Interest Expended

Interest expended increased by 56.74% from % 1,210.52 million in Fiscal 2018 to = 1,897.33 million in Fiscal 2019, primarily
due to an increase in interest on deposits from % 244.27 million in Fiscal 2018 to = 829.14 million in Fiscal 2019 on account of
increase in deposits. Deposits increased from 2 7,495.22 million in Fiscal 2018 to = 15,934.25 million in Fiscal 2019 on account
of increase in Banking Outlets and addition of new customers. Other interest expense also increased by 35.84% from 2 666.26
million in Fiscal 2018 to = 905.03 million in Fiscal 2019 on account of increase in refinance borrowings obtained from
development financial institutions. This was partially offset by a decrease in interest on RBI/ inter-bank borrowings by 45.61%
from = 299.99 million in Fiscal 2018 to = 163.16 million in Fiscal 2019 due to decrease in inter-bank borrowings primarily due
to repayment of grandfathered borrowings during Fiscal 2019.

Operating Expenses

Operating expenses increased by 45.19% from % 1,313.77 million in Fiscal 2018 to = 1,907.43 million in Fiscal 2019 primarily
due to an increase in payments to and provisions for employees from % 872.24 million in Fiscal 2018 to 2 1,266.73 million in
Fiscal 2019 on account of increase in employees from 2,883 employees as of March 31, 2018 to 3,931 employees as of March
31, 2019. Rent, taxes and lighting increased by 67.34% from % 74.28 million in Fiscal 2018 to 2 124.30 million in Fiscal 2019
primarily due to increase in Banking Outlets from 240 as of March 31, 2018 to 382 as of March 31, 2019. There was also an
increase in advertisement and publicity expenses by 976.23% from 2 2.23 million in Fiscal 2018 to 224.00 million in Fiscal
2019, primarily to due to increase in brand awareness campaigns. Repairs and maintenance expenses increased by 38.88% from
% 122.76 million in Fiscal 2018 to = 170.49 million in Fiscal 2019, on account of increase in expenditure towards our core
banking solutions, and upgradation of information technology. In addition, other expenditure, primarily comprising of
professional fees, increased by 25.26% from 2 133.35 million in Fiscal 2018 to 2167.03 million in Fiscal 2019, on account of
increase in payment to outsourced vendors including payments for increased volume, increase in payment to credit bureaus,
payment to consultants and commission to business correspondents.

Provisions and Contingencies

Provisions and contingencies increased by 106.79% from % 610.05 million in Fiscal 2018 to % 1,261.55 million in Fiscal 2019,
primarily due to a significant increase in provision for current taxes from = 107.23 million in Fiscal 2018 to = 623.35 million
in Fiscal 2019 on account of higher profit before tax. In addition, other provisions significantly increased from % 27.59 million
in Fiscal 2018 to % 292.16 million in Fiscal 2019 due to the creation of a floating provision in Fiscal 2019, i.e. a provision of
1.5% on outstanding standard inclusive finance (JLG) portfolio. This increase was partially offset by deferred tax credit which
increased from 2 43.79 million in Fiscal 2018 to = 100.09 million in Fiscal 2019. Write-off of advances also decreased by
21.57% from 427.93 million in Fiscal 2018 to % 335.62 million in Fiscal 2019, primarily due to higher write-offs in Fiscal
2018 on account of demonetisation.

Profit

For the reasons discussed above, net profit for the year was = 114.92 million in Fiscal 2018 compared to = 903.98 million in
Fiscal 2019.

FINANCIAL CONDITION
Assets

The table below sets out the principal components of our assets as of the dates indicated:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of March 31, As of December 31,
2018 2019 2020 2019 [2020
(@million)

Cash and balances with the Reserve Bank of India 308.22 483.04 605.27| 741.65] 889.02
Balance with banks and money at call and short notice 1,763.40| __2,28058| 7,770.71 | 1083.18 | 7442.57
Investments 3,113.43] __6,643.93[ _ 8,081.98 | 8928.26 [15114.41
‘Advances 15,686.78| _26,795.84| _ 35,319.44 [33609.03 [37822.63
Fixed assets 135.41 189.77 387.30 | 307.36] 433.58
Other assets 552.40| 1,218.87 1,480.52 | 1222.09 | 1801.88
Total 21,559.64| _37,612.03| 53,645.22 [45,891.57 (63,504.09

 

 

 

Total assets increased by 38.38% from 2 45,891.57 million as of December 31, 2019 to % 63,504.09 million as of December
31, 2020. This increase was primarily due to an increase in balances with banks and money at call and short notice by 587.15%
from % 1,083.18 million as of December 31, 2019 to 2 7,442.57 million as of December 31, 2020 and investments by 69.29%
from 8,928.26 million as of December 31, 2019 to 215,114.41 million as of December 31, 2020.

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