MANAPPURAM GENERAL FINANCE & LEASING LTD.

(GOLD LOAN)

COMPANY BACKGROUND
India's second largest gold loan provider, with the loan book of Rs.70bn; 7% of organized market. The company provides loans against household jewelry; Grown its loan book at a CAGR of 120% over the last 4 yrs. Driven by its expanding branch network, or strong brand name and the ability to swiftly appraise gold, make a lending decision and then structure the loan for the retail or SME borrower.

COMPANY TIMELINE
YEAR 1992 1996 1999 EVENT Company Established Company goes public Via an IPO. Commencement of Gold financing business

2007
2008 2009 2010 2010 2010

PE funding of Rs.700million from sequoia and others

PE funding of Rs.700 million from ashmore and others Acquired sister company MAFIT from promotors Raised Rs. 2.5 billion through a QIP Preferential issues of Rs. 1 billion to promoters Raised Rs. 10 Billion through another QIP

NATURE OF BUSINESS

Demand Nature:

Demand arises from unanticipated short term liquidity requirement-- households to meet their urgent personal (marriage, medical etc) or business (working capital) needs.

Provides loan if the applicant satisfies 3 criteria:

Loan against jewelry Jewelry should be used Should come from a household. Hence, does not provide loans to jewelers, banks, or against commodity bullion.

NATURE OF BUSINESS (CONT)

All loans are of 1year maturity. There is no prepayment penalty or lock-in period. 90-day average price of Gold is considered With more than 60% of branches been opened in FY11; targets to open 500 branches/ year for FY12, FY13

NPA CRITERIA
NPAs arise only after 180 days of non-payment of interest post the due date. Rising of NPLs is further minimized by the contracts MPFL enters with the customers, which gives them the option to:

Sell the pledged gold as the LTV crosses 90%

Make a margin call (interim payment) if the LTV crosses a pre-decided value

DEMAND AND EXPANSION

Urgency and not interest rates drive the demand for Gold Loan Cultural aspects/strong sentimental value attached to pledged jewelry Rapidly scaled up distribution network to grab market share.

From

291 branches in FY07 to 2280 branches in Jun11

LAST YEAR PERFORMANCE

60% of branches are less than1yr old.

75%

of costs are fixed, hence as the AUM increases cost as a % decline.

87% of Loans are above Rs.100,000 Gold per customer benchmark for MPFL is 40gm. This is continuously monitored (way to diversify risk) Auctioned 1000mln of gold in FY11.

COMPARISON CHART

Balance Sheet of Manappuram Finance(Liabilities) Sources Of Funds

------------------- in Rs. Cr. ------------------Mar '11 12 mths Mar '10 12 mths 34.04 34.04 0 0 576.52 610.56 1,650.05 185.61 1,835.66

Mar '09

12 mths

Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Networth Secured Loans Unsecured Loans Total Debt

83.38 83.38 0 0 1,840.58 1,923.96 4,372.31 1,281.70 5,654.01

21.26

17.26

143.62

167.88

371.24

79.85

451.09

Total Liabilities (Networth + Total Debt)

7,577.97

2,446.22

618.97

Balance Sheet of Manappuram Finance(Assets) Application Of Funds

------------------- in Rs. Cr. ------------------Mar '11 12 mths 171.17 33.28 137.89 6.86 40.32 666.37 6,917.63 0 7,584.00 112.63 78.46 191.09 7,392.91 7,577.98 Mar '10 12 mths 70.34 13.56 56.78 0.12 140.67 148.82 2,085.41 119.39 2,353.62 84.5 20.46 104.96 2,248.66 2,446.23 Mar '09 12 mths 35.56 7.79 27.77 0.26 1.08 31.06 519.66 82.34 633.06 36.39 6.82 43.21 589.85 618.96

Gross Block Less:- Accum. Depreciation Net Block Capital Work in Progress Investments Total Current Assets(Cash & Bank Bal.) Loans and Advances Fixed Deposits Total CA, Loans & Advances Current Liabilities Provisions Total CL & Provisions Net Current Assets(Total CA, loans & adv - Total CL) Total Assets

RATIOS
Investment Valuation Ratios 2011 Face Value 2 Dividend Per Share 0.6 Operating Profit Per Share (Rs) 18.26 Profitability Ratios Operating Profit Margin(%) 65.3 Gross Profit Margin(%) 63.47 Net Profit Margin(%) 23.92 Return On Capital Employed(%) 9.97 Return On Net Worth(%) 14.69 Liquidity And Solvency Ratios Current Ratio 39.69 Quick Ratio 39.64 Debt Equity Ratio 2.94 Long Term Debt Equity Ratio 2.94 2010 10 2.5 93.02 67.36 66.14 25.05 13.03 19.6 0.8 22.36 3.01 0.63 2009 10 2.5 48.09 51.69 49.59 18.27 13.71 18.64 0.99 14.57 2.83 0.97

TAKE AWAY
Keeping in mind the previous performance & current growth rate, company seems to have a bright future. Gold rates have been constantly increasing providing financial security. Since there is an existence of 75% of unorganized market, there is huge scope for expansion.

THANK YOU!!
PRAYANK BOTHRA- (03) RAHUL KANSARA- (12) SAMBBHAV BENGANI- (17) RUSHABH SHAH- (22) SIDDHARTH GOENKA- (28) SIDDHARTH JAIN- (29) VIRAL JARIWALA- (42)