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SAKTHI FINANCE LIMITED Our Company Was Originally Incorporated As “The Pollachi Credit Society Private Limited” on March 30, 1955 Under the Indian Companies Act, 1913

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SAKTHI FINANCE LIMITED Our Company Was Originally Incorporated As “The Pollachi Credit Society Private Limited” on March 30, 1955 Under the Indian Companies Act, 1913 PROSPECTUS March 30, 2016 SAKTHI FINANCE LIMITED Our Company was originally incorporated as “The Pollachi Credit Society Private Limited” on March 30, 1955 under the Indian Companies Act, 1913. The Company was later converted into a public limited company and the name of our Company was changed to “Sakthi Finance Limited” on July 27, 1967 and a fresh Certificate of Incorporation was obtained from Registrar of Companies, Madras. The corporate identity number of our Company is L65910TZ1955PLC000145. Our Company is registered as a Non-Banking Financial Company under Section 45-IA of the Reserve Bank of India Act, 1934 (2 of 1934). Registered Office:62, Dr. Nanjappa Road, Post Box No. 3745, Coimbatore-641 018, Tamil Nadu. Tel No: +91 422 2231471-474/4236200; Fax No: +91 422 2231915; Website: www.sakthifinance.com. For further details of changes in Registered Office of our Company, refer chapter titled “History and Certain Corporate Matters” beginning on page 86. Company Secretary and Compliance Officer: Mr. S. Venkatesh; Tel No: +91 422 4236207; Fax No: +91 422 2231915; Email: [email protected] PUBLIC ISSUE BY SAKTHI FINANCE LIMITED (“COMPANY” OR THE “ISSUER”) OF SECURED REDEEMABLE NON CONVERTIBLE DEBENTURES OF FACE VALUE OF ` 1000 EACH (“NCD”), UPTO ` 10,000 LAKH (HEREINAFTER REFERRED TO AS THE “BASE ISSUE”) WITH AN OPTION TO RETAIN OVER SUBSCRIPTION UPTO ` 10,000 LAKH, AGGREGATING TO ` 20,000 LAKH (HEREINAFTER REFERRED TO AS THE “OVERALL ISSUE SIZE”). THE ISSUE IS BEING MADE UNDER THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE AND LISTING OF DEBT SECURITIES) REGULATIONS, 2008, AS AMENDED (“DEBT REGULATIONS”). PROMOTERS: DR. M. MANICKAM AND MR. M. BALASUBRAMANIAM. For further details refer to the chapter titled “Our Promoters” on page 100. GENERAL RISKS Investors are advised to read the Risk Factors carefully before taking an investment decision in relation to this Issue. For taking an investment decision, 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 section titled Risk“ Factors” from page 13 to page 29. This document has not been and will not be approved by any regulatory authority in India, including the Securities and Exchange Board of India (“SEBI”), the Reserve Bank of India (“RBI”), any Registrar of Companies or any stock exchange in India. ISSUER’S ABSOLUTE RESPONSIBILITY The Issuer, having made all reasonable inquiries, accepts responsibility for, and confirms that this 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 Prospectus is true and correct in all material aspects 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 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 NCDs proposed to be issued by our Company have been rated by ICRA Limited (“ICRA”). ICRA has vide its letter no. RTG/Chen/245/15-16 dated February 10, 2016 assigned and reaffirmed, and vide its letter no. Reval/Chen/138/15-16 dated March 11, 2016 revalidated, a rating of “[ICRA] BBB (Stable)” for an amount of up to ` 20,000 lakh for the NCDs. The rating of the NCDs by ICRA indicates moderate degree of safety regarding timely servicing of financial obligations and carry moderate credit risk. The rating provided by ICRA may be suspended, withdrawn or revised at any time by the assigning rating agency and should be evaluated independently of any other rating. This rating is not a recommendation to buy, sell or hold the NCDs and investors should take their own decisions. Please refer to Annexure B of this Prospectus for rationale for the above ratings. PUBLIC COMMENTS The Draft Prospectus dated March 12, 2016 has been filed with BSE Limited (“BSE”), the Designated Stock Exchange pursuant to regulation 6(2) of the Debt Regulations. The Draft Prospectus was uploaded by the BSE on its website www.bseindia.com and was open for public comments for a period of seven Working Days from the date of filing of the Draft Prospectus. LISTING The NCDs are proposed to be listed on BSE. Our Company has obtained ‘in-principle’ approval for the Issue from the BSE vide its letter dated March 29, 2016. For the purposes of the Issue, BSE shall be the Designated Stock Exchange. COUPON RATE, COUPON PAYMENT FREQUENCY, MATURITY DATE, MATURITY AMOUNT AND ELIGIBLE INVESTORS For details relating to Coupon Rate, Coupon Payment Frequency, Maturity Date and Maturity Amount of the NCDs, please refer chapter titled “Issue Structure” beginning on page 117 of this Prospectus. For details relating to eligible investors, please refer chapter titled “The Issue” on page 44 of this Prospectus. LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE DEBENTURE TRUSTEE DALMIA SECURITIES PRIVATE LIMITED S.K.D.C CONSULTANTS LIMITED GDA TRUSTEESHIP LIMITED Khetan Bhavan, Room No. 17, “Kanapathy Towers”, Third Floor, ‘GDA House’, First Floor, Plot No 85, 2nd Floor, 198, Jamshedji Tata Road, 1391/A-1, Sathy Road, Ganapathy, S No 94 &95S, Bhusari Colony (Right), Kothrud, Mumbai - 400 020 Coimbatore - 641 006 Pune - 411038 Tel No: +91 22 30272829/32/33 Tel No: + 91 422 6549995, 2539835-36 Tel No: + 91 20 25280081 Fax No: +91 22 30272820 Fax No: + 91 422 2539837 Fax No: + 91 20 25280275 Email: [email protected] Email:[email protected] Email: [email protected] Website: www.dalmiasec.com Website:www.skdc-consultants.com Website: www.gdatrustee.com Investor Grievance Email: [email protected] Investor Grievance Email: [email protected] Investor Grievance Email : [email protected] Contact person: Mr. Indrajit Bhagat/ Ms. Swati Agrawal Contact person: Mr. K. Jayakumar Contact person: Ms. Sujata Kulkarni Compliance Officer: Ms. Piyali Deb Compliance Officer:Mrs. Vijayalakshmi Narendra Compliance Officer: Ms. Shamala Nalawade SEBI Registration No: INM000011476 SEBI Registration No: INR000000775 SEBI Registration No: IND000000034 ISSUE PROGRAMME* ISSUE OPENS ON April 07, 2016 ISSUE CLOSES ON May 06, 2016 * The Issue shall remain open for subscription from 10:00 a.m. till 5:00 p.m (Indian Standard Time) for the period mentioned above, with an option for early closure or extension by such period as may be decided by the Board of Directors or a duly constituted committee thereof. In the event of such early closure or extension of the subscription list of the Issue, our Company shall ensure that public notice of such early closure is published on or before the day of such early date of closure through advertisement/s in at least one leading national daily newspaper. On the Issue Closing Date, Application Forms will be accepted only from 10:00 a.m. till 3.00 p.m. (Indian Standard Time) and uploaded until 5.00 p.m. (Indian Standard Time) or such extended time as may be permitted by BSE. GDA Trusteeship Limited has vide its letter dated March 11, 2016 given its consent for its appointment as Debenture Trustee to the Issue and for its name to be included in this Prospectus and in all the subsequent periodical communications sent to the holders of the Debentures issued pursuant to this Issue. A copy of the Prospectus shall be filed with the Registrar of Companies, Tamil Nadu, Coimbatore in terms of section 26 of the Companies Act, 2013, along with the requisite endorsed/ certified copies of all requisite documents. For more information, see the chapter titled “Material Contracts and Documents for Inspection” on page202 . TABLE OF CONTENTS SECTION I: GENERAL ........................................................................................................................ 3 DEFINITIONS AND ABBREVIATIONS ........................................................................................................................... 3 CERTAIN CONVENTIONS, USE OF FINANCIAL, INDUSTRY AND MARKET DATA AND CURRENCY OF PRESENTATION ............................................................................................................................................................... 11 FORWARD-LOOKING STATEMENTS .......................................................................................................................... 12 SECTION II: RISK FACTORS ........................................................................................................... 13 SECTION III: INTRODUCTION ....................................................................................................... 30 GENERAL INFORMATION ............................................................................................................................................. 30 SUMMARY OF BUSINESS .............................................................................................................................................. 37 SUMMARY FINANCIAL INFORMATION ..................................................................................................................... 40 THE ISSUE ......................................................................................................................................................................... 44 CAPITAL STRUCTURE ................................................................................................................................................... 48 OBJECTS OF
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