Arohan Financial Services Limited | Annual Report 2022-23

| 164 Annual Report | 2022-2023 Financial Note 40: Financial Instruments - fair value measurements (Contd.) (C) Financial assets and liabilities measured at fair value - recurring fair value measurements As at March 31, 2023 Level 1 Level 2 Level 3 Financial Assets: Investments - 7,877.00 - Total - 7,877.00 - As at March 31, 2022 Level 1 Level 2 Level 3 Financial Assets: Investments - 5.00 - Total - 5.00 - 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 considers 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 and security receipts, 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. Particulars As at 31 March 2023 As at 31 March 2022 Carrying value Fair value Carrying value Fair value Financial assets Cash and cash equivalents 55,656.06 55,656.06 95,362.92 95,362.92 Other bank balance 37,800.09 37,800.09 35,372.38 35,372.38 Trade receivables 1,537.64 1,537.64 200.59 200.59 Loans 4,78,221.95 4,75,004.70 3,71,019.93 3,82,864.62 Other financial assets 2,757.32 2,757.32 547.14 547.14 Total 5,75,973.06 5,72,755.81 5,02,502.96 5,14,347.65 Financial liabilities Debt securities 30,084.77 30,788.48 28,338.42 22,395.27 Borrowings (other than debt securities) 3,80,936.33 3,79,860.23 3,41,078.35 3,53,948.70 Subordinated liabilities 42,327.83 43,041.20 43,309.37 36,725.19 Other financial liabilities 9,946.14 9,946.14 3,713.27 3,713.27 Total 4,63,295.07 4,63,636.05 4,16,439.41 4,16,782.43 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. 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)