            11.88                  Rs.35/-


Stock Options granted

Series I:

The weighted average fair value of stock options granted was Rs.59.04. The Black Scholes model has
been used for computing the weighted average fair value of options considering the following inputs:

                                                     Yr 1      Yr 2        Yr 3      Yr 4
 Exercise Price (Rs.)                                35.00      35.00       35.00     35.00
 Expected Volatility (%)                             38.44      38.44       38.44     38.44
 Historical Volatility                                 NA         NA          NA        NA
 Life of the options granted (Vesting and             1.50       2.50        3.50      4.50
 exercise period) in years
 Expected dividends per annum (Rs.)                   3.00       3.00        3.00      3.00
 Average risk-free interest rate (%)                  5.98       6.33        6.54      6.73
 Expected dividend rate (%)                           2.31       2.31        2.31      2.31


Series II :

The weighted average fair value of stock options granted was Rs.91.75. The Black Scholes model has been
used for computing the weighted average fair value of options considering the following inputs:

                                                    Yr 1    Yr 2     Yr 3     Yr 4
 Exercise Price (Rs.)                                35.00     35.00    35.00    35.00
 Expected Volatility (%)                             19.89     19.89    19.89    19.89
 Historical Volatility                                  NA       NA       NA       NA
 Life of the options granted (Vesting and              1.50     2.50     3.50     4.50
 exercise period) in years
 Expected dividends per annum (Rs.)                   3.00       3.00        3.00      3.00
 Average risk-free interest rate (%)                  6.64       6.83        6.93      7.26
 Expected dividend rate (%)                           2.52       2.52        2.52      2.52




                                                    F-96
Series III :

The weighted average fair value of stock options granted was Rs.74.85. The Black Scholes model has been
used for computing the weighted average fair value of options considering the following inputs:

                                                  Yr 1    Yr 2     Yr 3     Yr 4
 Exercise Price (Rs.)                              35.00     35.00    35.00    35.00
 Expected Volatility (%)                           31.85     31.85    31.85    31.85
 Historical Volatility (%)                            NA       NA       NA       NA
 Life of the options granted (Vesting and            1.50     2.50     3.50     4.50
 exercise period) in years
 Expected dividends per annum (Rs.)                   3.00       3.00       3.00       3.00
 Average risk-free interest rate (%)                  6.96       7.10       7.26       7.40
 Expected dividend rate (%)                           2.52       2.52       2.52       2.52

Series IV :

The weighted average fair value of stock options granted was Rs. 136.40. The Black Scholes model has
been used for computing the weighted average fair value of options considering the following inputs:

                                                  Yr 1    Yr 2     Yr 3     Yr 4
 Exercise Price (Rs.)                              35.00     35.00    35.00    35.00
 Expected Volatility (%)                           41.51     41.51    41.51    41.51
 Historical Volatility (%)                            NA       NA       NA       NA
 Life of the options granted (Vesting and            1.50     2.50     3.50     4.50
 exercise period) in years
 Expected dividends per annum (Rs.)                   3.00       3.00       3.00       3.00
 Average risk-free interest rate (%)                  7.68       7.76       7.82       7.87
 Expected dividend rate (%)                           0.89       0.89       0.89       0.89

Series V :

The weighted average fair value of stock options granted was Rs. 253.90. The Black Scholes model has
been used for computing the weighted average fair value of options considering the following inputs:
                                                  Yr 1    Yr 2     Yr 3     Yr 4
 Exercise Price (Rs.)                              35.00     35.00    35.00    35.00
 Expected Volatility (%)                           69.22     69.22    69.22    69.22
 Historical Volatility (%)                            NA       NA       NA       NA
 Life of the options granted (Vesting and            1.50     2.50     3.50     4.50
 exercise period) in years
 Expected dividends per annum (Rs.)                   3.00       3.00       3.00       3.00
 Average risk-free interest rate (%)                  9.41       9.36       9.34       9.36
 Expected dividend rate (%)                           1.63       1.63       1.63       1.63

The expected volatility was determined based on historical volatility data equal to the NSE volatility rate
of Bank Nifty which is considered as a comparable peer group of the Company. To allow for the effects
of early exercise, it was assumed that the employees will exercise the options within six months from the
date of vesting in view of the exercise price being significantly lower than the market price.




                                                   F-97
Effect of the employee share-based payment plans on the profit and loss account and on its financial
position:
                                                                             (Rs. in lacs)
                                                                As at March As at March
                                                                  31, 2009    31, 2008
 Total compensation cost pertaining to employee share-                580.57          653.95
 based payment plan (entirely equity settled)
 Liability for employee stock options outstanding as at year        2,584.88        2,689.69
 end
 Deferred compensation cost                                           445.98          863.05




Since the enterprise used the intrinsic value method the impact on the reported net profit and
earnings per share by applying the fair value based method is as follows:

In March 2005, ICAI has issued a guidance note on “Accounting for Employees Share Based Payments”
applicable to employee based share plan the grant date in respect of which falls on or after April 1, 2005.
The said guidance note requires that the proforma disclosures of the impact of the fair value method of
accounting of employee stock compensation accounting in the financial statements. Applying the fair
value based method defined in the said guidance note, the impact on the reported net profit and earnings
per share would be as follows:

                                                                Year ended         Year ended
                                                               March 31, 2009     March 31, 2008
 Profit as reported (Rs. in lacs)                                   61,240.21          38,982.65
 Add: Employee stock compensation under intrinsic value
                                                                        580.57              653.95
 method (Rs. in lacs)
 Less: Employee stock compensation under fair value
                                                                        553.44              615.95
 method (Rs. in lacs)
 Proforma profit (Rs. in lacs)                                      61,267.34            39,020.65
 Earnings per share
 Basic (Rs.)
 - As reported                                                           30.11                 20.26
 - Proforma                                                              30.12                 20.28
 Diluted (Rs.)
 - As reported                                                           28.64                 19.71
 - Proforma                                                              28.65                 19.73
 Nominal value                                                           10.00                 10.00




                                                   F-98
15.    Securitisation/ Direct Assignment

The Company sells loans through securitisation and direct assignment. The information on securitisation
/ direct assignment activity of the Company as an originator for the year March 31, 2009 and March 31,
2008 is given below:

                                                                Year ended             Year ended
                                                               March 31, 2009         March 31, 2008
Total number of loan assets securitized/directly
                                                                         1,49,860                 65,020
assigned
Total book value of loan assets securitized/directly
                                                                      3,12,498.40             211,822.17
assigned (Rs. in lacs)
Sale consideration received for the securitized/directly
                                                                      3,38,334.83             248,140.60
assigned assets (Rs. in lacs)
Gain on account of securitization/direct assignment*
                                                                       41,816.19               36,318.39
(Rs. in lacs)

* Gain on securitization / direct assignment deals done after February 1, 2006 is amortised over the
period of the loan.

The information on securitisation & direct assignment activity of the Company as an originator as on
March 31, 2009 and March 31, 2008 is given in the table below :
                                                                                     (Rs. in Lacs)
                                                                As at March 31,     As at March 31,
                                                                      2009                 2008
Outstanding credit enhancement                                           97459.32              56,687.05
Outstanding liquidity facility                                          17,137.30               7,127.85
Outstanding subordinate contribution                                      3,301.71              5,159.40

16.    Derivative Instruments:
       The Notional principal amount of derivative transactions outstanding as on March 31, 2009 for
       principal swaps are Rs. NIL (March 31, 2008 – Rs.Nil ) and for interest rate swaps Rs.
       Nil(March 31, 2008 – Rs 95,000 lacs). The interest rate swaps is to hedge against exposure to
       variable interest outflow on loans. The broad term of the instruments are to receive fixed rate of
       interest/variable rate equal to INBMK and to pay a variable rate equal to INBMK/MIBOR.

17.    Supplementary Statutory Information
                                                                                             (Rs. in lacs)
i      Managing Director’s Remuneration
                                                                 Year ended            Year ended
                                                                March 31, 2009        March 31, 2008
       Salaries                                                            40.00                46.96
       Perquisites                                                          8.13                 9.78
       Contribution to Provident fund                                       0.09                 0.09
       Employee stock option scheme                                        14.77                 9.70
                                                                           62.99                66.53
        Note: - As the future liability for gratuity and leave encashment is provided on an actuarial
        basis for the Company as a whole, the amount pertaining to the directors is not ascertainable
        and, therefore, not included above.
        The computation of profits under section 349 of the Act has not been given as no commission
        is payable to the Directors / Managing Director.
                                                   F-99
                                                                                                             (Rs. in lacs)
ii    Expenditure in foreign currency (On cash basis)
                                                                           Year ended              Year ended
                                                                          March 31, 2009          March 31, 2008
      Travelling                                                                   236.38                    13.81
      Others                                                                     3,320.21                      Nil
                                                                                 3,556.59                    13.81

iii   Net dividend remitted in foreign                  Year ended March 31,                Year ended March 31,
      exchange                                                  2009                                2008
      Period to which it relates                        Interim       Final                 Interim       Final
                                                        2008-09      2007-08                2007-08      2006-07
      Number of non-resident shareholders                       6            6                       6           2
      Number of equity shares held on which            42,403,023 42,403,023                45,863,023 35,125,801
          dividend was due
      Amount remitted (state the foreign
          currency)
        Euro                                                       -               -                  -            2,234
        American Dollar                                      840,330       3,966,606          1,154,077        1,683,294

18.   Additional information pursuant to the provisions of paragraphs 3, 4C and 4D of Part II of
      schedule VI to the Act
i     Licensed Capacity, Installed capacity, Actual production and Sales
       Class of      Units     Licensed      Installed Capacity        Actual Production and           Sales Value
       Goods                  Capacity as    as at March 31, (in       Sales for the year ended        (Rs. in lacs)
                             at March 31,           KW)                  March 31, (in units)
                             2009    2008     2009       2008            2009          2008         2009          2008
      Electricity-    44     NA       NA     22,430      22,430    34,546,664       30,200,617    2,251.19*       966.44
       Windmill
      Electricity-    1      NA       NA      7,500      7,500     32,192,600       10,275,400    1,014.07        323.68
       Biomass
      *Includes compensation charges received towards generation loss.

ii    Consumption of raw materials - indigenous
          Raw material              Units         Quantity for the year                Value for the year ended
                                                   ended March 31,                      March 31, (Rs in lacs)
                                                      2009             2008              2009                 2008
           Biomass Fuel              Tons          69,354          25,332               687.17                258.06


19.   Based on the intimation received by the Company, none of the suppliers have confirmed to be
      registered under “The Micro, Small and Medium Enterprises Development (‘MSMED’) Act,
      2006”. Accordingly, no disclosures relating to amounts unpaid as at the year end together with
      interest paid /payable are required to be furnished.
20.   Final dividend (including tax on dividend) includes an amount of Rs 12.31 lacs in respect of
      dividend paid by the Company for the previous year on 2,63,100 equity shares allotted before
      the date of book closure as they rank pari-passu with the existing equity shares for dividend.



                                                       F-100
21.   The auditors’ report dated May 13, 2009 on financial statements as of and for year ended
      March 31, 2009 included, as an Annexure, a statement on certain matters specified in the
      Companies (Auditors Report) Order, 2003, which was modified to indicate that there was an
      instance of fraud on the Company by its franchisee.
22.   Previous Year Comparatives
      The figures for the previous year have been regrouped and reclassified, wherever necessary to
      conform to current year’s classification.




                                               F-101
Notes to Accounts for the year 2007-2008
1.     Secured Loans

a) (i) Privately placed Redeemable Non-convertible Debentures of Rs.1,000/- each
                                                                                (Rs. in lacs)
                                                          As at March 31,        As at March
                                                                2008               31, 2007
 Number                                                          15,165,476          12,379,858
 Amount                                                          151,654.76          123,798.58

Secured by exclusive mortgage of office premises. Further secured by charge on Plant and
Machinery, Furniture and other fixed assets of the Company, charge on Company’s book debts,
leased assets, loans, advances and other investments of the Company subject to prior charges created
or to be created in favour of the Company’s bankers, financial institutions and others.

Debentures are redeemable over a period of 12 months to 160 months from the date of allotment
depending on the terms of the agreement.


   (ii) Privately Placed Redeemable Non-Convertible Debenture of Rs.1,000,000/- each

                                     Amount (Rs. in lacs)
       Date of
                           As at March 31,        As at March 31,               Redemption date
  Allotment/renewal
                                 2008                    2007
           05.05.2006                      Nil                5,000.00                04.05.2007
           23.10.2006                      Nil               10,000.00                24.10.2007
           12.12.2006                       Nil                  5,000.00             17.12.2007
           14.12.2006                  5,000.00                  5,000.00             18.04.2008
           18.01.2007                 11,000.00                 11,000.00             18.07.2008
          21.06.2007                   2,500.00                       0.00            19.12.2008
          27.06.2007                   2,500.00                       0.00            27.02.2009
          27.06.2007                   2,500.00                       0.00            26.12.2008
          04.07.2007                   5,000.00                       0.00            04.07.2009
                                           5000                       0.00
          05.07.2007                  15,000.00                                       05.07.2010
          09.07.2007                   7,000.00                       0.00            09.07.2010
          11.07.2007                   1,000.00                       0.00            09.07.2010
          17.07.2007                  15,000.00                       0.00            17.07.2009
          25.07.2007                  15,000.00                       0.00            25.07.2010
          30.07.2007                   2,500.00                       0.00            30.07.2009
          28.08.2007                   2,500.00                       0.00            28.04.2009
          07.09.2007                   4,000.00                       0.00            04.09.2009
          10.09.2007                   2,500.00                       0.00            10.09.2010
          13.09.2007                   1,000.00                       0.00            13.09.2009
          13.09.2007                   3,400.00                       0.00            19.09.2008
          17.09.2007                   3,800.00                       0.00            17.09.2010
                                                  F-102
                                    Amount (Rs. in lacs)
       Date of                         Redemption date                           Redemption
  Allotment/renewal       As at March 31,        As at March 31,                    date
                                2008                    2007
          21.09.2007                 2,500.00                  0.00               21.09.2010
          05.10.2007                 2,000.00                  0.00               05.10.2009
          05.10.2007                 1,500.00                  0.00               05.10.2010
          09.10.2007                  2,500.00                      0.00          09.10.2009
          12.10.2007                  2,500.00                      0.00          28.09.2009
          15.10.2007                  2,000.00                      0.00          15.10.2010
          18.10.2007                 12,000.00                      0.00          18.10.2010
          19.10.2007                  5,000.00                      0.00          19.10.2010
          19.10.2007                  8,000.00                      0.00          18.10.2009
          22.10.2007                  2,500.00                      0.00          22.10.2009
          30.10.2007                  5,000.00                      0.00          30.10.2009
       TOTAL                        146,700.00                 36,000.00

    Secured by exclusive charge by way of hypothecation of loan agreements.


  (iii) Privately Placed Redeemable Non-Convertible Debenture of Rs.1,000/- each

                                    Amount (Rs. in lacs)
     Date of                                                                  Redemption
Allotment/renewal         As at March 31,           As at March 31,              date
                                2008                      2007
          18.07.2006                         Nil                10,000.00           18.07.2007
          29.08.2006                         Nil                 1,500.00           29.11.2007
          31.08.2006                         Nil                10,000.00           29.08.2007
          26.09.2006                         Nil                 1,000.00           24.12.2007
          26.09.2006                         Nil                 1,000.00           25.09.2007
          27.09.2006                         Nil                   500.00           26.09.2007
          18.01.2007                        0.44                      0.44          18.01.2009
          07.06.2007                    2,500.00                      0.00          06.05.2008
          20.06.2007                      500.00                      0.00          18.06.2008
          22.06.2007                    2,500.00                      0.00          23.06.2008
          07.08.2007                    5,000.00                      0.00          30.07.2009
          21.09.2007                    3,400.00                      0.00          19.09.2008
         TOTAL                         13,900.44                24,000.44

Secured by exclusive charge by way of hypothecation of loan agreements.




                                                 F-103
b) Term Loans :
                                                                                        (Rs. in lacs)
                                                                     As at March 31,     As at March
                                                                           2008            31, 2007
i.      From Financial Institutions / Corporates :
        (a)         Secured by an exclusive charge by way of
                    hypothecation of specific movable assets               106,342.57          75,471.30
                    being fixed/current assets relating to
                    hypothecation loans
        (b)         Secured by an exclusive charge by way of
                    hypothecation of specific immovable/                     1,785.36           2,053.72
                    movable assets pertaining to the wind farm
        (c)         Secured by an exclusive charge by way of
                    hypothecation of specific immovable/                       963.00           1,126.38
                    movable assets pertaining to the wind farm
                    and guaranteed by a former Director.
ii.     From Foreign Institution:
       Secured by an exclusive charge by way of Hypothecation
       of specific Loan agreements and all amounts owing to and              2,172.80           3,621.33
       received by the Company pursuant to the above
       Agreements
                  Total                                                    111,263.73          82,272.73


                                                                                        (Rs. in lacs)
                                                                     As at March 31,     As at March
                                                                           2008            31, 2007

iii.    From Banks :
        (a)        Secured by hypothecation of vehicles                         10.07               13.47
        (b)        Secured by an exclusive charge by way of
                   hypothecation of specific movable assets                502,000.38         256,001.64
                   being fixed / current assets relating to lease,
                   hypothecation loans
        (c)        Secured by an exclusive charge by way of
                   hypothecation of specific immovable/                      1,202.27           1,431.99
                   movable assets pertaining to the wind farm

        (d)        Secured by an exclusive charge by way of
                   hypothecation of specific immovable/                      2,116.56           2,378.38
                   movable assets pertaining to the bio mass
                   plant.
                  Total                                                    505,329.28        259,825.48




                                                    F-104
 c) Cash Credit from Banks
                                                                                          (Rs. in lacs)
                                                                    As at March 31,        As at March
                                                                          2008               31, 2007
Cash Credit from Banks                                                     225,646.66         104,118.36
Secured by hypothecation of specific assets covered under Loan Agreements, Book debts, equitable
mortgage of title deeds of immovable property.




 2.    Subordinated Debt
       The Company has raised Tier II capital by issue of subordinated debt bonds amounting to Rs.
       30,516.38 lacs (March 31, 2007: Rs. 29,924.71 lacs) with coupon rate of 10 % to 12% per
       annum which are redeemable over a period of 62 months to 80 months.


 3.   Cash & Cash Equivalents
                                                                                              (Rs. in lacs)
 Particulars                                                   Year ended March         Year ended March
                                                                    31, 2008                 31, 2007
 Cash & Bank balance                                                    137,420.45               181,064.16
 Less : Fixed deposits having original maturity
 greater than 3 months or pledged with banks or lien                      70,221.15               37,042.50
 marked deposits
 Balance considered as cash & cash equivalents for
                                                                          67,199.30              144,021.66
 cash flow statement

 4.    Gratuity and other post-employment benefit plans:

       The Company has an unfunded defined benefit gratuity plan. Every employee who has
       completed five years or more of service gets a gratuity on separation at 15 days salary (last drawn
       salary) for each completed year of service.

       Till March 31, 2007, the Company was providing for leave benefits based on actuarial valuation.
       In the current year, the Company has adopted the AS 15 (Revised) which is mandatory from
       accounting periods commencing on or after December 7, 2006. Accordingly the Company has
       changed method of providing short term leave benefits from actuarial valuation to estimate basis.
       Further, in accordance with the transitional provision in the revised AS, no amount has been
       adjusted to the General Reserve as the amount is not material. This change is not having material
       impact on the profit for the current year.

       Consequent to the adoption of revised AS 15 ‘Employee Benefits’ issued by the ICAI, the
       following disclosures have been made as required by the standard:




                                                  F-105
Profit and Loss account
Net employee benefit expense (recognized in Employee Cost)                    (Rs. in lacs)
                                                                         Gratuity
                                                                       March 31, 2008
 Particulars
 Current service cost                                                              53.25
 Interest cost on benefit obligation                                               17.24
 Expected return on plan assets                                                      NA
 Net actuarial (gain) / loss recognised in the year                               101.94
 Past service cost                                                                   Nil
 Net benefit expense                                                              172.43
 Actual return on plan assets                                                        NA


Balance sheet
Details of Provision for gratuity                                         (Rs. in lacs)
                                                                         Gratuity
                                                                       March 31, 2008
 Particulars

 Defined benefit obligation                                                       322.76
 Fair value of plan assets                                                           NA
                                                                                  322.76
 Less: Unrecognised past service cost                                                Nil
 Plan asset / (liability)                                                        (322.76)

Changes in the present value of the defined benefit obligation are as follows:


                                                                           (Rs. in lacs)
                                                                         Gratuity
                                                                       March 31, 2008
 Particulars

 Opening defined benefit obligation                                               174.31
 Interest cost                                                                     17.24
 Current service cost                                                              53.25
 Benefits paid                                                                    (23.98)
 Actuarial (gains) / losses on obligation                                         101.94
 Closing defined benefit obligation                                               322.76

The Company would not contribute any amount to gratuity in 2008-09 as the scheme is unfunded.


                                                      F-106
The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:
                                                                        Gratuity
                                                                     March 31, 2008
 Particulars
                                                                            %
 Investments with insurer                                                   NA

The principal assumptions used in determining gratuity obligations for the company’s plan are shown
below :
                                                                      Gratuity
 Particulars                                                            March 31, 2008
 Discount Rate                                                                          8%
 Increase in compensation cost                                                          5%
 Employee Turnover                                                            5% and 10%

The estimates of future salary increases, considered in actuarial valuation, take account of inflation,
seniority, promotion and other relevant factors, such as supply and demand in the employment market.

Amounts for the current period are as follows:                              (Rs. in lacs)
                                                                        March 31, 2008
 Particulars
 Defined benefit obligation                                                          322.76
 Plan assets                                                                            NA
 Surplus / (deficit)                                                               (322.76)
 Experience adjustments on plan liabilities                                          101.94
 Experience adjustments on plan assets                                                  NA

 The current year being the first year of adoption of AS 15 (revised) by the Company, the previous year
 comparative information has not been furnished.




                                                     F-107
5.
        The Company is a primarily engaged in financing activities. It operates in a single business and
        geographical segment. The Company also owns windmills and biomass which generate income
        from sale of electricity and the same has been classified as ‘Unallocated reconciling item’ as per
        requirements of AS – 17 on ‘Segment Reporting’ issued by ICAI.


                                                                                                   (Rs. in lacs)
                              Year ended March 31, 2008                       Year ended March 31, 2007
                                     Unallocated                                     Unallocated
     Particulars        Financing                                        Financing
                                     reconciling      Total                           reconciling      Total
                        Activities                                       Activities
                                        items                                            items
Segment Revenue          249,612.56      1,290.12   250,902.68            141,007.94      1,130.66   142,138.60
Segment       Results
(Profit before tax
and after interest on      62,225.82        (956.50)       61,269.32       28,993.09          390.13         29,383.22
Financing Segment)

Less: Interest on
unallocated                     N.A.         686.02           686.02            N.A.          460.80           460.80
reconciling items
Net profit before
                           62,225.82      (1,642.52)       60,583.30       28,993.09         (70.67)         28,922.42
tax
Less: Income taxes              N.A.           N.A.        21,600.65            N.A.            N.A.          9,882.71
Net profit                      N.A.           N.A.        38,982.65            N.A.            N.A.         19,039.71
Other Information:
Segment assets          1,813,703.73      10,785.10     1,824,488.83    1,069,157.13      12,257.85     1081,414.98
Unallocated
                                                            2,372.02                                          2,120.47
corporate assets
Total Assets            1,813,703.73      10,785.10     1,826,860.85    1,069,157.13      12,257.85    1,083,535.45
Segment liabilities     1,635,520.68       6,089.70     1,641,610.38      959,257.03       6,988.92      966,245.95
Unallocated
                                                            3,614.57                                          8,661.98
corporate liabilities
Total Liabilities       1,635,520.68       6,089.70     1,645,224.95      959,257.03       6,988.92      974,907.93
Capital expenditure         1,266.01            Nil         1,266.01        1,851.87       1,184.44        3,036.31
Depreciation                1,884.86       1,821.11         3,705.97          414.81         570.32          985.13
Other non - cash
                           29,713.13           13.73       29,726.86       18,991.11            Nil          18,991.11
expenses




                                                  F-108
6. Related Party Disclosures

  Subsidiaries                             : Shriram Powergen Limited (upto March 27, 2008)


  Associates                               : Shriram Asset Management Company Limited
                                             Ashley Transport Services Limited (upto July 3, 2007)


  Enterprises having significant influence   Shriram Holdings (Madras) Private Limited
  over the Company                         : Shriram Capital Limited (formerly known as Shriram
                                             Financial Services Holding Private Limited)
                                             Newbridge India Investments II Limited


  Key Managerial Personnel                 : R Sridhar, Managing Director



  Relatives of Key Managerial Personnel    : Mrs. Padmapriya Sridhar (spouse)




                                           F-109
                                                                                                                              (Rs. in Lacs)
                                        Enterprises having                                                                        Relatives of Key
                                                                                                            Key Management
                                       significant influence       Subsidiaries        Associates                                   Management                    Total
                                                                                                               Personnel
                                        over the Company                                                                              Personnel
                                         2008          2007        2008    2007     2008       2007         2008       2007         2008       2007        2008           2007
Payments/Expenses

Employee      benefits    for   key
                                                -              -       -       -           -            -     66.53      20.32            -           -     66.53          20.32
management personnel
Royalty                                  623.54*   356.35*             -       -         -            -           -         -            -        -         623.54   356.35
Data Sourcing fees                        57.95*    44.61*             -       -         -            -           -         -            -        -          57.95    44.61
Service Charges                          347.70*   266.28*             -       -         -            -           -         -            -                  347.70   266.28
Equity dividend                        2,561.15# 2,263.15#             -       -         -            -        2.52      2.37         1.22     1.22       2,564.89 2,266.74
Interest on subordinate debt                   -         -             -       -   101.94^       46.50^           -         -            -        -         101.94    46.50
Investments in shares                          -         -             -    4.99   30.00@      180.00@            -         -            -        -          30.00   184.99
Rent paid                                 58.80*    45.80*             -       -         -            -           -         -            -        -          58.80    45.80
Rental Deposit                                 -    49.00*             -       -         -            -           -         -            -        -              -    49.00
Receipts/Income
Sale of investments                            -         -          4.99       -   112.50@              -          -        -            -        -         117.49        -
Subscription of equity shares          6,955.20# 9,282.00#             -       -          -             -          -     1.75            -        -       6,955.20 9,283.75
Subscription       to     optionally
                                       2,400.00#               -       -       -           -            -          -          -          -        -       2,400.00               -
convertible warrants
Rent & electricity                              -              -       -       -      5.40^         5.40^          -          -          -        -          5.40           5.40
Balance outstanding at the year end
Share capital                          8,537.15# 7,847.15#             -       -         -           -         8.40      8.12         4.05     4.05       8,549.60 7,859.32
Share warrants                         2,400.00#   772.80#             -       -         -           -            -         -            -        -       2,400.00   772.80
Investments in shares                          -         -             -    4.99   240.00+     420.00+            -         -            -        -         240.00   424.99
Outstanding expenses                      62.18*   147.04*             -       -         -           -        30.00         -            -        -          92.18   147.04
Rent Deposit given                        49.00*    49.00*             -       -         -           -            -         -            -        -          49.00    49.00
Interest payable on subordinate
                                                -              -       -       -   233.22^     131.28^             -          -          -        -        233.22         131.28
debt



                                                                                   F-110
*      Denotes transactions with Shriram Capital Limited (formerly known as Shriram Financial Services
       Holding Private Limited)
#      Denotes transactions with Shriram Holdings (Madras) Private Limited
^      Denotes transactions with Shriram Asset Management Company Limited
@      Denotes transactions with Ashley Transport Services Limited
+      Investments in shares as on March 31, 2008 includes Rs. 240 Lacs (March 31, 2007: Rs. 240 lacs)
       invested in Shriram Asset Management Company Limited and Rs. Nil (March 31, 2007: Rs. 180
       lacs) in Ashley Transport Services Limited
7.     Leases
       In case of assets given on operating lease
       The Company has given land and building on operating lease for period ranging 11 months to 60
        months.
       In case of assets given on financial lease including hire purchase
         The company has given vehicles on finance lease. The lease term is for 3 to 5 years. There is no
        escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements.

                                                                                               (Rs. in lacs)
                                                                As at March 31,         As at March 31,
                                                                      2008                    2007
       Total gross investment in the lease                               6,539.13                22,654.39
       Less : Unearned finance income                                      800.06                 5,088.49
       Less: Unguaranteed residual value                                      Nil                        Nil
       Present value of minimum lease payments                           5,739.07                17,565.90
       Gross investment in the lease for the period :
       Not later than one year [Present value of minimum                  6,164.18               15,373.89
       lease payments receivable Rs. 5,388.35 lacs as on
       March 31, 2008 (March 31, 2007: Rs.11,693.34
       lacs)]
       Later than one year but not later than five years                    374.95                7,280.50
       [Present value of minimum lease payments
       Rs.350.72 lacs as on March 31, 2008 (March 31,
       2007 : Rs. 5,872.56 lacs)]
       Later than five years [Present value of minimum                          Nil                     Nil
       lease payments Nil as on March 31, 2008 (March
       31, 2007: Nil)]

        In case of assets taken on lease
        The Company has taken various office premises, furniture and fixtures, IT equipments and plant
        and machinery under operating lease. The lease payments recognized in the profit & loss account
        are Rs.1,475.33 lacs (March 31, 2007: Rs.987.91 lacs). Certain agreements provide for cancellation
        by either party and certain agreements contains clause for escalation and renewal of agreements.
        There are no sub leases.
        The future minimum lease payments in respect of non-cancellable operating lease as at the balance
        sheet date are summarized below :                                             (Rs. in lacs)
                                                              Year ended March           Year ended
                                                                    31, 2008           March 31, 2007
Minimum Lease Payments:
Not later than one year                                                     334.18                  173.99
Later than one year but not later than five years                           468.61                  167.75
Later than five years                                                          Nil                     Nil
                                                  F-111
8.    In accordance with the Reserve Bank of India circular no.RBI/2006-07/ 225 DNBS (PD) C.C No.
     87/03.02.004/2006-07 dated January 4, 2007, the Company has created a floating charge on the
     statutory liquid assets comprising of investment in Government Securities to the extent of
     Rs.427.44 lacs in favour of trustees representing the public deposit holders of the Company.

9.     Earnings per share

                                                               Year ended March     Year ended March
Particulars                                                         31, 2008             31, 2007
Net Profit after tax as per profit and loss account (Rs. in
                                                                        38,982.65           19,039.71
lacs) (A)
Weighted average number of equity shares for calculating
                                                                         1,924.01            1,729.59
Basic EPS (in lacs) (B)
Weighted average number of equity shares for calculating
                                                                         1,977.76            1,812.07
Diluted EPS (in lacs) (C)
Basic earnings per equity share (in Rupees) (Face value of
                                                                           20.26               11.01
Rs. 10/- per share) (A) / (B)
Diluted earnings per equity share (in Rupees) (Face value
                                                                           19.71               10.51
of Rs. 10/- per share) (A) / (C)


                                                               Year ended March     Year ended March
Particulars                                                         31, 2008             31, 2007

Weighted average number of equity shares for calculating
                                                                         1,924.01            1,729.59
EPS (in lacs)
Add : Equity shares arising on conversion of optionally
                                                                           23.83               69.00
convertible warrants (in lacs)
Add : Equity shares for no consideration arising on grant of
                                                                           29.92               13.48
stock options under ESOP (in lacs)
Weighted average number of equity shares in calculation
                                                                         1,977.76            1,812.07
diluted EPS (in lacs)




                                                 F-112
                                                                                        (Rs. in lacs)
10.   Deferred Tax Liabilities (Net)
                                                                   As at March 31,   As at March 31,
      The break up of deferred tax asset / liabilities is as
      under:-                                                            2008              2007

         Deferred Tax Liabilities
         Timing difference on account of :
         Differences due to accelerated amortisation of
         intangibles under Income Tax Act                                      Nil              31.26

         Differences in depreciation in block of fixed assets as
                                                                          2,755.33           3,191.73
         per tax books and financial books
         Effect of lease accounting                                       1,753.86           5,705.17

         Others                                                                Nil             141.60
         Gross Deferred Tax Liabilities (A)                               4,509.19           9,069.76
         Deferred Tax Asset
         Timing difference on account of :
         Expenses disallowed under Income Tax Act, 1961                    173.47               81.17
         Provision for securitization                                      503.73              326.61
         Provision for hedging contracts                                   239.78                  Nil
         Gross Deferred Tax Assets (B)                                     916.98              407.78


         Deferred Tax Liabilities (Net) (A-B)                             3,592.21           8,661.98


                                                                                         (Rs. in lacs)
                                                                   As at March 31,   As at March 31,
11.   Capital commitments
                                                                         2008              2007

      Estimated amount of contracts remaining to be executed
                                                                           100.00              375.56
      on capital account and not provided for (net of advances)




                                                F-113
                                                                                           (Rs. in lacs)
                                                                  As at March 31,      As at March 31,
12.   Contingent Liabilities not provided for
                                                                        2008                 2007

      Disputed income tax/interest tax demand contested in                 3,381.70             5,754.90
      appeals not provided for

      [Against the above, a sum of Rs. 318.11 lacs (March 31,
      2007: Rs. 318.11 lacs) has been paid under protest]



      Demands in respect of Service tax                                     284.00                230.24
      [Amount of Rs.15 lacs (March 31, 2007 : Rs. 15 lacs) has
      been paid under protest ]


      Guarantees issued by the Company and outstanding                     1,991.58             4,101.12
      In respect of portfolio management                                        Nil               356.67

13.   The company has converted 6,900,000 warrants issued to Shriram Holdings (Madras) Private
      Limited into equity shares at a premium of Rs.102/- during the year. the amount of Rs. 36,000
      lacs (including securities premium of Rs. 34,800 lacs) received from preferential allotment of
      shares was utilized for the purpose of increasing the net worth and working capital of the
      company. the company has further issued 8,000,000 warrants to Shriram Holdings (Madras)
      Private Limited on a preferential basis with an option to convert into equity shares of Rs 300/-
      each (including securities premium of Rs 290/-) within 18 months from the date of issue i.e.
      December 14, 2007.
14.   Recovery of service tax on lease and hire purchase transactions is kept in abeyance in view of
      the stay granted by Honourable Madras High Court. If any liability arises it will be recovered
      from the concerned parties. However, on contracts that are terminated, pending decision from
      the Honourable Madras High Court, equivalent service tax is written off.

15.   Borrowing costs aggregating to n
      Nil (March 31, 2007: Rs. 381.05 lacs) being interest on specific term loan from a bank for bio
      mass plant have been capitalized during the year.




                                                F-114
 16.    Employee Stock Option Plan

                       Series I           Series II            Series III          Series IV
Date of grant      October 31, 2005      April 1, 2006       October 9, 2006     August 17, 2007
Date of Board
                   October 19, 2005    February 22, 2006    September 6, 2006    August 17, 2007
Approval
Date of
Shareholder’s      October 13, 2005    October 13, 2005     October 13, 2005     October 13, 2005
approval
Number of                                                                            109,000
                      2,962,500             832,500              910,000
options granted
Method of
Settlement              Equity               Equity              Equity               Equity
(Cash/Equity)
Graded Vesting Period
After 1 year of  10% of options        10% of options       10% of options      10% of options
grant date       granted               granted              granted             granted
After 2 years of 20% of options        20% of options       20% of options      20% of options
grant date       granted               granted              granted             granted
After 3 years of 30% of options        30% of options       30% of options      30% of options
grant date       granted               granted              granted             granted
After 4 years of 40% of options        40% of options       40% of options      40% of options
grant date       granted               granted              granted             granted

Exercisable      10 years from         10 years from        10 years from       10 years from
period           vesting date          vesting date         vesting date        vesting date
Vesting          On achievement of pre-determined targets
Conditions

The details of Series I have been summarized below:
                                               As at March 31, 2008     As at March 31, 2007
                                             Number of     Weighted Number        Weighted
                                             Shares        Average     of Shares  Average
                                                           Exercise               Exercise
                                                           Price(Rs.)             Price(Rs.)
Outstanding at the beginning of the year         2,492,750 Rs. 35.00 2,962,500      Rs. 35.00
Add: Granted during the year                           Nil           -        Nil            -
Less: Forfeited during the year                        Nil           -        Nil            -
Less: Exercised during the year                     57,800 Rs. 35.00      157,250    Rs.35.00
Less: Expired during the year                      257,950           -    312,500            -
Outstanding at the end of the year               2,177,000 Rs. 35.00 2,492,750       Rs.35.00
Exercisable at the end of the year                 528,260           -    110,450
Weighted average remaining contractual                          10.09                   11.09
life (in years)
Weighted average fair value of options                      Rs. 59.04                Rs.59.04
granted



                                              F-115
          The details of Series II have been summarized below:
                                                  As at March 31, 2008       As at March 31, 2007
                                                Number of      Weighted     Number Weighted
                                                Shares         Average      of        Average
                                                               Exercise     Shares    Exercise
                                                               Price(Rs.)             Price(Rs.)
Outstanding at the beginning of the year             744,000      Rs.35.00       Nil             -
Add: Granted during the year                              Nil             - 832,500       Rs.35.00
Less: Forfeited during the year                           Nil             -      Nil             -
Less: Exercised during the year                        18,900     Rs.35.00       Nil             -
Less: Expired during the year                        171,000              -   88,500             -
Outstanding at the end of the year                   554,100      Rs.35.00 744,000        Rs.35.00
Exercisable at the end of the year                     38,400                    Nil
Weighted average remaining contractual                               10.49                   11.49
life (in years)
Weighted average fair value of options                           Rs. 91.75               Rs. 91.75
granted

          The details of Series III have been summarized below:
                                                  As at March 31, 2008      As at March 31, 2007
                                                Number of     Weighted     Number Weighted
                                                Shares        Average      of        Average
                                                              Exercise     Shares    Exercise
                                                              Price(Rs.)             Price(Rs.)
Outstanding at the beginning of the year             885,000     Rs.35.00       Nil             -
Add: Granted during the year                              Nil            - 910,000       Rs.35.00
Less: Forfeited during the year                           Nil            -      Nil             -
Less: Exercised during the year                           Nil            -      Nil             -
Less: Expired during the year                          74,000            -   25,000             -
Outstanding at the end of the year                   811,000     Rs.35.00 885,000        Rs.35.00
Exercisable at the end of the year                     81,100            -      Nil             -
Weighted average remaining contractual                              11.01                   12.01
life (in years)
Weighted average fair value of options                           Rs.74.85                Rs.74.85
granted

          The details of Series IV have been summarized below:
                                                 As at March 31, 2008      As at March 31, 2007
                                               Number of     Weighted     Number Weighted
                                               Shares        Average      of        Average
                                                             Exercise     Shares    Exercise
                                                             Price(Rs.)             Price(Rs.)
Outstanding at the beginning of the year                 Nil            -        -             -
Add: Granted during the year                        109,000     Rs.35.00         -             -
Less: Forfeited during the year                          Nil            -        -             -
Less: Exercised during the year                          Nil            -        -             -
Less: Expired during the year                            Nil            -        -             -
Outstanding at the end of the year                  109,000     Rs.35.00         -             -
Exercisable at the end of the year                       Nil            -        -             -
Weighted average remaining contractual                             11.88         -             -
life (in years)
Weighted average fair value of options                            136.40         -             -
granted
                                                F-116
The weighted average share price for the period over which stock options were exercised was
Rs.270.76 (March 31, 2007: Rs. 135.53)

The details of exercise price for stock options outstanding at the end of the year are:
March 31, 2008

Series         Range of        Number of             Weighted average          Weighted average
               exercise        options               remaining                 exercise price
               prices          outstanding           contractual life of
                                                     options (in years)
Series I          Rs.35/-               2,177,000            10.09                     Rs.35/-
Series II         Rs.35/-                 554,100            10.49                     Rs.35/-
Series III        Rs.35/-                 811,000            11.01                     Rs.35/-
Series IV         Rs.35/-                 109,000            11.88                     Rs.35/-

March 31, 2007

Series        Range of        Number of            Weighted average            Weighted average
              exercise prices options              remaining                   exercise price
                              outstanding          contractual life of
                                                   options (in years)
Series I          Rs.35/-                2,492,750         11.09                       Rs.35/-
Series II         Rs.35/-                  744,000         11.49                       Rs.35/-
Series III        Rs.35/-                  885,000         12.01                       Rs.35/-

Stock Options granted

Series I:

The weighted average fair value of stock options granted was Rs.59.04. The Black Scholes
model has been used for computing the weighted average fair value of options considering the
following inputs:

                                                      Yr 1       Yr 2        Yr 3         Yr 4
 Exercise Price (Rs.)                                 35.00       35.00       35.00        35.00
 Expected Volatility (%)                              38.44       38.44       38.44        38.44
 Historical Volatility                                  NA          NA          NA           NA
 Life of the options granted (Vesting and              1.50        2.50        3.50         4.50
 exercise period) in years
 Expected dividends per annum (Rs.)                     3.00        3.00        3.00        3.00
 Average risk-free interest rate (%)                    5.98        6.33        6.54        6.73
 Expected dividend rate (%)                             2.31        2.31        2.31        2.31




                                            F-117
Series II :

The weighted average fair value of stock options granted was Rs.91.75. The Black Scholes model
has been used for computing the weighted average fair value of options considering the following
inputs:

                                                    Yr 1    Yr 2     Yr 3     Yr 4
 Exercise Price (Rs.)                                35.00     35.00    35.00    35.00
 Expected Volatility (%)                             19.89     19.89    19.89    19.89
 Historical Volatility                                  NA       NA       NA       NA
 Life of the options granted (Vesting and              1.50     2.50     3.50     4.50
 exercise period) in years
 Expected dividends per annum (Rs.)                   3.00      3.00       3.00       3.00
 Average risk-free interest rate (%)                  6.64      6.83       6.93       7.26
 Expected dividend rate (%)                           2.52      2.52       2.52       2.52

Series III :

The weighted average fair value of stock options granted was Rs.74.85. The Black Scholes model
has been used for computing the weighted average fair value of options considering the following
inputs:

                                                    Yr 1    Yr 2     Yr 3     Yr 4
 Exercise Price (Rs.)                                35.00     35.00    35.00    35.00
 Expected Volatility (%)                             31.85     31.85    31.85    31.85
 Historical Volatility (%)                              NA       NA       NA       NA
 Life of the options granted (Vesting and              1.50     2.50     3.50     4.50
 exercise period) in years
 Expected dividends per annum (Rs.)                   3.00      3.00       3.00       3.00
 Average risk-free interest rate (%)                  6.96      7.10       7.26       7.40
 Expected dividend rate (%)                           2.52      2.52       2.52       2.52


Series IV :

The weighted average fair value of stock options granted was Rs. 136.40. The Black Scholes
model has been used for computing the weighted average fair value of options considering the
following inputs:

                                                    Yr 1    Yr 2     Yr 3     Yr 4
 Exercise Price (Rs.)                                35.00     35.00    35.00    35.00
 Expected Volatility (%)                             41.51     41.51    41.51    41.51
 Historical Volatility (%)                              NA       NA       NA       NA
 Life of the options granted (Vesting and              1.50     2.50     3.50     4.50
 exercise period) in years
 Expected dividends per annum (Rs.)                   3.00      3.00       3.00       3.00
 Average risk-free interest rate (%)                  7.68      7.76       7.82       7.87
 Expected dividend rate (%)                           0.89      0.89       0.89       0.89




                                            F-118
The expected volatility was determined based on historical volatility data equal to the NSE
volatility rate of Bank Nifty which is considered as a comparable peer group of the Company.
To allow for the effects of early exercise, it was assumed that the employees will exercise the
options within six months from the date of vesting in view of the exercise price being
significantly lower than the market price.
Effect of the employee share-based payment plans on the profit and loss account and on its
financial position:
                                                                                   (Rs. in lacs)
                                                                As at March As at March
                                                                  31, 2008   31, 2007
 Total compensation cost pertaining to employee share-                653.95        987.16
 based payment plan (entirely equity settled)
 Liability for employee stock options outstanding as at year        2,689.69        2,961.28
 end
 Deferred compensation cost                                           863.05        1,733.90

Since the enterprise used the intrinsic value method the impact on the reported net profit
and earnings per share by applying the fair value based method is as follows:

In March 2005, ICAI has issued a guidance note on “Accounting for Employees Share Based
Payments” applicable to employee based share plan the grant date in respect of which falls on or
after April 1, 2005. The said guidance note requires that the proforma disclosures of the impact
of the fair value method of accounting of employee stock compensation accounting in the
financial statements. Applying the fair value based method defined in the said guidance note, the
impact on the reported net profit and earnings per share would be as follows:

                                                                Year ended        Year ended
                                                               March 31, 2008    March 31, 2007
 Profit as reported (Rs. in lacs)                                   38,982.65         19,039.71
 Add: Employee stock compensation under intrinsic value
                                                                       653.95               987.16
 method (Rs. in lacs)
 Less: Employee stock compensation under fair value
                                                                       615.95               936.26
 method (Rs. in lacs)
 Proforma profit (Rs. in lacs)                                      39,020.65            19,090.61
 Earnings per share
 Basic (Rs.)
 - As reported                                                           20.26                 11.01
 - Proforma                                                              20.28                 11.04
 Diluted (Rs.)
 - As reported                                                           19.71                 10.51
 - Proforma                                                              19.73                 10.54
 Nominal value                                                           10.00                 10.00




                                         F-119
17.    Securitisation/ Direct Assignment

The Company sells loans through securitisation and direct assignment. The information on securitisation
and direct assignment activity of the Company as an originator for the year March 31, 2008 and March
31, 2007 is given below:

                                                                Year ended             Year ended
                                                               March 31, 2008         March 31, 2007
Total number of loan assets securitized/directly
                                                                           65,020                 68,204
assigned
Total book value of loan assets securitized/directly
                                                                      211,822.17              285,979.49
assigned (Rs. in lacs)
Sale consideration received for the securitized/directly
                                                                      248,140.60              311,095.04
assigned assets (Rs. in lacs)
 Gain on account of securitization/direct assignment*
                                                                       36,318.39               29,070.05
(Rs. in lacs)

* Gain on securitisation / direct assignment deals done after February 1, 2006 is amortised over the
period of the loan.

The information on securitisation & direct assignment activity of the Company as an originator as on
March 31, 2008 and March 31, 2007 is given in the table below :
                                                                                      (Rs. in Lacs)
                                                                As at March 31,     As at March 31,
                                                                      2008                 2007
Outstanding credit enhancement                                          56,687.05              31,095.67
Outstanding liquidity facility                                           7,127.85               2,236.77
Outstanding subordinate contribution                                     5,159.40               6,199.80

18.    Derivative Instruments:
       The Notional principal amount of derivative transactions outstanding as on March 31, 2008 for
       principal swaps are Rs. NIL (March 31, 2007 – Rs.60,000 lacs) and for interest rate swaps Rs.
       95,000 lacs (March 31, 2007 – Nil). The interest rate swaps is to hedge against exposure to
       variable interest outflow on loans. The broad term of the instruments are to receive fixed rate of
       interest/variable rate equal to INBMK and to pay a variable rate equal to INBMK/MIBOR.
19.    During the year ended March 31, 2008, the company has reassessed the balance useful life of its
       computer software, windmills and leasehold improvement (furniture & fixtures and electrical
       equipments / fittings). Based on such reassessment, the estimated balance useful life has reduced
       from 5 years to 3 years, 6 years to 3 years and 16-21 years to 5 years respectively. accordingly,
       the company has provided additional depreciation amounting to Rs. 1,492.74 lacs in respect of
       these assets during the year.




                                                  F-120
20.   Supplementary Statutory Information
                                                                                                           (Rs. in lacs)
i     Managing Director’s Remuneration
                                                                        Year ended                 Year ended
                                                                       March 31, 2008             March 31, 2007
      Salaries                                                                    46.96                      6.10
      Perquisites                                                                  9.78                      1.30
      Contribution to Provident fund                                               0.09                      0.09
      Employee stock option scheme                                                 9.70                     12.83
                                                                                  66.53                     20.32
       Note: - As the future liability for gratuity and leave encashment is provided on an actuarial
       basis for the Company as a whole, the amount pertaining to the directors is not ascertainable
       and, therefore, not included above.
       The computation of profits under section 349 of the Act has not been given as no commission
       is payable to the Directors / Managing Director.
                                                                                          (Rs. in lacs)
ii    Expenditure in foreign currency (On cash basis)
                                                                 Year ended          Year ended
                                                               March 31, 2008      March 31, 2007
      Travelling                                                         13.81                   3.40
      Others                                                                Nil                   Nil
                                                                         13.81                   3.40

iii   Net dividend remitted in foreign                 Year ended March 31,               Year ended March 31,
      exchange                                                  2008                              2007
      Period to which it relates                        Interim       Final               Interim       Final
                                                        2007-08      2006-07              2006-07      2005-06
      Number of non-resident shareholders                       6            2                     3           2
      Number of equity shares held on which            45,863,023 35,125,801             28,617,378 37,313,169
          dividend was due
      Amount remitted (state the foreign
          currency)
        Euro                                                    -              2,234            38,388         75,501
        American Dollar                                 1,154,077          1,683,294           990,400      1,118,940
        Yuan                                                    -                  -            13,652              -

21.   Additional information pursuant to the provisions of paragraphs 3, 4C and 4D of Part II of
      schedule VI to the Act

i     Licensed Capacity, Installed capacity, Actual production and Sales
      Class of     Units      Licensed       Installed Capacity    Actual Production and             Sales Value
      Goods                  Capacity as     as at March 31, (in   Sales for the year ended          (Rs. in lacs)
                            at March 31,            KW)              March 31, (in units)
                            2008    2007      2008       2007         2008             2007        2008         2007
      Windmill      44      NA       NA      22,430     22,430     30,200,617     36,013,398      966.44       1130.66
      Biomass        1      NA       NA       7,500       NIL      10,275,400          NIL        323.68         NIL




                                                      F-121
ii    Consumption of raw materials - indigenous
         Raw material           Units       Quantity for the year        Value for the year ended
                                             ended March 31,              March 31, (Rs in lacs)
                                             2008           2007           2008             2007
         Biomass Fuel           Tons         25,332         NIL           258.06             NIL


22.   The Company has initiated the process of identification of ‘suppliers’ registered under the
      “The Micro, Small and Medium Enterprises Development (‘MSMED’) Act, 2006” by
      obtaining confirmations from suppliers. Based on the intimation received by the Company,
      none of the suppliers have confirmed to be registered under MSMED Act, 2006. Accordingly,
      no disclosures relating to amounts unpaid as at the year end together with interest paid
      /payable are required to be furnished.
23.   Final dividend (including tax on dividend) includes an amount of Rs 162.45 lacs in respect of
      dividend paid by the Company for the previous year on 6,942,500 equity shares allotted before
      the date of book closure as they rank pari-passu with the existing equity shares for dividend.
24.   The auditors’ report dated May 26, 2008 on the financial statements as of and for year ended
      March 31, 2008 included, as an Annexure, a statement on certain matters specified in the
      Companies (Auditors Report) Order, 2003, which was modified to indicate that there was
      undisputed statutory dues remaining unpaid for more than six months.

25.   Previous Year Comparatives
      The figures for the previous year have been regrouped and reclassified, wherever necessary to
      conform to current year’s classification.




                                               F-122
Notes to Accounts for the year 2006-2007
1. SECURED LOANS

a) (i) Privately placed Redeemable Non-convertible Debentures:
                                                                                   (Rs. in lacs)
                                                      As at March 31,            As at March
                                                            2007                   31, 2006
 Redeemable Non-Convertible Debentures of Rs.1,000/-each
 Number                                                      12,379,858               17,443,008
 Amount                                                      123,798.58               174,430.08

Secured by mortgage of office premises, charge on Plant and Machinery, Furniture and other fixed
assets of the Company, charge on Company’s book debts, leased assets, lease rentals including future
receivables, loans, advances and other investments of the Company subject to prior charges created
or to be created in favor of the Company’s bankers, financial institutions and others.

Debentures are redeemable over a period of 6 months to 160 months from the date of allotment
depending on the terms of the agreement.

   (ii) Redeemable Non-Convertible Debenture of Rs.1,000,000/- each

       Date of                       Amount (Rs. in lacs)
                                                                               Redemption date
  Allotment/renewal               31.03.2007              31.03.2006
           26.09.2005                         Nil              10,000.00               24.01.2007
           05.05.2006                    5,000.00                    Nil               04.05.2007
           23.10.2006                  10,000.00                     Nil               24.10.2007
           12.12.2006                    5,000.00                    Nil               17.12.2007
           14.12.2006                    5,000.00                    Nil               18.04.2008
           18.01.2007                  11,000.00                     Nil               18.07.2008
      TOTAL                             36,000.00                 10,000.00

Secured by hypothecation of specific assets covered under agreements by way of an exclusive charge.

  (iii) Redeemable Non-Convertible Debenture of Rs.1,000/- each

      Date of                        Amount (Rs. in lacs)                       Redemption
 Allotment/renewal                31.03.2007              31.03.2006               date
         18.07.2006                    10,000.00                     Nil              18.07.2007
           29.08.2006                    1,500.00                    Nil                 29.11.2007
           31.08.2006                   10,000.00                        Nil             29.08.2007
           26.09.2006                    1,000.00                        Nil             24.12.2007
           26.09.2006                    1,000.00                        Nil             25.09.2007
          27.09.2006                       500.00                        Nil             26.09.2007
          18.01.2007                         0.44                        Nil             30.05.2007
         TOTAL                          24,000.44                        Nil

                                                 F-123
Secured by hypothecation of specific assets covered under agreements by way of an exclusive
charge.


b) Term Loans :
                                                                                        (Rs. in lacs)
                                                                     As at March 31,     As at March
                                                                           2007            31, 2006
i.      From Financial Institutions / Corporate :
        (a)        Secured by an exclusive charge by way of
                   hypothecation of specific movable assets                 75,471.30         34,839.13
                   being fixed/current assets relating to lease
                   and hire purchase agreements and
                   hypothecation loans
        (b)        Secured by an exclusive charge by way of
                   hypothecation of specific immovable/                      2,053.72          2,322.08
                   movable assets pertaining to the wind farm
        (c)        Secured by an exclusive charge by way of
                   hypothecation of specific immovable/                      1,126.38          1,326.66
                   movable assets pertaining to the wind farm
ii.               From Foreign Institution:
       Secured by an exclusive charge by way of Hypothecation
       of specific Hire Purchase agreements and all amounts
       owing to and received by the Company pursuant to the                  3,621.33          5,069.87
       above Hire Purchase Agreements

        Total                                                               82,272.73         43,557.74
iii.    From Banks :
        (a)        Secured by hypothecation of vehicle                          13.47            11.62
        (b)        Secured by an exclusive charge by way of
                   hypothecation of specific movable assets                256,001.64         87,216.72
                   being fixed / current assets relating to lease,
                   hypothecation loans and hire-purchase
                   agreements / loan agreements
        (c)        Secured by an exclusive charge by way of
                   hypothecation of specific immovable/                      1,431.99          1,661.71
                   movable assets pertaining to the windfarm

        (d)        Secured by an exclusive charge by way of
                   hypothecation of specific immovable/                      2,378.38         2,392.79
                   movable assets pertaining to the bio mass
                   plant.
                  Total                                                    259,825.48        91,282.84




                                                    F-124
 c) Cash Credit from Banks
                                                                                       (Rs. in lacs)
                                                                  As at March 31,       As at March
                                                                        2007              31, 2006
Cash Credit from Banks                                                    104,118.36           54,820.74
Secured by hypothecation of specific assets covered under Hire-Purchase/Lease/Loan Agreements, Book
debts, equitable mortgage of title deeds of the immovable property.



 d) HP Refinance Loan
                                                                                       (Rs. in lacs)
                                                                  As at March 31,       As at March
                                                                        2007              31, 2006
HP refinance loan (From institutions / corporates)                               Nil             110.39
 Secured by hypothecation of vehicles by hirers guaranteed by associate    concerns and also     by a
 former Director of the Company




 2.     Subordinated Debt
        The Company has raised Tier II capital by issue of subordinated debt bonds amounting to Rs.
        29,924.71 lacs (March 31, 2006 : Rs. 13,225.77 lacs) with coupon rate of 8 % to 11.50% per
        annum which are redeemable over a period of 61 months to 80 months.

 3.     The Company operates in a single business and geographical segment; hence no disclosure is
        given as per requirements of AS – 17 on Segment Reporting issued by ICAI.




 4. Related Party Disclosure

 Subsidiaries                                   : Shriram Powergen Limited


  Associates                                    : Shriram Asset Management Limited
                                                  Ashley Transport Services Limited



                                                : Shriram Holdings (Madras) Private Limited
 Enterprises having significant influence         Shriram Financial Services Holding Private Limited
 over the Company                                 Newbridge India Investments II Limited



 Key Managerial Personnel                       : R Sridhar, Managing Director



                                                     F-125
                                                                                                                                                            (Rs. in Lacs)
                                                                                                                           Key Management
                                                                                                                         Personnel (Managing
                                            Enterprises having
                                                                                                                          Director, Whole time
                                         significant influence over     Subsidiaries               Associates                                               Total
                                                                                                                         director, manager and
                                                the Company
                                                                                                                            other managerial
                                                                                                                               personnel)
                                            2007          2006        2007          2006        2007          2006        2007         2006          2007           2006
Payments/Expenses
Employee benefits for key management
                                                   -              -            -            -            -           -       20.32        29.24          20.32        29.24
personnel
Royalty                                      356.35          212.35            -            -            -           -           -               -    356.35          212.35
Data sourcing fees                             44.61         114.67            -            -            -           -           -               -     44.61          114.67
Service charges                              266.28          688.02            -            -         -              -           -            -        266.28         688.02
Equity dividend                            2,263.15         1257.82            -            -         -              -        2.37         1.66      2,265.52        1259.48
Preference dividend                               -          418.39            -            -         -              -           -            -             -         418.39
Interest on subordinate debt                      -              -             -            -      46.50         42.94           -            -         46.50          42.94
Redemption of preference share capital            -        5,147.93            -            -         -              -           -               -          -        5147.93
Investments in shares                             -              -           4.99           -     180.00             -           -               -     184.99             -
Rent Paid                                     45.80                                                                                                     45.80
Rental Deposit                                49.00                                                                                                     49.00
Receipts/Income                                   -              -             -            -            -           -           -               -          -              -
Sale of assets                                    -          127.24            -            -            -           -           -               -          -          127.24
Subscription of equity shares              9,282.00       30,687.67            -            -            -           -        1.75               -   9,283.75       30,687.67
Subscription to optionally convertible
                                                   -       1,792.00            -            -            -           -           -               -           -       1,792.00
warrants
Rent & electricity                                 -              -            -            -          5.40       5.40           -               -       5.40              5.40
Balance outstanding at the year end
Share capital                              7,847.15       3,931.24          -               -          -             -        8.12         5.54      7,855.27       3,936.78
Share warrants                               772.80       1,792.00          -               -          -             -           -            -        772.80       1,792.00
Investments in shares                             -              -       4.99               -     420.00        240.00           -            -        424.99         240.00
Outstanding expenses                         147.04         321.00          -               -          -             -           -            -        147.04         321.00
Proposed dividend                          1,569.43         786.25          -               -          -             -        1.62        1.11-      1,571.05         787.36
Rent Deposit given                            49.00              -                                                                                      49.00              -
Interest payable on subordinate debt              -              -             -            -     131.28         84.78           -               -     131.28         84.78

                                                                                    F-126
5.     Leases
         In case of assets given on operating lease
         The Company has given land and building on operating lease for period ranging 11 months to 60
         months.

         In case of assets given on financial lease including hire purchase
         The company has leased out vehicles on finance lease. The lease term is for 3 to 5 years after
         which the legal title is passed to the lessee. There is no escalation clause in the lease agreement.
         There are no restrictions imposed by lease arrangements.

                                                                                                  (Rs. In lacs)
                                                                                 Finance Lease

                                                                         2007                     2006
       Total gross investment in the lease                                 22,654.39                79,597.53
       Less : Unearned finance income                                       5,088.49                19,583.19
       Less: Unguarantee residual value                                          Nil                      Nil
       Present value of minimum lease payments                             17,565.90                60,014.34
       Gross investment in the lease for the period :
       Not later than one year [Present value of minimum                    15,373.89                48,597.94
       lease payments receivable Rs. 11,693.34 lacs as on
       March 31, 2007 (March 31, 2006: Rs. 36,551.99
       lacs)]
       Later than one year but not later than five years                     7,280.50                30,999.59
       [Present value of minimum lease payments Rs.
       5,872.56 lacs as on March 31, 2007 (March 31, 2006
       : Rs. 23,462.35 lacs)]
       Later than five years [Present value of minimum                             Nil                      Nil
       lease payments Rs. Nil as on March 31, 2007 (March
       31, 2006: Rs. Nil)]

       In case of assets taken on lease
       The Company has taken various office premises under operating lease. The lease payments
       recognized in the profit & loss account are Rs.987.91 lacs (March 31, 2006 : Rs.679.78 lacs).
       Certain agreements provide for cancellation by either party and certain agreements contains clause
       for escalation and renewal of agreements. There are no sub leases.

       The future minimum lease payments in respect of non-cancellable operating lease as at the balance
       sheet date are summarized below :
                                                                                            (Rs. in lacs)
                                                          For the year ended       For the year ended
                                                            March 31, 2007           March 31, 2006

Minimum Lease Payments:
Not later than one year                                                        173.99                     0.63
Later than one year but not later than five years                              167.75                    29.38
Later than five years                                                             Nil                      Nil



                                                    F-127
6.     In accordance with the Reserve Bank of India circular no.RBI/2006-07/ 225 DNBS (PD) C.C
      No.87/03.02.004/2006-07 dated Januray 4, 2007, the Company has, during the year, created a
      floating charge on the statutory liquid assets comprising of investment in Government Securities to
      the extent of Rs.592.29 lacs in favour of trustees representing the public deposit holders of the
      Company.

7.    Cash & Cash Equivalents
                                                                                           (Rs. in Lacs)
                                                               For the year ended     For the year ended
Particulars                                                      March 31, 2007        March 31, 2006

Cash & Bank balance                                                     181,064.16               25040.69
Less : Fixed deposits having original maturity
                                                                         37,042.50                 4596.58
greater than 3 months
Balance considered as cash & cash equivalents for
                                                                        144,021.66               20,444.11
cash flow statement


8.     Earnings per share

                                                               For the year ended     For the year ended
Particulars                                                      March 31, 2007        March 31, 2006
Net Profit after tax as per profit and loss account (Rs. in
                                                                         19,039.71               14,164.10
lacs)
Less: Preference dividend and tax thereon (Rs. in lacs)                         Nil                 483.10
Net Profit for calculation of EPS (Rs. in lacs) (A)                      19,039.71               13,681.00
Weighted average number of equity shares for calculating
                                                                          1,729.59                1,461.41
Basic EPS (in lacs) (B)
Weighted average number of equity shares for calculating
                                                                          1,812.07                1,547.38
Diluted EPS (in lacs) (C)
Basic earnings per equity share (in Rupees) (Face value of
                                                                             11.01                    9.36
Rs. 10/- per share) (A) / (B)
Diluted earnings per equity share (in Rupees) (Face value
                                                                             10.51                    8.84
of Rs. 10/- per share) (A) / (C)


                                                                   For the year       For the year ended
Particulars                                                      ended March 31,       March 31, 2006
                                                                      2007

Weighted average number of equity shares for calculating
                                                                          1,729.59                1,461.41
EPS (in lacs)
Add : Equity shares arising on conversion of optionally
                                                                             69.00                   82.58
convertible warrants (in lacs)
Add : Equity shares for no consideration arising on grant of
                                                                             13.48                    3.39
stock options under ESOP (in lacs)
Weighted average number of equity shares in calculation
                                                                          1,812.07                1,547.38
diluted EPS (in lacs)




                                                      F-128
                                                                                       (Rs. in lacs)
9.    Deferred Tax Liabilities (Net)
                                                                   As at March    As at March 31,
      The break up of deferred tax asset / liability is as
      under:-                                                        31, 2007           2006

         Deferred Tax Liabilities
         Timing difference on account of :
         Differences due to accelerated amortisation of
         intangibles under Income Tax Act                                31.26                 65.70

         Differences in depreciation in block of fixed assets as
         per tax books and financial books                             3,191.73               635.29
         Effect of lease accounting                                    5,705.17           11,693.51
         Others                                                         141.60              1,019.12
         Gross Deferred Tax Liabilities (A)                            9,069.76           13,413.62
         Deferred Tax Asset
         Timing difference on account of :
         Expenses disallowed under Income Tax Act, 1961                  81.17                 44.77
         Provision for securitization                                   326.61                    Nil
         Gross Deferred Tax Assets (B)                                  407.78                 44.77


         Deferred Tax Liabilities (Net) (A-B)                          8,661.98           13,368.85


                                                                                       (Rs. in lacs)
                                                                   As at March    As at March 31,
10.   Capital commitments
                                                                     31, 2007           2006

      Estimated amount of contracts remaining to be executed            375.56              791.40
      on capital account and not provided for (net of advances)




                                                F-129
                                                                                           (Rs. in lacs)
                                                                   As at March      As at March 31,
11.   Contingent Liabilities not provided for
                                                                     31, 2007             2006

      Disputed income tax/interest tax demand contested in              5,754.90            5,318.72
      appeals not provided for

      [Against the above, a sum of Rs. 318.11 lacs (March
      31, 2006 : Rs. 268.79 lacs) has been paid under
      protest which appears under advances recoverable in
      cash or in kind.]
                                                                          230.24                  Nil
      Demands in respect of Service tax
      [Amount of Rs.15 lacs has been paid under protest
      (March 31, 2006 : Nil)]
      Guarantees issued by the Company to banks & others               14,557.54           22,850.78
                                                                        4,101.12            1,752.68
      Out of which amount outstanding
      In respect of portfolio management                                  356.67             1123.63


12.   The company has converted 5,715,000 warrants issued to Uno Investments into equity share at a
      premium of Rs.25/- and 9,100,000 warrant issued to Shriram Holding (Madras) Private Limited
      at a premium of Rs.102/- during the year. The amount of Rs.10,973.03 lacs (including securities
      premium of Rs.9,491.53 lacs) received from preferential allotment of shares was utilized for the
      purpose of increasing the networth and working capital of the company.

13.   In View Of The Circular Number 9/2002 Dated April 18, 2002 Issued By The
      Department Of Company Affairs, No Debenture Redemption Reserve Is Required
      To Be Created In Case Of Privately Placed Debentures, Accordingly, The Debenture
      Redemption Reserve Of Rs.100 Lacs Created During The Year 2000-2001 Is Transferred To
      The General Reserve.

14.   Recovery of service tax on lease and hire purchase transactions is kept in abeyance in view of
      the stay granted by Honourable Madras High Court. If any liability arises it will be recovered
      from the concerned parties. However, on contracts that are terminated, pending decision from
      the Madras High Court, equivalent service tax is written off.

15.   Borrowing costs aggregating to Rs.381.05 lacs (March 31, 2006 : Rs. 62.01 lacs) being interest
      on specific term loan from a bank for bio mass plant under construction have been capitalized
      during the year and are included in ‘capital work in progress’




                                                F-130
16.   Employee Stock Option Plan


                                         Series I              Series II                 Series III
      Date of grant                  October 31, 2005        April 1, 2006            October 9, 2006
      Date of Board Approval         October 19, 2005      February 22, 2006         September 6, 2006
      Date of Shareholder’s
                                     October 13, 2005       October 13, 2005         October 13, 2005
      approval
      Number of options
                                        2,962,500               832,500                  910,000
      granted
      Method of Settlement
                                          Equity                 Equity                   Equity
      (Cash/Equity)
      Graded Vesting Period
      After 1 year of grant date    10% of options         10% of options        10% of options
                                    granted                granted               granted
      After 2 years of grant date   20% of options         20% of options        20% of options
                                    granted                granted               granted
      After 3 years of grant date   30% of options         30% of options        30% of options
                                    granted                granted               granted
      After 4 years of grant date   40% of options         40% of options        40% of options
                                    granted                granted               granted

      Exercisable period            10 years from       10 years from            10 years from vesting
                                    vesting date        vesting date             date
      Vesting Conditions            On achievement of pre-determined targets

      The details of Series I have been summarized below:

                                                             March 31, 2007           March 31, 2006
                                                        Number of     Weighted Number        Weighted
                                                        Shares        Average     of Shares  Average
                                                                      Exercise               Exercise
                                                                      Price(Rs.)             Price(Rs.)
       Outstanding at the beginning of the year            2,962,500 Rs. 35.00           Nil            -
       Add: Granted during the year                              Nil            - 2,962,500     Rs. 35.00
       Less: Forfeited during the year                           Nil            -        Nil            -
       Less: Exercised during the year                       157,250    Rs.35.00         Nil            -
       Less: Expired during the year                         312,500            -        Nil            -
       Outstanding at the end of the year                  2,492,750    Rs.35.00 2,962,500      Rs.35.00
       Exercisable at the end of the year                    110,450                     Nil
       Weighted average remaining contractual                           11.09 yrs               12.09 yrs
       life (in years)
       Weighted average fair value of options                             Rs.59.04                  Rs.59.04
       granted




                                                   F-131
The details of Series II have been summarized below:
                                                   March 31, 2007           March 31, 2006
                                              Number of     Weighted     Number Weighted
                                              Shares        Average      of       Average
                                                            Exercise     Shares   Exercise
                                                            Price(Rs.)            Price(Rs.)
 Outstanding at the beginning of the year               Nil            -        -                   -
 Add: Granted during the year                      832,500     Rs.35.00         -                   -
 Less: Forfeited during the year                        Nil            -        -                   -
 Less: Exercised during the year                        Nil            -        -                   -
 Less: Expired during the year                       88,500            -        -                   -
 Outstanding at the end of the year                744,000     Rs.35.00         -                   -
 Exercisable at the end of the year                     Nil                     -                   -
 Weighted average remaining contractual                       11.49 yrs         -                   -
 life (in years)
 Weighted average fair value of options                       Rs. 91.75         -                   -
 granted

The details of Series III have been summarized below:
                                                    March 31, 2007           March 31, 2006
                                              Number of      Weighted     Number Weighted
                                              Shares         Average      of       Average
                                                             Exercise     Shares   Exercise
                                                             Price(Rs.)            Price(Rs.)
 Outstanding at the beginning of the year                Nil            -        -                  -
 Add: Granted during the year                       910,000     Rs.35.00         -                  -
 Less: Forfeited during the year                         Nil            -        -                  -
 Less: Exercised during the year                         Nil            -        -                  -
 Less: Expired during the year                       25,000             -        -                  -
 Outstanding at the end of the year                 885,000     Rs.35.00         -                  -
 Exercisable at the end of the year                      Nil            -        -                  -
 Weighted average remaining contractual                        12.01 yrs         -                  -
 life (in years)
 Weighted average fair value of options                         Rs.74.85         -                  -
 granted

The weighted average share price for the period over which stock options were exercised was
Rs.135.53.

The details of exercise price for stock options outstanding at the end of the year are:
March 31, 2007

Series         Range of           Number of         Weighted average             Weighted
               exercise prices    options           remaining                    average exercise
                                  outstanding       contractual life of          price
                                                    options (in years)
Series I           Rs.35/-                2,492,750      11.09 years                      Rs.35/-
Series II          Rs.35/-                  744,000      11.49 years                      Rs.35/-
Series III         Rs.35/-                  885,000      12.01 years                      Rs.35/-




                                           F-132
March 31, 2006

Series        Range of          Number of         Weighted average          Weighted average
              exercise prices   options           remaining                 exercise price
                                outstanding       contractual life of
                                                  options (in years)
Series I          Rs.35/-               2,962,500      12.09 years                Rs.35/-
Series II          Nil                        Nil           Nil                    Nil
Series III         Nil                        Nil           Nil                    Nil


Stock Options granted

Series I:

The weighted average fair value of stock options granted was Rs.59.04. The Black Scholes
model has been used for computing the weighted average fair value of options considering the
following inputs:

                                                     Yr 1      Yr 2      Yr 3       Yr 4
 Exercise Price (Rs.)                                 35.00     35.00     35.00      35.00
 Expected Volatility                                38.44%    38.44%    38.44%     38.44%
 Historical Volatility                                  NA        NA        NA         NA
 Life of the options granted (Vesting and              1.50      2.50      3.50       4.50
 exercise period) in years
 Expected dividends per annum (Rs.)                    3.00      3.00      3.00       3.00
 Average risk-free interest rate                     5.98%     6.33%     6.54%      6.73%
 Expected dividend rate                              2.31%     2.31%     2.31%      2.31%

Series II :

The weighted average fair value of stock options granted was Rs.91.75. The Black Scholes model
has been used for computing the weighted average fair value of options considering the following
inputs:

                                                    Yr 1    Yr 2     Yr 3     Yr 4
 Exercise Price (Rs.)                                 35.00    35.00    35.00    35.00
 Expected Volatility                                19.89% 19.89% 19.89% 19.89%
 Historical Volatility                                  NA       NA       NA       NA
 Life of the options granted (Vesting and              1.50     2.50     3.50     4.50
 exercise period) in years
 Expected dividends per annum (Rs.)                    3.00      3.00      3.00       3.00
 Average risk-free interest rate                     6.64%     6.83%     6.93%      7.26%
 Expected dividend rate                              2.52%     2.52%     2.52%      2.52%




                                            F-133
 Series III :

 The weighted average fair value of stock options granted was Rs.74.85. The Black Scholes model
 has been used for computing the weighted average fair value of options considering the following
 inputs:

                                                     Yr 1    Yr 2     Yr 3     Yr 4
  Exercise Price (Rs.)                                 35.00    35.00    35.00    35.00
  Expected Volatility                                31.85% 31.85% 31.85% 31.85%
  Historical Volatility                                  NA       NA       NA       NA
  Life of the options granted (Vesting and              1.50     2.50     3.50     4.50
  exercise period) in years
  Expected dividends per annum (Rs.)                    3.00       3.00       3.00       3.00
  Average risk-free interest rate                     6.96%      7.10%      7.26%      7.40%
  Expected dividend rate                              2.52%      2.52%      2.52%      2.52%

 The expected volatility was determined based on historical volatility data equal to the NSE
 volatility rate of Bank Nifty which is considered as a comparable peer group of the Company.
 To allow for the effects of early exercise, it was assumed that the employees will exercise the
 options within six months from the date of vesting in view of the exercise price being
 significantly lower than the market price.
 Effect of the employee share-based payment plans on the profit and loss account and on its
 financial position:
                                                                                  (Rs. in lacs)
                                                                     2007           2006
  Total compensation cost pertaining to employee share-                987.16         353.49
  based payment plan (entirely equity settled)
  Liability for employee stock options outstanding as at year         2,961.28       2,120.92
  end
  Deferred compensation cost                                          1,733.90       1,767.43

Since the enterprise used the intrinsic value method the impact on the reported net profit and
earnings per share by applying the fair value based method is as follows :

In March 2005, ICAI has issued a guidance note on “Accounting for Employees Share Based
Payments” applicable to employee based share plan the grant date in respect of which falls on or
after April 1, 2005. The said guidance note requires that the proforma disclosures of the impact of
the fair value method of accounting of employee stock compensation accounting in the financial
statements. Applying the fair value based method defined in the said guidance note, the impact on
the reported net profit and earnings per share would be as follows:




                                             F-134
                                                                For the year          For the year
                                                                ended March         ended March 31,
                                                                  31, 2007               2006
Profit as reported (net off preference dividend and tax              19,039.71             13,681.00
thereon)
Add: Employee stock compensation under intrinsic value                   987.16               353.49
method
Less: Employee stock compensation under fair value                       936.26               291.51
method
Proforma profit (net off preference dividend and tax                  19,090.61            13,742.98
thereon)
Earnings per share
Basic
 - As reported                                                            11.01                 9.36
 - Pro forma                                                              11.04                 9.40
Diluted
 - As reported                                                            10.51                 8.84
 - Pro forma                                                              10.54                 8.88
Nominal value                                                             10.00                10.00


17.    Securitisation/ Direct Assignment

The Company sells loans through securitisation and direct assignment. The information on securitisation
& direct assignment activity of the Company as an originator for the year March 31, 2007 and March 31,
2006 is given below:

                                                                 For the year        For the year ended
                                                               ended March 31,        March 31, 2006
                                                                    2007
Total number of loan assets securitized/directly
                                                                           68,204                    26,886
assigned
Total book value of loan assets securitized/directly
                                                                       285,979.49               64,886.20
assigned (Rs. in lacs)
Sale consideration received for the securitized/directly
                                                                       311,095.04               70,020.42
assigned assets (Rs. in lacs)
Gain on account of securitization/direct assignment*
                                                                        29,070.05                5,664.25
(Rs. in lacs)

The information on securitisation & direct assignment activity of the Company as an originator as on
March 31, 2007 and March 31, 2006 is given in the table below :
                                                                                        (Rs. in lacs)
                                                                As at March           As at March
                                                                    31, 2007              31, 2006
Outstanding credit enhancement                                          31,095.67               4,054.25
Outstanding liquidity facility                                           2,236.77                     Nil
Outstanding subordinate contribution                                     6,199.80                     Nil

* Gain on securtisation deals done after February 1, 2006 is amortised over the period of the loan


                                                  F-135
18.    Derivative Instruments :
       The Notional principal amount of derivative transactions outstanding as on March 31, 2007 for
       principal swaps are Rs.60,000 lacs (March 31, 2006 - Nil) and for interest rate swaps Rs..Nil
       (March 31, 2006 – Rs.18,000 lacs).

19.    Accounting for assignment of loan portfolio
       Till March 31, 2006, the company assigned various loan portfolios (on recourse basis) to banks.
       The company, while accounting for such assignment, had transferred out from the books of
       account all individual loan accounts assigned and had also accounted for profit / loss on
       assignment in the year the portfolio was assigned. However, during the current year, the
       company has reinstated all loan balances in the books of account and has also accounted for the
       amounts payable to the banks as secured loans including for loans assigned during the prior
       years. The company has also reversed the proportionate profit so accounted at the time of loan
       assignment. This has resulted in an increase in hypothecation loans by Rs. 5,855.72 lacs,
       increase in secured loans by Rs. 6,233.49 lacs, reversal of proportionate profit by rs. 1,131.29
       lacs, accounting for interest income on such loan portfolio by rs. 1,872.11 lacs and accounting
       for interest expense on secured loans by rs. 1,030.62 lacs. As all amounts payable to the banks
       have been accounted in the books of account, there is no contingent liability on account of loan
       portfolio assigned to the banks as at march 31, 2007.

20.    Supplementary Statutory Information
                                                                                            (Rs. in lacs)

20.1   Managing Director’s Remuneration
                                                                                 2007           2006*
       Salaries                                                                   6.10           18.88
       Perquisites                                                                1.30            4.12
       Contribution to Provident fund                                             0.09            0.27
       Employee stock option scheme                                              12.83            5.97
                                                                                 20.32           29.24
       Note: - As the future liability for gratuity and leave encashment is provided on an actuarial
       basis for the Company as a whole, the amount pertaining to the directors is not ascertainable
       and, therefore, not included above.
       The computation of profits under section 349 of the Act has not been given as no commission
       is payable to the Directors / Managing Director
       * Includes remuneration paid to Managing Directors of merged Companies.

                                                                                            (Rs. in lacs)
20.2   Expenditure in foreign currency (On cash basis)
                                                                                   2007           2006
       Travelling                                                                   3.40           5.25
       Others                                                                        Nil            Nil
                                                                                    3.40           5.25




                                                F-136
20.3   Net dividend remitted in foreign exchange

       Period to which it relates                                             1.4.2006 to   1.4.2005 to
                                                                               31.3.2007     31.3.2006

       Number of non-resident shareholders                                             3             2
       Number of equity shares held on which dividend was due                 65,930,547    60,635,664
       Amount remitted (state the foreign currency)
         Euro                                                                     113,889       182,646
         American Dollar                                                        2,109,340     1,478,242
         Yuan                                                                      13,652           Nil

21.    The Company is engaged in generating power out of windmills. The details are as under:
                                                                            For the year      For the
                                                                               ended        year ended
                                                                             March 31,      March 31,
                                                                                2007           2006

                                                                                Not             Not
       Licensed Capacity
                                                                             Applicable      Applicable
       Installed Capacity (kwh)                                                22,430          23,180
       Units Generated(net of Captive consumption)                           36,013,398      36,242,528
       Units Sold                                                            36,013,398      36,242,528
       Sale Value (Rs. in lacs)                                               1,130.66        1,117.99


22.     Additional information with regard to other matters specified in paragraph 4A & 4D of Part II
        of Schedule VI of the Act are not applicable



23.     Based on the information and records available with the Company, there are no amount
        outstanding as payable for more than 30 days to any small scale industrial undertakings.
        (Previous year: Rs. NIL)
24.    During the year the Company incorporated a 100% subsidiary by name Shriram Powergen Limited
       to exclusively deal with the windmill and the bio-mass projects of the company. The certificate of
       incorporation of the subsidiary was obtained on 08.02.2007 and the certificate of commencement
       of business has been applied for.
       Consequently, its accounts were not prepared and audited as at 31.03.2007. Hence, the
       consolidated accounts were not presented.

25.     Previous Year Comparatives
        Previous year’s figures have been regrouped and reclassified, wherever necessary to conform
        to current year’s classification.




                                                  F-137
Notes to Accounts for the year 2005 - 2006

A) Balance Sheet
1) SECURED LOANS

a) (i) Privately placed Redeemable Non-convertible Debentures of Rs.1,000/- each


                                                          As at March 31,        As at March
                                                                2006               31, 2005
 Number                                                          17,443,008            8,655,836
 Amount Rs in Lacs                                               174,430.08            86,558.36

Secured by mortgage of office premises, charge on Plant and Machinery, Furniture and other fixed assets
of the Company, charge on Company’s book debts, leased assets, lease rentals including future
receivables, loans, advances and other investments of the company subject to prior charges created or to
be created in favour of the Company’s bankers, Financial institutions and others.

Debentures are redeemable over a period of 6 months to 160 months from the date of allotment
depending on the terms of the agreement.

(ii) Redeemable Non-Convertible Debenture of Rs.10,00,000/- each


                                                          As at March 31,        As at March
                                                                2006               31, 2005
 Number                                                                1000                 Nil
 Amount Rs in Lacs                                                   10,000                 Nil


Secured by hypothecation of specific assets covered under Loan agreements by way of an exclusive
charge.

Debentures are redeemable on 19th September, 2007 as per the terms of the agreement.


b) Term Loans :
                                                                                       (Rs. in lacs)
                                                                 As on 31.03.2006      As on 31.03.2005
i.    From Financial Institutions / Corporates :
      (a)     Secured by an exclusive charge by way of                    34,839.13              13,400.65
              hypothecation of specific movable assets
              being fixed/current assets relating to
              hypothecation loans
      (b)     Secured by an exclusive charge by way of                     2,322.08                2,590.44
              hypothecation of specific immovable/
              movable assets pertaining to the wind farm
      (c)     Secured by an exclusive charge by way of
              hypothecation of specific immovable/                         1,326.66                        -
              movable assets pertaining to the wind farm
              and guaranteed by a former Director.
ii.   From Foreign Institution:

                                                F-138
                                                                   As on 31.03.2006     As on 31.03.2005
        Secured by an exclusive charge by way of Hypothecation
        of specific Loan agreements and all amounts owing to and            5,069.87               3,259.20
        received by the Company pursuant to the above
        Agreements


                                                                                        (Rs. in lacs)

                                                                   As on 31.03.2006     As on 31.03.2005

 iii.    From Banks :
         (a)          Secured by hypothecation of vehicles                      11.62                   1.35
         (b)          Secured by an exclusive charge by way of                                    21,031.04
                      hypothecation of specific movable assets             87,216.72
                      being fixed / current assets relating to
                      Lease, Hypothecation Loans and Hire-
                      Purchase agreements/ Loan agreements
         (c)          Secured by an exclusive charge by way of
                      hypothecation of specific immovable/                  1,661.71                         -
                      movable assets pertaining to the wind farm
                      and guaranteed by a former Director.
         (d)          Secured by an exclusive charge by way of
                      hypothecation of specific immovable/                  2,392.79                         -
                      movable assets pertaining to the bio mass
                      plant.

 c) Cash Credit from Banks
                                                                                        (Rs. in lacs)
                                                                   As on 31.03.2006     As on 31.03.2005
Cash Credit from Banks                                                    54,820.74               3,157.91
Secured by hypothecation of specific assets covered under Hire-Purchase/Lease/Loan Agreements, Book
debts, equitable mortgage of title deeds of the immovable property and guaranteed by Former Director of the
Company.




 d)            HP Refinance Loan:

                                                                                        (Rs. in lacs)


                                                    F-139
                                                                  As on 31.03.2006      As on 31.03.2005
 From institutions / corporates
 Secured by hypothecation of vehicles by hirers guaranteed
 by associate concerns and also by a former Director of                      110.39                        -
 the Company



 2) Subordinated Debt :

 The Company has raised Tier II capital by issue of Subordinated Debt bonds amounting to Rs.
 13,225.77 lakhs (Previous Year – Rs.9,401.10 lakhs) with coupon rate of 8 % to 11% per annum which
 are redeemable over a period of 63 months to 80 months.


 3) Details of Deferred Tax Liability :
                                                                                        (Rs. in lacs)
                                                                  As on 31.03.2006      As on 31.03.2005
     Depreciation                                                         12,328.80              5,010.07
     Others                                                                1,040.05                339.91


 4) Contingent Liabilities in respect of :

                                                                                             As on
                                                                   As on 31.03.2006
                                                                                           31.03.2005
 Guarantees issued by the Company to Banks                                 22,035.68             2,628.82
 (Out of which amount outstanding)                                           1,621.55                   -
 Guarantees issued by the Company to Others                                   815.10               312.00
 (Out of which amount outstanding)                                            131.13               360.33
 In respect of Securitised assets                                          29,742.84             11,994.20
 In respect of portfolio management                                        11,994.20              1,846.28


     Disputed Income Tax/Interest Tax demand contested in appeals not provided for Rs. 5,318.72 lakhs
     (Previous Year Rs.2,693.26 lakhs) against which a sum of Rs.268.79 lakhs (Previous Year Rs.173.44
     lakhs) has been paid under protest which appears under advances recoverable in cash or in kind. In
     the opinion of the management there is no contingent liability, for the said disputed tax demand in
     view of favourable appellate decisions in the company’s own cases in the earlier years.

5) Disclosure as per Accounting Standard -19 ‘Leases’ :

 In case of assets given on lease
 The Company has given land and building on operating lease for period ranging 11 months to 60
 months.




                                                 F-140
 Financial Lease( including Hire Purchase loans after 01/04/2001)

                                                                                           (Rs. in lakhs)
                                 As on 31st March                      RECEIVABLE IN
                                       2006
                                                      Not Later than 1 Year Later than 1 Year Later than
                                                                            but not later than 5 5 Years
                                                                                  Years

 Gross Investment                         79,597.53              48,597.94            30,999.59       -

 LESS
 Unearned Income                          19,583.19              12,045.95             7,537.24       -


 Net Present Value                        60,014.34              36,551.99            23,462.35       -


 6)        53,88,350- Cumulative Redeemable Preference Shares (including 28,28,220 preference shares of
            amalgamating company SIL and 29,480 preference shares of amalgamating company SOFL) were
            redeemed during the year prior to the scheduled redemption date, as per the terms of the issue and
            equivalent amount is appropriated towards Capital Redemption Reserve.

B) General:

      i.         The Company has issued 1,60,00,000 Warrants on Preferential basis with an option to
                 convert into Equity Shares of Rs.112/- each including Premium of Rs.102/- within 18 months
                 from the date of issue i.e. 02.02.2006.

    ii.          In the opinion of the Management, Sundry Debtors, Current Assets and Loans and Advances
                 have a value on realisation in the ordinary course of business at least equal to the amount at
                 which they are stated.

   iii.          Recovery of Service Tax on Lease and Hire Purchase Transactions is kept in abeyance in
                 view of the stay granted by Madras High Court. If any Liability arises it will be recovered
                 from the concerned parties. However, pending decision from the Madras High Court, Service
                 Tax is provided for on termination of contracts.

   iv.           In view of uncertainty as to measurability and collectability, additional finance charges are
                 treated to accrue only on realization which were accounted for as per the terms of agreement
                 till the previous year. Had the earlier accounting policy been continued, the income from
                 operations for the year would have been higher by Rs.1,941.09 lakhs.

      v.         Gain or loss arising on securitization / direct assignment up to 31st January 2006 being
                 difference between book value of securitised assets and consideration for the same has been
                 recognized in the year of transfer of such assets. In case of securitization / direct assignment
                 of assets done thereafter, the income is recognized over the tenure of agreements as per the


                                                        F-141
             RBI Guidelines. Had the earlier accounting policy been followed, the income from
             operations for the year would have been higher by Rs. 488.09 lakhs.

vi.          Employee Stock Option Scheme (ESOS)

             In October 2005, pursuant to the approval of shareholders at the Extraordinary General Body
             Meeting, the Company approved an Employee Stock Option Scheme (ESOS). Under the
             scheme, the Company is authorized to issue up to 63,03,094 (including 30,31,667 shares for
             employees of amalgamating company i.e. Shriram Investments Limited) equity shares to
             eligible employees. Eligible employees are granted an option to purchase shares subject to
             vesting conditions. The options vest in a graded manner over four years. The options can be
             exercised within ten years from the date of vesting. 29,62,500 options have been granted
             under the scheme till the year ended 31st March 2006.

             The Company has adopted intrinsic value method in accounting for employee cost on
             account of ESOS. The value of shares Rs.110.10 (for amalgamating company i.e. Shriram
             Investments limited it is Rs. 103.84) is worked out based on the market prices at the time of
             grant. The difference between the market value and the exercise price of Rs. 35/- is being
             amortised as employee compensation cost over the vesting period. Commencing from the
             date of grant i.e. 31st October 2005 the total amount to be amortised over the vesting period is
             Rs. 2,120.92 lakhs.

             Accordingly the charge to Profit & Loss account during the current year is Rs. 353.49 Lakhs
             whereas amount to be provided in future is Rs.1,767.43 Lakhs.

       Stock option activity under the scheme is set out:
                  As at                                                      31st March       31st March
                                                                             2006             2005
         Stock Option outstanding at the beginning of the year               Nil              Nil
         Granted during the year                                             29,62,500        Nil
         Forfeited during the year                                           Nil              Nil
         Exercised during the year                                           Nil              Nil
         Stock Options outstanding at the end of the year                    29,62,500        Nil

        Stock Options outstanding at the end of the year

         Vesting period in years   Expected Vesting
         1                           296,250
         2                           592,500
         3                           888,750
         4                         1,185,000

vii.         Earning Per Share

                                                                       For the year ended
                        Particulars                         Unit       March        March
                                                                       2006         2005
       Basic
       Weighted Average No. of Shares Outstanding      Nos.(Lakh)         1461.41          515.72
       Profit after Tax & Preference Div and tax       Rs. in Lakh       13681.00         4674.35
       thereon
       Earning Per share (Face value of Rs.10/- per         (Rs.)             9.36           9.06
       share)


                                                   F-142
      Diluted
      Optionally Convertible Warrants                 Nos.(Lakh)         82.58          3.58
      Employee Stock Option Scheme                    Nos.(Lakh)          3.39            Nil
      Weighted Average No. of Shares Outstanding      Nos.(Lakh)       1547.38         519.30
      Earning Per share (Face value of Rs.10/- per       (Rs.)            8.84           9.00
      share)
      Reconciliation of basic and diluted shares
      used in computing EPS
      Number of shares considered as basic            Nos.(Lakh)       1461.41         515.72
      Weighted Average Shares outstanding
      Add: Effect of Optionally Convertible           Nos.(Lakh)          82.58         3.58
      Warrants
      Add: Effect of ESOS                             Nos.(Lakh)          3.39        Nil
      Number of shares considered as diluted          Nos.(Lakh)       1547.38        519.30
      Weighted Average Shares and potential
      shares outstanding


viii)           Related Party Transactions :
i) Items                          Enterprises having significant influence over the Company
                        Shriram Financial Services Holding       Shriram Holdings (Madras)Pvt Ltd
                        Pvt Ltd
                        31st March 2006      31st March 2005     31st March 2006 31st March 2005
Payments/Expenses
Royalty                            212.35                 81.3                    -                -
Data Sourcing Fees                 114.67                39.01                    -                -
Services Charges                   688.02              156.51                     -                -
Equity Dividend                      0.25              237.77            1,257.57               7.13
Preference Dividend                418.39              216.67                     -                -
Redemption         of            5147.93                     -                    -                -
Preference      Share
Capital
Receipts/Income
Sale of Assets                     127.24                    -                    -                -
Subscription       of                    -                   -           30687.67                  -
Equity shares
Subscription to
Optionally                               -                   -            1792.00                  -
Convertible Warrants


ii)         The Salary & Perquisites paid to the Managing Director for the current year is Rs.29.24 lakhs
           (previous year Rs.6.39 lakhs) includes Rs.5.97 lakhs arising out of ESOS, Rs 4.77 lakhs paid
           to the Managing Director of Shriram Investments Limited and Rs.9.63 lakhs paid to Managing
           director of Shriram Overseas Finance Limited.


ix)        Segment Reporting:




                                                  F-143
               The Company is engaged primarily in the business of financing and accordingly there are no
               separate reportable segments as per Accounting Standard 17 ‘Segment Reporting’ issued by
               The Institute of Chartered Accountants of India.

x)             The exchange risk on principal and interest amount on foreign currency loan from Foreign
               Institution has been hedged with a Banker and the liability has been converted into Indian
               Rupees.

xi)            The Company is in the process of creating floating charge on its Statutory Liquid Assets in
               favour of its depositors as required by Reserve Bank of India.



     xii)                                                                    (Rs. in lacs)

                                                                            Year ended              Year ended
                                                                             31.03.2006              31.03.2005
              Remuneration to Managing Director
            (Including Remuneration paid to Managing
            directors of Amalgamating companies viz; SIL
            and SOFL)
            Salary(including ESOS)                                                 25.12                    5.48
            Perquisites/Payments                                                    4.12                    0.91


  xiii) Expenditure in Foreign Currency                                                5.25                 5.31

 xiv) The Company does not have any dues payable to Small Scale Industrial units.

     xv) The Company is engaged in generating power out of windmills .The details are as under:


                                                                       Year ended                Year ended
                                                                        31.03.2006                31.03.2005
Licensed Capacity                                                     Not applicable             Not applicable
Installed Capacity                                                     23,180 kwh                  8,650 kwh
Units Generated
(Net of captive consumption)                                            36,242,528                 1,4635,956
Units Sold                                                              3,6242,528                  1,4635,956
 Sale Value ( Rs. in lakhs)                                                1,117.99                     491.73



xvi)        Other particulars as per clauses 4(c) & (d) of Part II of Schedule VI are not furnished, since the
            same are not applicable.

xvii) Expenses in respect of common branches and infrastructure are shared by the Company with other
      Companies and are booked under respective expenditure heads.

xviii)       Estimated amount of contracts remaining to be executed on capital account and provided for (net
            of advances paid) Rs. 791.40 Lakhs (Previous year Rs. 100 lakhs)




                                                      F-144
xix)   Borrowing costs aggregating to Rs. 62.01 lakhs (Previous year Nil) being interest and other costs
       on specific term loan from a bank for Bio Mass Plant under construction have been capitalized
       during the year and are included in ‘Capital Work in Progress’.


xx)    Derivative Transactions:

                 •   There are 6 (Previous Year – Nil ) Derivative instruments for hedging interest rate
                     risk outstanding as on 31st March 2006.

                 •   The foreign currency exposures that are not hedged by a derivative instrument or
                     otherwise is Nil. ( Previous Year – Nil )

                •
xxi)         Amalgamation

        a)     Shriram Investments Limited (SIL) and Shriram Overseas Finance Limited (SOFL) both
              Non Banking Financial Companies were amalgamated with the Company with effect from
              01.04.2005 in accordance with the Order of the Hon’ble High Court of Judicature of Madras
              dated 25.11.2005 and 01.12.2006 respectively.

              Shriram Reckon Trucks Ltd. was merged with Shriram Overseas Finance Ltd. with effect
              from 1st April 2005 as per the Orders of the Hon’ble High Court of Judicature of Madras
              dated 14.07.2006 and the Hon’ble High Court of Judicature of Bombay dated 18.08.2006.

             The business of SIL and SOFL primarily comprises financing of Commercial Vehicles.

              The amalgamations have been accounted for under the “Pooling of Interests method” in
              accordance with Accounting Standard (AS)14 – “Accounting for Amalgamations” issued by
              ICAI.

        b) The schemes of amalgamation have been given effect to in the accounts. The assets and
           liabilities of SIL and SOFL have been transferred to and vest with the company with effect
           from 01.04.2005.

        c) The equity shareholders of SIL are entitled to 1 Equity share of Rs. 10/- each in the Company
           for every Equity share of Rs 10/- each held in SIL. Accordingly 6,06,33,350 Equity Shares of
           Rs. 10/- each amounting to Rs 6,063.33 lakhs were allotted to the shareholders of SIL.

        d) The shareholders of SOFL are entitled to 6 shares of Rs 10/- each in the Company for every
           10 Equity shares of Rs 10/- each held in SOFL. Accordingly 1,86,45,886 Equity Shares of
           Rs.10/- each (including fractional entitlements) amounting to Rs.1864.59 lakhs are to be
           allotted to shareholders of SOFL and has been reflected in the balance sheet under “Equity
           Share Capital Suspense Account”. The dividend payable on these shares @ 30% and tax on
           distributed profits has been provided for, pursuant to the scheme of amalgamation.

              As per the scheme of amalgamation the transferee company shall allot the new shares to a
              Trust/ Director or Officer of transferee company against the fractional entitlements of
              transferor company’s (i.e. SOFL ) shareholders. These shares shall be held by such Trust/
              Director/ Officer for and on behalf of such shareholders and will be sold at appropriate time



                                                   F-145
           and price. The net sale proceeds shall be distributed among the shareholders in proportionate
           to their shareholdings.

        e) The amount of Rs 1,243.06 lakhs being the difference between the paid up Equity share
           capital of amalgamating company i.e. SOFL and the paid up value of shares issued to SOFL
           share holders is shown under “General Reserve” in accordance with the scheme of
           amalgamation as approved by the Honourable High Court of Judicature of Madras.

        f) The figures of the current year includes figures of amalgamating companies viz; Shriram
           Investments Limited and Shriram Overseas Finance Limited. Therefore, the figures of the
           current year are not comparable with those of the previous year.

xxii)    Figures for the previous year have been regrouped/rearranged wherever necessary to conform
         to the classification of the current year.




                                                F-146
Notes to Accounts for the year 2004 - 2005

   1) SECURED LOANS

   a) Privately placed Redeemable Non-convertible Debentures:

                                                                      As on
                                                                  31.03.2005

   Redeemable Non-Convertible Debentures (Number)                  8,655,836
   of Rs.1000/- each (Amount in lakhs)                             86,558.36

   Secured by mortgage of office premises, charge on Plant and Machinery, Furniture and other fixed assets
   of the Company, charge on Company’s book debts, leased assets, lease rentals including future
   e receivables, loans, advances and other investments of the company subject to prior charges created or to
   be created in favour of the Company’s bankers, Financial institutions and others.

   Debentures are redeemable over a period of 6 months to 160 months from the date of allotment
   depending on the terms of the agreement.

                                                                 (Rs. in lakhs )
                                                                    As on
   b) Term Loans:                                                  31.03.2005

      i.      From Financial Institutions / Corporate:

             a) Secured by an exclusive charge by way of           13,400.65
                hypothecation of specific movable assets
                being Fixed / Current assets relating to
               Lease and Hire Purchase Agreements.

             b)Secured by an exclusive charge by way                2,590.44
               of Hypothecation of specific immovable/
               movable assets pertaining to the windfarm.

      ii.    From Foreign Institution :                             3,259.20
             Secured by an exclusive charge by way of
             hypothecation of specific Hire Purchase
             agreements and all amounts owing to and
             received by the Company pursuant to the
             above Hire Purchase Agreements

      iii.    From Banks:
              a) Secured by hypothecation of vehicle                    1.35


             b) Secured by an exclusive charge by way              21,031.04
                of hypothecation of specific movable
                assets being Fixed / Current assets
                relating to Lease, Hypothecation Loans
               and Hire –Purchase / Loan agreements



                                                    F-147
 c) Cash Credit from Banks:                                   3,157.91

 Secured by hypothecation of specific assets covered under Hire-Purchase/Lease/Loan Agreements, Book
 debts and guaranteed by Former Director of the Company.


 2) Subordinated Debt :

 The Company has raised Tier II capital by issue of Subordinated Debt bonds amounting to Rs.9,401.10
 lakhs with coupon rate of 8 % to 11% per annum which are redeemable over a period of 63 months to 80
 months.

 3) Contingent Liabilities in respect of :
                                                           (Rs. in lakhs)
                                                                 as on
                                                             31.03.2005


    Guarantees issued by the Company to Banks                2,628.82
    (Out of which amount outstanding)                          411.04
    Guarantees issued by the Company to Others               3,779.90
    (Out of which amount outstanding)                          360.33
    In respect of Securitised assets                        11,994.20
    In respect of portfolio management                       1,846.28

     Disputed Income Tax/Interest Tax demand contested in appeals not provided for Rs. 2,693.26
     lakhs against which a sum of Rs. 173.44 lakhs has been paid under protest which appears under
     advances recoverable in cash or in kind. In the opinion of the management there is no contingent
     liability, for the said disputed tax demand in view of favourable appellate decisions in the company’s
     own cases in the earlier years.

4) Disclosure as per Accounting Standard – 19:

 On Financial Lease                                                                   (Rs.in lakhs)
                            As on 31st March                      RECEIVABLE IN
                                  2005
                                                 Not Later than 1 Year Later than 1 Year Later than
                                                                       but not later than 5 5 Years
                                                                             Years

 GROSS INVESTMENT                    36,424.63               15,468.16          20,956.47       -

 LESS
 UNEARNED INCOME                     10,999.45                5,637.11           5,362.34       -

 NET PRESENT VALUE                   25,425.18                9,831.05          15,594.13       -




                                                   F-148
 On Hire Purchase (for Agreement entered from 01/04/2001)

                                                                          (Rs.in lakhs)
                              As on 31st March                     RECEIVABLE IN
                                    2005
                                                Not Later than 1 Year Later than 1 Year Later than
                                                                      but not later than 5 Years
                                                                           5 Years
 GROSS INVESTMENT                     32,745.78             17,243.06         15,502.72     -

 LESS
 UNEARNED INCOME                        9,061.00               4,002.48           5,058.52      -

 NET PRESENT VALUE                    23,684.78               13,240.58          10,444.20      -




5) General :

    i)         The Company has issued 29,66,000 Warrants on Preferential basis with an option to convert
               into Equity Shares of Rs.35/- each including Premium of Rs.25/- within 18 months from the
               date of issue i.e 16.02.2005.

   ii)         The levy of Sales tax on lease transactions has been challenged in writ proceedings. The
               liability, if arises, will be recovered from the concerned lessees. There are no demands
               outstanding.

   iii)        In the opinion of the Board of Directors, the Sundry Debtors, Current Assets and Loans and
               Advances have a value on realisation in the ordinary course of business atleast equal to the
               amount at which they are stated.

   iv)         Recovery of Service Tax on Lease and Hire Purchase Transactions is kept in abeyance in
               view of the stay granted by Madras High Court. Liability if arises will be recovered from
               the concerned parties. However, Service Tax recoverable is written off on termination of a
               contract.




                                                    F-149
  v)          Earning Per Share

                                                               For the year
                                                                  ended
                    Particulars                    Unit        March
                                                                2005
Basic
Opening No. of Shares                           Nos.(Lakh)     418.99
Total No. of Shares Outstanding                 Nos.(Lakh)     654.28
Weighted Average No. of Shares Outstanding      Nos.(Lakh)     515.72
Profit after Tax                                Rs. in Lakh   4,674.35
Earning Per share (Face value of Rs.10/- per       (Rs.)        9.06
share)
Diluted
Optionally Convertible Warrants                 Nos.(Lakh)      3.58
Weighted Average No. of Shares Outstanding      Nos.(Lakh)     519.30
Earning Per share (Face value of Rs.10/- per      (Rs.)         9.00
share)
Reconciliation of basic and diluted shares
used in computing EPS
Number of shares considered as basic            Nos.(Lakh)     515.72
Weighted Average Shares outstanding
Add: Effect of Optionally Convertible           Nos.(Lakh)      3.58
Warrants
Number of shares considered as diluted          Nos.(Lakh)     519.30
Weighted Average Shares and potential
shares outstanding


vi) Related Party Transactions:

       Key Personnel :

       Managing Director : Mr.R. Sridhar
       Remuneration      : Rs. 6.39 Lakhs

vii) Segment Reporting:

   The Company is engaged primarily in the business of financing and accordingly there are no separate
   reportable segments as per Accounting Standard 17 issued by The Institute of Chartered Accountants
   of India.

viii) Deferred Tax liability arising on account of timing difference comprising of Depreciation, Lease
     Adjustments, Additional Finance Charges, Deferred Revenue Expenses and other items has been
     provided in accordance with Accounting Standard 22 issued by The Institute of Chartered
     Accountants of India.

ix) Principle amount of foreign currency loan from Foreign Institution and Interest payable thereon has
    been hedged with a Banker.

x) The Company is in the process of creating floating charge on its Statutory Liquid Assets in favour of
   its depositors as required by Reserve Bank of India.



                                                F-150
 xi) Charge has been created by way of equitable mortgage of title deeds for Rs.100 lakhs on the
     immovable property of the Company in favour of a bank in respect of credit facility sanctioned
     to an Associate Company.




                                                         (Rs. in lakhs)
                                                          Year ended
                                                          31.03.2005

xii) Remuneration to Managing Director

      Salary                                                   5.48
      Perquisites/Payments                                     0.91
xiii) Expenditure in Foreign Currency                          5.31

xiv) The Company does not have any dues payable to Small Scale Industrial units.

xv) The Company is engaged in generating power out of windmills .The details
    are as under:
                                                       Year ended
                                                       31.03.2005

  Licensed Capacity                                     Not applicable
  Installed Capacity