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Notes to Accounts of Aryaman Financial Services Ltd.

Mar 31, 2018

Note - 1

A. CORPORATE INFORMATION:

Aryaman Financial Services Limited is a public limited company domiciled in India with its registered office located at 102, Ganga Chambers, 6A/1, W.E.A., Karol Bagh, New Delhi-110005. The Company is listed on BSE Limited (BSE). The Company is engaged in the business of Merchant Banking.

Footnotes:

(i) The market value of Investment in Aryaman Capital Markets Ltd is Rs. 2,246.52 Lacs as on 31.03.2018 and Rs. 1,779.42 Lacs as on 31.03.2017

(ii) The Market value of Investments in Escorp Asset Management Ltd is Rs. 526.75/- as on 31/03/2018 (These shares were not listed as on 31.03.2017)

2. Terms / rights attached to Equity Shares:

The Company has only one class of equity shares having a par value of Rs. 10/-. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends if any, in Indian rupees. The dividend proposed, if any, by the Board of Directors is subject to the approval of the Shareholders at the ensuing Annual General Meeting, except in case of interim dividend.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the Shareholders.

The general reserve is used from time to time to transfer profits from retained earnings for appropriations purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.

Footnotes:

i. Loan from Financial Institutions represents Car Loan taken from Daimler Financial Services India Pvt Ltd of Rs. 36.00 lacs for tenure of 5 years, repayable in monthly installments of Rs. 0.59 lacs .The amount payable in next 12 months has been shown as current maturities of long term debt in other financial liabilities shown in Note No. 17.

3. Contingent liabilities & Commitments:

The company does not have any contingent liabilities and Commitments (Including Capital Commitments as on March 31, 2018 (As at March 31, 2017 - Nil).

4. Segment Reporting:

The Company''s Board of Directors has been identified as the Chief Operating Decision Maker (CODM) as defined under Ind AS 108 "Operating Segments". The CODM evaluates the Company''s performance and allocated the resources based on an analysis of various performance indicators. The Company is primarily engaged in the business of financial services. The same has been considered as business segment and the management considers these as a single reportable segment. Accordingly, disclosure of segment information has not been furnished

5. Financial instruments:

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

1. The following methods and assumptions were used to estimate the fair values:

Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amounts largely due to short term maturities of these instruments.

2. Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for expected losses of these receivables. Accordingly, fair value of such instruments is not materially different from their carrying amounts.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

- Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.

- Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly

- Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

There were no significant changes in classification and no significant movements between the fair value hierarchy classifications of financial assets and financial liabilities during the period.

6. Financial risk factors:

The Company''s principal financial liabilities comprise loans and borrowings, advances and trade and other payables. The purpose of these financial liabilities is to finance the Company’s operations and to provide to support its operations. The Company’s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations.

The risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. Liquidity risk management implies maintenance sufficient cash including availability of funding through an adequate amount of committed credit facilities to meet the obligations as and when due.

The Company manages its liquidity risk by ensuring as far as possible that it will have sufficient liquidity to meet its short term and long term liabilities as and when due. Anticipated future cash flows are expected to be sufficient to meet the liquidity requirements of the Company. The Company does not have any undrawn borrowing facilities with the Banks/Financial institutions.

b) Market risk:

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include investment, deposits, foreign currency receivables and payables. The Company''s treasury team manages the Market risk, which evaluates and exercises independent control over the entire process of market risk management

i. Foreign currency risk:

Foreign currency risk can only arise on financial instruments that are denominated in a currency other than the functional currency in which they are measured. The Company''s functional and presentation currency is INR. The Company does not have any foreign currency transactions and hence is not exposed to the Foreign Currency Risks.

ii. Interest rate risk:

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. The Company''s does not have any long term borrowings. Hence, the Company is not exposed to the interest rate risk.

c) Credit risk:

Credit risk is the risk of financial loss to the Company if a customer or counter-party fails to meet its contractual obligations. The Company is exposed to credit risks from its operating activities, primarily trade receivables, cash and cash equivalents, deposits with banks and other financial instruments. The Company is not significantly exposed to the credit risk toward trade receivables considering the nature of services provided by the Company

Trade and other receivables:

The Company considers the probability of default upon initial recognition of assets and whether there has been a significant increase in credit risks on an ongoing basis throughout each reporting period.

To assess whether there is a significant change increase in credit risk the Company compares the risks of default occurring on the assets as at the reporting date with the risk of default as at the date of initial recognition. It considers the reasonable and supportive forward looking information such as:

i. Actual or expected significant adverse changes in business.

ii. Actual or expected significant changes in the operating results of the counterparty

iii. Financial or economic conditions that are expected to cause a significant change to the counterparty''s ability to meet its obligations

iv. Significant increase in credit risk on other financial instruments of same counterparty

Movement in provisions of doubtful debts and advances - There were no Provision of doubtful debts as on March 31, 2018 and March 31, 2017.

7. Capital risk management:

The Company’s objectives when managing capital are to

i. safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

ii. maintain an optimal capital structure to reduce the cost of capital

In order to maintain or adjust the capital structure, the Company may issue new shares, adjust the amount of dividends paid to shareholders etc. The Company''s policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor, creditors and market confidence and to sustain future development and growth of its business. The Company will take appropriate steps in order to maintain, or if necessary adjust, its capital structure.

8. Recent accounting prouncements:

Ind AS 115 - Revenue from Contracts with Customers:

In March 2018, the Ministry of Corporate Affairs has notified the Companies (Indian Accounting Standards) Amended Rules, 2018 (“amended rules”). As per the amended rules, Ind AS 115 “Revenue from contracts with customers” supersedes Ind AS 11, “Construction contracts” and Ind AS 18, “Revenue” and is applicable for all accounting periods commencing on or after 1 April 2018.

Ind AS 115 introduces a new framework of five step model for the analysis of revenue transactions. The model specifies that revenue should be recognised when (or as) an entity transfer control of goods or services to a customer at the amount to which the entity expects to be entitled. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts with customers. The new revenue standard is applicable to the Company from 1 April 2018.

The Company is evaluating the requirement of the amendment and the impact on the financial statements. The effect on adoption of Ind AS 115 is expected to be insignificant”.

9. The financial statements were approved for issue by the Board of Directors on May 30, 2018.

10. The figures of the previous year''s have been regrouped or reclassified wherever necessary to make them comparable


Mar 31, 2015

1. Some of the debit/credit balances are subject to confirmation and reconciliation.

2. In view of the number of employees being below the stipulated numbers, the Payment of Bonus and payment of Gratuity Act are not applicable to the company for the year.

3. The advance given to Cochin Stock Exchange towards Corporate membership has been written off to the extent of Rs. 8,30,262/-, to arrive at the current value, as estimated by the Management.

4. Income/Expenditure in foreign currency:

5. The useful life of Fixed Assets has been revised in accordance with Sch II to the Companies Act 2013 which is applicable for accounting period commencing on or after 1st April, 2014. Consequently a sum of Rs. 0.25 lac being the caring amount net of residual value of fixed assets where remaining useful life as at 1st April 2014 in Nil has been charged to retained earnings as permitted by schedule II. In other case carrying amount has been depreciated over the remaining useful life of the assets and the effect on the profit is not material.


Mar 31, 2014

1. Some of the debit/credit balances are subject to confirmation and reconciliation.

2. In view of the number of employees being below the stipulated numbers, the Payment of Bonus and payment of Gratuity Act are not applicable to the company for the year.

3. The advance given to Cochin Stock Exchange towards Corporate membership has been written off to the extent of Rs. 6,64,211/-, to arrive at the current value, as estimated by the Management.

4. RELATED PARTY DISCLOSURES:

As per Accounting Standard 18, the disclosures are as under:

1. List of related parties where control exists: Details of related parties

Sr.

No Category Name of the Related Party

1 Holding Company: Mahshri Enterprises Pvt.Ltd.

2 Subsidiary Company: Aryaman Capital Markets Ltd (Formerly known as Aryaman Broking Ltd)

3 Associates Companies: Overskud Multi Assets Management Pvt. Ltd. Nopea Capital Services Pvt. Ltd. Escorp Industries Ltd Vardhman Investment

4 Key Managerial Personnel: Shripal Shah Shreyas Shah Shrenik Shah (Father)

5 Key Managerial Personnel'': Roopa Shah (Mother) Relatives Meloni Shah (Wife)

Previous period Figures have been regrouped/classified/rearranged wherever necessary to make them comparable to those for the current year.


Mar 31, 2013

1. Some of the debit/credit balances are subject to confirmation and reconciliation.

2. In view of the number of employees being below the stipulated numbers, the Payment of Bonus and payment of Gratuity Act are not applicable to the company for the year.

3. The advance given to Cochin Stock Exchange towards Corporate membership has been written off to the extent of Rs.4,98,158/-, to arrive at the current value, as estimated by the Management.

4. Income/Expenditure in foreign currency:

5. RELATED PARTY DISCLOSURES:

As per Accounting Standard 18, the disclosures of transactions with the related parties as defined in the Accounting Standard are given below:


Mar 31, 2012

NOTES

1) Some of the debit/credit balances are subject to confirmation and reconciliation.

2) In view of the number of employees being below the stipulated numbers, the Payment of Bonus and payment of Gratuity Act are not applicable to the company for the year.

3) The advance given to Cochin Stock Exchange towards Corporate membership has been written off to the extent of Rs.3,32,105/-, to arrive at the current value, as estimated by the Management.

3. Till the year ended 31st March, 2011, the company was using pre - revised Schedule VI of the Companies Act, 1956, for preparation & presentation of its financial statements. During the year ended 31st March. 2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the Company. The Company has reclassified previous year figures to conform to this year's classifications.


Mar 31, 2011

1. Contingent Liability Rs. 3.15 Lacs. (P.Y. Rs. 3.15 Lacs)

2. Some of the debit/credit balances are subject to confirmation and reconciliation.

3. In view of the number of employees being below the stipulated numbers, the Payment of Bonus Act is not applicable to the company for the year.

4. The Company is following up the matter in regard to the advance given to Cochin Stock Exchange Corporate membership further necessary action would be taken based on the communication from the Stock Exchange.

5. Related Party Disclosures:

As per Accounting Standard 18, the disclosures of the transactions with the related parties as defined in the Accounting Standard are given below:

(1) List of related parties where control exist and related parties with whom transactions have taken place and relationships:

Sr. Name of the Related party Relationship No

1. Aryaman Broking Ltd Subsidiary Company

2. Vardhaman Investments Firm in which Relative is a partner.

3. D.S.Sharma Key Managerial personnel

(2) Key Management personnel and their relatives.

Name of relatives and key management personnel with whom the Co. had transactions during year-

D. S. Sharma Key Managerial personnel

Shripal Shah Key Managerial personnel

6. Previous years figures have been regrouped and rearranged wherever necessary.


Mar 31, 2010

1. Contingent Liability Rs. 3.15 lacs. (P.Y. Rs. 42.98 Lacs)

2. Some of the debit/credit balances are subject to confirmation and reconciliation.

3. In view of the number of employees being below the stipulated numbers, the Payment of Gratuity Act is not applicable to the company for the year. The same is the case with respect to payment of Bonus Act.

4. The accounts of the Company are not signed by a Company Secretary, as the Company despite its efforts is not in a position to fill the vacant position of a Company Secretary.

5. Related Party Disclosures:

As per Accounting Standard 18, the disclosures of the transactions with the related parties as defined in the Accounting Standard are given below:

(1) List of related parties where control exist and related parties with whom transactions have taken place and relationships:



Sr.No Name of the Related party Relationship

1. Aryaman Broking Ltd Subsidiary Company

2. Mahshri Enterprises Pvt Ltd Promoter

3. Vardhaman Investments Firm in which Relative is a partner.

4. Roopa S Shah Relative



(2) Key Management personnel and their relatives.

Name of relatives and key management personnel with whom the Co. had transactions during year-

D. S. Sharma Key Managerial personnel

12. Previous year figures are for the period starting from October 01, 2008 to March 31, 2009. Previous years figures have been regrouped and rearranged wherever necessary.

V Generic names of Principal Products , Services of the Company

Item Code No. (ITC Code) Not Applicable

Production Description 1. Financial Services

2. Project Consultancy

3. Merchant Banking



Code No. for the services rendered by the Company is not available in the Publication of Indian Trade classification for ITC Code of Products by Ministry of Commerce, Directorate General of Commercial Intelligence and Statistics, Calcutta 700 001

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE ON THE ACCOUNTS FOR THE PERIOD ENDED MARCH 31, 2010.

i. In respect of Fixed Assets

The company has no fixed assets and in view of this Para 4 (i) (a), (b) & (c) of the said order are not applicable to the company.

ii. In respect of inventories

The company is in the business of providing broking services and in view of this Para 4 (ii) (a), (b) & (c) of the said order are not applicable to the company.

iii. In respect of loans, Secured and unsecured, Granted or taken by the company to / from Companies, firms or other parties listed in the register maintained under Section 301 of the companies Act. 1956:

a) The company has not granted any loan to Companies, Firms or other parties listed in the register maintained under section 301 of The Companies Act, 1956.

b) In view of our comment in Para 4 (iii) (a) the clauses (b), (c) and (d) are not applicable to the company.

c) The company has not taken loan from Companies, Firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

d) In view of our comment in para 4 (iii) (c) the clauses (f) and (g) are not applicable to the company.

iv. In our opinion and according to information and explanations given to us there are adequate internal control procedures commensurate with the size of the company and the nature of business with regard to purchase of fixed assets and sale of services. During the course of our audit we have not observed any continuing failure to correct major weakness in the aforesaid internal control system.

v. In respect of transactions covered under Section 301 of the Companies Act,1956

a) In our opinion and according to the information and explanations given to us, the transactions that need to be entered into the register maintained under Section 301 of the Act, have been so entered.

b) As per the information and explanations given to us, there are no transactions of purchase and sales of services have been made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 aggregating during the year to Rs. 5 Lacs or more in respect of each party.

vi. As per the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Act and rules framed there under.

vii. In our opinion the company has an internal audit system, which is commensurate with the size and nature of its business.

viii. We have been informed that the central government has not prescribed maintenance of cost records under Section 209(1 )(d) of the Companies Act, 1956.

ix. In respect of statutory dues there are no undisputed statutory dues payable by the Company.

x. The Companys has accumulated losses at the end of the financial year.

xi. Based on our audit procedures and according to the information and explanation given to us we are of the opinion that the company has not defaulted in repayments of dues to the financial institution, banks or debenture holders.

xii. In our opinion and according to the information and explanations given to us no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debenture & other securities.

xiii. The company is not a chit fund or a nidhi / mutual benefit funds / society. Therefore para 4 (xiii) is not applicable to the company.

xiv. Based on information and explanation given to us, the company is not dealing or trading in shares, securities, debentures and other investments and hence the requirements of para 4 (xiv) of the order are not applicable to the company.

xv. In our opinion and according to the information & explanation given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi. The company has not raised any term loans during the year.

xvii. On the basis of our examination of balance sheet it appears that the company has not raised funds raised on short term basis are not used for long term investment basis and vice versa.

xviii. The company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix. The company has not issued any debentures during the year and therefore para 4 (xix) of the order is not applicable to the company.

xx. The company has not raised any money by way public issue during the period.

xxi. During the course of our examination of the books and records of the company carried out in accordance with generally accepted auditing practices in India and according to information and explanation given to us we have neither come across any instance of fraud on or by the company during the year, nor have we been informed of such case by the management.

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