Aryaman Financial Services Ltd Management Discussions.

Your Company is SEBI registered Category I Merchant Banker. Company mainly participates into SME Segment of Primary market issues. SME Platform offers an entrepreneur and investor friendly environment, which enables the listing of SMEs from the unorganized sector scattered throughout India, into a regulated and organized sector. The platform provides opportunity to SME entrepreneurs to raise equity capital for growth and expansion. It also provides immense opportunity for investors to identify and invest in good SMEs at an early stage.

Aryaman Financial Services Limited is a merchant banker. The Company is engaged in the business of lead management and syndication of small and medium sized initial public offerings (IPOs), follow on public offer (FPOs), rights issues, composite issues, qualified institutional placement (QIPs), private investment in public equity (PIPE) deals, venture capital (VC) funding and other forms of fund raising. The Companys principal products/services include income from merchant banking fees. It also acts as lead manager to mergers and acquisitions (M&A) transactions, open offers, delisting offers and buybacks, among others. The Company provides valuation and advisory services for foreign investments, employee stock options plan (ESOP) certifications, fairness opinions of amalgamation schemes, mergers and spin-off transactions, among others. The Company, through its subsidiary and group companies, provides stock and commodity broking services.

The Global Economy

In 2021, the world economy recovered significantly from the disruptions caused by COVID-19 pandemic in 2020. While the global economy had not fully recovered from the pandemic, the Russia-Ukraine crisis had emerged. Before the war, supply- demand mismatches and government support during the pandemic caused inflation in many nations, forcing monetary policy tightening. Recent lockdowns in China could result in the formation of new bottlenecks in supply networks around the world. IMF predicts global economic growth of 3.6% in each year 2022 as well as in 2023, down from 6.1% in 2021. As geopolitical tensions persist, commodity prices remain elevated, and the withdrawal of monetary accommodation gathers speed, the global growth outlook remains uncertain. Emerging economies are susceptible to capital outflows and rising commodity prices, both of which contribute to inflationary pressures

Indian Economy

Economic recovery in India was shaping up well after the second wave of the pandemic, and there was a steady improvement across industries and services. Multiple outbreaks and waves of the COVID-19 pandemic led to supply chain disruption and also pushed inflation higher, comprehending even more challenges for policy-making. According to the NSO second advance estimates, the Indian economy could grow by 8.9% in FY 2021-22. Given the forecast for inflation and growth, uncertainty related to global events and the unprecedented impact of COVID-19, the Reserve Bank of India (RBI) believes that continued policy assistance is required for the economy.

In comparison to the preceding waves, the impact of the continuing third wave of the pandemic on recovery is likely to be limited. The proposals in the Union Budget for FY 2022-23 to develop public infrastructure through higher capital spending are expected to boost growth and attract private investment via a high multiplier effect. However, persistent supply-side bottlenecks, steadily rising international crude oil prices and increasing raw material costs have added the concerns.

Widespread vaccine coverage, gains from supply-side reforms and regulatory ease, sustained export growth, and the availability of budgetary space to ramp up capital spending will contribute to a 7.5% growth in FY 2022-23 (Source: RBI Survey Report). The year ahead looks promising for private sector investment, with the banking system in a strong position to help the economy recover. The Economic Survey 2021-22 expects recovery of the economy with Indias real GDP estimated to record 8.0%-8.5% growth in FY 2022-23. As per IMFs World Economic Outlook projections - January 2022, Indias real GDP projected to grow at 9% in FY 2021-22 and FY 2022-23 and at 7.1% in FY 2023-24, which would make India the fastest growing major economy in the world for all 3 years.


In 2021, the Indian equity market outperformed both Asian and developed markets. Flushed liquidity, supportive monetary policy, a faster-than-expected post-pandemic economic rebound, and a successful vaccination programme boosted the Indian equity market in the first nine months of FY 2021-22. However, the performance of Indian equity market was impacted in the fourth quarter of FY 2021-22 owing to faster-than-expected monetary tightening in the U.S., bond rates have surged, crude oil and other commodity prices have soared, and geopolitical tensions following Russias invasion of Ukraine.

According to the NSE Market Pulse report for April 2022, the Hang Seng Index (Hong Kong) and the Nikkei 225 Index (Japan) both fell 22.5% and 4.7% over the preceding 12 months through March 2022. Indian equities followed global markets in volatility, but exceeded developing and developed market counterparts. In FY 2021-22, the Nifty 50 Index and Nifty 500 Index rose 18.9% and 21%. Nifty Midcap 50 and Nifty Small-Cap 50 Indexes rose 20.9% and 18.4% in FY 202122. Global developments caused foreign investment to move to safer and less expensive asset groups. Strong local institutional investment and direct investor acquisitions have somewhat mitigated the outflow of foreign money from Indian markets.

The improvement in liquidity conditions on the back of strong policy support was responsible in no small measure for the bull run witnessed in 2020-21. The liquidity support, increased retail participation, and buoyant market sentiment led to a slew of IPOs hitting the markets. As a result, the stock markets witnessed 55 initial public offerings (IPOs), with a cumulative capital raised of 46,029.71 crore, up 115per cent year-on-year (YoY) from 21,382.35 crore. Furthermore, 64,058.61 crore was raised through a total of 21 rights issues, up 15per cent YoY from 55,669.79 crore through 17 rights issues.

At the current juncture, it may not be appropriate to say that all the positives have been priced-in. However, it can be safely said that the market valuations are not reflecting pessimistic expectations. Therefore, going ahead investors will have to be much more discerning in their stock selection and stick with good management with proven track record of delivering healthy growth.


A strong and well-functioning financial sector fortifies the foundations of growth and development. The Reserve Bank has accorded the highest priority to preserving financial stability by taking quick and decisive steps to ease liquidity constraints, restore market confidence and prevent contagion to other segments of the financial market.

Thus, despite the pandemic induced bouts of volatility, the Indian financial system has remained resilient and is now in a better position to meet the credit demands as recovery takes hold and investment activity picks up.


Foreign Institutional Investors sold equity shares from October 2021 to March 2022 to the tune of Rs. 2,31,315 Crores. Further in April 2022 the net FIIs outflow was Rs. 40,652 Crores. However, such large selling has been largely absorbed so far by retail flow of savings into equities. The demand and supply chains have been very adversely affected due to the ongoing pandemic Covid -19 and due to the war in Ukraine.

The risks are emerging from the domestic and external side, namely 1) a faster-than expected rise in inflation, which could create pressure for preemptive tightening; 2) increase in credit stress domestically and wider credit spreads, leading to tighter financial conditions, stalling growth recovery; 3) slowdown in global growth; 4) risk aversion in global capital markets, faster-than-anticipated tightening in global financial conditions; and 5) swings in global commodity prices.

Over last two years, global GDP growth averaged just 1.5 percent, well below the official global recession threshold, widely thought to be around 2.5 percent. Needless to say, if world economic growth slows more toward that underlying trend instead of soft-landing glide path, then another global recession is possible.


In 2021, the investment banking industry in India had its finest year ever, owing to a wave of public offerings and stock sales, which enabled the industry, earn its highest fee from deal-making. According to a Refinitiv study, the countrys M&A activity totaled USD 17.2 billion last year (as of March 17, 2022), with 417 M&A deals completed. The enthusiasm of private equity and SPACs (Special Purpose Acquisition Vehicles) signaled a strong appetite for risk and value in the market. Due to a slew of big-ticket IPOs and the maturation of Indias IT unicorns from start-ups to mature listed businesses, investment bankers have cracked such deals.

During FY 2021-22, the countrys M&A activity was the third highest in the world, trailing only the United States and Australia, with around USD 61.1 billion in M&A transactions. India has the competitive advantage of having achieved considerable success in the field of software, and entrepreneurs should take advantage of this by applying it to digitalization and other relevant fields. Fintechs, PLI scheme manufacturing, and retail have latent potential. Mergers and acquisitions are primarily driven by economies of scale, cost-effectiveness, and higher-earning capacities. With the economys further opening, reforms, and the benefits of new schemes, existing players will be forced to move quickly and make place for mergers and acquisitions in the coming year



The Total Income of the Company stood at Rs. 282.06 Lacs for the year ended March 31, 2022 as against Rs 478.12 Lacs in the previous year. The Company made a Net Profit of Rs. 57.52 Lacs for the year ended March 31, 2022 as compared to the Net Profit of Rs. 83.50 Lacs in the previous year.


The Consolidated Total Income is Rs. 13,809.18 Lacs for the financial year ended March 31, 2022 as against Rs. 8,946.17 Lacs during the previous financial year. Consolidated Net Profit is Rs. 83.20 Lacs for the year ended March 31, 2022 as compared to Rs. 93.29 Lacs in the previous year registering a decrease of 10.82%

Further there has been a similar lack of growth in financial performance of the subsidiary; Aryaman Capital Markets Limited and Escorp Asset Management Limited. However, considering extremely difficult market conditions it is commendable that these subsidiaries have not incurred any substantial losses.


The Companys internal control systems are adequate, operating effectively and commensurate with the size of business. These internal control systems are provided through competent management, implementation of standard policies and processes, maintenance of an appropriate audit programme with an internal control environment, effective risk monitoring and management information systems. Moreover, the Company continuously upgrades these systems in line with the best available practices.

The internal control systems are supplemented by extensive internal audits, regular reviews by the Management and standard policies and guidelines to ensure the reliability of financial and all other records to prepare financial statements and other data. The Management Information System (MIS) forms an integral part of the Companys control mechanism. The Company has regular checks and procedures through internal audits conducted by an independent audit firm, periodically. The reports are deliberated and an executive summary of the same along with Action Taken Reports (ATR) and steps taken by the Management to address the issues, are placed before the Audit Committee meeting/ Board meeting for their review. Reports of internal auditors are reviewed by the Audit Committee, and corrective measures, if any, are carried out towards further improvement in systems and procedures in compliance with Internal Control Systems. The Board also recognises the work of the auditors as an independent check on the information received from the Management on the operations and performance of the Company.


Risks are integral to financial markets. However, it has been SEBIs continuous endeavor to reduce risks, even for service providers like your Company. As already mentioned, the company encounters risks posed by game changing technological, regulatory, taxation and competitive disruptions. Investments made by your company face market-related risks. Marked-to- market valuation of investments in compliance with accounting standards can have a meaningful impact on companys bottom line, beyond reasonable control of the management, as witnessed during FY20. Covid-19 Pandemic, posed a very different kind of risk for health of its employees and their families and business continuity.

Efforts are being continuously made to make the Company withstand all such risks and grow. It has a diversified bouquet of service offerings to a cross section of customer base. Superior risk management measures have been put in place to reduce risk in broking business. Prudent asset allocation and selection of investment products in line with time horizon, dilutes risks in proprietary investments. A comprehensive risk evaluation methodology and processes for early identification and mitigation of all kinds of risks are also in place. The Company has proactively encountered the challenges posed by Covid-19 Pandemic to ensure safety of its employees and business continuity.

Our implementation of risk management at the operational level embraces the identification, analysis and assessment of all possible risks as provided below:

Risk Concern Response
Economic and political risk Arising from changes in the macroeconomic conditions like political instability, foreign exchange fluctuations and crude oil prices. The Company has a dynamic business set up that allows itself to restrategise and respond to the uncertainties.
Financial and market risk Uncertainty in capital markets and negative investor sentiments may slow down the investments. Diversified business offerings, strong research and experienced team ensure promptness and stable operations.
Competition risk Loss of market share to existing players or new entrants. Competition gets the best out of the Company. It makes all the efforts to offer undivided attention to its customers. Besides, strong digital infrastructure and risk management team further ensure steady flow of operations.
Regulatory and compliance risk Regulatory risk arises due to dynamic changes in regulations that may significantly affect the business. Compliance risk arises due to the negligence in complying statutes, internal policies and best practices related to the business. The Company has ensured transparent disclosures in meeting the regulatory norms. The experienced team is further capable of handling and fulfilling all regulatory norms.
Human resources risk This risk arises due to low motivation, dissatisfaction or attrition of employees. Using the human capital risk approach, the Company efficiently manages the working culture, declaring performance-based incentives, conducting induction and training programmes at regular intervals.


The Company has established a comprehensive system for risk management and internal controls for all its businesses to manage the risks that it is exposed to. The objective of its risk management framework is to ensure that various risks are identified, measured and mitigated and also that policies, procedures and standards are established to address these risks and ensure a systematic response in the case of crystallization of such risks.

The Company has classified the key risks associated with its business into implied market risk, operational risk, information technology/cyber security risk, liquidity risk, credit risk and reputation risk. It has established various policies with respect to such risks which set forth limits, mitigation strategies and internal controls to be implemented by the three lines of defence approach provided below. These policies include a corporate risk and investment policy, a liquidity risk management policy, an operational risk management policy, an outsourcing policy, a fraud risk management policy, an information technology risk management policy, an information security management policy and a surveillance policy.

The Company is particularly sensitive to risks emanating from the introduction of new products and services. Before the launch of any new product or service, it is reviewed and approved by the corporate risk management group, compliance and operations groups and product and process approval committee that has been set up earlier. These groups and committee review the product/service through the lenses of regulatory compliance, risk management and integration with the existing risk management systems

The Board oversees the Companys risk management and has constituted a Risk Management Committee, which frames and reviews risk management processes and controls.

The risk management system features a ‘three lines of defence approach

The first line of defence comprises its operational departments, which assume primary responsibility for their own risks and operate within the limits stipulated in various policies approved by the Board or by committees constituted by the Board.

The second line of defence comprises specialised departments such as risk management and compliance. They employ specialised methods to identify and assess risks faced by the operational departments and provide them with specialised risk management tools and methods, facilitate and monitor the implementation of effective risk management practices, develop monitoring tools for risk management, internal control and compliance, report risk related information and promote the adoption of appropriate risk prevention measures. The Number of Employees are 23 (Twenty Three).


PARTICULARS 2021-22 2020-21 Change in ratios in %
Current ratio 9.94 7.64 17.06%
Debt- Equity Ratio 0.0027 0.01 4811.08%
Debt Service Coverage Ratio (31.22) N.A. N.A.
Interest Service Coverage Ratio 76.25 25.78 11.48%
Long term debt to working capital 0.01 0.03 1551.65%
Current liability ratio 0.92 0.83 132.95%
Total debts to total assets 0.0026 0.01 5097.78%
Return on Equity Ratio 0.06 0.03 8933.13%
Trade Receivable Turnover Ratio 64.08 84.82 0.89%
Trade Payable Turnover Ratio 83.65 23.53 15.11%
Net Capital Turnover Ratio 0.64 0.40 405.30%
Net Profit Ratio 0.28 0.23 511.91%
Return on Capital Employed 0.07 0.03 7664.93%
Return on Investment 0.01 0.02 4927.31/5


Debt- Equity Ratio Increased due to repayment of debts
Long term debt to working capital Decreased due to increase in working capital
Current liability ratio Increased due to reduction in the liabilities
Total debts to total assets Decreased due to increase in total assets & repayment of debts
Return on Equity Ratio Increased due to increase in net profit
Net Capital Turnover Ratio Increased due to increase in revenue from operations & working capital
Net Profit Ratio Increased due to increase in revenue from operations
Return on Capital Employed Increased due to increase in profit before interest, tax and exceptional items
Return on Investment Decreased due to increase in the investments


At Aryaman Financial Services Ltd, people are the key driving force behind the Companys success. They make us outperform. Respecting them, keeping them motivated and developing their skills and careers are essential if we are to be successful. We recognize and embrace the value that an engaged and motivated workforce can bring to an organization. The Company stays committed to its principle of ‘Your Success is our Success. The work environment is not just supportive of high levels of performance, but also the one in which people can share and celebrate their success.

Intellectual capital is one of the key resources of the Company to ensure business sustainability and growth. The Company has an experienced and talented pool of employees who play a key role in enhancing business efficiency, devising strategies, setting-up systems and evolving business as per industry requirements. The Company provides regular skill and personnel development training to enhance employee productivity. As part of group processes, the Company follows a robust leadership potential assessment and leadership development process. These processes identify and groom leaders for the future and also enable succession planning for critical positions in the Company.

Being a growth-oriented and progressive organization, it recognises the importance of professionalism. The Company has embarked on several human resource initiatives to enhance the productivity of the organization and each individual. The Company endeavours to provide a safe, conducive and productive work environment.


India is today one of the most vibrant global economies on the back of robust banking and insurance sectors. The relaxation of foreign investment rules has received a positive response from the insurance sector, with many companies announcing plans to increase their stakes in joint ventures with Indian companies. Over the coming quarters, there could be a series of joint venture deals between global insurance giants and local players.

The Indian equity market is expanding in terms of listed companies and market capitalization, widening the playing field for brokerage firms. Sophisticated products segment is growing rapidly, reflected in the steep rise in growth of derivatives trading.

With the increasing retail penetration, there is an immense potential to tap the untapped market. Growing financial awareness is expected to increase the fraction of population participating in this market. Total wealth held by individuals in unlisted equities is projected to grow at a CAGR of 19.54% to reach Rs. 17.64 lakh crore (US$ 273.69 billion) by FY22.

Total value of Private Equity (PE)/ Venture Capital (VC) investment grew 44% over the past three years in value terms to reach US$ 48 billion in 2019. VC investments grew to US$ 3.6 billion in July-September 2020 from US$ 1.5 billion in the previous quarter, powered by the mega deals, which included the US$ 1.3 billion raised by the online retailer—Flipkart.


In this Annual Report, we have disclosed forward-looking information to enable investors to comprehend our prospects and take investment decisions. This report and other statements - written and oral - that we periodically make contain forwardlooking statements that set out anticipated results based on the managements plans and assumptions. We have tried, wherever possible, to identify such statements by using words such as ‘anticipate, ‘estimate, ‘expects, ‘projects, ‘intends, ‘plans, ‘believes and words of similar substance in connection with any discussion of future performance.

We cannot guarantee that these forward-looking statements will be realised, although we believe we have been prudent in our assumptions .The achievements of results are subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialize or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Readers should keep this in mind. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.