Arohan Annual Report FY 20-21

Board of Director’s Report (INR in Lakhs ) As at 31 March 2021 As at 31 March 2020 Particulars Portfolio Outstanding Provision as per ECL Provisions as a % of Portfolio Outstanding Portfolio outstanding Provision as per ECL Provisions as a % of Portfolio Outstanding Standard assets 4,11,489 35,874 8.72% 4,42,287 7,568 1.71% Non- performing assets 52,096 35,120 67.41% 11,184 11,184 100.00% Total 4,63,585 70,994 15.31% 4,53,471 18,752 4.14% The overall AUM, as on March 31, 2021, reported at INR 4,64,800 Lakhs with a Net NPA of 3.96%. Revenue grown by 8.5% despite a challenging year of business. Subdue business had led to marginal growth of revenue, higher provisions led to negative Total Other Comprehensive Income (TOCI). The Company improve gender balance from about 6% in April’20 to over 10.88% during the year end. Recovery CSR (R-CSR) team was strengthened all across, a separate and independent Credit function was established and a Deputy Business Head structure for Operations was brought in. The Company also launched the meraArohan suite of IT modules and the apnaBazaar app for cross sell segment. As a key achievement, during the year under review, the Company won several noteworthy awards: 4 SKOCH Orders-Of-Merit awards 20th ICSI National Award for Excellence in Corporate Governance, 2020 in the Unlisted Segment, Emerging Category Best Chief Financial Officer (CFO) awards Governance Professional of the year, 2020 to the Company Secretary Quality recertification of the Internal Audit function The Company has also been certified as a Great Places to Work by the Great Place To Work® Institute and has been ranked 86th among the 100 Best Companies to Work for in India 2020 and has been identified in the list of top 25 best work places in the BFSI sector. The rank was upgraded to 65th position. CHANGE IN THE NATURE OF BUSINESS Last year, the Company decided to hive off its MSME business undertaking as a going concern basis to Ashv Finance Limited (erstwhile known as Jain Sons Finlease Limited) on a slump sale basis for a lump sum purchase consideration without assigning value to each asset and liability of the Business, as contemplated under the provisions of Section 50B read with Section 2(42C) of the Income Tax Act 1961. However, because of the COVID 19 pandemic and lockdown thereafter, the transaction was deferred in the preceding financial year. Thus, in the current financial year 2020-21 the Company hived off its MSME business to Ashv Finance Limited (erstwhile known as Jain Sons Finlease Limited) under the terms and conditions stated in the Business Transfer Agreement dated February 10, 2021. Since the transaction with Ashv Finance Limited (erstwhile known as Jain Sons Finlease Limited), was a related party transaction for the Company, the same was approved by the Shareholders of the Company at their meeting dated February 08, 2021 as per Rule 15 of the Companies (Meeting of Board and its Powers) Rules, 2014. CAPITAL INFUSION During the year, the Company has preferentially allotted 18,50,000 Equity Shares to Arohan ESOP Trust, 55,30,329 Equity Shares to ASK Financial Holding Private Limited, 4,76,190 Equity Shares to Kiran Vyapar Limited, 9,52,380 Equity Shares to Aavishkaar Venture Management Services Private Limited, and 10,47,430 Equity Shares to Mr. Rajesh Sachdeva on a private placement basis. Post allotment of Equity Shares as aforesaid, the issued, subscribed and paid-up share capital of the Company stands at INR 1,201,773,030 (Rupees One Hundred and Twenty Crores Seventeen Lakhs Seventy Three Thousand And Thirty Only) comprising of 120,177,303 (Twelve Crores one Lakh Seventy Seven Thousand Three Hundred And Three Only) Equity Shares of INR 10 each as on March 31, 2021. The net worth of the Company as on March 31, 2021 was INR 95,863 Lakhs. During the year, the Company has not raised share capital in any other manner except as mentioned above. During the year, the Company has also issued 9,750 Secured, Redeemable Non-Convertible Debentures at a face value of INR 10,00,000 aggregating to INR 97,500 Lakhs on a private placement basis to multiple identified Qualified Institutional Buyers (QIBs) and Foreign Institutional Investors (FIIs). 83