Arohan Annual Report FY 20-21

RESOURCES AND LIQUIDITY Your Company being a Systemically Important Non-Deposit Accepting NBFC is subject to the capital adequacy requirements prescribed by the Reserve Bank of India. The Company was required to maintain a minimum Capital to Risk Asset Ratio (CRAR) of 15% as prescribed under the Non-Banking Financial Company-Micro Finance Institutions (Reserve Bank) Directions, 2016 (as amended from time to time) based on total capital to risk weighted assets. Your Company maintained a CRAR ratio higher than the RBI prescribed ratio, which is 24.27% as on March 31, 2021. The Company has an outstanding on secured and unsecured borrowings of INR 4,415 crores at the end of Financial Year 2020-21. RBI GUIDELINES & SRO Your Company is registered with Reserve Bank of India (RBI), as a non-deposit accepting NBFC (“NBFC-ND-SI”) under Section 45-IA of the RBI Act, 1934. As per Non-Banking Finance Companies RBI Directions, 1998, the Directors hereby report that the Company did not accept any public deposits during the year and did not have any public deposits outstanding at the end of the year. The Company being the member of MFIN, follows the Code of Conduct as prescribed by the SRO. The Company also complies with the standards and rules as prescribed by the above SRO from time to time. CREDIT RATING The Company’s Financial discipline and prudence is reflected in the strong credit ratings ascribed by rating agencies as given as on March 31, 2021: - Instrument Rating Outlook Bank Instruments A- Stable Non-Convertible Debentures A- Stable PARTICULARS OF EMPLOYEES The ratio of the remuneration of each director to the median employee’s remuneration and other details in terms of Section 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, have been annexed herewith as Annexure III to the Directors’ Report. The statement containing particulars of employees as required under Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in a separate annexure forming part of the Directors’ Report. In terms of Section 136 of the Companies Act, 2013, theDirectors’ Report and theAccounts are being sent to the Members excluding the aforesaid annexure and the same is open for inspection at the Registered Office of the Company. A copy of the statement may be obtained by the Members, by writing to the Company Secretary of the Company. CORPORATE GOVERNANCE The Company strives to adopt and adhere to the highest standards of Corporate Governance principles and best practices. With this objective the Company has put in place various policies, systems and processes to achieve transparency, high levels of business ethics and compliance with applicable laws. The Board & other Sub Committee of Board ensures the high standards of transparency and accountability in all its activities. The best management practices and a high level of integrity in decision making are followed to ensure long term creation of value for all the stakeholders. A complete Corporate Governance Report is attached with the Directors’ Report and annexed as Annexure IV. EMPLOYEE STOCK OPTION PLAN (ESOP) During the year, the Company amended its ESOP Trust Deed and its ESOP Plan 2010 & 2018 respectively in order to keep the amended trust deed align with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014. The Company also implemented a new employee stock option plan, Arohan ESOP 2021, which was approved by the members on their meeting held on February 8, 2021. Further, Stock Options are granted to eligible employees and KMPs of the Company, under the Arohan ESOP Plans as may be decided by the Nomination & Remuneration Committee. Annual Report | 2020-2021 88