Arohan Financial Services Limited | Annual Report 2022-23

| 150 Annual Report | 2022-2023 Financial Arohan Financial Services Limited Summary of significant accounting policies and other explanatory information for the year ended 31 March 2023 (Contd.) (All amounts in ` lakhs unless otherwise stated) Note 24: Other equity As at 31 March 2023 As at 31 March 2022 Securities premium 93,917.23 71,037.15 Statutory reserves 9,439.12 8,024.79 Retained earnings 20,935.40 15,540.75 General reserves 80.27 80.27 Share option outstanding account 1,433.07 1,155.08 Treasury shares (7,041.43) (5,507.68) Other comprehensive income - - Equity instruments through other comprehensive income - - Changes in fair value of loan assets - - Total 1,18,763.66 90,330.36 Nature and purpose of reserves: Securities premium The securities premium represents premium received on issue of shares. This amount can be utilised in accordance with the provision of the Companies Act 2013. Statutory reserves This reserve is created as per the provision of section 45(IC) of the Reserve Bank of India (‘RBI) Act, 1934. An amount equal to 20% of profits after tax is transferred to this reserve every year. This is a restricted reserve and any appropriation from this reserve can only be made after prior approval from RBI. Retained earnings The amount that can be distributed by the Company as dividends to its equity shareholders is determined based on the financial statements of the Company and also considering the requirements of the Companies Act, 2013. Thus, the amounts reported above are not distributable in entirety. Retained earnings is a free reserve, retained from company’s profits to meet future obligations. General reserves The Company has transferred a portion of the net profit to general reserve before declaring dividend pursuant to the provision of erstwhile Companies Act. Share based payment reserve The reserve is used to recognised the fair value of the options issued to the employees of the Company under its stock option plan. Treasury shares The Company has created ESOP trust for providing ESOP to its employees. The Company treats ESOP trust as its extension and share held by ESOP trust are treated as treasury shares. Own equity instrument that are re-acquired (treasury shares) are recognised at cost and deducted from equity. Other comprehensive income This represents the cumulative gains and losses arising on the fair valuation of equity instruments measured at fair value through other comprehensive income. Equity instruments through other comprehensive income This represents the cumulative gains and losses arising on the fair valuation of equity instruments measured at fair value through other comprehensive income. Changes in fair value of loan assets This represents the cumulative gains and losses arising on the fair valuation of loan assets classified under business model of hold and hold to collect.