Arohan Annual Report FY 20-21

Arohan Financial Services Limited Summary of significant accounting policies and other explanatory information for the year ended 31 March 2021 (Contd.) (c) Market risk a. Interest rate risk i. Liabilities The Company’s policy is to minimise interest rate cash flow risk exposures on long-term financing. As at 31 March 2021, the Company is exposed to changes in market interest rates through debt securities, other borrowings and subordinated liabilities at variable interest rates. Interest rate risk exposure Below is the overall exposure (*) of the Company to interest rate risk: Particulars Year ended 31 March 2021 Year ended 31 March 2020 Variable rate liabilities Borrowings other than debt securities 144,706.25 250,233.25 Fixed rate liabilities Debt securities 97,500.00 - Borrowings other than debt securities 174,319.54 146,624.02 Subordinated liabilities 21,000.00 21,000.00 Liability against securitisation - 666.61 Total 437,525.79 418,523.88 (*) Figures are presented at principal carrying value for both the years. Sensitivity The sensitivity of the statement of profit and loss is the effect of the changes in market interest rates on debt securities, other borrow- ings and subordinated liabilities. Below is the sensitivity of profit and loss in interest rates. Particulars Year ended 31 March 2021 Year ended 31 March 2020 Interest sensitivity* Interest rates – increase by 0.50% 2,158.88 1,603.91 Interest rates – decrease by 0.50% (2,158.88) (1,603.91) ‘* Holding all other variables constant ii. Assets The Company’s fixed deposits are carried at amortised cost bearing fixed rate of interest, hence sensitivity analysis is not been presented. b. Price risk Exposure The Company’s price risk exposure arises from investments held and classified in the balance sheet either as fair value through other comprehensive income or at fair value through profit and loss. To manage the price risk arising from investments, the Company diversifies its portfolio of assets. As on balance sheet data there is no material investment in their balance sheet. Financial As at 31 March 2020 Less than 1 year 1-2 year 2-3 year More than 3 years Total Financial assets Cash and cash equivalents 68,859.86 - - - 68,859.86 Other bank balances 6,731.90 6,773.23 2,888.33 60.54 16,454.00 Trade receivables 500.26 - - - 500.26 Loans 2,82,938.99 248,220.49 20,215.14 10,152.49 5,61,527.11 Other financial assets 1,987.98 29.96 47.27 89.16 2,154.37 Total undiscounted financial assets 3,61,018.99 2,55,023.68 23,150.74 10,302.19 6,49,495.60 Financial liabilities Borrowings other than debt securities 2,57,240.57 1,29,780.62 42,745.94 16,453.40 4,46,220.53 Subordinated liabilities 2,837.05 2,836.71 3,734.15 23,203.31 32,611.22 Other financial liabilities 8,441.60 175.02 68.96 346.22 9,031.80 Total undiscounted financial liabilities 2,68,519.22 46,549. 05 40,002.93 4,87,863.55 Net undiscounted financial assets/ (liabilities) 92,499.77 (23,398.31) (29,700.74) 1,61,632.05 169