| 182 Annual Report | 2025-2026 Financials 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 44: Financial risk management (cont’d) A. Credit risk Credit risk is the risk that the Company will incur a loss because its customers or counterparties fail to discharge their contractual obligations. The Company’s exposure to credit risk is influenced mainly by cash and cash equivalents excluding cash in hand, other bank balances, investments, loan assets, trade receivables and other financial assets. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls. a) Financial assets that expose the entity to credit risk The following table provides information about the exposure to credit risk and expected credit loss for assets on finance. Cash and cash equivalents and bank balance other than cash and cash equivalents The Company holds cash and cash equivalents and bank balance of ₹52,279.20 lakhs at March 31, 2026 (March 31, 2025: ₹67,340.79 lakhs). This also includes earmarked funds as on March 31, 2026 of ₹123.04 lakhs (March 31, 2025: ₹167.96 lakhs) which does not possess any credit risk. The rest of cash and cash equivalents including fixed deposits are held with bank and financial institution counterparties with sound credit ratings. Expected credit loss on trade receivables and other financial assets Trade receivables of ₹1,353.26 lakhs (March 31, 2025: ₹837.89 lakhs) primarily includes receivables against fees and commission income and are measured at amortised cost. These receivables are of short term in nature and there has been no impairment allowance on the same. Other financial asset as on March 31, 2026 of ₹2,241.03 lakhs (March 31, 2025: ₹1,621.36 lakhs) are measured at amortised cost and there has been no impairment allowance on the same except for Insurance receivables of nil as on March 31, 2026 (March 31, 2025: ₹65.63 Lakhs). Expected credit loss on Investments The following table provides information about the exposure to credit risk and expected credit loss for investments Particulars Gross carrying amount Weighted average loss rate Loss allowance Whether credit impaired As at March 31, 2026 Current (not past due) 53,123.98 - - No Upto 30 days overdue - - - NA More than 30 days and upto 60 days overdue - - - NA More than 60 days and upto 90 days overdue - - - NA More than 90 days overdue 2,853.42 84.35% 2,406.77 Yes As at March 31, 2025 Current (not past due) 34,458.40 0.01% 5.00 No Upto 30 days overdue - - - NA More than 30 days and upto 60 days overdue - - - NA More than 60 days and upto 90 days overdue - - - NA More than 90 days overdue 5,281.20 64.38% 3,400.00 Yes
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