181 | Annual Report | 2024-2025 Arohan Financial Services Limited Notes to financial statements for the year ended March 31, 2025 (Contd.) (All amounts in ` lakhs unless otherwise stated) Note 26: Other equity As at March 31, 2025 As at March 31, 2024 Securities premium 1,22,302.03 1,20,226.78 Statutory reserves 17,909.27 15,715.55 Retained earnings 53,754.10 45,670.93 General reserve 80.27 80.27 Share option outstanding account 2,700.80 1,940.55 Treasury shares (10,124.87) (7,899.62) Total 1,86,621.60 1,75,734.46 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 Reserve Bank of India (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 reserve 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 option outstanding account 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.
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