2. The Present Challenge The Microfinance industry has seen turbulent times, since the Andhra Pradesh crisis of Oct’10. The Malegam Committee had made its proposals to the RBI in Jan’11 The Reserve Bank of India, as per its Monetary Policy Statement 2011-12, has decided to regulate the Microfinance sector as a separate category. Bank credit to MFIs shall be eligible as priority sector advance subject to the new definition of “qualifying assets”. Pricing guidelines and caps on margin and interest rate have also been specified.

5. The Way Forward Restructure the Products offered - to fall within RBI’s definition of “qualifying assets” Initiate requisite organizational capacity building exercises so as to enable CTL conform to the guidelines for MFIs to be included in the regulatory framework Build on branding, by offering a comprehensive set of services, either directly or through strategic alliances with NGOs, Section 25 companies etc.

6. Proposed changes in Product The company will adhere to the new interest rate of 26% There will be five schemes of Rs 10000, 15000, 20000, 25000, 35000 for first cycle loan All schemes except Rs 10000 will require 4 cheques for re payments Tenure for 10000 & 15000 loans shall be 52 weeks & for loan amounts > 20000 tenure shall be 104 weeks Renewals for all schemes possible after 20 weeks

7. Capacity Building Exercises The following will need to be addressed – - Equity Infusion - New Branch roll-out - Systems - Corporate Governance - Risk Structures

8. Comprehensive Services Capital Trust plans to move forward in its commitment to its clients by emphasizing on financial literacy and skill building. It shall work with NGOs, Section 25 companies operating in its locales and also through Vishwas Credit and Livelihood Program, to ensure that its clients receive a variety of financial services, including SHG linkages. As part of Corporate Social Responsibility, it is proposed that 10% of the profit is contributed to building the corpus of Vishwas

9. (in ` MN) Particular2008-09 A2009-10 A2010-11(E)2011-12(P)2012-13(P)2013-14(P)2014-15(P)2015-16(P) Number of Branches1125385085100145160 Number of Active Client6494185713014624493463255327576820108850 Client per Branch590743793490545533530680 Number of Loan Officer45122146200340400580640 Portfolio Outstanding as on 31st March401241709882389353851456736 Loan Disbursement5620835712912917423455298029 Cumulative Loan Disbursed562646221913483090641459222622 Profit Per Year-132421364648127 Fund Requirement: Debt 11202158317343584197 Equity 70300100 0 Future Projections Cont.

10. Ratio Analysis 2008-09 A2009-10 A2010-11(E)2011-12(P)2012-13(P)2013-14(P) 2014- 15(P) 2015- 16(P) Average Outstanding Balance6206442048712364236457556285651454574 Portfolio at Risk0.00%0.64%0.91% Average Portfolio Per Loan Officer89552610153431163199494148370278398844206887102610524319 Operating Cost Ratio53.29%38.20%34.13%6.23%4.17%3.62%3.07%2.61% Total Cost Ratio72.71%43.23%48.93%20.45%22.77%21.02%19.65%19.00% Operating Self Sufficiency Ratio25.48%104.09%106.81%127.62%114.86%111.77%108.96%117.57% Portfolio Yield12.29%37.04%44.04%13.43%14.75%15.04%13.53%14.65% Return on Assets-12.85%1.52%2.10%1.95%1.73%1.74%1.18%2.33% Return on Equity-17.69%2.94%5.59%18.83%19.45%23.31%22.64%28.26% Debt Equity Ratio0.491.031.635.383.133.084.123.74 CAR172.36%57.85%44.67%16.85%21.03%18.29%15.25%17.10%

11. Vishwas Credit and Livelihood Program

12. Section 25 not-for-profit entity Livelihood support services provided to the marginalised community in the areas where Capital Trust is operating. Facilitate financial services at competitive terms Operates at the grass root levels with the regular staff and volunteers. Revenues from the Corpus, donations, consulting and fees

13. Areas of activity Business Correspondent for Banks - SHG Model Business Facilitator for delivering financial services on fee basis –Insurance –Savings –Remittances –Pension etc Livelihood and Skill Building - Vocational Training Provide and facilitate medical and medicinal requirments for the community Work with the women groups on their health and nutritonal issues in collaboration with orgainsations working for women and girl children