Annual Report Summary
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The document is the 32nd Annual Report for the Financial Year 2022-23 of Hero FinCorp Limited, a Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India (RBI). The report includes a tribute to Dr. Brijmohan Lall Munjal, Founder & Chairman Emeritus, Hero Group, who passed away. The theme of the report is "Confidence to make it happen." The report includes key highlights, chairman's message, joint MD & CEO's message, information about the company's foundation, board of directors, CSR report, a journey timeline for the company, growth at a glance, board committees, corporate information, board's report, and financial statements (both standalone and consolidated).
Key Highlights:
- Hero FinCorp has a team of more than 12,000 employees (both on and off roll).
- The company has a strong credit rating of AA+.
- It boasts the fastest network rollout, reaching over 2,000 locations.
- Assets Under Management (AUM) reached INR 41,497 Cr.
- The company focuses on financial inclusion, with 81% of customers being new to credit.
- Hero FinCorp has over 4,100 touch points.
- The company has impacted 10 million lives.
- A loan is disbursed every 10 seconds.
Chairman's Message (Dr. Pawan Munjal):
- Celebrates the 10th Anniversary of Hero Fin-Corp, highlighting growth from 2013 to 2023.
- The loan book has grown to INR 41,497 Cr., up 26% from the year before.
- Touched over 10 million lives through more than 4100 touchpoints.
- A loan is disbursed every 10 seconds.
- Recorded its highest ever Profit After Tax (PAT) of INR 457 Cr. (post CCPS adjustment) in FY-23.
- Focuses on operational excellence and digital transformation.
- Awarded the Great Place to Work Certification for the 6th consecutive year and recognized among the Top 25 BFSI players in the country.
- FY-24 focus will be on building granular and diversified portfolios as it enables the dreams of every Indian.
Jt. MD & CEO's Message (Abhimanyu Munjal):
- The economic outlook is promising, supported by government focus on infrastructure, digital transformation, and economic reforms.
- The company's loan book reached INR 41,497 Cr., 26% higher than the year before, with a 30% compounded annual growth rate over the past 5 years.
- Highest-ever profit after tax (PAT) of INR 457 Cr. in FY-23 (post-CCPS adjustment).
- Emphasis on digital efforts, innovation, risk management, and compliance.
- The company will adopt a three-pronged (dot) COM methodology pegged on Credit Cost Reduction, OpEx Optimization, and Margin Expansion.
- Gratitude expressed to stakeholders including the Government, Regulators, Investors, Partners, Customers, and Employees.
CSR Initiatives (FY 2022-23):
- Raman Kant Munjal Scholarships: Scholarship initiative for meritorious students from humble backgrounds. In FY 23, 55 students were provided with the scholarships. Since its inception, the scholarships have positively impacted the lives of approximately 150 students.
- DhanCharcha: A financial literacy campaign in rural areas, reaching 1.52 lakh beneficiaries across 270 villages. 30,000 beneficiaries enrolled in government schemes.
- Hunar: Aims to skill youth in financial job roles. 250 youth were trained in FY-23, with 40% securing placements.
- Pathakshala: Initiative to upskill teachers. In FY 23, 250 teachers were trained across 6 locations.
- Saarthi: A career counselling program that benefitted 21,713 students from 146 schools across 14 states.
- Miscellaneous initiatives included a BeMySanta Initiative, Computer Lab setup, and a Tree Plantation Drive (500+ trees planted). Hygiene Kit Distribution.
- Thematic areas of intervention: Education (71%), Financial Literacy (19%), Skill Development (7%), Miscellaneous (3%). 1.74 Lakh Lives Impacted through 5 planned interventions.
- 52% of beneficiaries were female and 48% were male.
Financial Performance & Key Financial Data:
- Total Income: Increased by 34% from Rs. 4,491 crore in FY 2021-22 to Rs. 6,033 crore in FY 2022-23.
- Profit Before Tax: Increased by 378% from Rs. (256.13) crore in FY 2021-22 to Rs. 712.60 Crore in FY 2022-23.
- Profit After Tax: Increased by 336% from Rs. (194.00) crore in FY 2021-22 to Rs. 457.33 crore in FY 2022-23.
- Loan Assets: Grew by 25% from Rs. 30,231 crore in FY 2021-22 to Rs. 37,800 crore in FY 2022-23.
- Capital Adequacy Ratio: Maintained at 20.57%, well above the RBI mandated norm of 15%.
- Dividend: A final dividend of 81% (Rs. 8.10 per equity share) was recommended for FY 2022-23. The total dividend is ₹103.12 crore.
Corporate Governance:
- The company is committed to maintaining high standards of corporate governance. The report on corporate governance is annexed as Annexure B. The company does not have the requisite number of independent directors as required under Regulation 17 of SEBI Listing Regulations which it needs to comply with.
Funding and Borrowings:
- The company has a diversified borrowing profile including NCDs, commercial papers, and bank/FI lines.
- The average cost of borrowing is 7.4% for the year ending March 31, 2023.
Risk Management:
- The company employs a three-lines-of-defense model.
- Risk Management team is guided by the Company's Risk Management Committee which oversees development and implementation of Risk Assurance practices.
Other Key Points:
- HHFL saw considerable growth in the financial year 2022-23, receivables under financing activity has reached to Rs. 3,658.27 crore in the financial year 2022-23. HHFL has Revenue from operations of Rs. 400.32 crore in financial year 2022-23.
- The company has received approval from Reserve Bank of India (RBI) for obtaining factoring business license.
- The company is committed to work towards its plan to bring an Initial Public Offer of its equity shares which shall be enhancing the value for our stakeholders.
This summary provides a holistic overview of the Hero FinCorp Limited’s 32nd Annual Report, covering its financial performance, strategic initiatives, CSR activities, and governance practices.
