181 | Annual Report | 2025-2026 (D) Fair value of instruments measured at amortised cost The financial assets such as cash and cash equivalents, bank balance other than cash and cash equivalents, trade receivables and other financial assets and financial liabilities i.e. other financial liabilities approximates their carrying value to their fair value. Fair value of loans, investments, debt securities, borrowings (other than debt securities) and subordinated liabilities 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 March 31, 2026 As at March 31, 2025 Carrying value Fair value Carrying value Fair value Financial assets Investments 32,408.34 32,617.60 34,453.40 34,511.22 Loans 7,00,698.72 7,04,722.74 5,70,510.84 5,78,286.04 Total 7,33,107.06 7,37,340.34 6,04,964.24 6,12,797.26 Financial liabilities Debt securities 16,012.57 16,111.62 21,303.69 21,272.91 Borrowings (other than debt securities) 5,48,993.14 5,47,823.43 4,09,070.54 4,09,027.73 Subordinated liabilities 24,956.61 25,924.45 39,966.14 41,409.19 Total 5,89,962.32 5,89,859.50 4,70,340.37 4,71,709.83 The respective carrying values of certain on-balance sheet financial instruments approximate their fair value. These financial instruments include cash on hand, bank balance (other than cash and cash equivalents), trade receivables, trade payables 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 Notes to financial statements for the year ended March 31, 2026 (cont’d) (All amounts in ₹ lakhs unless otherwise stated) Note 43: Financial Instruments - fair value measurements (cont’d) Note 44: Financial risk management Risk Management The Company’s activities expose it to market risk, liquidity risk and credit risk. The Company’s board of directors has overall responsibility for the establishment and oversight of the Company risk management framework. The Company manages the risk basis policies approved by the board of directors. The board of directors provides written principles for overall risk management. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements Risk Exposure arising from Measurement Risk management Credit risk Cash and cash equivalents (excluding cash on hand), other bank balances, investments, loans, trade receivables and other financial assets. Credit limit and ageing analysis Highly rated bank deposits and diversification of asset base. Liquidity risk Borrowings, debt securities, subordinated liabilities, trade payables and other financial liabilities. Cash flow forecasts Committed borrowing and other credit facilities and sale of loan assets (whenever required). Market risk - interest rate Change in interest rate of variable rates borrowings, debt securities and subordinated liabilities. Sensitivity analysis Review of cost of funds and pricing disbursement. Market risk - security price Investments in equity securities, mutual funds, security receipts and certificate of deposits. Sensitivity analysis Diversification of portfolio, with focus on strategic investments. In order to avoid excessive concentration of risk, the Company’s policies and procedures include specific guidelines to focus on maintaining a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.
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