135 | Annual Report | 2025-2026 Arohan Financial Services Limited Notes to financial statements for the year ended March 31, 2026 Summary of material accounting policies and other explanatory information to Financial Statement 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 NonBanking Financial Company (‘NBFC’) with the Reserve Bank of India (‘the RBI’) from July 08, 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 January 10, 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 May 25, 2018. The Company is primarily engaged in providing the livelihood promotion services such as micro-credit to socio-economically disadvantaged customers unreached 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 The Audited Financial Statement of the Company comprise the Statement of Assets and Liabilities as at March 31, 2026, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity, and the Statement of Cash Flows for the year ended March 31, 2026 and the summary of material accounting policies and other explanatory notes (collectively, the ‘Financial Statement’). (i) Statement of compliance with Indian Accounting Standards (Ind AS) The Financial Statement have been prepared on a going concern basis. The accounting policies are applied consistently to all the year presented in the Financial Statement. These Financial Statement have been prepared by the management to comply in all material respects as required in accordance with Indian Accounting Standards (“Ind AS”), as prescribed under Section 133 of the Act read with Companies (Indian Accounting Standards) Rules 2015, as amended by the companies (Indian Accounting Standards) Amendment Rules, 2016 (as amended from time to time), other applicable guidelines issued by the Reserve Bank of India (“RBI”) and the financial statements presented as per format prescribed under division III to Schedule III of Companies Act, 2013. which have been approved by the Board of Directors at their meeting held on May 21, 2026. (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. The financial Statement were approved by the Company’s Board of Directors and authorised for issue on May 21, 2026. 3 Material accounting policies (i) Estimates, judgements and assumptions The preparation of audited financial statements in conformity with the Ind AS requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the accompanying disclosure and the disclosure of contingent liabilities, at the end of the year. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and future periods are affected. Although these estimates are based on the management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring adjustment to the carrying amounts of assets or liabilities in future periods.
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