#1回回, TOI Capital Trust Merging New-Age Fintech with Traditional Lending CAPITAL TRUST LIMITED Q4 & FY 2023 INVESTOR PRESENTATION May 2023#2Disclaimer Capital Trust Certain statements in this document that are not historical facts are forward looking statements. Such forward- looking statements are subject to certain risks and uncertainties like government actions, local, political or economic developments, technological risks, and many other factors that could cause actual results to differ materially from those contemplated by the relevant forward-looking statements. Capital Trust Limited will not be in any way be responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances. 2#3TABLE OF CONTENTS COMPANY OVERVIEW & RECENT UPDATES 04-11 CAPITAL DIGITAL LOANS CAPITAL TRUST 2.0 FINANCIALS KEY PARTNERSHIPS 12-19 20-26 27-30 31-32 Capital Trust#4NIRMA NIRMA Capital Trust LUCKLE COMPANY OVERVIEW & RECENT UPDATES#5Capital Trust - Financing with a Tech-Touch Balance Company Snapshot • Being India's first "Rural Doorstep-Fintech Company," we are focused on providing financial inclusion services to underserved India by merging fintech and traditional financing. Our digitized rural financing model offers quick digital micro loans to MSMEs and caters to over 72,049 customers across 92 districts through 297 branches in 10 states in India. CALU Our Vision To become the first fully digitalised and most trusted consumer service point in rural India that redefines the rules of MSME financing. ZALJU PALJU ano8 no8 Capital Trust Our Mission To encourage self-sufficiency and entrepreneurship in the underserved part of India by using 'low-cost, high-tech' digital finance processes. 5 As we continue to address the growing capital needs of the underserved markets of India, we have reached a tipping-point in our digital transformation journey, propelling us into the next phase of growth to help us serve more customers, better.#6Important Recent Updates: Launchpad For Future Growth Capital Trust 01 02 22 Merger of Subsidiaries Final merger of subsidiaries (Capital Trust Microfinance and Capital Trust Housing) with the holding company, Capital Trust Limited, was completed in March 2023 (post reservation of order in December 2022). ук 03 Successful Bullet Repayments In April and May 2023, Capital Trust successfully repaid *77 Cr bullet repayments (45 Cr Sub-Debt repayment to IDFC First Bank and *32 Cr NCD+TL repayment to SBI). Formalization of Informal MSMES In May 2023, RBI released "Formalisation of Informal Micro Enterprises on Udyam Assist Platform" circular thereby classifying all CTL Loans as PSL MSME loans. 04 Legacy Portfolio Write-Off in Q4FY23 Start of new phase for Capital Trust with complete clean up and significant write off in legacy portfolio (sourced before Dec 2019 with joint liability cash collection, high ticket size, and long tenure). 6#71. Merger Of Subsidiaries Capital Trust Microfinance merged into Capital Trust Benefits Realized: Capital Trust HOUSING FINANCE Capital Trust Consolidation of Assets Increase in Authorized Capital of CTL Increase in Net Worth of CTL Increase in Net Owned Funds of CTL Increase in Capital Adequacy of CTL Simplified Capital Structure 7#82. Formalization of Informal MSMEs RBI/2023-24/27 (FIDD.MSME & NFS.BC.No.09/06.02.31/2023-24) circular ("Formalisation of Informal Micro Enterprises on Udyam Assist Platform") CLASSIFICATION DOCUMENTATION TICKET SIZE ANNUAL INCOME UNSECURED Income Tax Return GST Certificate > 10 Lakh > * 10 Lakh New Age Fintechs Formal MSME PAN Card Udyam Aadhaar Shop & Establishment 1Lac-10 Lakh 4Lac 10 Lakh Geography Focused MSME NBFCs Aadhaar Card Informal MSME *30,000 1 Lac - 3Lac-4 Lakh Udyam Assist Bank Account Capital Trust Microfinance Aadhaar Card 20,000 60,000 <3 Lakh NBFC-MFIS Capital Trust Benefits to CTL: MSME PSL Classification, Formalization of sector, Increased funding potential from Banks / NBFCs 80 SECURED Banks / Large SME Focused NBFCs Product Focused MSME NBFCs#93. Successful Bullet Repayments State Bank of India -30 Cr NCD repayment on 20th April -* 2 Cr TL repayment on 30th April IDFC FIRST Bank -45 Cr Sub-Debt repayment on 1st May Borrowings: * 96 Cr (March) to 24 Cr (May) Capital Adequacy: 56% (March) to 85% (May) Leverage: 1.3X (March) to 0.3X (May) 9 Capital Trust#104. Legacy Portfolio Write-Off in Q4FY23 Total Legacy Disbursement from FY16: 2131 Cr Capital Trust 795 725 471 297 139 127 116 109 101 FY18 FY19 FY20 FY21 • Reason for 71 Cr WO • 30 00 71 Written Off * FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q4 FY23 Legacy Portfolio Fresh Start (Capital Trust 2.0) *75 Cr Net Worth vs 120 Cr Net Worth but continuous questions of future losses Investor / Banker / Funder focus on CDL and not Legacy portfolio . Providing clear visibility and growth path for future ** 17Cr impact taken from provisions, 54Cr impact taken directly to the P&L 10#11Numbers at a Glance ANY PORTFOLIO 150 Cr NET WORTH 75 Cr Off: 107 Cr On: 43 Cr e Capital Trust BORROWINGS March 23: 96 Cr May 23:24 Cr 32 Cr SBI NCD+TL 45 Cr IDFC SD closure in April and May 23 CAPITAL ADEQUACY March 23: 56% May 23: ~85% LEVERAGE March 23: 1.3X May 23: 0.3X GNPA & NNPA GNPA: *1.5 Cr (1%) NNPA: 0% 11 Provisions 3.1 Cr#12CAPITAL DIGITAL LOANS Vikram Vikram Vikram బాలిక O 00 B 425 O 0 b భావిక C C O C احا e Whavily Vikram Vikram. Vikram Vikram Vikram. Vikram. Vikram- livery Fa Very ruse 9 Vikram J Vikram AP $ Vikram بیمار Vikram... جار A B B Vikram... Vikram AP e Vikram AP B Vik All B V AP B 100° Vikram Vikram Re Very Fast Ver Fast Veg Fast Capital Trust N AP AP AP RASHREE#13Current Product Offering Product Name Type of Loan Ticket Size (*) Tenure ROI Repayment Capital Digital Loan Unsecured Income Generating Business Loan 30,000 75,000 12-24 months 32%+ Digital NACH followed by physical cash collection Capital Trust - Branch banking Ease of getting loan Unsecured loan Digital loan Why CTL? - Human connect - Quick turnaround time - Transparency with connect app - Paperless Process - Small Ticket Size - Short Tenure Production Optimization - Optimal EMI amount - Short Turn-Around-Time - High Yield - Digital Collection Enabled - Full Cash Collection Setup - Geo-tagged and Analytics backed 13#14Target Audience Graduated from Microfinance 8% of the Microfinance clients graduate yearly from the Microfinance sector and hit a wall MISSING MIDDLE New to Organized Credit Replacing traditional informal sources of financing (local moneylenders) which currently account for 84% of all financing to MSMEs Informal MSMES Unserved by MFIS (owing to RBI guidelines) and banks / large NBFCs (owing to no formal income documentation) ☑ Clients Needing Instant Credit With 100% digital processes, company is able to disburse loans in a matter of hours from onboarding 14 Capital Trust#15Our Clientele Capital Trust Kirana Stores Dairy and Livestock Farmers Grocery Vendors राजनाथ Small Eateries Textile Stores Handicraft Manufacturers Utility Stores Salons Flower Vendors 15#16Branch Network 297 Branches spread across 92 Districts in 10 States of India 33 39 3 10 51 33 47 20 34 16 20 Capital Trust Actively Disbursing Branches: 176 Collection-Only Branches: 121 Reason for Collection-Only Branches: Bad geographical delinquency in past, high DPD of other MFIs evident in pin code report, CDL delinquency crossing set 30+DPD benchmark#17Portfolio Quality Total Disbursed: 512 Cr Portfolio Outstanding: *120 Cr Covid 2nd Wave Impact 2.8% 4.3% Capital Trust 30+ DPD: 1.8% 90+ DPD: 1.3% 3.8% 3.4% 3.4% 3.0% 2.8% 2.5% 2.3% 2.3% 2.2% 2.1% 1.8% 1.7% 1.3% 0.3% Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 30+% 90+% 17#18Product Features 回 Driven by Technology 1 Faster Credit Delivery Unique Customer Profile Capital Trust Low Risk - High Returns Stringent Credit Control Rural Doorstep Fintech Company Client facing Capital Connect smart phone application in addition to staff Capital Sales application. ■ Paperless Processing. ■ Geo-tagging of business and customers. Short Turn-Around-Time | Serving the For Disbursement Capability for same day disbursement with 81% loans disbursed within 48 hours turnaround time. ! Missing Middle Only player offering unsecured, individual, digital, business generating loans of less than 1 Lac. Sector untapped by MFIS and Banks / NBFCs. Ticket size of 30,000 - 75,000. Better Rewards Higher NIM's. ◉ Short tenure of 12-24 months makes repayment! faster. Digital NACH Collections. Automated risk engine preventing build of concentration. Robust Quality Checks ☐ Blending the best of " physical & digital practices. Al and Business Intelligence to calculate applicants' income based on business industry. High quality portfolio - lower NPA. 18#19Rural Doorstep Fintech 2. HYBRID CREDIT UNDERWRITING QR Code scan of Aadhaar Card Automated credit bureau check Physical Verification of business and residence premise Business and cash flow analysis Physical Visit Engine Credit Engine Telephonic Verification 18 4. COLLECTION Automated client allocation based on client geo-tagged residence Automated outbound dialling, installment reminder message Monthly NACH payment Payment enabled through company app Cash collection if digital payment not received 19 Capital Trust 1. LEAD GENERATION Generate lead by door to door canvasing Geotagging of business and residential premise Mobile number verification through OTP Handholding of client through digital onboarding 3.DIGITAL DISBURSEMENT E-Sign / Signing of Terms and Conditions E-NACH Penny-drop verification Disbursement into bank account DIGITAL PROCESS PHYSICAL PROCESS#20CAPITAL TRUST 2.0 ACCEPTED BY WOMEN ORLDWIDE humchums Fund up BHARAT CLOTH EMP 23 24 25 26 27 28 2 Capital Trust#21Acknowledging What Went Wrong: CDL - Legacy Differentiators Timeline CDL Sourced Post FY20 Legacy Sourced Before FY20 Capital Trust Enhancement in CDL Product About Collection Tenure Active flagship product of the company that is automated credit engine backed Digital NACH collection as 1st mode of repayment 12 24 months Predominantly joint-liability, cash collection product with comparatively larger ticket sizes and longer tenure 100% Cash collection - 36 60 months Ticket Size 30,000 75,000 1,00,000 5,00,000 Rate of Interest 32%+ Process Highly tech enabled underwriting, collection and monitoring process 24-28% Traditional collection and monitoring process With ~50% digital collection in CDL, lower operational cost Reduced risk owing to shorter time period. Also, higher client renewal % as client comes back for next loan Reduced risk owing to smaller exposure Greater NIMs and higher ability to absorb external factors Use of data and BI to remove subjectivity and possibility of deviation in processes 21#22Capital Trust 2.0: A Clean Slate 1. Remaining Portfolio High quality, seasoned AUM with 1% GNPA and 0% NNPA *120 Cr CDL product with good portfolio performance and 30 Cr legacy product I I I with minimum potential of forthcoming losses | I 2. Pioneers in Technological Advancements By leveraging technology to penetrate underserved segments, we have capitalized on the inability of banks to rapidly scale operations and customize rigid policies in regard to providing business loans in rural India Capital Trust Capital 閨 • 3. Hybrid Dual Credit Automated credit (credit bureau checks and preset algorithms) supplemented with Traditional Safeguards of Branch Banking (physical verification of residence, business premise and cash flow analysis) ☑ Trust 2.0 22 I 1 • 4. Lending-As-A-Service With the inherent potential to disburse upwards of Rs. 60Cr monthly through its existing branch network, Capital Trust is employing Lending-As-A-Service as a model for growth 6 partnerships live with more expected soon#231. Remaining Portfolio 150 Cr Capital Trust 100% 100% 97% 99% 140 96% 9 96% 97% 97% 98% 99% 93% 94% 12 120 15 100 16 160 80 16 80 60 60 40 40 20 0 25 52 52 BIH DE UP IMP PUN JHA ODS RAJ UP UKH CG DEL Portfolio Under Management GNPA GNPA % Provision Balance NNPA % Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Companywide Collection Efficiency 23 150.3 Cr 1.5 Cr 1.0% 3.1 Cr 0.0%#242. Pioneers in Technological Advancements Capital Trust 2015 2016 2017 2018 2019 2019 2020 2020 2021 NOW Decision to go 100% Cashless Disbursements (First in rural industry) Issuance of Geo-Tagged Digital Receipts rather than physical passbook signing (First in rural industry) Decision to go 100% Cashless Collection as first mode of payment (First in rural industry) Incorporation of Al Enabled Credit Engine (automated decision making with credit scoring of borrower. Done on Income, Credit History and Debt servicing capacity) Launch of Al Enabled Geo-Tagged Client Route Mapping for increased operational efficiency Launch of Capital Sales smartphone app with real-time information at staff fingertips (First in rural industry) Launch of client-facing Capital Connect smartphone app (First in rural industry) Start of 100% paperless processes: no physical signature required from sourcing to disbursement (First in rural industry) PROACTIVE RATHER THAN REACTIVE: Introduction of Al Enabled Physical Visit Engine (automated income input analysing client industry, sales and margin) Capital Trust is emerging as a Thought and Innovation leader capturing the changing rural landscape. RURAL DOORSTEP-FINTECH COMPANY With our newly developed automated disbursement engine and algorithmic credit scorecard, our disbursements have increased consistently. Further, our average turnaround time has improved to less than 48 hours as on Q4 FY2023 24#253. Hybrid Dual Credit Instant in-principal approval by automated credit decisioning system with no manual intervention at client doorstep. Final approval subject to positive physical verification of cash flow and disposable income Capital Trust Disbursement QR Code Scanning of Aadhaar By Field Team Automatic uploading of client data into system. Location geo- tagged and case rejected if client residence is beyond 20kms from branch Automated Credit Bureau Check Link-up with Equifax to review past credit history. Hard rejection in case of negative credit bureau history Physical Verification by Field Credit Team Ground level authentication by physical verification of home, business and income. All details uploaded into app Algorithmic Credit Rule Engine & Physical Visit Engine Automatic rejection in case of any deviation from prescribed credit policies Telephonic Verification by HO Credit Team Verification of documents uploaded into system and re-assessment of cash flow of client during call No exceptions or manual intervention permitted Decision communication flow and all processes are automated Technology used at all stages of loan cycle eliminating requirement of physical movement of documents All processes time stamped and tracking of cases available on live basis 25 5#264. Lending-As-A-Service Capital Trust Shift towards Off Balance Sheet partnerships for last 1.5 years in an aim to offer Lending-As-A-Service (LAAS) BC / Co-Lending Disbursements done with: niyogin tru arthmate ENABLING ENTREPRENEURS Lendbox <kaleidofin Lenden Total Disbursements 30+% 90+% POS (in Cr) 30+% (on POS) 90+% (on POS) (* in Cr) (on Disbursement) (on Disbursement) 5 Live Partnerships 238 110 1.3%* 0.8%* 0.6%* 0.4%* CAPRI GLOBAL expected to go live in June CAPITAL LIMITED * With current portfolio performance, partners have started sharing risk 26#27Capital Trust Zespri Crice FINANCIALS#28Key Highlights & Ratios Net Worth (in Crores) 117 118 119 121 122 124 119 75 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Capital Adequacy Ratio (%) Borrowings (* in Crores) 240 238 228 209 Capital Trust 155 130 114 96 24 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 May 23 Leverage (in X) 56% 45% 43% 44% 46% 49% 48% 41% 85% 2.0 2.0 1.9 1.7 1.3 1.3 1.0 1.0 il Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 May 23 0.3 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 May 23 28#29Key Highlights & Ratios Particulars Capital Trust (* in Crores) Q4 FY23 Q4 FY22 YoY % Q3 FY23 QoQ% FY23 FY22 YoY % Total Income 20.0 27.8 -28% 19.8 1% 86.9 106.0 -18% Total Expense (excluding tax) 81.9 25.4 222% 24.6 232% 148.2 120.2 23% Profit/Loss After Tax -46.0 1.6 -3.5 -45.6 -10.8 322% Net Worth 74.5 120.0 -38% 119.2 -37% 74.5 120.0 -38% On-Book Portfolio 43.4 229.4 -81% 126.8 -66% 43.4 229.4 -81% Off-Book Portfolio 106.9 70.8 51% 134.3 -20% 106.9 70.8 51% Total Assets Under Management (AUM) 150.3 300.2 -50% 261.1 -42% 150.3 300.2 -50% Net Interest Margin 17.6%* 16.3%* 8% 14.7%* 20% 20.8% 15.9% 31% Cost Of Borrowing 14.9% 13.4% 11% 14.3% 4% 14.9% 13.4% 11% Book Value Per Share 46.0 74.3 -38% 73.5 -37% 46.0 74.3 -38% * Annualized 29 29#30Consolidated Balance Sheet Capital Trust (* in Crores) Assets Q4 FY23 Q3 FY23 Q2 FY23 Financial Assets Liabilities And Equity Financial Liabilities Q4 FY23 Q3 FY23 Q2 FY23 Cash and Cash Equivalents 8.1 12.0 Trade Payables 0.8 0.8 0.2 9.1 Debt Securities 30.0 32.4 41.9 Bank Balances other than cash & 65.1 68.4 64.7 Borrowings other than Debt Securities 20.9 36.4 42.2 cash Equivalents Deposits 0.0 0.0 0.0 Trade Receivables 3.2 3.2 5.5 Subordinate Liabilities 45.0 45.0 44.9 Loan Portfolio 40.2 106.1 134.8 Lease Liabilities 0.0 0.0 0.0 Investments 0.1 0.0 Other Financial Liabilities 13.4 18.4 20.7 Other Financial Assets 13.4 23.1 21.7 Total Financial Liabilities 110.1 133.1 149.9 Total Financial Assets 130.1 212.8 235.8 Non-Financial Liabilities Non-Financial Assets Current Tax Liabilities (Net) Provisions 0.0 0.0 0.0 1.2 1.4 1.4 Current Tax Assets (Net) 6.0 6.9 7.1 Other Non-Financial Liabilities 1.8 2.6 4.0 Deferred Tax Assets (Net) 49.3 33.9 34.0 Total Non-Financial Liabilities 3.0 4.0 5.4 Property, Plant and Equipment 1.3 1.4 1.4 Right to use Asset 0.0 0.0 0.0 Equity Intangible Assets 0.2 0.2 0.2 Equity Share Capital 16.2 16.2 16.2 Other Non-Financial Assets 0.8 1.1 1.1 Other Equity 58.3 102.9 108.2 Total Non-Financial Assets 57.6 43.5 43.9 Total Shareholders Fund 74.5 119.2 124.4 Total Assets 187.7 256.3 279.7 Total Liabilities and Equity 187.7 256.3 279.7 30#31Capital Trust KEY PARTNERSHIPS#32Equity & Funding Partnerships Equity: 1 LIGHTHOUSE DREAM DARE SCALE | CARE Public Sector Banks: 2 Private Sector Banks: 2 UCO BANK State Bank of India IDFC FIRST Bank InCred DFI / NBFCs / P2PS: 9 Borrow. With Confidence. HDFC BANK Samunnati tru LenDen 32 USHA FINANCIAL We Support Your Goals niyogin arthmate ENABLING ENTREPRENEURS Capital Trust Lendbox#33Capital Trust Vinod Raina Chief Financial Officer [email protected] Vahin Khosla Executive Director [email protected] THANK YOU