Arohan Financial Services Limited | Annual Report 2022-23

123 | Annual Report | 2022-2023 Arohan Financial Services Limited Summary of significant accounting policies and other explanatory information for the year ended 31 March 2023 1 Corporate informatories Arohan Financial Services Limited (‘the Company’) is incorporated under the provisions of the Companies Act 1956. The Company has been registered as a Non-Banking Financial Company (‘NBFC’) with the Reserve Bank of India (‘the RBI’) from 8 July 2009 and pursuant to the notification issued by the RBI for classification of NBFCs as Non-Banking Finance Company – Micro Finance Institutions (‘NBFC-MFI’), the Company’s application for registration as an NBFC-MFI was approved by the RBI on 10 January 2014. The Company has converted itself into a public limited company and changed its name to Arohan Financial Services Limited and has received a fresh certificate of incorporation dated 25 May 2018. The Company is primarily engaged in providing the livelihood promotion services such as micro- credit to socio-economically disadvantaged customers un-reached by the formal banking systems. In addition to the core business of providing micro-credit, the company uses its distribution channel to provide certain other financial products and services. 2 Basis of preparation (i) Statement of compliance with Indian Accounting Standards (Ind AS) These financial statements have been prepared by the Company in accordance with the Indian Accounting Standards (‘Ind AS’) as notified by Ministry of Corporate Affairs (‘MCA’) under Section 133 of the Companies Act, 2013 (‘Act’) read with the Companies (Indian Accounting Standard) Rules, 2015 as amended by the Companies (Indian Accounting Standards) Amendment Rules, 2016 (as amended), the provisions of the Act (to the extent notified and applicable) and other applicable guidelines issued by the RBI. The financial statements for the year ended 31 March 2023 has been authorised and approved by the Board of Directors in their meeting held on 12 May 2023. The Guidance Note on Division III - Schedule III to the Companies Act. 2013 issued by the Institute of Chartered Accountants of India (“ICAI”) has been followed in so far as they are not inconsistent with any of these Directions. (ii) Historical cost convention These financial statements have been prepared on going concern basis in accordance with accounting principles generally accepted in India. Further, the financial statements have been prepared on historical cost basis except for certain financial assets and financial liabilities and share based payments which are measured at fair values as explained in relevant accounting policies. 3 Significant accounting policies and key account estimates and judgements a) Basis of preparation The Company presents its balance sheet in order of liquidity. An analysis regarding recovery or settlement within 12 months after the reporting date (current) and more than 12 months after the reporting date (non–current) is presented in note 43. The financial statements have been prepared using the significant accounting policies and measurement bases summarised as below. These policies are applied consistently for all the periods presented in the financial statements, except where the Company has applied certain accounting policies and exemptions upon transition to Ind AS.