nbhcindia

1. GLOBOIL INDIA 2014 COLLATERIZED TRADE FINANCE UNDER SECURED WAREHOUSING www.nbhcindia.com

2. The Indian Commodity Eco-system • Agricultural Production increasing YoY. Oilseeds production expected to decline to 13.30MMT from 14.20MMT last year • Key growth drivers ranging from application of technology, agronomy practices usage of chemicals & fertilizers , seeds, improved irrigation , etc. • India continues to be a major importer of edible oil • Food inflation, though moderating is cause of worry to the common man and the government • Storage demand in agri-commodities though seasonal , evidences a secular growth trend • Utilization levels as well as storage opportunity depict untapped opportunity • Collateral Management in post-harvest credit directly co-related to WHR financing • WHR financing estimated to grow to Rs 70,000 cr+ in 2018, from current level of Rs 25,000 cr on the back of increasing Policy impetus ( like WDRA, increasing focus on agri-lending ), advent of credible collateral management industry • Improved and enhanced warehousing space , Regulatory measures , gradual improvement and traction in investments , participation of private sector , endeavour to imbibe, global standards , etc. are enablers of structured finance in secured warehouses • Few service providers have any focus in efficient commodity management , commodity quality testing & certification as well as in commodity care & protection * Source: Company / Industry / Consultants Data

3. Basis of Structured Finance Managing the above risks entails thorough knowledge of : All the risks across the eco-system : recognize, identify, manage, control , mitigate The eco-system : Commodities, warehousing , crop patterns, eco-system participants Demand-supply dynamics Insurance as a risk mitigant The documentary aspects The Regulatory and Administrative measures

4. Crucial link in the Commodity-value chain Structured Trade in Secured warehouse is key to a seamless value chain Risk Management is the enabling catalyst for trade- farm gate to processor to wholesaler Enables enhancing market share , reduce costs, mitigate risks across the value chain The Commodity Ecosystem

5. Warehousing and Collateralized Trade Finance Benefits to the Lenders Benefits to the eco-system • Access to credit working capital and post-harvest liquidity • Easy liquidity services against inventory • Storage management facilities either at door step or dedicated warehouses • Supplier liquidity ensures uninterrupted supply flow on account of credit constraints • Ability to negotiate payment and regulate payment tenors • Liquidity matched to the seasonality of the business • Definable and un-encumbered Collateral • Real-time valuation and Mark to Market for margin calls • Assets with short term horizon < 1 year • Relatively non-NPA as risk of quantity and quality borne by professional Collateral Manager • Ability to spread risks amongst larger cross section of stake holders, commodities and eco-system • Expedient disposal of commodities in case of default Key features of a Professional Collateral Manager Brings invaluable and immense fiduciary trust within the eco-system Well capitalized and completely integrated service provider, ensures commitment and high quality of services Integrated bouquet of services ensure mitigation of risks across segments Price dissemination and commodity health care services , ensure value and quantity remains intact during storage

6. 2 1 3 WR QC WR WR QC QC QC 4 5 Rs. 6 Warehouse receipt funding…Model-1 • 6 Commodity Document Finance Farm Produce Quality Certificate Warehouse Certificate Farmer/Trader Bank NBHC warehouse Quality Testing Lab

7. Process NBHC Flow – Model 1

8. 8 Warehouse Receipt Funding : Model 2

9. 9 Process Flow – Model 2

10. Requisites for successful WRF System • Regulatory and Policy enablers provide acceptability for commodity based funding, and also reduces the cost to the recipients of credit • Facilitators with requisite capabilities mitigate inherent risks via various mitigants like operational control, insurance, legal agreements, etc. • Facilitators act like connectors between the lender and borrower, enabling the lender to fund the commodities under storage, and at the same time creating accessibility for the borrower FINANCIAL INSTITUTION STORAGE & SUPPORT INFRASTRUCTURE BORROWERS Acceptance Ability FACILITATORS ENABLERS Accessibility Affordability Source: In-house , various USAID, UNCTAD WORLD BANK studies, etc

11. NBHC Cecure-CollateralManagement Solutions Cecure Risk management based on • Policies, • Infrastructure & • Operations Cecure’s Risk Management is a 4-step cyclic process. • Risk Identification • Risk Measurement • Risk Management & • Risk Mitigation Cecure puts emphasis on methodical and proactive risk management • Audit & Surveillance • ISO 9001 & ISO 22000 complied practices • Secure documentation • Insurance and Fidelity policies • Collateral Intelligence • In-house commodity profiling and protection services Edge to clients • Secure credit portfolio on commodities • Enhances volume of business and productivity • Enables spreading of risk and overall mitigation Services -NBHC Cecure provides collateral management services based on structured warehouse accreditation, risk prevention & mitigation. Assurance of quality and quantity of the commodities is provided to both depositor and lender.

12. Efficiency in cost and operations globally benchmarked commodity management practices Liquidity Enabled by liquidity Commodities benefit from easy conditions Reward Get proper remuneration of produce as per quality Meet Strict compliances standards Reach Larger segment of farmers to benefit from MSP including cost &efficiency Quality Mitigates concern and enhances value during commodity storage Informed Better decision making NBHC Services 12 Supply Chain Management Storage & Bulk Handling Collateral Management Testing & Certification Audit & Accreditation MSP Procurement Preservation & Protection Reducing cost & inefficiency Reducing liquidity risk Reducing market adoption risk Reducing credit risk Reducing Pest risk Reducing compliance risk Reducing cost & wastage NBHC Platform Brands NBHC has a unique service basket offering customized end-to-end commodity management solutions fostering better utilization of resources Each service is a part of supply chain as well as an independent service offering

13. NBHC Fact-file FACT FILE Recent Presence 23 states (in which NBHC has worked) Sales & admin offices 59 Warehousing Storage capacity (All types ) 2.15 + mn MT Storage space (All types ) 12.90 + mnsq.ft Storage facilities (All types ) 1320+ Storage facilities (Lease Franchisee Owned ) 570+ Collateral Management Commodity under CM (cumulative) 25.68+ mn MT Storage facilities under CM (cumulative) 9,000+ Geographical Spread 550+ locations CM & SP Funding facilitated (cumulative) Rs 43,000 + crs Assets under CM Management (cumulative) Rs61,000 + crs No. of Banks / Financial Inst. Associated with 43 No. of warehouse receipts issued (cumulative) 2,18,700+ Expertise in number of Commodities 160+ Quality Assurance & Pest Management QA Laboratories / facilities 35+ (200+ mobile labs) Number of Commodities tested 160+ Pest Management Services 15 states Accreditations 23 licenses Commodity Fumigation (cumulative) 33.33 mn MT Human Resources Sales, admin and operations support staff 690+ Supervisory outsourced staff 930+ Warehouses Security personnel 920+

14. The NBHC Advantage… Company Profile • Corporate entity • Well established • Strong pedigree • Sound financials • Recognized brands • Able Management team Expanse & Expertise Services • 550+ locations, cumulatively at 9000+ • 170+ districts • 18 states • 1320+ storage facilities under management • Capacity under management 2.15 mn MT • 43 Banks in association with, for CM • 160+ commodities • 59 sales & admin offices • Customer centric • Integrated commodity management • solutions • Proficient at all stages of supply • chain • Services across the eco-system Customized Services Platform On-line sampling and assaying • Rake handling & surveying • Onsite and offsite services • Stackwise accounting • Clientwise stack management • Real time issuance of WHR • Export & Import consignments • Dry and Cold Storage environments • Agricultural commodities & • Non-Agricultural commodities • Assorted grades and varieties • Insurance – Claims management • pan –India operations • Commodity disposal solutions Warehouse Management Elaborate Risk Management Strong SOPS Accreditation as per NBHC standards • Selection • Accreditation • Management • Inward & Outward SOPS • Commodity assaying • Lock & Key arrangements • Personnel deployment • Stack sealing • Client stock demarcation • Commodity Care • Sample preservation • Warehouse Risk Matrix • Commodity assaying and valuation • Audit and Surveillance • Client selection and acceptability • Market Intellicom • Trade Intelligence • Assorted triggers for pre-emptive risk • reporting • Insurance enablement

15. Our Promoters • India Value Fund Advisors established in 1999 • One of the largest and most experienced Private Equity teams in India • India-oriented fund with focus on Indian Companies • Raised four funds with a corpus of US$ 1.2 billion from ~30 global top end institutional investors • IVFA management philosophy underscores the deep commitment it carries to all its stake holders- the Investor, the Entrepreneur and the Management • Fund’s Evolution Trail • Corporate structure • Managing Partner plays a key pivotal role • Investment Managers involved in transaction & acquisitions • Business Managers involved in enhancing the businesses • www.ivfa.com

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