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Aurionpro Solutions Ltd.

BSE: 532668 Sector: IT
NSE: AURIONPRO ISIN Code: INE132H01018
BSE LIVE 15:44 | 09 Dec 149.65 21.85
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NSE LIVE 15:56 | 09 Dec 149.40 21.70
(16.99%)
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OPEN 128.00
PREVIOUS CLOSE 127.80
VOLUME 379168
52-Week high 224.90
52-Week low 90.35
P/E 8.81
Mkt Cap.(Rs cr) 328.48
Buy Price 0.00
Buy Qty 0.00
Sell Price 147.90
Sell Qty 268.00
OPEN 128.00
CLOSE 127.80
VOLUME 379168
52-Week high 224.90
52-Week low 90.35
P/E 8.81
Mkt Cap.(Rs cr) 328.48
Buy Price 0.00
Buy Qty 0.00
Sell Price 147.90
Sell Qty 268.00

Aurionpro Solutions Ltd. (AURIONPRO) - Director Report

Company director report

To the Members of Aurionpro Solutions Limited

The Directors are pleased to present Nineteenth Annual Report of the Company togetherwith its Audited financial statements for the year ended 31 March 2016:

1. FINANCIAL RESULTS

Consolidated Financials of the Company:

31 March 2016 31 March 2015
Revenue
Revenue from operations 71042.94 73691.40
(Net of excise duty of Rs 42.84 (31 March 2015: Rs 124.09))
Other income 924.22 1753.33
Total revenue 71967.16 75444.73
Operating expenses 23949.42 26065.74
Change of Inventories of raw material finished goods and stock-in-trade (58.99) 746.06
Employee benefits expense 30375.07 26989.69
Finance costs 2307.42 2241.73
Depreciation and amortisation 1653.44 3769.78
Other expenses 7511.05 7442.27
Total expenses 65737.41 67255.27
Profit before tax minority interest and exceptional item 6229.75 8189.46
Less: Exceptional item - 22293.47
Profit before tax and minority interest 6229.75 (14104.01)
Income tax expense:
(a) Current tax 478.22 348.49
(b) MAT credit utilised/entitlement 203.20 290.16
(c) Tax adjustment of earlier years 248.94 (2.82)
(d) Deferred tax credit (209.62) (353.17)
720.73 282.66
Profit after tax but before minority interest 5509.02 (14386.67)
Less: Minority interest 91.81 (10.86)
Profit after tax and minority interest 5417.21 (14375.81)

Total income decreased to Rs 71967.16 Lakhs from Rs 75444.73 lakhs in the previousyear at the rate of 4.61%.

Financials of the Company on a standalone basis

31 March 2016 31 March 2015
Revenue
Revenue from operations 16017.75 26108.13
(Net of excise duty of Rs 42.84 (31 March 2015: Rs 124.09))
Other income 1572.45 1319.11
Total revenue 17590.20 27427.24
Expenses
Operating expenses 3223.13 13994.49
Change in inventories of raw material finished goods and stock-in-trade (87.46) 774.53
Employee benefits expense 7399.63 6399.18
Finance costs 925.35 1051.56
Depreciation and amortisation 929.15 905.90
Other expenses 3231.61 2910.38
Total expenses 15621.41 26036.04
Profit before taxation 1968.79 1391.20
Income tax expense:
(a) Current tax 450.23 341.92
(b) MAT credit utilised/entitlement 203.20 290.16
(c) Tax adjustment of earlier years 248.24 18.25
(d) Deferred tax credit (161.48) (236.20)
740.19 414.13
Profit for the year 1228.60 977.07

2. DIVIDEND

The Board of Directors ("the Board") has recommended dividend at the rate ofRs 3/- per equity share (30%) for the financial year ended 31 March 2016. The total payouttowards dividend and tax thereon will be Rs 792.57. The Members may approve the proposeddividend.

3. STATE OF COMPANY'S AFFAIRS

The management has re-organized the company around its strategy of simplifying andsharpening its focus on three core businesses - Enterprise Security Digital Innovationand Banking industry solutions. The businesses are so structured to give proper autonomyand empowerment to leaders leading the three core businesses. The year saw considerablestrengthening of the management team with leadership hires in sales and marketingfunctions. The Organization has redefined its market positioning in keeping with highimpact businesses namely - Digital Innovation Enterprise Security and BusinessOptimization and corresponding changes in sales and delivery organization has been rolledout globally.

Aurionpro has also significantly invested in strengthening the company's infrastructurein markets as well as for its delivery capabilities. The entire sales operations operatesout of Salesforce.com system today allowing for real-time view into sales pipelinebilling and revenue accrual with predictive business analytics. Company now uses Netsuitefor consolidating all of its accounting across business units and has invested in Pardotas its Marketing Automation Tool. Delivery teams have been strengthened in India and a newdevelopment center has been established in Leeds in the UK. Adding to its numeroustechnical and operational certifications the company also attained PCMM Level 5certifications for its India and Security practices. The certifications strengthenAurionrpo's credentials and enable it to provide the highest levels of security andpredictability through mature delivery processes.

4. FINANCIAL RESOURCES/FUND RAISING

(a) ESOP

The Company has Employee Stock Option Scheme 2010 ("the Scheme") which hasbeen approved by the Members at the Annual General Meeting held on 30 September 2009. Thedetails of the options granted vested exercised lapsed and outstanding as on the dateof this Report are as under.

Particulars Number of Options
Options available under the Scheme 1000000
Options granted & vested (500000)
Options exercised (250000)
Options lapsed & forfeited 250000
Options outstanding under the Scheme 500000

During the year the Company has not granted any fresh options under the Scheme.

(b) Issue of Preferential Shares:

During the year the Company raised capital through the issuance of equity shares /convertible share warrants pursuant to the approval of the Members obtained at theprevious Annual General Meeting dated 22 September 2015 and in terms of the provisions ofthe Act and the SEBI (Issue of Capital and Disclosure Requirements) 2009 as amended fromtime to time ("SEBI Regulations"). The details of the equity shares / sharewarrants issued during the year are as under:

i) Equity Shares:

The details of equity shares allotted are as under:

Date of Allotment Name of the Allottee & category Number of equity shares allotted (face value Rs 10/- each) Issue Price
15th October 2015 Ajay Sarupria - Non Promoter 200000 220/-
15th October 2015 SAM Financial Services Pvt. Ltd - Non Promoter

400000

220/-
15th October 2015 Lakshmi Family Private Trust - Non Promoter 200000 220/-
27th October 2015 Paresh Zaveri - Promoter 500000 220/-
27th October 2015 Amit Sheth - Promoter 200000 220/-
27th October 2015 Indusvaley Holdings Pte Ltd - Non Promoter 595983 220/-

The equity shares so allotted and subject to lock-in and have been priced as stipulatedunder the SEBI Regulations.

ii) Convertible Share Warrants:

Date of Issuance Name of the Allottee & category Number of Warrants Issued Issue / conversion Price
15th October 2015 Ajay Sarupria - Non Promoter 540000 220/-
15th October 2015 Lakshmi Family Private Trust - Non Promoter 200000 220/-
27th October 2015 Paresh Zaveri - Promoter 300000 220/-
27th October 2015 Amit Sheth - Promoter 200000 220/-

The convertible share warrants so issued have been priced in conformity with theformula stipulated in the SEBI Regulations and the said warrants can be converted intoequity shares (face value of Rs 10/- each) within a period of 18 months from the issuedate.

5. MATERIAL CHANGES & COMMITMENTS

There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of financial year of the Company to whichthe financial statement relates and the date of this report.

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 form MGT9 is annexed herewith as "Annexure 1".

8. CORPORATE GOVERNANCE

The Report on corporate governance as per the requirements of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 forms part of this Annual Report. Further the requisite Certificate from M/s.Milind Nirkhe & Associates Practicing Company Secretaries confirming the compliancewith the conditions of Corporate Governance has been included in the said Report.

9. MANAGEMENT'S DISCUSSION AND ANALYSIS (MDA)

Management's 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 the Annual Report.

10. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company is committed to the noble spirit of giving back to the society and has beencontributing to the various charitable initiatives aimed at improving the social good.After coming into effect of the Section 135 of the Companies Act 2013 (the"Act") and rules made thereunder the Company has formalized a structure forundertaking such CSR activities in more organized manner by formulating a CSR Policy andCommittee of the Board ("the CSR Committee") for this purpose. The CSR Policy ofthe Company sets out the broad social objectives towards the accomplishment of which theCompany would undertake initiatives. The Board has constituted a CSR Committee as perCompanies (Corporate Social Responsibility Policy) Rules 2014 which performs thefunctions as contemplated under the CSR Policy.

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 "Annexure 2".

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) 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 31 March2016 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. Amit Sheth Co-Chairman & ManagingDirector retire by rotation and being eligible offers himself for reappointment at theensuing Annual General Meeting.

None of the Independent Directors have had any pecuniary relationship or transactionswith the Company during Financial Year 2015-16 except to the extent of theirdirectorship. None of the Directors or KMP of the Company is related inter-se. AllIndependent Directors have given declarations affirming that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16(1 )(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

(b) Appointment/Resignation of KMP:

Mr. Mehul Raval resigned as the Company Secretary and Compliance Officer w.e.f 20November 2015. Subsequently Mr. Ninad Kelkar has been appointed as the Company Secretaryand Compliance Officer with effect from 12 January 2016.

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.

It's a practice of Board of Directors to annually evaluate its own performance and thatof its committees and individual Directors.

15. MEETINGS

During the year 2015 - 16 the Board met five times on 28 May 2015 11 August 2015 17*August 2015 05 November 2015 and 12 February 2016. The gap between two meetings did notexceed 120 days.

16. COMMITTEES

As on 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.

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 put in place a WhistleBlower mechanism in order to enable the employees and Directors to report their concernsabout the management operations and other affairs of the Company. In terms of the WhistleBlower Policy the whistle blowers are provided an access to the Audit Committee to lodgetheir concerns. This policy is available on the website of the company at 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.

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 at http://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 not invited or accepted any public deposits.

22. AUDITORS AND AUDIT REPORT

M/s BSR & Co. LLP Chartered Accountants (LLP Regn No. AAB- 8181) has beenappointed as Statutory Auditors at the 17th Annual General Meeting ("theAGM") held on 30 September 2014 to hold office for a period of five years tillconclusion of the 22nd Annual General Meeting of the Company. As per theprovision of Section 139 of the Act the said appointment is subject to ratification bythe members at every AGM. Accordingly an item for the ratification of appointment of M/sBSR & Co. LLP Chartered Accountants has been taken up in the notice of the forthcoming AGM for the approval of members. Necessary confirmation regarding eligibility andwillingness to accept office has been received from the Statutory Auditors.

The Statutory Auditor of the Company has stated in their report that during the courseof 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 Following Qualifications have been observed by the secretarial Auditor during theAudit Period.

(a) The Company is not having designated Chief Financial Officer; and

(b) The composition of the Board of Directors is not in conformity with Regulation 17of SEBI (Listing obligations and Disclosure Requirements) Regulations 2015

Directors Reply on the qualifications in Secretarial Audit Report are as follows:

The Company is in search of a suitable candidate who can be

appointed as a Chief Financial Officer and an Independent Director and we are hopefulof restoring the composition of Board as per the requirement of SEBI (Listing Obligationand 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.

Disclosures pertaining to the remuneration and other details as required under section197(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 2016 31 March 2015
Information technologies and consultancy services 6041.50 7691.25
Interest income on working capital loan 298.69 309.10
Total 6340.19 8000.35

a. Expenditure in foreign currency (on accrual basis)

(' In lakhs)

Particulars 31 March 2016 31 March 2015
Software consultancy and development and other expenses 586.44 753.06
Foreign Travel 144.45 332.51
Total 730.89 1085.57

b. Value of Import on C.I.F. basis

Particulars 31 March 2016 31 March 2015
Software consultancy and development and other expenses 929.61 425.29
Total 929.61 425.29

26. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. The Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy. During the year 2015-16 the Companyhas not received any sexual harassment complaints.

27. ACKNOWLEDGEMENTS

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

Amit Sheth

Co-Chairman & Managing Director

Mahendra Mehta

Director

Mumbai

Registered Office:

35th Floor

Sunshine Tower Tulsi Pipe Road

Dadar (W) Mumbai - 400 013.

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