Arohan Financial Services Limited | Annual Report 2021-22

Financials | 193 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 41: Financial risk management (Contd.) The Company provides for expected credit loss based on the following: Financial assets that expose the entity to credit risk (*) These represent gross carrying values of financial assets, without netting off impairment loss allowance. (**) Exclude cash in hand balance since there is no credit risk. Cash and cash equivalents and bank deposits Credit risk related to cash and cash equivalents (excluding cash on hand) and bank deposits is managed by only accepting highly rated deposits from banks and financial institutions across the country. Trade receivables Trade receivables measured at amortised cost and credit risk related to these are managed by monitoring the recoverability of such amounts continuously. Other financial assets Other financial assets measured at amortized cost includes security deposits, receivable on assignment, advances recoverable on behalf of business correspondence arrangements, insurance claim receivables and other receivables. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously. Nature Assets covered Basis of expected credit loss Low credit risk Cash and cash equivalents (excluding cash on hand), other bank balances, investments, loans, trade receivables and other financial assets Life time expected credit loss or 12 month expected credit loss Moderate credit risk Loans Life time expected credit loss or 12 month expected credit loss High credit risk Loans Life time expected credit loss or fully provided for Particulars As at March 31, 2022 As at March 31, 2021 (i) Low credit risk Cash and cash equivalents (**) 95,307.35 1,15,630.20 Other bank balances 35,372.38 19,249.42 Trade receivables 200.59 113.67 Investments 5.00 - Loans (*) 3,47,813.23 3,60,257.37 Other financial assets 547.14 1,051.46 (ii) Moderate credit risk Loans (*) 48,322.90 51,230.98 (iii) High credit risk Loans (*) 18,700.69 52,096.33