MASFIN

fll{J\� FINANCIAL SERVICES LIMITED M FSL/SEC/EQ/2021/28 May 19, 2021 To, To, The Manager, General Manager BSE Limited National Stock Exchange of India Limited Phtroze Jeejeebhoy Towers Exchange Plaza Dalal Street Plot No. C/1, G Block Mumbai- 400001 Bandra-Kurla Complex Bandra (East) Mumbai-400051 Scrip Code: 540749, 947381 Trading Symbol: MASFlN Dear Sir, Sub.: Investor Presentation for the quarter and year ended on March 31, 2021 Please find enclosed herewith Investor Presentation for the quarter and year ended on March 31, 2021. Thanking you, Yours faithfully, #{J\fo For, Financial Services Limited Riddhi Bhaveshbhai Bhayani Company Secretary and Compliance Officer A.CS No.: 41206 Encl.: As above Regd. Office: \, + 91(0) 079 4110 6500 /079 3001 6500 6, Ground Floor, Narayan Chambers, � + 91(0) 079 4110 6597,+ 91 . (0) 079 41 ' 1 06561 B/h Patang Hotel, Ashram Road, Ahmedabad-380 009. O www.mas.co.in CIN : L65910GJ1995PLC026064 i:!!l:I mfsl@mas.co.in �� �.�: ENDEAVOURS 'I'lie <Power of <Distri6ution INVESTOR PRESENTATION – Q4 FY21 ffl .. '/�P II . ' .. '·' • • \ " u ' '\ I 'I ,. t • ' 0 D o •D c • � 0 0 0 n u Q D D 0 Disclaimer �- ENDEAVO�S This presentation has been prepared by and is the sole responsibility of MAS Financial Services Limited (together with its subsidiary MAS Rural Housing & Mortgage Finance Limited). By accessing this presentation, you are agreeing to be bound by the trailing restrictions. This presentation does not constitute or form part of any offer or invitation or inducement to sell or issue, or any solicitation of any offer or recommendation to purchase or subscribe for, any securities of the company, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contractor commitment therefore. In particular, this presentation is not intended to be a prospectus or offer document under the applicable laws of any jurisdiction, including India. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. Such information and opinions are in all events not current after the date of this presentation. There is no obligation to update, modify or amend this communication or to otherwise notify the recipient if information, opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate. Certain statements contained in this presentation that are not statements of historical fact constitute “forward-looking statements.” You can generally identify forward-looking statements by terminology such as “aim”, “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “intend”, “may”, “objective”, “goal”, “plan”, “potential”, “project”, “pursue”, “shall”, “should”, “will”, “would”, or other words or phrases of similar import. These forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause the company’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or other projections. Important factors that could cause actual results, performance or achievements to differ materially include, among other: (a) material changes in the regulation governing our businesses; (b) the company’s inability to comply with the capital adequacy norms prescribed by the RBI; (c) decrease in the value of the Company’s collateral or delays in enforcing the Company’s collateral upon default by borrowers on their obligations to the Company; (d) the Company’s inability to control the level of NPAs in the Company’s portfolio effectively; (e) certain failures, including internal or external fraud, operational errors, systems malfunctions, or cyber security incidents; (f) volatility in interest rates and other market conditions; and (g) any adverse changes to the Indian economy. This presentation is for general information purposes only, without regard to any specific objectives, financial situations or informational needs of any particular person. The Company may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such change or changes. The adoption of Indian Accounting Standards (“IND-AS”) for the purposes of the company’s financial reporting. The disclosures provided here are to merely for comparing key differences with previous accounting standards. There is a possibility of the financial results and the additional disclosures to be updated, modified or amended because of adjustments which may be required to be made on account of introduction of new standards or its interpretation, receipt of guidelines or circulars from regulatory bodies and/ or Reserve Bank of India and/or changes because of exercising any available exemptions. The Company has restated the financial information of prior interim periods of the current financial year and the comparable interim periods of prior financial year to reflect the change in accounting policy with regard to recognition of gain on derecognition of financial assets on account of direct assignment of loans. The gain has been recognized as deferred revenue i.e. “Interest Receivable on loan transfer transactions” (Other Non-Financial Liabilities) in place of Retained earnings which is amortized over the maturity of the financial assets derecognized (assigned loans) in place of recognizing gain upfront through profit & loss statement as made applicable while migrating to IND AS The Company has also restated the financial information of previous financial years. 2 Table of Content � ENDEAVO�S 04 MAS AT A GLANCE 05 JOURNEY OF 104 QUARTERS 06 STRONG FUNDAMENTALS 07 NAVIGATING COVID 19 PANDEMIC 09 PRODUCT OFFERINGS 11 LIABILITY MANAGEMENT 12 GOING FORWARD 13 STRENGTHENING THE FUNDAMENTALS… 14 FINANCIAL REVIEW 21 CREDIT QUALITY 24 REPUTED MARQUEE INVESTORS 25 FINANCIAL STATEMENT FY19- FY21 26 MAS RURAL HOUSING & MORTGAGE FINANCE LIMITED (MRHMFL) – SUBSIDIARY 28 NAVIGATING COVID 19 PANDEMIC (MRHMFL) 29 FINANCIAL PERFORMANCE – Q4 FY21 (MRHMFL) 31 LIABILITY MANAGEMENT (MRHMFL) 32 CREDIT QUALITY (MRHMFL) 33 UNDERSTANDING MAS MAS at a Glance �� ENDEAvo:Us 25 Strong Retail Presence & Distribution Network Years of Endeavours I Delhi NCR Rajasthan 53,724 6 99 • 1 branch Mn. • 9 branches covering major towns AUM States and NCR Branches of Delhi Gujarat • 55 branches across the state Madhya Pradesh J 3,478 7,00,000 + • 10 branches covering major towns Customer locations Active loan accounts Maharashtra • 21 branches covering Karnataka major towns • 1 branch in Bangalore Diversified Product Portfolio I Tamil Nadu • 2 branches in Chennai and Coimbatore Micro-Enterprise Loans SME Loans 2-Wheeler Loans Commercial Vehicle Loans 290 314 127 NBFCs Sourcing Intermediaries: =..a� (MEL) -o O 4 Journey of 104 Quarters �� ENDEAvo:Us Asset Under Management (AUM) 59,663 53,384 53,724 41,570 31,561 25,650 20,052 13,910 10,123 6,909 3,884 5,118 20 1,510 2,312 2,597 2,682 4Q 44Q 48Q 52Q 56Q 60Q 64Q 68Q 72Q 76Q 80Q 84Q 88Q 92Q 96Q 100Q 104Q Profit After Tax (PAT) 1,666 1,433 1,435 911 674 534 390 311 259 132 157 183 0 22 69 80 75 Q 0-4 Q 40-44 Q 45-48 Q 49-52 Q 53-56 Q 57-60 Q 61-64 Q 65-68 Q 69-72 Q 73-76 Q 77-80 Q 81-84 Q 85-88 Q 89-92 Q 93-96 Q 96-100Q 100-104 (In INR Mn.) 5 Figures up to March 17 is as per I-GAAP and from thereon it is IND-AS Strong Fundamentals �� ENDEAvo:Us Enablers for Navigating through current unprecedented challenges STRONG PROVISION SUCCESSFUL TRACK ROBUST LIQUIDITY HIGHLY CAPITALISED BUFFER & PORTFOLIO RECORD POSITION QUALITY • Successfully withstood • Highly capitalised for • Consistent track record of • Cash and cash equivalent multiple headwinds over future growth. Sufficient high-quality portfolio with of INR 10,000 Mn. as on the years. capital to continue the Net Stage 3 Assets of 31st March 2021. growth momentum. 1.52% as on 31st March • Proven track record of 2021. • Sufficient liquidity to • Capital Adequacy of more than 25 years with cover opex and debt 26.85% ,Tier I Capital AUM CAGR of 37.25% and • High Covid-19 related liabilities for atleast next Adequacy of 24.81% & PAT CAGR of 41.97%. provisioning buffer of INR 12 months. Tier II Capital Adequacy of 562.30 Mn. which is 2.04% 1.39% of the on book • Positive across all Assets. cumulative ALM buckets. 6 Navigating COVID 19 pandemic (1/2) �� ENDEAvo:Us ASSETS AND PORTFOLIO QUALITY • The AUM stood at INR 53,724 Mn. a contraction of 9.95% over the corresponding period. However, the two quarters are not comparable due to the pandemic impact. The Gross Stage 3 Assets is 1.94% and Net Stage 3 Assets is 1.52% of AUM as on 31st March 2021. • The Company is in process of constantly assessing the present evolving situation, in order to make necessary amendments in the credit policy. In line of our dictum of extending credit where it is due and adopting a cautious approach the disbursement was INR 12,941 Mn. in the March quarter. • The Company total special COVID provision as on 31st March 2021 stands at INR 562.30 Mn. which is 1.39% of the on book assets of INR 40,498 Mn. • The collection efficiency for the March quarter was around 95% which is very close to pre COVID levels. • During the year, to relieve COVID-19 pandemic related stress, the Company has invoked resolution plans for 425 eligible MSME borrowers (Including Assigned Portfolio) amounting to INR 150.13 Mn. based on the parameters laid down in accordance with the resolution policy approved by the Board of Directors of the Company and in accordance with the guidelines issued by the RBI on 6 August 2020. for the year ended 31 March 2021. CAPITAL AND LIQUIDITY MANAGEMENT • Company’s Capital adequacy remained strong at 26.85% with Tier I Capital of 24.81% and Tier II Capital of 2.04%. The Company has adequate capital and financial resources to fuel its future growth. • As on 31st March 2021, the company had liquidity buffer of around INR 10,000 Mn. and unutilised Cash Credit facility of around INR 3,250 Mn. In addition the company has sanction on hand to the tune of INR 10,000 Mn. in the form of Term loan, NCD and Direct assignment. • Company also assessed its structural liquidity for the period ended 31st March 2021 and based on the assessment there is no negative impact on liquidity and the cash flow in all the cumulative buckets remains positive. Company has also stress tested its liquidity model and is comfortably placed to meet its repayment obligations for the entire year. 7 Navigating COVID 19 pandemic (2/2) �� ENDEAvo:Us OPERATIONAL MANAGEMENT • Currently , all our 99 branches are operational with adequate staffing to be scaled up gradually depending upon the situation. • Company uses banking platform for 100% of its disbursement and collections. The use of banking platform ensured seamless Collection operations during the lockdown. • On cost monitoring, the company has taken various initiatives to enhance the efficiency of the employees, cutting on advertisement, travelling and other related expenses. The company is also taking steps to move more towards variable based cost structure. EMPLOYEES • Reskilling and training of Employees. • Daily basis Health advisory as well as regular monitoring of temperatures of employees. • Regular sanitizing of office premises, as well compulsory sanitizing of all individuals entering the office premises. • Availability of Doctor on call. 8 Diversified product offerings presenting significant �� ENDEAvo:Us growth opportunities MAS focuses on serving the underserved credit needs of mid and low income group segments Micro-Enterprise INR 29,705 Mn.  Loans of up to INR 300,000 to Micro-Enterprises which primarily include retailers, traders, small manufacturers and service providers Loans AUM as of Mar 31 , 2021  Tenure up to 36 months; Average ticket size in Q4 FY21 – INR 35,917 INR 18,724 Mn.  Loans of up to INR 50 Mn. to SMEs which primarily include manufacturers, SME Loans distributors, dealers and service providers engaged in various industries AUM as of Mar 31, 2021  SME loans include working capital loans, loans for machinery and loans to purchase Industrial Sheds.  Tenure up to 60 months; Average ticket size in Q4 FY21 – INR 3.47 Mn. Two Wheeler INR 3,267 Mn.  Two-wheeler loans to our customers, which primarily include farmers, self- employed and salaried individuals and professionals Loans AUM as of Mar 31, 2021  Tenure up to 36 months; Average ticket size in Q4 FY21 – INR 50,312 Commercial Vehicle INR 2,029 Mn.  Loans of up to INR 700,000 for the purchase of new and used CVs to small road transporters, used cars to small traders and manufactures and (CV) Loans AUM as of Mar 31, 2021 tractors to the persons engaged in Agricultural activities  Tenure up to 60 months; Average ticket size in Q4 FY21 – INR 2,47,676 9 AUM by Product Category �� ENDEAvo:Us AUM by Product Category (INR Mn.) Segment Performance Micro-Enterprise loans(MEL) SME loans 2-Wheeler loans Commercial Vehicle loans Mar -21 vs Mar-20 -9.95% 59,663 1,547 53,384 4,003 53,724 18.33 % 1,582 2,029 4,654 3,267 Micro-Enterprise loans (MEL) 17,740 13,505 18,724 5.55 % SME loans 36,374 18.38 33,643 % 29,705 2-Wheeler loans 31.17% Mar-19 Mar-20 Mar-21 Commercial Vehicle loans CAGR : 0.32% In line of our dictum of extending credit where it is due and adopting a cautious approach towards fresh disbursement because of current pandemic situation resulting in contraction of AUM. 10 Liability Management �� ENDEAvo:Us SOURCES OF FUND BORROWING COST OF BORROWING (COB)* as on 31st March 2021 36,606 DIRECT ASSIGNMENT 8.86% 9.32% 9.10% 9.10% 8.75% 31,227 29% 25,632 CASH CREDIT 32% NON-CONVERTIBLE DEBENTURES 7% SUB DEBT Mar-19 Mar-20 Mar-21 1% FY19 FY20 FY21 Q4 FY20 Q4 FY21 TERM LOAN (In INR Mn.) *Quarterly figures have been annualized. 31% • The composition of our liability mix ensures healthy ALM and well diverse resource mix. • The Company withstood the litmus test very successfully during this most challenging period. – A testimony to its very efficient liability management. • Capital adequacy ratio, as on 31st March 2021 is 26.85% against regulatory norms of 15%. Tier I capital is 24.81% as against requirement of 10%. Tier II capital is just 2.04% which will increase from time to time depending on the requirement and also as a source of structural liquidity to strengthen ALM. • Around 75% of the portfolio is MSME loans which qualifies as Priority Sector Lending. Over the years we have maintained around 35% to 40% of AUM as off book through Direct assignment transactions. It is with door to door maturity and without recourse to the company. This further strengthens the liability management. The Direct Assignment sanction on hand is around INR 8,000 Mn. • The total Cash credit limit available to the company is INR 17.95 Bn. spread across 14 banks. The utilization level is maintained at 65% - 70% of the total Cash Credit Facility, ensuring sufficient liquidity on hand. • Leverage Ratio on balance sheet works out to be 3.12 times and going forward plan is to maintain the leverage at optimum level. 11 Going Forward �- ENDEAVO�S ASSET CREATION  To anchor to our belief that, growth along with quality is the key to enhance the shareholders’ value.  Anticipated growth for the next five years to be in the range of 20% - 30% with an understanding of recalibrating it depending on the macro situation, prioritising asset quality and profitability, thereby maintaining healthy ROA and ROCE.  We will continue serving the informal LIG and MIG class of customers spread over rural , semi urban and urban areas leveraging on our more than two decades of experience and striving to add value to our clients.  SME and Housing finance offers huge potential and company will maintain adequate focus as it is anticipated as one of the key growth drivers.  The distribution network of the current states in operation will be strengthened and endeavors will be to provide one of the most efficient financial services which we term as the Power of Distribution. The company will also explore the potentiality of entering into new geographies. • Strengthening and expanding the association with various channel partners will be one of the key focus areas. LIABILITY MANAGEMENT  Ideal debt resource mix, ensuring continuous flow of funds while maintaining optimum utilization of capital.  The assets created by the company is expected to generate good securitization/assignment demand thereby enabling the company to de-risk and maintain the off book portfolio. OPERATIONAL EXCELLENCE  Learning and Unlearning is a constant endeavor at MAS and will strive to improve the efficiency in all the areas of operation. 12 Strengthening the Fundamentals… � ENDEAVO�S Amortising the gain on assignment of loans over the tenure of the assets in place of booking it upfront Till June quarter, on derecognition of loans in its entirety upon assignment, as per Ind AS 109 'Financial Instruments', the Company has been recognising the difference between the carrying amount (measured at the date of derecognition) and the consideration received (including new asset obtained less any new liability assumed) as gain immediately in the profit or loss. In view of the Company, this inflates the income at the time of assignment and leads to reporting higher earnings per share, potentially higher dividend pay-out and improved capital adequacy ratio which does not reflect the faithful representation of the business model.. Further, after taking views from RBI circular no. RBI/2019-20/170 DOR (NBFC).CC.PD.No.109/22.10.106/2019-20 dated 13 March 2020 which states that the responsibility of preparing and ensuring fair presentation of the financial statements of a NBFC vests primarily with its Board of Directors, RBI circular no. DNBS. PD. No. 301/3.10.01/2012-13 dated 21 August 2012 and as per paragraph 19 of Ind AS 1 'Presentation of Financial Statements', management has concluded that the upfront booking of income which is to be received over underlying residual terms of the assigned portfolio would be so misleading that it would conflict with the objective of the financial statements set out in the Conceptual Framework for Financial Reporting under Ind AS and therefore to present a true and fair view of the Company’s financial position, financial performance and cash flows, the Company has departed from the requirements of Ind AS 109 during the year ended 31 March 2021. Further, NBFC industry body Finance Industry Development Council (the "association”) which is represented by more than 100 NBFCs, has made representation to Reserve Bank of India and National Financial Reporting Authority (‘NFRA’) whereby the said change in accounting policy has also been requested by the association itself. The association has requested RBI to allow the gain on direct assignment transactions to be amortized instead of recognition of the gain in the statement of profit and loss immediately upon assignment of the loans. Accordingly, the Company has changed its policy in the year ended 31 March 2021 for more transparent and fair representation of the financial results. As per the new policy, on derecognition of financial assets on account of direct assignment of loans, gain is recognized as “Unearned income on assigned loans” under the head other non-financial liabilities and amortized in the profit or loss over the underlying residual terms of the assigned portfolio. As per paragraph 14(b) of Ind AS 8 'Accounting Policies, Changes in Accounting Estimates and Errors', an entity may change its accounting policy if it results in the financial statements providing reliable and more relevant information about the effects of transactions, other events or conditions on the entity’s financial position, financial performance or cash flows. The Company believes that by following new policy, the above objective will be achieved. For detailed understanding, The detailed concept note has been attached to the below link: HTTPS://MAS.CO.IN/PDF/CONCEPT NOTE - ACCOUNTING TREATMENT OF GAIN ON ASSIGNMENT UNDER IND AS.PDF 13 ..................... � ENDEAVO�S FINANCIAL REVIEW 14 Key Highlights – Q4 FY21 �� ENDEAvo:Us ASSET UNDER MANAGEMENT (AUM) PROFIT AFTER TAX (PAT) RETURN ON AVG. NET WORTH* 9.95 53,724 % 365 5.88% 14.14 % INR Mn. (Mar - 20: INR 59,663 Mn.) INR Mn. (Q4 FY20: INR 345Mn.) RETURN ON AVG. BALANCE SHEET ASSETS* 3.01 NET INTEREST INCOME (NII) COST OF BORROWING (COB) % 781 22.77 RETURN ON AVG. AUM* % INR Mn. 8.75 (Q4 FY20: INR 1,011Mn.) 35 bps 2.80 % NII without effect of carrying cost % 863 14.60 % (Q4 FY20: 9.10%) INR Mn. OPERATING EXPENSE RATIO (OER)* CAPITALIZATION ASSIGNED TO 1.09% BANKS/FIS 31.65 % (FY20: 1.59%) TOTAL CRAR: 26.85% 24.62 % 1.58% TIER I CRAR : 24.81% . 0.62 % (Q4 FY20: 1.57%) of AUM TIER II CRAR : 2.04% Due to current pandemic situation : a) Adopted a cautious approach towards fresh disbursement leading to contraction in AUM. b) Maintained High level of liquidity leading to higher carrying cost. c) Created and maintained high Covid-19 related provisioning buffer * Figures have been annualized. 15 Financial Performance – Q4 FY21 �� ENDEAvo:Us ASSETS UNDER MANAGEMENT (AUM) NET WORTH CAGR 0.32% CAGR 16.52% -9.95% 19.54% 11726 59,663 53,384 53,724 9809 8637 Mar-19 Mar-20 Mar-21 Mar-19 Mar-20 Mar-21 ON & OFF BOOK AUM ON BOOK OFF BOOK 25% 39% 44% 75% 61% 56% Mar-19 Mar-20 Mar-21 (In INR Mn.) 16 Financial Performance – Q4 FY21 �� ENDEAvo:Us REVENUE NET INTEREST INCOME (NII)* CAGR 3.05% CAGR -3.69% 6,727 5,939 5,592 -14.60% 4005 -18.10% 3551 3294 -22.77% 1011 781 863 1,699 1,391 FY19 FY20 FY21 Q4 FY20 Q4 FY21 Q4 FY21 FY19 FY20 FY21 Q4 FY20 Q4 FY21 without effect of carrying cost OPERATING EXPENSE PROFIT AFTER TAX (PAT) CAGR -12.50% CAGR 0.07% 899 805 616 1666 -12.03% 1433 1435 5.88% 234 206 345 365 FY19 FY20 FY21 Q4 FY20 Q4 FY21 FY19 FY20 FY21 Q4 FY20 Q4 FY21 (In INR Mn.) *NII impacted due to contraction in AUM and maintaining high level of liquidity. 17 Financial Performance – Q4 FY21 �� ENDEAvo:Us RETURN ON AVG. BALANCE SHEET ASSETS RETURN ON AVG. AUM (ROAUM)* (ROTA)* 4.46% 3.02% 2.95% 4.02% 2.80% 2.53% 2.31% 2.94% 3.09% 3.01% FY19 FY20 FY21 Q4 FY20 Q4 FY21 FY19 FY20 FY21 Q4 FY20 Q4 FY21 RETURN ON AVG. NET WORTH (RONW)** 18.89% 19.30% 14.65% 15.16% 14.14% FY19 FY20 FY21 Q4 FY20 Q4 FY21 ** Networth considered without OCI * Figures have been annualized. 18 Financial Performance – Q4 FY21 �� ENDEAvo:Us Optimized cost structure OPERATING EXPENSE RATIO (OE RATIO)* OPERATING EXPENSE AS % OF NII 1.70% 26.36% 1.59% 1.57% 1.58% 22.67% 22.44% 23.15% 18.71% 1.09% FY19 FY20 FY21 Q4 FY20 Q4 FY21 FY19 FY20 FY21 Q4 FY20 Q4 FY21 Efficiently maintaining the quality of assets GROSS STAGE 3 ASSETS NET STAGE 3 ASSETS 1.94% 1.52% 1.39% 1.42% 1.14% 1.14% Mar-19 Mar-20 Mar-21 Mar-19 Mar-20 Mar-21 *Quarterly figures have been annualized. 19 Financial Performance – Q4 FY21 �� ENDEAvo:Us Strongly Capitalized DEBT – EQUITY RATIO (DER) CAPITAL ADEQUACY RATIO (CAR) 3.18 3.12 2.97 29.70% 26.86% 26.85% Mar-19 Mar-20 Mar-21 Mar-19 Mar-20 Mar-21 INTEREST COVERAGE RATIO (ICR) 2.08 1.84 1.82 1.73 1.67 Healthy Coverage FY19 FY20 FY21 Q4 FY20 Q4 FY21 20 Asset Under Management - Credit Quality �� ENDEAvo:Us ASSET UNDER MANAGEMENT- DPD 8.00% 6.00% 0.71% 1.59% 0.69% 1.01% 0.35% 1.00% 4.00% 0.41% 1.25% 1.18% 0.91% 1.22% 0.88% 2.00% 2.60% 1.75% 1.87% 0.00% Mar-19 Mar-20 Mar-21 1 – 30 DPD 31 – 60 DPD 61 – 90 DPD 91 –120 DPD > 120 DPD 21 Credit Quality � ENDEAVO�S (In INR Mn.) FY21 FY20 Particulars AUM Provision AUM Provision Stage 1 39060.66 130.40 31762.21 106.04 Stage 2 792.64 73.95 863.52 111.56 Stage 3 644.25 225.79 629.19 164.73 TOTAL ON BOOK 40497.54 430.14 33254.91 382.33 Assigned Portfolio 13226.87 N/A 26407.92 N/A TOTAL AUM 53724.41 59662.82 Particulars FY21 FY20 Gross Stage 1 And Stage 2 Assets As % Of On Book Assets 98.41% 98.11% Stage 1 & Stage 2 Assets (Standard Assets) Provisioning 0.51% 0.67% Gross Stage 3 Assets As % Of On Book Assets 1.59% 1.89% Stage 3 Assets Provisioning 35.05% 26.18% Net Stage 3 Assets As % Of On Book Assets 1.03% 1.40% Gross Stage 3 As % Of AUM 1.94% 1.42% Net Stage 3 As % Of AUM 1.52% 1.14% Note: (1) Stage 3 (>90 DPD Assets) on Assigned portfolio is INR 399.32 Mn. on 31st March 2021 and INR 217.30 Mn. on 31st March 2020 which has been taken into consideration while calculating Stage 3 As % Of AUM. (2) The company special COVID provisioning as on 31st March 2021 is INR 562.30 Mn. (Not netted off with gross assets in various stages) with which total provision amounts to around INR 992.44 Mn. (3) During the year, to relieve COVID-19 pandemic related stress, the Company has invoked resolution plans for 425 eligible MSME borrowers (Including Assigned Portfolio) amounting to INR 150.13 Mn. based on the parameters laid down in accordance with the resolution policy approved by the Board of Directors of the Company and in accordance with the guidelines issued by the RBI on 6 August 2020. for the year ended 31 March 2021. 22 Constantly maintaining quality portfolio �� ENDEAvo:Us Catalyst in growth of Entrepreneurs, not creating just borrowers STAGE 3 ASSETS 1.94% 2.00% 1.39% 1.42% 1.50% 1.52% 1.00% 1.14% 1.14% 0.50% 0.00% Mar-19 Mar-20 Mar-21 GROSS STAGE 3 ASSETS NET STAGE 3 ASSETS 23 Reputed Marquee FIIs and DIIs shareholders base �� ENDEAvo:Us Shareholding as on 31st March 2021 Marquee Non Promoter Shareholders MOTILAL PRIVATE EQUITY Mutual Fund AXIS MUTUAL FUND 8.81% IDFC MUTUAL FUND Trust TATA AIA LIFE INSURANCE 7.40% MOTILAL OSWAL MUTUAL FUND Foreign Portfolio ASK INVESTMENT MANAGERS PRIVATE LIMITED Investor 1.58% SCHRODER INTERNATIONAL SELECTION FUND INDIAN Others ( Including OPPORTUNITIES AIFs, Fis & Banks) Promoter and 3.19% INDIA EMERGING OPPORTUNITIES FUND LIMITED Promoter Group Individuals DIMENSIONAL FUND ADVISORS 73.60% 5.40% UNISUPER LIMITED AS TRUSTEE FOR UNISUPER 24 Financial Statement: FY19 – FY21 �� ENDEAvo:Us PROFIT & LOSS STATEMENT INR Mn. FY 2019 FY 2020 FY 2021 Total Revenue 5592 6727 5939 Expenses 3391 4446 4010 Finance Costs 2041 2722 2645 Operating Expense 805 899 616 Provisions and Loan Losses 545 825 749 Profit Before Tax 2201 2282 1929 Profit After Tax 1433 1666 1435 Other comprehensive income -66 47 75 Total comprehensive income 1367 1713 1510 BALANCE SHEET STATEMENT INR Mn. Mar-19 Mar-20 Mar-21 ASSETS Financial assets 36435 44906 50847 Loans 31807 33485 38051 other financial assets 4628 11422 12795 Non-financial assets 763 811 929 Total assets 37197 45718 51776 LIABILITIES Financial liabilities 27494 34946 39339 Debt securities (including Subordinate Debt) 598 599 3740 Borrowings (other than debt securities) 19598 25202 29198 Other Financial Liabilities 7297 9145 6401 Non-financial liabilities 1067 963 711 Total liabilities 28561 35909 40050 EQUITY Equity share capital 547 547 547 Other equity 8090 9262 11179 Total equity 8637 9809 11726 Total liabilities and equity 37197 45718 51776 25 MAS Rural Housing & Mortgage Finance Limited (MRHMFL) Subsidiary 26 About MRHMFL MAS is targeting affordable housing finance segment through its subsidiary • MAS Rural Housing & Mortgage Finance Limited (“MAS Housing” or MRHMFL) is a non-deposit taking , NHB registered, housing finance institution. It was incorporated in 2008 and headquartered in Ahmedabad, Gujarat • MRHMFL provides loans for purchase of new and old houses, construction of houses on owned plots, home improvement loans and loans for purchase and construction of commercial property. It also extend loans to developers for construction of affordable housing projects • MRHMFL provides housing loans in rural and semi-urban areas of Gujarat, Maharashtra, Rajasthan and Madhya Pradesh • With its continued focus on the rural and semi-urban segments, the company has 69 branches and have sourcing arrangements with 44 intermediaries – typically project developers and property agents Housing Loans  Loans of up to INR 5 Mn. for residential and INR 10 Mn. for commercial  Provides housing loans to customers, who are primarily salaried and self-employed individuals and loans to developers for construction of affordable housing project  Tenure up to 300 months for residential and 144 months for commercial  Average Ticket size in Q4 FY21– INR 8,34,228  AUM as of 31st March 2021– INR 2,849 Mn. 27 Navigating COVID 19 pandemic ASSETS AND PORTFOLIO QUALITY • The AUM stood at INR 2,849 Mn. a contraction of 0.58% over the corresponding period. However, the two quarters are not comparable due to the pandemic impact. The Gross Stage 3 Assets is 0.37% and Net Stage 3 Assets is 0.26% of AUM as on 31st March 2021. • The Company is in process of constantly assessing the present evolving situation, in order to make necessary amendments in the credit policy. In line of our dictum of extending credit where it is due and adopting a cautious approach the disbursement was INR 237.20 Mn. In March quarter. • The total special COVID provision as on 31st March 2021 stands at INR 33.12 Mn. which is around 1.25% of the on book assets of INR 2,643.66 Mn. • The collection efficiency for the March quarter was around 96% which is very close to pre COVID levels. CAPITAL AND LIQUIDITY MANAGEMENT • Company’s Capital adequacy remained strong at 43.45% with Tier I Capital of 35.12% and Tier II Capital of 8.33%. The Company has adequate capital and financial resources to grow its business operations. • As on 31st March 2021, the company had liquidity buffer of around INR 225 Mn. and unutilised Cash Credit facility of INR 170 Mn. In addition the company has sanction on hand to the tune of INR 250 Mn. in the form of Term loan. • Company also assessed its structural liquidity for the period ended 31st March 2021 and based on the assessment there is no negative impact on liquidity and the cash flow in all the cumulative buckets remains positive. Company has also stress tested its liquidity model and is comfortably placed to meet its repayment obligations for the entire year. 28 Financial Performance – Q4 FY21 ASSETS UNDER MANAGEMENT (AUM) NET WORTH CAGR 2.68% CAGR 7.92% 5.72% -0.58% 539 510 2,865 2,849 463 2,702 Mar-19 Mar-20 Mar-21 Mar-19 Mar-20 Mar-21 BORROWING GROSS STAGE 3 ASSETS & NET STAGE 3 ASSETS GROSS STAGE 3 ASSETS NET STAGE 3 ASSETS 2,546 2,225 2,269 0.36% 0.37% 0.34% 0.26% 0.25% 0.26% Mar-19 Mar-20 Mar-21 Mar-19 Mar-20 Mar-21 (In INR Mn.) 29 Financial Performance – Q4 FY21 REVENUE NET INTEREST INCOME (NII) CAGR 4.65% CAGR 4.18% 140 142 130 384 353 325 6.11% -5.45% 36 38 91 86 FY19 FY20 FY21 Q4 FY20 Q4 FY21 FY19 FY20 FY21 Q4 FY20 Q4 FY21 PROFIT BEFORE TAX (PBT)* PROFIT AFTER TAX (PAT)* 43 38 22 3 -12 2 -9 FY19 FY20 FY21 Q4 FY20 Q4 FY21 FY19 FY20 FY21 Q4 FY20 Q4 FY21 (In INR Mn.) *The company has made special COVID provision of INR 20.22 Mn. in Q4 FY20 and INR 8.61 Mn. in Q4 FY21 respectively. The special COVID provision made in FY 20-21 INR is 12.90 Mn.. 30 Liability Management • The composition of our liability mix ensures healthy ALM and well diverse resource mix. Sources of Fund as on 31st March 2021 • The Liability management was tested last year and the company could successfully demonstrate its capability of efficient liability management CASH CREDIT, • Capital adequacy ratio, as on 31st March 2021 is 43.45% against regulatory norms of NHB 0.09% DIRECT 12%. Tier I capital is 35.12%. Tier II capital is just 8.33% which will increase from time to REFINANCE, ASSIGNMENT, time depending on the requirement and also as a source of structural liquidity to 6.66% 8.52% strengthen ALM. • Around 65% of the on book portfolio qualifies as priority sector lending for banks as on lending to HFCs. We keep on raising term loans from banks both priority sector and Non priority sector lending with a average maturity of 5 -7 years. • We keep on availing refinance from NHB which is currently 6.66% of our total borrowing mix. This help us to raise matching tenure loans at very competitive rates. The company is working very hard to enhance NHB refinance share in our total liability management. • The total Cash credit limit available to the company is INR 170 Mn.. The company utilizes the fund as per the requirement , ensuring sufficient liquidity on hand. TERM LOAN, 84.73% • Around 100% of the housing loan portfolio qualifies as priority sector lending for banks if the same is assigned to banks. Increase in direct assignment of portfolio over a period of time will enable efficient ALM and will bring about capital efficiency. 31 Credit Quality FY21 FY20 Particulars (In INR Mn.) AUM Provision AUM Provision Stage 1 2,470.90 2.20 2,487.95 3.48 Stage 2 162.91 8.44 101.37 5.44 Stage 3 9.84 2.93 9.27 2.56 TOTAL ON BOOK 2,643.66 13.57 2,598.59 11.48 Assigned Portfolio 205.29 N/A 266.85 N/A TOTAL AUM 2,848.95 2,865.44 Particulars FY21 FY20 Stage 1 And Stage 2 Assets As % Of On Book Assets 99.63% 99.64% Stage 1 And Stage 2 Assets ( Standard Assets) Provisioning 0.40% 0.34% Stage 3 As % Of On Book Assets 0.37% 0.36% Stage 3 Assets Provisioning 29.83% 27.56% Net Stage 3 As % Of On Book Assets 0.26% 0.26% Stage 3 As % Of AUM 0.37% 0.34% Net Stage 3 As % Of AUM 0.26% 0.25% Note: (1) Stage 3 (>90 DPD Assets) on Assigned portfolio is INR 0.57 Mn. on 31st March 2021,and INR 0.51 Mn. on 31st March 2020 which has been taken into consideration while calculating Stage 3 As % Of AUM. (2) The company special COVID provisioning as on 31st March 2021 is INR 33.12 Mn. (Not netted off with gross assets in various stages) with which total provision amounts to around INR 46.70 Mn. The Special COVID provision done during the quarter is INR 8.61 Mn. 32 ..................... � ENDEAVO�S UNDERSTANDING MAS 33 About MAS �- ENDEAVO�S � � ........ VISION MISSION BELIEF To be one of the most efficient To constantly endeavor, to attain excellence and “We have miles to go & Promises to keep……” distributors of financial services and create a very wide Financial distribution network and “Together we can and we will” create value on a very large scale. to be catalyst; in providing the most efficient financial services which we term as financial inclusion. LIABILITY MANAGEMENT OPERATIONAL EXCELLENCE S  Self Propelling Business Model – Capital requirement Key Enablers: L met predominantly from internal accruals  Focusing on extending credit where it is due A 03 T  Healthy ALM  HR Policy N  Right mix of resources  Being a Learning Organization E  Planning and maintaining Cost Efficiency 02 M A D ASSET CREATION N U  Dictum: Credit Where It Is Due F  Product Mix 001  Adding Value  Unique Distribution Model 34 Unique and Robust Distribution Network �� ENDEAvo:Us Through NBFC Partners (1/3) AIM & OUR UNDERSTANDING Efficient last mile delivery of credit Value chain approach has proven to be Better quality of intermediation with Revenue sharing model ensures scalability across its product range namely MEL, the most potent one to solve advantage of adequate capital base of the relationships where the operational SME, 2 Wheeler and Commercial informality because of proximity to the along with better understanding of the cost and credit cost to be borne by the Vehicle Loans end borrowers operations and demography partner NBFCs is considered. The partnership is with full recourse to the partner KEY CRITERIA FOR Promoters Operational Financial Product Alignment Growth Strategy Capital Base STARTING RELATIONSHIP Evaluation Excellence Performance CREDIT ASSESSMENT Pre-Engagement Due Diligence Transaction Level Due Diligence Periodical Deep Diving • Promoters’ Domain Expertise • Alignment of Credit screen for various • Continuous engagement in order to improve • Strategic alignment products their Systems & Operations to ensure the • Range of Products • Creation of portfolio quality of portfolio and compliance • On site system and Operational Setup • On site audit of the portfolio Hypothecated 35 Unique and Robust Distribution Network �� ENDEAvo:Us Through NBFC Partners (2/3) IMPACT MAS NBFCs Borrowers Eco-System • Widens its network while maintaining • Value addition in improving their • Creates an all-round enabling • Catalyst in Efficient last mile delivery a relatively lower risk profile systems and operations which helps situation of extending credit where it of credit • Establishes knowledge partnerships in scalability and Sustainability of is due by extending credit with deep and increase its local market business penetration and understanding knowledge • Gets vital liability support due to our understanding of the retail products Started with 1 NBFC in 2008, currently having Huge potential to grow along with these NBFCs partners across our relationship with more than 100 such NBFCs product range for efficient last mile delivery of credit having virtual presence Pan India. TRACK RECORD GOING FORWARD 360° view for scalability and sustainability of relationship in the form of : Have grown at a CAGR of around 30% in last five a) Providing Liability Solution years across our product range with immaculate b) Product Development & Strengthening their system and Operations track record. c) Capital Advisory 36 Sharpening the learning curve(3/3) �� ENDEAVO�S The learning curve is further strengthened: CREDIT ASSESSMENT Continuous strengthening of due diligence and audit process - both pre and post disbursement. Our proven track record of Further strengthening the field due more than INR 14,000 Crore diligence. cumulative disbursement CONSTANT MONITORING with total loss less than 0.5% over a decade across Close indulgence with partner NBFCs both on the system as well as credit part. various tough periods Additional diligence of financial accounting assures our confidence on with necessary deep diving also to be the the model. part of monitoring to preempt any irregularities. EVALUATION MATRIX Further strengthening the evaluation and the exposure matrix for all the NBFCs partners. 37 Robust and Comprehensive Credit Assessment & �� ENDEAvo:Us Risk Management Framework MAS aims to give credit where it is due with the dictum of adherence and adaptability Robust credit assessment Credit assessment process overview by Product Micro-Enterprise Loans SME Loans • Analysis of business potential and • Business operating history is end use, cash flows and model required from minimum 1 year to 5 Income Profile (business to have cash profit for the years depending on loan size previous 3 years) • 50-70% of turnover to be reflected in • Requires a guarantor or co-applicant current account Asset according to the assessment of the • Eligibility criteria is based on applicant’s profile Profile Stability turnover, debt/equity ratio and net Qualitative & worth on a case-to-case basis Quantitative Checks Two-wheeler Loans Commercial Vehicle Loans • At least one property (residential or • Requires vehicle hypothecation and business) should be owned by the insurance cover End use applicant or jointly residing family • Analysis of income, experience, and Track Record members of loan business stability requirements • For a student applicant, a co- depending on whether the applicant applicant is compulsory is a first time user, first time owner, fleet operator or a captive user 38 Team MAS �- ENDEAVO�S EXPERIENCED PROMOTER  Mr. Kamlesh Chimanlal Gandhi, aged 55 years, is the Founder, Chairman and Managing Director of MAS since inception.  He visualized the opportunities in the retail financial services very early and has been leading the strategic initiatives and the execution team at MAS.  He has close to 30 years of experience in the financial services sector.  Under his leadership the company grew very consistently at CAGR of more than 40% over all these years. Mr. Kamlesh Chimanlal Gandhi Chairman & MD  Late Mr. Mukesh Chimanlal Gandhi, was a Co-founder, whole-time Director - Finance MAS Financial Services Limited. He was associated with the Company from May 25, 1995 till Jan 19, 2021.  He was designated as the Director (Finance) and Chief Financial Officer of the Company on March 20, 2015. He held bachelor’s and Master’s degrees in commerce from Gujarat University  He had over 30 years of experience in the financial services sector, with the Company  He was also the chairman of the Gujarat Finance Company Association and a director of the Finance Industry Development Council.  He played an important role in bringing the company to its present level from a humble beginning in the year 1995, Late Mr. Mukesh Chimanlal Gandhi based on very strong fundamentals. He was filled with positivity, enthusiasm, zeal, kindness and pragmatism The Company has immensely benefitted from his vision and vigilance.  Team MAS remain committed to it’s vision of excellence through endeavours. 39 Team MAS �� ENDEAVO�S EMINENT DIRECTORS Mrs. Darshana Saumil Pandya Mr. Bala Bhaskaran Mr. Chetan Ramniklal Shah Mr. Umesh Rajanikant Shah Mrs. Daksha Niranjan Shah Executive Director & CEO Independent Director Independent Director Independent Director Independent Director  Darshana Saumil Pandya, aged 47  He has been associated with the  He has been associated with the  He has been associated with the  She is a business graduate from years, is an executive Director and Company as a Director since Company since June 2008 and as Company as an independent Indian Institute of Management Chief Executive Officer of MAS November 1995 and as an an independent Director since April Director since December 2016 (IIM), Ahmedabad, specializing in Financial. She has been associated independent Director since April 2014  He is a Chartered Accountant Finance and Marketing and also a with the Company since June 1, 2014  He holds bachelor’s degrees in  He has more than 35 years of student of Economics and 1996, and as an executive Director  He is a management graduate with commerce and law (general) from experience in the diverse fields Statistics. since December 23, 2016 two decades of experience in the Gujarat University connected with Finance,  She worked as a Programme  She holds a bachelor’s degree in consultancy and financial sector.  He is also a qualified chartered Accounting, Auditing and Taxation Director of Vikas Centre for commerce from Gujarat University  He has a number of management accountant registered with the  He also has 5 years hands-on Development and Friends of  She has over 20 years of consultancy inputs from his rich Institute of Chartered Accountants experience of working in an NBFC Women's World Banking by serving experience in the financial service experience of India and building capacity of more than sector  He has done his engineering from  He has over 33 years of experience 80 Microfinance Organizations all IIT-Madras, MBA from IIM- in the financial services sector and over India. Bangalore and CFA from ICFAI has in the past worked with the  She worked as Managing Director Natpur Co-operative Bank as the of Pahal Financial Services Pvt. Ltd Manager – Finance from 2011 to 2014. At present she is the Managing Director of Altura Financial Services Ltd since 2014. CORE Consisting of more than 35 employees being EXECUTION Consisting of more than 1500 employees who with MAS since inception and inclusion of works along with the core team towards TEAM lateral talents who have proven their TEAM accomplishing the company’s Mission and capability, dedication and loyalty. Vision. 40 Major events and milestones �� ENDEAvo:Us 2008 2018 1995 - Acquired second and - Listing of Equity Shares on 2020 2016 third round of capital 2012 2014 Bombay Stock Exchange & infusion worth INR 435 National Stock Exchange O c f w a i o n n n i m t d a h i n n m M T c c e w e o ic n r o o r p c o p - o e w - e d r r h a a r t e e t i e o i t o l n a e n i , r l s M F r - e M F s n lo p O . a e a a t c n e t n d i d d v I e t N I h l C y R e I C 4 h I 0 o V 0 u e s M n in t n u g . r e fr , o m R f c o o a f e u p c IN r i e t t i R a h v l e 6 r i d o n 5 u f 0 t u n h M s d e io n o n . f S p C in a u C r s r P v e c S a h c h o a C e n s a e l d p d d a i t b r 5 a y y 0 l d F % e M a O l - u ‘ - S B R p ta g a a r b n is a l k e e d d l e o o d s a u u n t t b l o o r o a o ‘ r I t k N d i n i D n g a A w t ’ e a w s i th - i M - n R R f o u e a t i c s i s l i e a e o i l d v n O e f o d r s f e w a s IN a d h l d R c i a t 3 i p o 5 i 0 n ta a M l l o c n f a . p I f N r it o R a m l - E - B n C A n d o . U e o m M a n p v a c l o e r u c o t o e r s s d n s e s 2 o d 5 l i I t d N h a Y R t e e 6 a d 0 r of Enterprise loans finance subsidiary from DEG debentures of INR 400 Mn. 2,330 Mn. through an IPO basis Received first round Disbursement and - AUM crossed INR 50 Bn. Listing of NCDs - Raised Subordinate - AUM crossed INR 30 Bn. of capital infusion of on Bombay Stock AUM crossed INR Debentures of INR 200 Mn. - Bank loan rating upgraded to INR 65 Mn. from Exchange 10 Bn. - Motilal Oswal infused “Acuité AA -” with Stable Bellwether Micro - AUM crossed INR 20 Bn. capital of INR 1,000 Mn. outlook and Short-term rating Fund 2013 2011 assigned as Acuité A1+ 2015 2017 2006 2019 41 <Ifie (J'ower of (J)istri6ution REGISTERED OFFICE MAS Financial Services Limited 6, Ground Floor, Narayan Chambers, Ashram Road, Ahmedabad-380009 www.mas.co.in INVESTOR CONTACT Mr. Ankit Jain Mr. Nishant Vyas Chief Financial Officer Investor Relations Manager 079-41106682 079-41106551 ankit_jain@mas.co.in nishant_vyas@mas.co.in