Arohan Annual Report FY 20-21

During FY 2020-21, Arohan recorded its total asset and gross portfolio at INR 5,481 Cr and INR 4,648 Cr respectively. Arohan closed the year with the following key financial results: • Total Revenue stood at INR 1,014 Cr. Despite a difficult year impacted by COVID-19, there has been a total revenue growth of 8.47% in FY21 as compared to FY 2019-20. • Pre-Provision Operating Profit Margin stood at 28.22% in FY 2020-21 • Pre-Provisions Profit before Taxes stood at INR 286 Cr, thus demonstrating strong business fundamentals. • In a challenging external situation, the Management took additional provisions to weather the storm, ending with INR 710 Cr. of provisions, translating to approximately 15.31% of the Company’s Business Assets. • Equity infusion of about INR 168 Cr by existing and new investors showed the strong backing of the investor community, willing to provide Arohan with confidence capital during a challenging external environment. • As on March 31, 2021 total borrowing outstanding for Arohan was close to INR 4,415 Cr. The Company held surplus liquidity of INR 1,158 Cr to help mitigate any liquidity related risks during and post the pandemic. • With Tier-I and Tier-II Capital raised over FY2020-21, the CRAR held steady at 24.27%, which is well above the regulatory requirement of 15%. • The Company’s Net worth remained intact despite post impairment losses in FY2020-21. Arohan’s Branch network grew from 711 in FY 2019-20 to 737 in FY 2020-21, while its employee strength grew by 8.26%, from 6,272 in FY 2019- 20 to 6,790 in FY 2020-21. The company ensured a comfortable financial performance throughout the year to support business. An analysis of the organisation’s financial performance for the Financial Year 2020-21, as compared to the previous year, is given below: INCOME STATEMENT ANALYSIS Revenue Revenue has grown by 8.47% from FY 2019-20 to FY 2020-21, mainly due to the growth in interest income contributing to the overall revenue growth for the Company. Expenditure Interest expenses have increased by 22% YoY, with increase in borrowings. With the employee count increasing from 6,272 in FY 2019-20 to 6,790 in FY 2020-21, employee costs increased by 17% over the previous year. Administrative costs have decreased marginally by 2% from the previous year. Key Ratios Overall Opex ratio has increased, primarily due to muted business growth in a challenging external environment. The weighted average interest charged to customers was in FY 2020-21 against % in FY 2019-20. Break-up of Revenue for FY 2020-21 Management Discussion & Analysis 49