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COMPANY OVERVIEW

Established in the year 1974, the Shriram Group, comprising 750 Branches and Service
Centres, in India's premier financial services chain. This company is the largest player in
Truck Financing and Chit funds in the Indian subcontinent.

The group, have an overall customer base in excess of 12 Million, more than
60,000 employees across 3,000 offices, net profit of Rs. 22 billion with Assets Under
Management (AUM) in excess of Rs.90,000 Crores, has a significant presence in the
Insurance Consultancy, Consumer Durable Finance and Stock Broking businesses. It also
have diversified investments in areas such as Information Technology, Pharmaceuticals,
Property Development, Project Engineering, Packaging and Auto Components.

The Shriram Group's business ventures are built on providing the most efficient
and customer-focused services based on the simple principle of putting people first. This
'People First' business philosophy has earned them unstinted customer loyalty through
many generations.

It is so well-embedded in the cultural ethos of the group that the employees attrition rate
is under 10% and all the CEOs and Senior Management of the group companies are home
grown. Empowerment and freedom of operation have been deployed effectively across
the group, resulting in an environment that is conducive to nurturing talent and allowing
the exceptional ones to blossom. This philosophy over the years has created a win-win
situation for the group and its employees and continues to be the unique value proposition
for the group.

Management Philosophy

Shriram Groups business ventures are highly successful due to its management
philosophy. Features of this include total empowerment of its employees, decentralized

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decision-making process and freedom of action. Most of all, the Group views every
employee as a potential partner in business. Group companies have also been
instrumental in creating innumerable indirect jobs in the communities they serve.

HISTORY AND MILESTONE

1974 Commencement of Business - Shriram Chits


1979 Commencement of Business - Shriram Transport Finance Co (STFC)
1982 Commencement of Business - Shriram Investments Ltd
1984 IPO of STFC
1986 Commencement of Business - Shriram City Union Finance Co (SCUF)
1989 Commencement of Business - Shriram Overseas Finance Ltd
1994 IPO of SCUF
1994 Commencement of Business - Shriram Asset Management Co. Ltd
1995 Commencement of Business - Shriram Insight Share Brokers Ltd
1997 Commencement of Business - Bharat Re-Insurance Brokers Pvt. Ltd
1999 Citicorp CV financing tie up with STFC
2002 Citicorp invested in STFC and SIL
2003 Commencement of Business - Insight Commodities and Futures Pvt. Ltd
2004 Commencement of Business - Shriram Capital Ltd
2004 Reliance Capital and UTI Bank invested in STFC and SIL
2005 Shriram Capital Ltd became the holding company of the Financial service and
entities of the group
2005 Entry of Chryscapital as Partner with STFC,SIL and Shriram Overseas Financial
Ltd(SOFL)& EPC
2006 Entry of Sanlam as Life Insurance business partner and commencement of
business- Shriram Life Insurance Co
2006 Merger of Shriram Investments Ltd & Shriram Overseas Finance Ltd with STFC
2006 Commencement of Business - Shriram Fortune Solutions Ltd
2007 Entry of TPG as STFC's partner

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2008 Commencement of Business - Shriram General Insurance Ltd
2009 Non-Convertible Debenture Placement by STFC
2009 Commencement of Business - Shriram Wealth Advisors Ltd
2010 Commencement of Business - Shriram Equipment Finance company Ltd
2010 Commencement of Business - Shriram Automall India Ltd
2011 TPG invested in Shriram Capital (SCL)
2011 Commencement of Business - Shriram Financial Products Solutions
2011 Commencement of Business - Shriram Housing Finance Ltd
2011 LeapFrog Investment into Shriram Credit Company Limited (SCCL)

VISION, MISSION AND VALUES:

VISION
'Serving the under-served, Addressing the bottom of the pyramid, Inclusive financing
are all phrases that have become common place in the corporate world today. Whether it
is the Chit Fund business, Transport & Equipment Finance business, Consumer Finance
business or even the huge deposit customer base of Shriram ,over 90% of the 10.2 million
customers of the group come under the purview of the under-served.

GOING BEYOND SOUTH

Chit Funds in 1974 and Transportation Finance in 1978 were all started in South India;
Shriram Groups business strategy of providing a competitive platform to capture the
savings and borrowing wallets of the middle and lower income groups found immediate
acceptance in the southern states and enabled the group to successfully establish itself in
every nook and corner of South India. As Shriram became a household name in the four
southern states, the group ventured into the other three regions through their
transportation business where again the target market was the under-served owner-
operator and customers of used vehicles. By institutionalising a direct connect with the
end customer and by taking complete ownership of every key business process, the

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Shriram branch was not only in full control of the customer fulfillment process but was
also in a unique position to establish a great and sustainable relationship with customer.
This approach created a huge entry banner to most other players (both Indian & MNCs)
who made several futile attempts to enter the segment. The unique and well-executed
business model attracted several investors, both strategic and portfolio, which enabled the
transportation business of the group to grow by leaps and bounds.

DIVERSIFICATION INTO INSURANCE


Shrirams stupendous record in building teams at the branch level and providing an
environment for these teams to excel was effectively complemented by a very large
number of agents who supported the branches on customer acquisition for retail deposits.
With over 25,000 active agents, Insurance was a logical diversification as this sector
opened up to private players. While Shriram was amongst the last movers into the Life
and General Insurance industry, the groups established track record of delivering value
to the under-served through a low-cost, relationship-based model enabled them to create
history by being the only General Insurance company to be profitable in its first full year
of operation and one of the two Life Insurance companies to be profitable in the first year
of operation. Sanlam, the largest insurer in South Africa and Shrirams Insurance partner,
is working closely with the group to take the Insurance Businesses to the next level in the
coming years.

GOING FORWARD

With an enviable growth record of 40% CAGR in the last 7 years, an excellent
array of happy investors, a brand that resonates trust and reliability, an employee
strength of over 42,000 with single digit attrition, an ever-growing customer base of
10.2 million strong and a successful low-cost delivery model, Shriram is today a
Financial Services conglomerate poised for attaining greater heights in the near future.
The group realizes that they have to continue to do things differently to sustain the
growth levels and their exemplary service to their target market across businesses. A
strong think-tank has been created at Shriram Capital at the Holding Company level to

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oversee and provide key inputs to the operating CEOs in critical areas of Synergy
Creation, Risk Management and Leadership development. So much going for the group
internally and in the market place, Shriram has become every Shareholders pride and
every Competitors envy!

The Shriram Group set out with the objective of reaching out to the common man with
a host of products and services that would be helpful to him in his path to prosperity.
Over the decades, the Group has achieved significant success in executing this objective
and has created a tremendous sense of loyalty amongst its customers.
Efficiency in operations, integrity and a strong focus on catering to the needs of the
common man, by offering him high quality and cost-effective products & services, are
the values driving the organization. These core values are deep-rooted within the
organization and have been strongly adhered to over the decades.
The group prides itself on its perfect understanding of the customer. Each product or
service is tailor-made to perfectly suit the needs of the customer. It is this guiding
philosophy of putting people first that has brought the Group closer to the grassroots and
has made it the preferred choice for all financing requirements amongst the customers.

NON-BANKING FINANCIAL COMPANY (NBFC) A GENERAL SCENARIO

Non-Banking Financial Company (NBFC) is a company registered under the


Companies Act, 1956 and is engaged in the business of loans and advances, acquisition of
shares/stock/bonds/debentures/securities issued by Government or local authority or other
securities of marketable nature, leasing, hire-purchase, insurance business, chit business
but does not include any institution whose principal business is that of agriculture
activity, industrial activity, sale/purchase/construction of immovable property. A non-
banking institution which is a company and which has its principal business of receiving
deposits under any scheme or arrangement or any other manner, or lending in any manner
is also a non-banking financial company (Residuary non-banking company).

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WHAT TO SHRIRAM GROUP FINANCE?

1. Commercial Vehicle Financing


2. Consumer & Enterprise Finance
3. Retail Stock Broking.
4. Life Insurance
5. General Insurance
6. Financial Product Distribution
7. Wealth Advisor

1. Commercial Vehicle Financing:-

The Commercial Vehicle business of the group had its genesis in four
companies, one in each zone and with the common mission of providing used
vehicle financing to the largely under-served owner-operators in the trucking
industry.Engaged exclusively in financing of Commercial Vehicles, both new as well
as old, Shriram Transport Finance Company Limited (STFC), as of now has over
0.85 million truck-owners as customers.
The Assets Under Management is in excess of Rs. 49,000 crores. STFC also
enjoys monopoly position in financing of Used Vehicles. STFC boasts a PAN-India
branch network of 539 offices and 70 SBUs and employees more than 16,000
people. STFC is listed in the Bombay Stock Exchange (BSE), and National Stock
Exchange (NSE) of India.STFC is the consolidation of all the four entities, which
happened with the advent of our major financial partner, Texas Pacific Group. This
consolidation and subsequent growth over the last 5 years propelled STFC to the
leadership position in the Transportation Finance Sector.
The key value proposition of STFC include funding the entire business cycle
of the transporter, ranging from his basic working capital needs through discounting
his freight bills and facilitating his vehicle replacement.

2. Consumer & Enterprise Finance:-

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The Consumer Finance business of the group had its origins from the needs of the
Chit Funds customers and was started in year 2002 as a separate business unit,
Shriram City Union Finance Ltd. Shriram Housing Finance Ltd. (SHFL) is a Housing
Finance Company registered with the National Housing Bank (NHB), and promoted
by Shriram City Union Finance Ltd. Shriram Housing Finance received the
Certificate of Registration from NHB in August 2011, and commenced their lending
operations from December the same year. Over the years, this business has evolved
itself in the following four distinct verticals:
A. Individual Personal Loans catering to the needs of families for purposes ranging from
emergencies to education.
B. Small Business Loans targeted to Micro Enterprises, self-employed professionals and
such under-served segments of the business community across the various sectors of
the economy.
C. Asset Purchase Loans include all asset-based finance with specific thrust on used and
new three-wheelers/cars and two-wheelers through dealer outlets.
D. Loan against gold is the last addition to the business verticals that caters to the
emergency needs of families that are willing to pledge jewels as well as refinancing
pawn brokers who have been running this business for decades.
The attractiveness of the consumer business and the efficient manner in which the
customer origination and collections are being done encouraged large private equity
players like Texas Pacific Group to take significant stakes, which has in turn enabled a
strong foundation for a sustained Year-on-Year growth in Enterprise value.

3. Retail Stock Broking:-

Stock Broking business of the group was started in 1995, promoted by


professional entrepreneurs and incubated by the Shriram Group through its entity,
Shriram Insight Share Brokers Ltd.
Stock Broking business commenced operations with a corporate membership in NSE in
the cash segment in 1996. Membership in the derivatives segment in the NSE was
acquired in 2003.The Business has expanded into the commodities market with a trading-

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cum-clearing membership in the Multi Commodity Exchange (MCX) and the National
Commodities and Derivatives Exchange (NCDEX) through a 100% subsidiary.
Stock Broking business is firmly focused in the rapidly growing High Networth
Individual (HNI) and Retail space. The business has an active client base of 0.2 million.
The business operates through 1000 branches with equal no. of trading terminals.
The business model of Stock Broking largely focused on owned branches in the initial
years and has now graduated into the franchisee mode of expansion that will cater to PAN
India target market. Rapid expansion has been made possible in this two-pronged strategy
of owned and franchisee outlets and is expected to have an end-state distribution,
networking over 5000 branches.
As the business starts targeting the next level of mass affluent customers, expanding into
wealth management and advisory space, same would also become a key thrust area that
can potentially enhance profitability and shareholder value in the medium term.

4. Life Insurance:-
Shriram was one of the late entrants into the Life Insurance business in India, which
saw a huge influx of private players entering the industry ever since new licenses were
issued in 2006.The largest Insurance player in South Africa, Sanlam is Shrirams
partner in the Life Insurance business.

5. General Insurance:-

Shrirams foray into General Insurance happened much later than its entry into Life
Insurance, though this alliance too was with our Life Insurance partner, Sanlam (South
Africa).Sanlams subsidiary, Santam is the leading non-life Insurance player in South
Africa.
The General Insurance business in India has gone through significant changes both in
terms of new private players entering the Industry as well as the changes in the
regulatory landscapes.Shriram with its huge captive transportation customers /
business focused all its energy on addressing this target market and ensuring visible
benefits to the transportation community.Faster claims settlement through taking an

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end-to-end responsibility of the settlement process coupled with a relationship
approach have enhanced the brand equity of Shriram both in Insurance and the
transportation businesses and positioned the General Insurance venture to be a market
leader in motor insurance in the medium term.
Shrirams General Insurance strategy is multi-pronged developing insurance broking,
Risk Management and Loss Assessment pillars which are also the key focus areas in
order to enable significant benefits to the Insurance Industry in general and Shriram
General Insurance in particular.

6. Financial Product Distribution:-

Shriram Groups multifarious Financial Services businesses and its successful track
record of setting up individual business entities in every possible area of this space has
resulted in owning a 9.5 million strong customer base across these business entities.
Data Mining these customer bases and offering various products of the group to each
of these individual entities customers is a huge opportunity for the group. In order to
exploit this opportunity and benefit from the needs of the large customer base of the
group, a distribution company was set up Shriram Fortune Solutions Ltd. primarily
for selling investment and insurance products to the group customers.This business
has the unenviable task of being a multiproduct provider to the groups customers
thereby needing to set up a strong training ground for its field force as well as
continuously work in other group companies to design blue print and implement
strategies that will result in unprecedented cross-sell revenue for the group.
This business has started with a distribution of Debentures / Fixed Deposits and
Life Insurance products and is gradually equipping itself to also distribute non-life and
other investment products in the group. Being a captive distribution company, this
business has a huge opportunity to leverage groups customer base and product
capabilities and create immense value to shareholders and investors in the medium
term.

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7. Wealth Advisor:-

Shriram Wealth Advisors is an integrated wealth management advisory services


company, backed by Shriram Group of Chennai. The objective of Shriram Wealth is to
provide affordable high quality wealth advisory and research services to the middle
class masses and bring a transformational change to their economic well-being.
Shriram Wealth plans to provide Wealth Management Advisory Services and research
platform to existing clients of Shriram Group and also new clients.
Our Wealth Management process begins at financial planning and continues its
journey with its clients in actualising their financial goals. In the course of the
advisory, we shall start with suggesting an array of asset classes including, equity,
mutual fund, portfolio management, insurance and structured & fixed income products,
and add more asset classes as we go along. The entire process of client servicing and
execution shall be complimented by state-of-the-art technology to ensure maximum
client satisfaction.

SHRIRAM COMMERCIAL VEHICLE FINANCING

Overview
They are a part of the "SHRIRAM" conglomerate which has significant presence
in financial services viz., commercial vehicle financing business, consumer finance, life
and general insurance, stock broking, chit funds and distribution of financial products
such as life and general insurance products and units of mutual funds. Apart from these
financial services, the group is also present in non-financial services business such as
property development, engineering projects and information technology.Company was
incorporated in the year 1979 and is registered as a Deposit taking NBFC with Reserve
Bank of India under section 45IA of the Reserve Bank of India Act ,1934.STFC decided
to finance the much neglected Small Truck Owner. Shriram understood the power of

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'Aspiration' much before marketing based on 'Aspiration' became fashionable. Shriram
started lending to the Small Truck Owner to buy new trucks. But They found a mismatch
between the Aspiration and Ability. The Truck Operator was honest but the Equity at his
command was not sufficient to support the credit levels required to buy a new truck
They did not have the heart to send the Truck Operator back empty handed; we
decided to fund Pre-owned Trucks. This was the most momentous decision that we made.
What followed was Sheer magic.From Driver to Owner, even if only of a Pre-owned
Truck and from Pre-owned Truck to the New Truck, we have been with him in his
journey of Prosperity as he has been our partner in our road to success and leadership.
At Shriram, credit-worthiness of the Small Truck Owner has always been an article of
faith. This faith has guided our journey from our pioneering days in financing Small
Truck Owners to the present day leadership. Today we are not only the leader in Truck
Finance; we are also India's largest Asset Based Non-Banking Finance Company.
The inability of the economists to capture data relating to the economic activity of the
informal sector has resulted in its neglect at the policy-making levels in the government.
The distribution of Truck Ownership being scattered among a large number of individuals
has resulted in this very important group being missed by the institutional radar.
It is estimated that 80% of trucks in the country are in the hands of individuals.

COMMERCIAL VEHICLE FOR FINANCING

A. Heavy Duty Truck (HDT)


B. Medium, Intermediate And Light Duty Truck (LDT)
C. Pick Up Truck And Mini Truck ( P&MT)
D. Passenger Vehicle
E. Farm Equipment
F. Construction Vehicle & Equipment

A. Heavy Duty Truck (HDT):-


Defined as Heavy Commercial Vehicles or alternatively Multi Axle Vehicles having
gross vehicle weight upwards of 16.2 tons. Being a life line of the economy, these

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vehicles are an integral part of the commercial activity of any country and these
vehicles are usually deployed in the long haul distance and in transportation of
materials at the ports as also in the extraction of natural resources like Iron or Coal
etc.

Almost 100 percent of these vehicles are purchased only under financing and it is
estimated that nearly 1.5 to 2million HCVs are plying the Indian roads. Shriram
Transport offers financing options for the purchase of both new and used vehicles to
this segment which has some of the bigger fleet owners on one end of the spectrum
and the small fleet / single vehicle owner on the other.

B. Medium, Intermediate And Light Duty Truck (LDT)

These vehicles have a gross vehicle weight ranging from 5 to 16.2 tones and are
engaged in medium haulage business especially connecting rural/ semi urban roads to
urban centers. The population of these vehicles is estimated to be around 5 million.
Shriram Transport offers tailor made financing solutions for the purchase of both used
and new LCVs across the country which has the highest component of stand
operators within its segmentation.

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C. Pick Up Truck And Mini Truck ( P&MT)
These vehicles have a GVW of less than 5 tons and they fulfill the role of
transportation in the spoke in a hub and spoke arrangement. These vehicles have high
concentrations in short hauls and last mile delivery situations. Nearly 3 million of
these vehicles occupy the bottom end of this industry of which about 0.3 to 0.5
million vehicles are three wheeler goods carrying vehicles, the balance being four
wheelers. Shriram Transport gives flexible loan options to prospective buyers of these
vehicles which incidentally has the highest concentration of the small operator and
driver cum owner category of vehicle users.

D. Passenger Vehicle

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India being a country with a population of 1.4 billion coupled with a widespread
geographical area and an extensive road network, the volume of people moving from
one place to another is catered to by a wide range of passenger vehicles starting from
simple three wheelers, taxis, muvs, vans to high cost and state of the art Volvo /
Mercedes buses travelling across the length and breadth of the country. There are
nearly 10 millions of passenger vehicles that exist which makes this as one of the
highest potential vertical for financing and the most insulated from economic
downturns. In the car segment Shriram Transport had earlier restricted itself to
finance on yellow board (Taxi) vehicles only, keeping in line with its philosophy of
lending against an earning asset but from 2010 personal car loans have also been
included in the product range, thus aligning ourselves to changing lifestyles of the
populace.

Who are eligible?


Any individual / Partnership firm / company with more than 2 years business
experience. Ownership of a vehicle is not mandatory. Funding extended to First Time
User, Transporters and Captive Consumers.

How much?

Loan amount can vary from a few thousands to crore depending upon the specific
requirement.Funding can be up to the extent of 100 % of the chassis, body funding
can be extended on special requirement & on the past experience.Generally

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undertaken is Hypothecation funding. They are also taking over an old high-interest
loan and converting it into low interest loan.

Repayment:

In general repayment period is of 3 -4 years, however depending on the nature of the


deal the tenure can vary from 6 - 60 months.The repayment schedule & the
amortization schedule is sent on disbursement of the loan.

Interest:
Interest is charged on a flat rate based on the scheme applicable for the particular
product.

E. Farm Equipment
Being an agrarian economy, a substantial part of India lives in its villages and a major
portion of our population is engaged in agriculture. Shriram Transport has a granular
footprint of more than 300 rural / semi urban branches which are located in these
centers to cater to the requirement of finance from buyers of tractors, harvesters and
various other farm equipments which are deployed both for agricultural and
commercial purposes. Hitherto a domain of co operative and nationalized banks rural
branches, this segment is 5millions lakh strong and is ever growing thanks to
mechanized methods of agriculture becoming a necessity in the wake of rural labour
in availability.

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Eligibility :-

Agricultural Users

Any individual aged above 21 years at the beginning of the tenure and below 65 years by
the end of the tenure; involved in agriculture for the last 5 years.

Having minimum 2 acres of land with its value at least twice the loan amount.

Staying in the same place for at least 3 years.

Having an annual income equal to the yearly installment

Mortgage of land of 2 to 3 times of the loan amount

Commercial Users

Any individual aged above 21 years at the beginning of the tenure and below 65
years by the end of the tenure; involved in business for the last 3 years.

Owns at least one tractor or commercial vehicle.

Owns either a house or an office or at least 2 acres of land.

Has a permanent phone connection either at office or at home.

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Loan Amount:

The loan amount varies from customer to customer depending on the valuation of the
land being mortgaged, income of the customer and tenure desired. A maximum of 100%
of the cost of the tractor, 75% of the cost of the trailer and 50% of the cost of the
implements is funded.

Documentation:

Agricultural use

Application form with photograph of the customer and all co applicants and/or

guarantor.

Performa Invoice of the asset to be funded from an authorized dealer.

Land records of the borrower/s.

Land valuation and title search report of the land.

Residence proof of the borrower/s.

Identity proof of the borrower/s.

Signature verification of the borrower/s.

Loan agreement, duly signed by the applicants and guarantor.

2 SPDCs(Security Post Dated Cheques) for entire tenure.

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Commercial Use

Application form with photograph of the customer and all co applicants and/or
guarantor.

Proforma Invoice of the asset to be funded from an authorized dealer.

Proof of Income (any of the following) :

- Billing statement for the past one year

- Latest Income tax Return

- Last 6 months bank statement

Residence proof of the borrower/s.

Identity proof of the borrower/s.

Signature verification of the borrower/s.

Loan agreement, duly signed by the applicants and guarantor.

2 SPDCs(Security Post Dated Cheques) for entire tenure.

Rates & Fees:

The rate of interest varies from customer to customer and depends on various
factors like land holding, loan amount, viability of the proposition and the underlying
collaterals provided.

Interest:

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Interest is charged on a monthly/quarterly/half-yearly reducing balance basis as
the case may be. Every instalment that is paid has a component of principal as well as
interest. Interest is charged on the principal outstanding after every instalment payment.

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