Arohan Financial Services Limited | Annual Report 2021-22

Financials | 191 Annual Report | 2021-2022 Arohan Financial Services Limited Summary of significant accounting policies and other explanatory information for the year ended 31 March, 2022 (Contd.) (All amounts in ` lakhs unless otherwise stated) Note 40: Financial Instruments - fair value measurements (Contd.) (C) Financial assets and liabilities measured at fair value - recurring fair value measurements Valuation process and technique used to determine fair value Specific valuation techniques used to value financial instruments include: (a) Eligible portfolio loans valued by discounting the aggregate future cash flows (both principal and interest cash flows) with risk-adjusted discounting rate for the remaining portfolio tenor. The Company has considered the average valuation impact arrived using average lending rate of last quarter. (b) For unquoted equity instruments, the Company has used earning capitalisation method (fair value approach) discounted at a rate to reflect the risk involved in the business. (c) For mutual funds, the Company has used the net asset value (NAV) on the basis of the statement received from the investee party. (D) Fair value of instruments measured at amortised cost Fair value of instruments measured at amortised cost for which fair value is disclosed is as follows, these fair values are calculated using Level 2 inputs. The respective carrying values of certain on-balance sheet financial instruments approximate their fair value. These financial instruments include cash on hand, balances with banks, receivables and certain other financial assets and liabilities. Carrying values were assumed to approximate fair values for these financial instruments as they are short-term in nature and their recorded amounts approximate fair values or are receivable or payable on demand. As at March 31, 2022 Level 1 Level 2 Level 3 Financial Assets: Loans at fair value through other comprehensive income - - - Total - - - As at March 31, 2021 Level 1 Level 2 Level 3 Financial Assets: Loans at fair value through other comprehensive income - - - Total - - - Particulars As at 31 March 2022 As at 31 March 2021 Carrying value Fair value Carrying value Fair value Financial assets Cash and cash equivalents 95,362.92 95,362.92 1,15,801.75 1,15,801.75 Other bank balance 35,372.38 35,372.38 19,249.42 19,249.42 Trade receivables 200.59 200.59 113.67 113.67 Loans 3,71,019.93 3,82,864.62 3,92,590.53 3,95,536.85 Other financial assets 547.14 547.14 1,051.46 1,051.46 Total 5,02,502.96 5,14,347.65 5,28,806.83 5,31,753.15 Financial liabilities Debt securities 28,338.42 22,395.27 1,00,735.92 1,01,706.58 Borrowings (other than debt securities) 3,41,078.35 3,53,948.70 3,19,775.64 3,20,863.08 Subordinated liabilities 43,309.37 36,725.19 21,008.31 23,452.28 Other financial liabilities 3,675.95 3,675.95 6,701.39 6,701.39 Total 4,16,402.09 4,16,745.11 4,48,221.26 4,52,723.33