Arohan Annual Report FY 20-21

Ratios FY 19-20 FY 20-21 Variance Yield 21.24% 20.68% -2.64% Opex 5.14% 5.46% 6.25% CRAR 24.80% 24.27% -2.14% Weighted average interest charged qualifying assets 20.82% 20.45% -1.78% Leverage 4.36 4.61 5.74% BALANCE SHEET ANALYSIS Loan Portfolio In a year which was marked by consolidation at Arohan, the Company had a 4% de-growth in Gross Loan Portfolio from FY2019-20 and touched the INR 4,648 Cr mark. This is due to the Company witnessing muted disbursements due to the various challenges posed by the COVID-19 pandemic and movement restrictions due to lockdowns across geographies mostly during the first half of the financial year. Net Worth With sufficient Tier-I and Tier-II raised during FY2020-21, Arohanmanaged to retain its Networth at FY2019-20 levels, despite a challenging year marked by consolidation in the Company’s operations. MANAGING LIQUIDITY DURING THE YEAR With the rapid change in the macro-environment during FY 2020-21, managing liquidity became key to managing the overall business at Arohan. With changes in the behaviour of underlying assets and liabilities, Arohan maintained strong liquidity through diverse borrowing relationships and access to multiple sources of capital. While Arohan granted moratorium to all its customers, the Company did not receive the same relief from all of its lenders but manages to get this benefit from a few lenders thus, avoiding a negative asset liability mismatch in the Company’s books. Arohan struck a fine balance between carrying high liquidity in the books and taking the drag of negative carry on such liquid assets. With additional provisions due to stress on financial, Arohan prudently opted for liquidity over-negative carry of funds. Arohan’s Cash and Cash Equivalent as of March 31, 2021 was INR 1,158 Cr compared to INR 689 Cr as of March 31, 2020. Additionally, as of March 31, 2021, Arohan’s Liquidity Coverage Ratio (LCR) was 684%. Raising Funds During the Year Post the COVID-19 induced lockdown in 2020, lenders’ appetite went down significantly, such that non-recourse and partial recourse transactions in the form of assignment and securitization structures had no takers in the market. Accordingly, Arohan did not execute any Securitisation or Assignment transactions during FY 2020-21. Moreover, access to traditional sources of capital also became a challenge since most financial institutions decided to wait and watch on how collection numbers would unwind post the unlocking. Instruments used to raise funds include Secured and Non-Secured Term Loans, Secured and Non-Secured Non- Convertible Debentures, Cash Credit Facilities, External Commercial Borrowings, Masala Bonds Net Worth INR in Crs Annual Report | 2020-2021 50