Arohan Financial Services Limited | Annual Report 2021-22

Financial Analysis During FY2021-22, Arohan recorded its total asset and gross loan portfolio at INR 5,229 Cr and INR 4,122 Cr respectively. Arohan closed the year with the following key financial results: Total Revenue stands at INR 920 Cr. Pre Provisions Profit before Taxes stands at INR 219 Cr shows strong business model fundamentals. Sub Debt infusion of ~INR 225 Cr by new investors was significant with increased Tier II Capital base and accordingly improved CRAR at 34.58%. Net worth remains intact despite post impairment losses. While Arohan’s branch network grew from 737 in FY2020-21 to 740 in FY2021-22, it’s employee strength grew by 6%, from 6,790 in FY2020-21 to7,160 (excluding245 apprentice) in FY2021-22. The company ensured a comfortable fund position throughout the year to support its business. As on March 2022, the borrowing outstanding was close to INR 4,120 Cr. An analysis of the organization’s financial performance for theFinancial Year 2021-22, as compared to the previous year, is given below: Income Statement Analysis Revenue has de-grown by 9% from FY2020-21 to FY2021-22 which was mainly due to muted growth in portfolio contributing to lower income. Break-up of Revenue for FY 2022 Expenditure Interest expenses have decreased by 14% y-o-y in line with decrease in borrowings. With the employee count increasing from 6,790 in FY2020-21 to 7,160 in FY2021-22, employee costs increased from INR 189 Cr in FY2020- 21 to INR 210 Cr in FY2021-22 showing 11% increase over the previous year. The administrative costs have increased by 31% from the previous year. Key Ratios The Opex ratio increased primarily due to a muted business growth and base impact. The weighted average interest charged to customers was 20.05% in FY2021-22 against 20.45% in the previous financial year. Ratios FY 2020-21 FY 2021-22 Variance Yield 20.68% 19.64% -5.03% Opex 5.46% 6.84% 25.27% CRAR 24.27% 34.58% 42.48% Weighted Average Interest Charged 20.45% 20.05% -1.96% Leverage 4.61 4.03 -12.58% Interest Income Fee Income Other Income 5% 2% 93% 64 Annual Report | 2021-2022