6. SAVAGE_ADB Inclusive Business Presentation v3

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    HOWTOFUNDANINCLUSIVEBUSINESSSEPTEMBER 2013

    1The views expressed in this presentation are the views of the authors and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board ofGovernors, or the governments they represent. ADB does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequence of their

    use. The countries listed in this paper do not imply any view on ADB's part as to sovereignty or independent status or necessarily conform to ADB's terminology.

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    Agenda

    1 Introduction To Unitus Capital

    2 How UC helps companies grow

    3 Client Examples: Janalakshmi Financial Services/ENCASH

    5 Conclusion

    4 Equity investments in Inclusive Businesses

    2

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    Institutional Investors Impact Funds Family Offices /

    Foundations High Net Worth

    Individuals

    GovernmentInstitutions

    GlobalInvestors

    Debt & Equity CapitalMarkets

    Structured Products Private Placements Mergers & Acquisitions Buy-side Advisory

    Work

    Microfinance Microinsurance Technology Renewable Energy Healthcare Education

    Water & wastemanagement

    Agriculture

    SocialBusinesses

    UNITUS CAPITAL

    3

    Unitus Capital connects social businesses with the global capital markets

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    Demonstrated ability to deliverinnovativetransaction structures and increase ourclients access to capital and attractive

    investment opportunities

    Raised ~$900 mn for 40 clients across emerging sectors likemicrofinance/rural banks, healthcare, education, renewable energy

    Expansive geographic presence focused onhigh growth and emerging economies

    Mandates in India, the Philippines, Pakistan, Singapore andChina

    Mandates in Philippines, USA, Africa, China, India, Pakistan andAustralia

    Strong pipeline of significant transactions Current pipeline of signed mandates totals over$250 mn

    for ~20 clients

    Strong investor relationships with a uniquemix of mainstream and social investors

    Coverage of over 500 institutional investor groups

    Talented core team of 18 professionals withstrong credentials

    Alma mater includes leading institutions like Harvard BusinessSchool, MIT, Oxford, Duke University, ESCP-EAP, IIM

    Ahmedabad, ISB, IIM Bangalore, MDI, IIT Kanpur, IIT Guwahati

    Top tierinvestment banking and private equityexpertise

    Talent pool from TVS Capital, World Bank, Acumen Fund, MorganStanley, Citigroup, UBS, Nomura, Lehman Brothers, KPMG,

    Deloitte, SBI Capital Markets and Kotak

    4

    UNITUS CAPITAL

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    1. Establish short list and approach

    2. Drive development of marketing documentation

    Co-ordinate information requirements and arrange

    site visits.

    4. Manage due diligence

    Co-ordinate closely with lawyers on all commercial

    issues, and push through key contractual wish list.

    5. Assist negotiation and final documentation

    Negotiate, agree and outline terms subject to duediligence, investors internal approval and final

    documentation

    3. Determine heads of terms

    5

    Throughout the process, UC commits to ensuring that the client has complete and up-to-date decision making information

    A TRUE PARTNERSHIP THROUGHTHE ENTIRE TRANSACTION

    Geoff WoolleyCo-Chairman

    Narayan RamachandranCo-Chairman

    Senior advisory panel

    Core transaction team

    Equity placement expertise + Execution support

    Execution Management

    Eric SavageCo-Founder and

    PresidentAbhijit Ray

    Co-Founder and MD

    Project Lead

    Gauravjeet SinghDirector

    Amit Kumar RathiVice President

    CLIENT

    Develop marketing documentation in collaborationwith the client, including teaser document,information memorandum, managementpresentation, process letter, etc.

    Establish formal dialogue with a willing investorcandidates

    Kylie CharltonCo-Founder & MD

    Ann ShortChief OperatingOfficer

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    82,161

    193,150

    300,847

    695,974

    12 34

    65

    177

    -

    20

    40

    60

    80

    100

    120

    140

    160

    180

    200

    0

    100,000

    200,000

    300,000

    400,000

    500,000

    600,000

    700,000

    800,000

    2010 2011 2012 2013

    Borrowers Gross Portfolio outstanding (in USD million)

    CLIENT PROFILEJANALAKSHMI FINANCIAL SERVICES

    UC has helped Janalakshmi Financial Services, a Bangalore based microfinance institution,raise $90 mm in equity and $80 mm in debt over the last four years.

    Janalakshmi provides savings, loans, pensions, insurance and other critical products totheir clients in urban India.

    UC took an early bet on a very promising MFI with a visionary founder, strong technology and great management.

    6

    CAGR: 114%

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    CLIENT PROFILE ENCASH

    Headquarter Manila, Philippines

    Business

    Provides retail ATMs, ATM process outsourcing and software services to

    Philippine thrift, cooperative and rural banks. Enables them to provide their rural customers access to a wider range offinancial products and services.

    Equity Raised USD 3 million (February 2012)

    Investors Incofin Investment Management, ResponsAbility

    Impact

    The funds raised helped ENCASH to substantially increase their ATM network byapproximately 850 ATMs to about 1200 ATMs.Provided much needed financial services to an estimated additional 2.5 mm rural

    Filipinos.First equity transaction in the Philippines for Incofin.

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    Equity Vs. Debt Financing

    Advantages: Frees up working capital, pristine

    financial history not needed, access to investorsnetworks, typically doesnt have rigidly definedrepayment amount or interest payments

    Disadvantages: Investors entitled to a share of theprofits, and can have a say in companymanagement, therefore finding the right investor iskey

    Equity Financing:

    Selling a portionof your business

    to investorsthrough a share

    offering

    Advantages: Retain ownership of business, buildsbusiness credit, interest payments are tax deductible

    Disadvantages: Monthly payments drain workingcapital, putting assets up as collateral, credit ratingsuffers if payment obligations arent kept, high debt =high risk to investors for future equity raises

    Debt Financing:

    Getting a loanfrom a financialinstitution

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    Key components of a business plan

    Executive Summary Essentials about the company in 1-2

    pages

    Company Description Management Overview & Products andServices

    Industry Overview Defining the addressable market andcompetitors

    Strategy & Roadmap Marketing, sales, expansion plans, andtargets and benchmarks

    Competition Overview of the competitive dynamics ofthe business

    Financials Income Statement, Balance Sheet,Cash Flow, Projections to showprofitability

    Funding How Equity/Debt funds will be allocated

    Annexure Supporting Documents, charts, etc.

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    EQUITY INVESTMENTSIN INCLUSIVE BUSINNESSWhat Investor are looking for:

    Growth Investors are seeking capital appreciation through growth

    Transparency High Level of transparency provides greater confidence to the investor community. Governance- Good governance is essential for the benefit of all stakeholders, especially investors.

    Founder/s and senior management team A reputed promoter group and a seasoned management team

    Profitability: A company that is profitable or has a clear path to profitability will have considerable leverage overinvestors

    Technology: The level of technological symbiosis with the business is an important factor, as it directly relates tothe efficiency of the business.

    Potential Investors in the Inclusive Business space:

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    Social and financial performance metrics

    Equity Internal Rate of Return (IRR) Gross Margin EBITDA PAT Valuation Metrics

    Price/Earnings Ratio Price/Book Ratio Price/Revenue Ratio

    Financial Metrics

    Social MetricsA Consensus is still forming

    Counting something and making it count IRIS Double/Triple Bottom Line PPI (Grameen Foundation)

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    UNITUS CAPITAL (UC) IS THE WORLDS LEADING SOCIAL INVESTMENT BANK

    Named as the #1 investment bank in Asia in 2012 by social investment deal volume.

    Unitus Capital is a highly trusted advisory in the social impact space.

    We have a world class team with deep experience in PE, VC and banking.

    Ourmission is to act as a catalyst between the investors and the social enterprises.

    UC would be happy to explore helping any inclusive business that isconsidering accessing foreign equity.

    UNITUS CAPITAL

    Unitus Capitals main focus is the BoP pop