To the Members of Aurionpro Solutions Limited
The Directors are pleased to present Twentieth Annual Report of the Company togetherwith its Audited financial statements for the financial year ended 31st March2017.
1. FINANCIAL RESULTS
The highlights of the Consolidated Financial Results are as under:
| || ||(Rs.in Lakhs) |
| ||31 March 2017 ||31 March 2016 |
|Income || || |
|Revenue from operations ||63828.04 ||71042.94 |
|Other income ||846.39 ||83.43 |
|Total revenue ||64674.43 ||71126.37 |
|Operating expenses ||17802.84 ||23949.42 |
|Change of Inventories of raw material finished goods and stock-in-trade ||(208.13) ||(58.98) |
|Employee benefits expense ||31146.58 ||30309.70 |
|Finance costs ||2632.62 ||2307.42 |
|Depreciation and amortization expenses ||2618.83 ||1653.44 |
|Other expenses ||8692.33 ||6735.64 |
|Total expenses ||62685.07 ||64896.64 |
|Profit before tax minority interest and exceptional item ||1989.36 ||6229.73 |
|Less: Exceptional item ||2759.71 ||- |
|Profit before tax and minority interest ||4749.07 ||6229.73 |
|Income tax expense: || || |
|(a) Current tax ||627.32 ||478.22 |
|(b) MAT credit utilised/entitlement ||186.13 ||203.20 |
|(c) Tax adjustment of earlier years ||275.37 ||248.93 |
|(d) Deferred tax credit ||(402.06) ||(209.62) |
|Profit after tax but before minority interest ||4062.31 ||5509.00 |
|Less: Minority interest ||(283.92) ||91.81 |
|Profit after tax and minority interest ||4346.23 ||5417.19 |
The highlights of the Standalone Financial Results are as under:
| ||31 March 2017 ||31 March 2016 |
|Revenue from operations ||21096.69 ||16017.75 |
|Other income ||1206.60 ||625.42 |
|Total revenue ||22303.29 ||16643.17 |
|Expenses || || |
|Operating expenses ||7355.41 ||3223.13 |
|Change in inventories of raw material finished goods and stock-in-trade ||133.26 ||(87.45) |
|Employee benefits expense ||8077.20 ||7399.63 |
|Finance costs ||910.99 ||925.35 |
|Depreciation and amortization expenses ||1326.36 ||929.15 |
|Other expenses ||2700.22 ||2284.57 |
|Total expenses ||20503.44 ||14674.38 |
|Profit before taxation ||1799.83 ||1968.79 |
|Income tax expense: || || |
|(a) Current tax ||333.34 ||450.23 |
|(b) MAT credit utilized/entitlement ||186.13 ||203.20 |
|(c) Tax adjustment of earlier years ||285.71 ||248.24 |
|(d) Deferred tax credit ||39.21 ||(161.48) |
|Profit After Tax ||955.44 ||1228.60 |
The analysis of the financial performance has been discussed in detail in theManagement Discussion and Analysis attached to this report.
2. MATERIAL CHANGES & COMMITMENTS
SCHEME OF DEMERGER:
The Board of Directors of the Company has on 09th May 2017 approved the scheme ofarrangement for demerger of non-core businesses of Aurionpro Solutions Limited(hereinafter referred to as the "Aurionpro" or "Demerged Company")into Trejhara Solutions Limited ("Resulting Company" or "Trejhara") awholly owned subsidiary of Demerged Company.
The business divisions consisting of Enterprise Security Digital Innovation Banking& Fintech and Government Solutions which are core business strengths (hereinafterreferred to as "Core Business") of the Company. Aurionpro is also providingconsulting services in these areas and has also developed IP which is available on cloudas SAAS (Software as a Service) and PAAS (Platform as a Service) models. These businessdivisions consist of Consulting Interactive Customer Communication (Interact DX) andSupply Chain Solutions (Logistics) which are non-core business (hereinafter referred toas "Non-Core Business") of the Company.
The Core Businesses and Non-Core Business has distinct characteristics with differentbusiness models and are at a different maturity stages in their life cycles. Thedifference is not only in their revenue cycles but require different sales approach andmethodologies have varied technology skill sets & cash flow profiles. Thus both thebusinesses have different risk profiles and growth opportunities and both of them have adistinct attractiveness to divergent set of investors. In order to unlock the truepotential the businesses would require undiluted management bandwidth to execute therespective vision. Therefore it would be prudent that Non-Core Business may betransferred into a separate Company and whose shares would also be listed on the stockexchange after the demerger
The Scheme is subject to the approval of the shareholders in the National Company LawTribunal ("the NCLT") convened meeting sanction of the NCLT and such otherapprovals as may be required.
Apart from above there are no material changes and commitments affecting the financialposition of the Company which have occurred between the end of financial year of theCompany to which the financial statement relates and the date of this report.
The Board of Directors ("the Board") has recommended dividend at the rate ofRs.1/- per equity share (10%) for the financial year ended 31st March 2017.
The Company has a healthy order book and it is optimistic on certain opportunitieswhich may further strengthen the order book. As a result there may be an increasedworking capital requirement. Further the Company will continue to focus on reducing theleverage. In this context the Board of Directors has decided to be conservative andrestrict dividend distribution at 10%.
The Members may approve the proposed dividend.
4. STATE OF COMPANY'S AFFAIRS
The management has focused on sharpening and strengthening three corebusinesses-Cybersecurity Digital Innovation and Banking industry solutions. Thebusinesses are so structured to give proper autonomy and empowerment to leaders leadingthe three core businesses. The year saw considerable consolidation based on thereorganization the previous year. Greater autonomy empowerment of leaders to acceleratego to market while being accountable for business performance has enabled greater marketpenetration.
Aurionpro has also significantly invested in strengthening the company's infrastructurein markets as well as for its delivery capabilities through viable partnerships withglobal hardware companies local channel partners and resellers. The entire salesoperations operates out of Salesforce.com system today allowing for real-time view intosales pipeline billing and revenue accrual with predictive business analytics. Companynow uses Netsuite for consolidating all of its accounting across business units and hasinvested in Pardot as its Marketing Automation Tool. Delivery teams have been strengthenedin India USA and UK. Adding to its numerous technical and operational certifications thecompany also sustained PCMM Level 5 certifications for its India and Security practices.The certifications enable it to provide the highest levels of security and predictabilitythrough mature delivery processes.
5. FINANCIAL RESOURCES/FUND RAISING
During the year the Company has not granted any fresh options under the Scheme. As on31st March 2017 there are no outstanding options pending for exercise.
The Company has Employee Stock Option Scheme 2010 ("the Scheme") which hasbeen approved by the Members at the Annual General Meeting held on 30thSeptember 2009.
(b) Issue of Preferential Shares:
During the year the Company has not made any fresh issue of equity shares orconvertible warrants under preferential issue scheme/private placement. However warrantholders of 1240000 convertible warrants issued and allotted under preferentialallotment scheme 2015 has exercised their rights and accordingly 1085000 equity shareshave been allotted after 31st March 2017. The details of the equity sharesallotted pursuant to conversion of warrants are as under:
|NAME OF WARRANT HOLDER ||NO OF WARRANTS HELD ||DATE ALLOTMENT OF EQUITY SHARES ||EQUITY SHARES ALLOTTED ON EXERCISE OF CONVERSION RIGHTS ||NO OF WARRANTS LAPSED |
|IL and FS Trust Company Limited ||200000 ||03rd April 2017 ||150000 ||50000 |
|Mr. Ajay Sarupria ||540000 ||28th April 2017 ||485000 ||55000 |
|Mr. Paresh Zaveri ||300000 ||28th April 2017 ||250000 ||50000 |
|Mr. Amit Sheth ||200000 ||28th April 2017 ||200000 ||NIL |
6. SUBSIDIARIES/JOINT VENTURES/ASSOCIATE COMPANIES
The details of Subsidiaries/Joint Ventures/Associate Companies and changes thereto ifany has been provided in MGT-9 which forms part of Directors Report.
7. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in the prescribed formMGT-9 is annexed herewith as Annexure 1".
8. CORPORATE GOVERNANCE
The Report on corporate governance as per the requirement of Regulation 34 of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 forms part of this Annual Report. Further the requisite certificatefrom M/s. Milind Nirkhe & Associates Practicing Company Secretaries confirming thecompliance with the conditions of corporate governance has been included in the saidReport.
9. MANAGEMENT DISCUSSION AND ANALYSIS (MDA)
Management Discussion and Analysis for the year under review as required underRegulation 34 (2) (e) of the Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 has been covered in a separate sectionforming part of this Annual Report.
10. CORPORATE SOCIAL RESPONSIBILITY (CSR)
In accordance with the provisions of Section 135 read with Schedule VII of theCompanies Act 2013 the Company has adopted a CSR Policy outlining various CSR activitiesto be undertaken by the Company. The CSR Policy of the Company is available on theCompany's website www.aurionpro.com.
During the year under review the Company has spent Rs. 32 Lakhs on CSR activities.
The Board has constituted a CSR committee inter-alia to define and monitor budgets tocarry out CSR activities to decide CSR projects or activities to be undertaken and tooversee such projects.
CSR Committee comprises of following:
|Ms. Carol Realini ||- ||Chairperson |
|Dr. Mahendra Mehta ||- ||Member |
|Mr. Amit Sheth ||- ||Member |
|Mr. Samir Shah ||- ||Member |
Further the disclosures as required under Rule 9 of Companies (Corporate SocialResponsibility Policy) Rules 2014 has been enclosed to this Report in "Annexure2".
11. INTERNAL CONTROL SYSTEM & THEIR ADEQUACY
The Company has an internal control system which commensurate with the size scale andnature of its operations. The Internal Audit Team monitors and evaluates the efficacy andadequacy of internal control system in the Company its compliance with operating systemsaccounting procedures and policies of the Company.
12. DIRECTORS' RESPONSIBILITY STATEMENT
In terms of the provisions of Section 134(3)(c) of the Act the Directors confirm that:
i) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures if any;
ii) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year 31stMarch 2017 and of the profit and loss of the Company for that period;
iii) the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
iv) the Directors have prepared the annual accounts on a going concern basis; and
v) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
vi) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
13. DIRECTORS/KEY MANAGERIAL PERSONNEL (KMP)
(a) Board of Directors:
Pursuant to the provision of Section 152(6) of the Companies Act 2013 and article 127of the Articles of Association of the Company Mr.Paresh Zaveri Chairman & Director retire by rotation and being eligible offers himself for reappointment at the ensuingAnnual General Meeting.
None of the Independent Directors had any pecuniary relationship or transactions withthe Company during Financial Year 2016-17. None of the Directors or KMP of the Company isrelated inter-se.
All Independent Directors have given declarations affirming that they meet the criteriaof independence as laid down under Section 149(6) of the Companies Act 2013 andRegulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
The information as required to be disclosed under regulation 36 of the ListingRegulations in case of reappointment of director is provided in Corporate GovernanceReport forming part of the Annual Report.
(b) Appointment/Resignation of Directors/KMP
During the year under review Mr. Amit Sheth resigned from executive position as theManaging Director of the Company but he has continued to remain as Co-Chairman &Non-Executive Director on the Board.
14. PERFORMANCE EVALUATION
The Company's policy relating to appointment and remuneration of Directors KMPs andother employees including criteria for determining qualifications positive attributes andindependence of Directors are covered under the Corporate Governance Report which formspart of this Annual Report.
The Board of Directors annually evaluate its own performance and that of its committeesand individual Directors.
The Board has formulated the Nomination and Remuneration Policy for selection andappointment of Directors senior management personnel and their remunerations. This policyis available on the website of the company at http://www.aurionpro.com/investors/.
During the year under review the Board met four times on 30th May 2016 12thAugust 2016 12th November 2016 and 13th February 2017. The gapbetween two meetings did not exceed 120 days.
As on the date of this report the Board has four committees-
i) Audit Committee;
ii) Nomination and Remuneration/Compensation Committee;
iii) Stakeholder Relationship/Investor Grievance and Share Transfer Committee; and
iv) Corporate Social Responsibility Committee.
The detailed information in relation to these committees including composition and theterms of reference and other details are provided in Corporate Governance Report.
17. VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has established the necessary vigil mechanism and has put in place aWhistle Blower mechanism in order to enable the employees and Directors to report theirconcerns about the management operations and other affairs of the Company. In terms ofthe Whistle Blower Policy the whistle blowers are provided an access to the AuditCommittee to lodge their concerns. This policy is available on the website of the Companyat http://www.aurionpro.com/investors/.
18. RISK MANAGEMENT POLICY
The Company has formulated a comprehensive Risk Management Policy to identify assessand mitigate various risks associated with the Company. This policy is available on thewebsite of the company at http://www.aurionpro.com/investors/.
19. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
The details of loans guarantees and investments covered under the provisions ofSection 186 of the Companies Act 2013 are given under the notes to the standalonefinancial statements forming part of this annual report.
20. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All related party transactions entered into during the financial year were on an arm'slength basis and were in the ordinary course of business. During the financial year theCompany has not entered into any contract/arrangement transactions with related partieswhich could be considered material in accordance with the policy of the Company as torelated party transactions. The details of all related party transactions are placedbefore the Audit Committee for approval. The policy as to Related Party Transactions asapproved by the Board is available on the Company's website athttp://www.aurionpro.com/investors/.
The details of transactions entered into with the related parties are disclosed in thenotes to the stand alone financial statements forming part of this Annual Report.
21. PUBLIC DEPOSITS
During the year the Company has neither invited nor accepted any public deposits.
22. AUDITORS AND AUDIT REPORT:
During the year under review M/s. B S R & Co. LLP Chartered Accountants StatutoryAuditors of the Company resigned as a Statutory Auditors of the Company w.e.f 31stJanuary 2017. Consequently M/s. Chokshi & Chokshi LLP Chartered Accountants hasbeen appointed as Statutory Auditors of the Company by the Members to fill up the casualvacancy caused due to resignation of M/s. B S R & Co. LLP.
M/s. Chokshi & Chokshi LLP shall hold office up to the conclusion of forthcomingAnnual General Meeting.
The Board of Directors has recommended appointment of M/s. Chokshi & Chokshi LLP(Firm Registration No. 101872W/W100045) Chartered Accountants as Statutory Auditors ofthe Company to hold office from the conclusion of this Annual General Meeting till theconclusion of the fourth consecutive Annual General Meeting.
M/s. Chokshi & Chokshi LLP Chartered Accountants being eligible under section139(1) and other applicable provisions has consented to act as the Statutory Auditors ofthe Company and has also confirmed that their appointment if made would be within thelimits prescribed under the Companies Act 2013.
The Statutory Auditors of the Company has stated in their report that during thecourse of Audit no fraud on or by the Company has been noticed or reported.
23. SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 Secretarial Audit wascarried out by M/s. Milind Nirkhe & Associates Company Secretary in Practice. TheReport of the Secretarial Audit is annexed herewith as "Annexure 3".
The qualifications raised by the Secretarial Auditor and Board's response thereto areas under.
|Qualification : ||The Company is not having designated Chief Financial Officer during the year under review. |
|Response : ||On the date of this report Company has appointed Chief Financial Officer (CFO) and has ensured compliance. |
|Qualification : ||The composition of the Board of Directors is not in conformity with Regulation 17 of SEBI (Listing obligations and Disclosure Requirements) Regulations 2015 |
|Response: ||The Company is in search of a suitable candidates who can be inducted as Independent Directors. The Company is hopeful of restoring the composition of Board as per the requirement of SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015. |
24. PARTICULARS OF EMPLOYEES
In terms of the provision of Section 197(12) of the Act read with the Rules 5(2) and5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014a statement showing the names and other particulars of the employees drawing remunerationin excess of the limits set out in the said rules is provided in a separate annexureforming part of this Report. Having regard to the provision of the first proviso toSection 136(1) of the Act the Annual Report excluding the aforesaid information is beingsent to the Members of the Company. In terms of Section 136 the said annexure is open forinspection at the Registered Office of the Company. Any Member interested in obtaining acopy of the same may write to the Company Secretary.
The disclosures pertaining to the remuneration and other details as required undersection 197(12) of the Act read with Rule 5(1) of the of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 have been provided in the Annual Reportas "Annexure 4".
25. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
In terms of section 134(3)(m) of the Companies Act 2013 read with rule 8 of theChapter IX The Companies (Accounts) Rules 2014 the Directors furnish herein below therequired additional information:
? Conservation of Energy:
Although the operations of the Company are not energy intensive the management ishighly conscious of the criticality of the conservation of energy at all operationallevels. The requirement of disclosure of particulars with respect to conservation ofenergy as prescribed in Section 134(3)(m) of the Act read with Rule 8(3) of the Companies(Accounts) Rules 2014 is not applicable to the Company and hence are not provided.
? Technology Absorption:
The Company continues to latest technologies and innovations for improving theproductivity and quality of its products and service offerings. The Company is alsopartnering with major technology providers in global markets.
? Foreign Exchange Earnings and Outgo:
The details of foreign exchange earned and spent by the Company during the year aregiven below:
Earnings in foreign currency
|Particulars ||31 March 2017 ||31 March 2016 |
|Information technologies and consultancy services ||4367.14 ||6041.50 |
|Interest income on working capital loan ||311.89 ||298.69 |
|Total ||4679.03 ||6340.19 |
Expenditure in foreign currency (on accrual basis)
| || ||( Rs.In lakhs) |
|Particulars ||31 March 2017 ||31 March 2016 |
|Software consultancy and development and other expenses ||212.60 ||586.44 |
|Travelling expenses ||255.80 ||144.45 |
|Total ||468.40 ||730.89 |
26. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The Company has in place necessary Policy as required under the Sexual Harassment ofWomen at the Workplace (Prevention Prohibition & Redressal) Act 2013. The InternalComplaints Committee (ICC) has been set up to redress complaints received regarding sexualharassment. All employees (permanent contractual temporary trainees) are covered underthis policy. During the year 2016-17 the Company has not received any sexual harassmentcomplaints under the policy.
27. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/Courts which wouldimpact the going concern status of the Company and its future operations.
28. DISCLAIMER AND FORWARD LOOKING STATEMENT
The statements in the Board's Report and the Management Discussion & Analysisdescribing the Company's objectives expectations or forecasts may be forward-lookingwithin the meaning of applicable securities laws and regulations. Actual results maydiffer materially from those expressed in the statement. Important factors that couldinfluence the Company's operations include global and domestic demand and supply inputcosts availability changes in government regulations tax laws economic developmentswithin the country and other factors such as litigation and industrial relations
The Directors would like to place on record their sincere appreciation for thecontinued co-operation support and assistance provided by the financial institutionsbanks customers vendors members and other government departments and authorities.
For and on behalf of the Board of Directors
Co-Chairman & Director
Synergia IT Park
Plot No. R-270
T.T.C. Industrial Estate
Near Rabale Police Station
Rabale Navi Mumbai -400701
Date: 28 August 2017.