Asset Receivable Management (ARM)

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Where we start - Wisdom of Recovery

Order

Clearance Complexity

Chaos

ComplexityClearance

Chaos

Emergence of New Order

Order

Why ARM - Our Philosophy

ARM MAKES OR BREAKS THE

BUSINESS VIABILITY

What is our Motive - Vision Statement

TO GET BACK ALL OUR LEGITIMATE DUES IN TIME

What We Do? - Salient To SREI Largest financier in CE segment Niche player in CE segment, present in all the related field like project advisory

services, project execution, equipment rental Having livid relationship with all the major players and customers in construction

and mining segment Relationship Platform: Each Customer is tagged onto a Relationship Manager & an

ARM Officer Portfolio being managed

SEP Retail /SME Strategic T & S TotalLive Contracts 4998 7756 4534 177 17465

Matured Contracts 434 4125 1897 4 6460Asset Cost (Rs. In Crs.) 1534 3901 14710 776 20921Portfolio Size ( Rs. Cr. ) 828 1550 7380 582 10340

No. of 3+ Contracts 193 857 144 0 11943+ Contract Exposure

(Rs. In Crs.) 36 142 159 0 337No. of Critical Accounts

No. of Assets Seized During the FY 2009 - 2010

Release (Out of the total Seizure)

Sold (Out of the Seized Last Year)

1199

310

479

948

ARM StructureGroup ARM Head

Head Strategic & Core Recovery Head SME & Retail Recovery Head SME Critical Accounts, Asset Management & Paralegal

Head Loss Recovery

Collection Executive

Operations

RRH’s (9)

Collection Executives

SEP Business

Home LoanSREU

CRM

Central Repo Team & Execution Cell

Repo & Resale Ops

Paralegal Operations

Sec 138

Yard Management

Repo Administration

ARM Operation

South

North

East

West

Operations

M.I.S. & Portfolio Analysis

RH’s

How we do? - Process & Path of Recovery

SOFT COLLECTION Relationship Management > Constant Touch

> Exchanging Information> Creating Value Proposition

Receivable Management > Bucketing ( Soft, Hard & Critical)

HARD COLLECTION Asset Management > Repossessions

> Bringing the Asset from the Customer domain to

Our domain

Opportunity Management > Find an alternate option

Ultimate Recourse > Legal action

What & When we do? - Receivables Management

Bucketing of Receivables

Soft Bucket Hard Bucket Critical ( 0-3) ( 3-5) (5 Plus & Rescheduled

cases)

What & When we do? - Receivables Management… Contd.

Soft Bucket (0 to 3)• Relationship Manager Prime mover in this bucket• Tele calling, • Written Communication• Regular follow up • PDC deposit• Knowing the billing cycle • Asset Inspection

Hard Bucket (3 to 5)• Joint monitoring by ARM team • Objective is to help in resolution and collection of monthly installments on schedule• Highlight early default cases and take immediate corrective action• Provide requisite logistics support to respective RMs

Critical (5 Plus & Rescheduled cases > 3 OD)• Reducing the provisioning in this segment adds to our bottom line. • Prime responsibility of ARM team : to work like passionate soldiers • Unwritten directive : solving these cases take precedence for all• Regular Follow up• Negotiation• Reschedulement• Surrender/ Repossession• Resale• Legal Tools• Loss Claim

SREI Mantra for Asset Financing

SREILender V/S Asset Provider

CustomerOwner V/S Asset Manager

Asset is the Key Mitigant All other Credit enhancement tools follow later

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ADC or the Asset Dominated Cycle

SourcingAsset RiskCustomer’s equityService Backup

UsabilityCash flowsContracts in handViabilityRepayments

ExitNew PurchaseRefinanceRestructure

Asset is the Core Mitigant in our finance proposals

Collection / Legal Terminologies

Bucket DPD IRR / Yield / Subvention Billing Collections NPA Matured NPA Rock Case ODC CBC PLR / SBR Roll forward & Rollback Repossession / Surrender Insurance Claim: Theft or Accident PDC, SPDC & Non PDC Time Matured Accounts

Non Starter Closure / Foreclosure Reschedulement PDD HANT PTP Triggers Critical RM Value Arbitration/ Sec 9 / Sec 17 Sec 138 Sec 156 complaint Consumer Forum, Loss Claims ,

Money Suits Execution of Award / Decree

ARM Team – SWOT

Team having good knowledge of the market and products

Top Management having first hand practical experience and ready to lead by example

Experienced ARM team at all levels across the country

Group Support system like GOI, Quippo Relationship based model for holistic

performance incl. collections

Poor PDD position especially RC Copies

Difficult logistics Thinly distributed portfolio with low

PDC penetration Undue reliance on HO support Indecisiveness & timely escalations Carrying the dead wood of bad Cases Inconsistency

Environmental issues and regional imbalances

Recovery Blues : hostile media, aggressive judiciary, unfavorable Govt. authorities

Third party sales and untraceable assets

Low resale prices due to large no. of seized assets in the market

Probability of high attrition Large no. of repos could result in

heavy losses NPAs having a spiraling trend

Huge number of matured cases : Huge potential base for ODC

Convert large repo stock into a business proposition by way of financing options

A formalized Asset Management strategy to help in resale of seized assets

Huge mound of loss cases with good recovery potential

Thank You