SUNDARAM FINANCE HOLDINGS Information Memorandum Dated : March 15, 2018 SUNDARAM FINANCE HOLDINGS LIMITED [CIN: U65100TN1993PLC025996] 21, Patullos Road, Chennai – 600 002 Tel: 91 44 28521181 Fax: 91 44 28586641 E-mail: [email protected] Website: www.sundaramholdings.in ; www.sundaramfinance.in Contact Person: Mr. P.N. Srikant, Secretary & Compliance Officer Sundaram Finance Holdings Limited was originally incorporated on October 13, 1993 under the Companies Act, 1956 as Sundaram Finance Securities Private Limited with the Registrar of Companies, Tamil Nadu at Chennai. Subsequently the Company has been converted into public limited company w.e.f. November 22, 1993. The name of the Company was changed to Sundaram Insurance Broking Limited w.e.f. May 21, 2003. Effective December 5, 2003, the name of the Company was changed as Sundaram Finance Distribution Limited. Subsequently, the name of the Company was changed to Sundaram Finance Investments Limited w.e.f. December 21, 2016 and thereafter to Sundaram Finance Holdings Limited w.e.f. March 29, 2017. Sundaram Finance Limited is the Promoter of the Company. INFORMATION MEMORANDUM FOR LISTING OF 15,11,03,860 EQUITY SHARES OF Rs.5/- EACH OF THE COMPANY THIS INFORMATION MEMORANDUM IS SUBMITTED FOR THE PURPOSE OF LISTING OF THE 4,00,00,000 FULLY PAID UP EQUITY SHARES OF RS. 5/- EACH HELD BY THE DEMERGED COMPANY, VIZ., SUNDARAM FINANCE LIMITED (SFL) AND 11,11,03,860 FULLY PAID UP EQUITY SHARES OF RS. 5/- EACH ALLOTTED TO THE SHAREHOLDERS OF SFL PURSUANT TO THE SCHEME OF ARRANGEMENT AND AMALGAMATION SANCTIONED BY THE NATIONAL COMPANY LAW TRIBUNAL, DIVISION BENCH, CHENNAI VIDE ITS ORDER NO. CP/210-214/CAA/2017 DATED JANUARY 12, 2018, RECEIVED BY THE COMPANY ON JANUARY 18, 2018. NO EQUITY SHARE OF THE COMPANY IS PROPOSED TO BE SOLD OR OFFERED PURSUANT TO THIS INFORMATION MEMORANDUM. GENERAL RISK Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in the equity instruments of Sundaram Finance Holdings Limited, unless they can afford to take the risks attached to such investments. For taking an investment decision, the investors must rely on their own examination of the Company including the risks involved. Investors are advised to read the Risk Factors carefully before taking an investment decision to invest in the shares of Sundaram Finance Holdings Limited. The equity shares of Sundaram Finance Holdings Limited have not been recommended or approved by the Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or adequacy of this document. Specific attention of the investors is invited to the statement of Risk Factors as set out under Section II of this Information Memorandum. ISSUER’S ABSOLUTE RESPONSIBILITY Sundaram Finance Holdings Limited, having made all reasonable inquiries, accepts responsibility for, and confirms that this Information Memorandum contains all information with regard to Sundaram Finance Holdings Limited and the equity shares of Sundaram Finance Holdings Limited, which is material, that the information contained in this Information Memorandum 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 document as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. LISTING The equity shares of Sundaram Finance Holdings Limited are proposed to be listed on the National Stock Exchange of India Limited (NSE). The Company has submitted this Information Memorandum to NSE and the same has been made available on the Company’s website viz. www.sundaramholdings.in / www.sundaramfinance.in. This Information Memorandum would also be made available on the website of NSE (www.nseindia.com). Registrar and Share Transfer Agent CAMEO M/s. Cameo Corporate Services Limited ‘Subramanian Building’ No.1 Club House Road Chennai - 600002 Tel: (91 44) 2846 0390 to 0395 Fax: (91 44) 28460129 E-mail: [email protected] Certified True Copy For Sundaram Finance Holdings Limited Place : Chennai Date : March 15, 2018 P.N. Srikant Secretary & Compliance Officer TABLE OF CONTENTS Section Major Heads Page no. I Definitions, Abbreviations & Definitions/Abbreviations 3 General Information Forward Looking Statements 5 II Risk Factors & Prominent Notes 6 III Introduction & about the General Information 11 Company Scheme of Arrangement and Amalgamation 12 Capital Structure 16 Shareholding 17 IV Statement of Tax Benefits 23 V About the Issuer Brief Summary of the Business/Activities of 37 the Issuer and its line of Business Industry Outlook 39 Applicability of Key Regulation 40 Main Objects of the Company Amendments to Our Memorandum of Asso- 41 ciation including change in name Management 42 Promoters 48 Group Companies 52 Dividend Policy VI Financial Information Financial Information of the Company 53 Financial Information of Group Companies 110 Management’s Discussion and Analysis of Financial Condition and Results of Operations 119 as reflected in the Financial Statements VII Legal and Other Information Outstanding Litigation 123 Outstanding dues to the creditors Material Developments Subsequent to Last 124 Financial Year Other regulatory & statutory disclosures VIII Other Information Ranking of Equity Shares and Terms of the Articles of Association 128 Mode of payment of dividend Option to receive shares in electronic form IX Material Contracts and Documents for Inspection 129 Declaration 130 Annexure A – Details of Outstanding Litigations 131 1 2 SECTION I DEFINITIONS, ABBREVIATIONS AND GENERAL INFORMATION A. DEFINITIONS Act The Companies Act, 2013 and the Rules framed thereunder and will include any statutory modification or re-enactment thereof for the time being in force. Appointed Date April 1, 2016 Articles or AOA Articles of Association of the Company Audit Committee Committee constituted by the Board in compliance with Section 177 of the Companies Act, 2013 Board Board of Directors of the Company Certificate of Certificates dated October 13, 1993 and March 29, 2017 received from the Incorporation Registrar of Companies (ROC) Demerged Company Sundaram Finance Limited or SFL Designated Stock National Stock Exchange of India Limited Exchange Resulting Company or Sundaram Finance Holdings Limited SFHL or the Company Directors Directors on the Board and Director shall mean any one of them Effective Date The date on which the Scheme became operative, i.e, the date of receipt of the Certified Copy of the Order from the Hon’ble National Company Law Tribunal, Division Bench, Chennai, i.e., January 18, 2018 Equity Share(s) Fully paid-up Equity Share(s) of Rs. 5/- each of the Company Equity Shareholder(s) Holder(s) of Equity Shares of the Company Information This updated Information Memorandum being filed with the National Stock Memorandum Exchange of India Limited IT Act Income Tax Act, 1961 and includes any statutory amendment or re-enactment thereof for the time being in force Agreement The Agreements entered into by the Company with the National Stock Exchange of India Limited Memorandum or MOA Memorandum of Association of the Company Promoter Sundaram Finance Limited Record Date February 2, 2018, the date fixed by the Board of Directors of the Demerged Company for the purpose of determining the shareholders of the Demerged Company, eligible for allotment of equity shares of the Resulting Company pursuant to the Scheme Registrar and Share Cameo Corporate Services Limited Transfer Agent 3 Scheme Composite Scheme of Arrangement and Amalgamation between Sundaram Insurance Broking Services Limited and Infreight Logistics Solutions Limited and Sundaram BPO India Limited and Sundaram Finance Limited and Sundaram Finance Holdings Limited and their respective shareholders and creditors as approved by the National Company Law Tribunal, Division Bench, Chennai vide Order dated January 12, 2018 which was received by us and filed with Registrar of Companies, Tamil Nadu, Chennai on January 18, 2018. SEBI Act Securities and Exchange Board of India Act, 1992 includind any statutory amendment or re-enactment thereof for the time being in force SEBI Listing Securities and Exchange Board of India (Listing Obligations and Regulations Disclosure Requirements) Regulations, 2015, for the time being in force Stock Exchange National Stock Exchange of India Limited SEBI ICDR Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 SCRA Securities Contract (Regulation) Act, 1956 SCRR Securities Contract (Regulation) Rules, 1957 B. ABBREVIATIONS CEO Chief Executive Officer CFO Chief Financial Officer CS Secretary & Compliance Officer CIN Corporate Identity Number CDSL Central Depository Services (India) Limited CCI Competition Commission of India DIN Director Identification Number DOB Date of Birth DSE Designated Stock Exchange EPS Earnings per Share ECGC Export Credit Guarantee Corporation of India KMP Key Managerial Personnel NSE National Stock Exchange of India Limited NSDL National Securities Depository Limited NA Not Applicable NCLT Hon’ble National Company Law Tribunal, Division Bench, Chennai PAN Permanent Account Number RBI Reserve Bank of India ROC Registrar of Companies, Tamil Nadu, Chennai SEBI Securities and Exchange Board of India SBSL Sundaram Business Services Limited SBPO Sundaram BPO India Limited w.e.f. With