FTIL’S SETTLEMENT PROPOSAL

FOR THE RESOLUTION OF NSEL

CRISIS

Agenda

• Motive behind settlement proposal

• Payment timeline

• Advantages of ‘without prejudice’ proposal

• Brokers involvement is must

• Recovery from NSEL Defaulters

• Recovery and Distribution process

• If No solution provided by brokers or trading clients

• FTIL’s future course of action

Motive behind settlement proposal

• The “without prejudice” proposal by FTIL towards resolution of the crisis warrants that all parties viz., brokers, trading clients, government and others participate with a resolution oriented mindset

The Proposal for Settlement:

• The settlement proposed will provide relief to 12,735 (100%) Trading Clients

• The source of funds:

• a. Settlement of the dues of the Trading Clients with an additional payment of Rs.2,679.50 crores, i.e. about 50% of the total outstanding claim of Rs. 4875 crores.

• b. First round of payments made to be equally by NSEL&BROKERS, as under:

• • NSEL: Rs. 500 crores* • • Brokers: Rs. 500 crores• • Sub-Total: Rs.1000 crores• • Total Payment: Rs.820 crores (for immediate payment). • *Rs.180 crores already paid through FTIL loan + Rs. 320 crores to be brought in

Proposal for payments

• The amount of Rs.820 crores will be used to make payments to Trading Clients at B and C Trading Clients at D may be paid through amounts recovered from the Defaulters. The proposal for payments is, as under:

Payment timeline

• As per the proposal 94% of the trading clients can receive 50% to 100% of their claims, approximately within 3-4 weeks of all legal formalities being completed

• The balance 6% trading clients can receive their claims approximately within 3-4 months from amounts recovered from Defaulters

Advantages of ‘without prejudice’

proposal

• The structure of the “without prejudice” proposal envisages an escalating waterfall pattern –

• The Small Claimants (below Rs.10 lakhs, being 7,053 in number) constituting 55.38% will receive 100% of their claim

• The mid-level claimants (between Rs. 10 lakhs and Rs. 1 crore, being 4901 in number) constituting 38.48% will receive 50% of their claim

• This aggregates to 11,954 in number constituting 93.86% of the total claimants.

• The PSUs will receive 100% of their claim.

• High Net-worth trading clients (781 in number) constituting 6% of the total claimants will receive 50% of their claim.

Brokers involvement is must

• The settlement proposal mandates participation of brokers for the exercise to be successful as the privity of contract of trading clients of NSEL are with their respective brokers

• Trading clients traded on NSEL exchange platform through their brokers under a Client-Broker agreement and the first point of contact/grievance for trading clients are their respective brokers

Recovery from NSEL Defaulters

• The investigating agencies have established the money trail to 22 defaulting members of NSEL and it is imperative that they honourtheir ‘pay-in’ obligations towards NSEL

• While 8 defaulters account for Rs 4,823 crore of the pay-in, constituting 86% of the outstanding, Rs 513 crore worth decrees have been obtained against 5 Defaulters by NSEL from the Bombay High Court

• Eleven defaulters have admitted to liabilities worth Rs 2,095 crorebefore various courts and fora. ED has seized assets worth Rs 700 crbelonging to the defaulters. Defaulters’ assets worth around Rs5,000 cr of has been attached by the EoW under the MPID Act, 1999

Recovery and Distribution process

• With the support of the government and other regulatory agencies brokers & trading clients under the supervision of High Court appointed Committee (HCC), recovery from the “defaulters” can be further expedited

• The without prejudice proposal assumes that all trading clients who are approximately 13,000 in number are genuine. NSEL is in the process of collecting data from trading clients to ascertain their genuineness

If No solution provided by brokers or

trading clients

• Despite this proposal, if there are trading clients and Brokers who do not come forward to a solution, then their only agenda is to kill FTIL and the interest of FTIL’s 63,000+ shareholders

FTIL’s future course of action

• FTIL has stated that would continue defending all the allegations in the court of law and will do so in the interest of its 63,000+ shareholders if the resolution is not acceptable to all parties

• FTIL will use all the legal means at its disposal to protect and create value for its 63,0000+ shareholders by implementing its Founder’s Vision for FTIL 3.0 - DigitalIndia@2025 to create / enable 108 ‘Digital Disruptors’ in 10 core industry segments