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.) (d) Total future lease payments relating to underlying leases are as follows: Particulars Within 1 year 1-2 years 2-3 years 3-4 years 4-5 years More than 5 years As at 31 March 2021 Lease payments 233.49 117.36 90.29 59.51 59.68 189.86 750.19 Less: Finance cost 49.95 35.56 28.00 23.21 19.20 29.20 185.12 Net present values 183.54 81.80 62.29 36.30 40.48 160.66 565.07 Particulars Within 1 year 1-2 years 2-3 years 3-4 years 4-5 years More than 5 years As at 31 March 2020 Lease payments 233.49 117.36 90.29 59.51 59.68 189.86 750.19 Less: Finance cost 49.95 35.56 28.00 23.21 19.20 29.20 185.12 Net present values 194.44 175.02 68.96 55.63 46.76 243.83 784.64 (e) Total cash outflow for leases for the year ended 31 March 2021 was INR 271.86 lakhs (31 March 2020; INR 261.48 lakhs) (f) The Company has leases for office building and furnitures. With the exception of short-term leases and leases of low-value underlying assets, each lease is reflected on the balance sheet as a right-of-use asset and a lease liability. Variable lease payments which do not depend on an index or a rate are excluded from the initial measurement of the lease liability and right of use assets. The Company classifies its right-of-use assets in a consistent manner to its property, plant and equipment. Each lease generally imposes a restriction that, unless there is a contractual right for the Company to sublease the asset to another party, the right-of-use asset can only be used by the Company. Some leases contain an option to extend the lease for a further term. The Company is prohibited from selling or pledging the underlying leased assets as security. For leases over office buildings and other premises, the Company must keep those properties in a good state of repair and return the properties in their original condition at the end of the lease. Further, the Company is required to pay maintenance fees in accordance with the lease contracts. (g) As per Ind AS 116 the weighted average incremental borrowing rate applied to lease liabilities recognised was 11%. Note 60: Contingent liabilities and commitments Particulars As at 31 March 2021 As at 31 March 2020 (a) Demand for income tax received from income tax authorities in respect of which the Company has gone for appeal. Based on the management assessment, crystallization of liability on these items is not considered probable and hence not acknowledged as debt by the Company. 38.20 38.20 (b) Corporate guarantee provided to IndusInd Bank towards partnership agreement. 75.00 75.00 (C) Guarantee for CDC group. 1,080.00 - (d) Corporate guarantee in the form of credit enhancement provided towards securitisation. - 1,311.69 (e) Sanctioned loan remaining disbursement 1,800.00 650.00 (f) Capital commitment for purchase/ development of tangible and intangible asset (net of advances). 178.04 13.81 Note 61: Consequent to the outbreak of the COVID-19 pandemic, the Indian Government announced a lockdown inMarch 2020. Subsequently, the national lockdown was lifted by the Government, but regional lockdowns continue to be implemented in areas with a significant number of COVID-19 cases. The impact of COVID-19, including changes in customer behavior and pandemic fears, as well as restriction of business and individual activities led to significant volatility in global and Indian financial markets and a significant decrease in global and local economic activities. This may lead to a rise in the number of borrower defaults and consequently an increase in corresponding provisions. The extent to which COVID-19 pandemic, including the current “second wave” that has significantly increased the number of cases in India, will continue to impact the Company’s performance and will depend on ongoing as well as future developments which are highly uncertain, Financial (C) Lease payments, not recognised as a liability The Company has elected not to recognise a lease liability for short term leases (leases with an expected term of 12 months or less) or for leases of low value assets. Payments made under such leases are expensed on a straight-line basis. The expense relating to payments not included in the measurement of the lease liability is as follows: Particulars As at 31 March 2021 As at 31 March 2020 Short-term leases 1,095.29 1,033.07 187