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Aurionpro Solutions Ltd.

BSE: 532668 Sector: IT
NSE: AURIONPRO ISIN Code: INE132H01018
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VOLUME 120091
52-Week high 181.00
52-Week low 59.75
P/E 13.89
Mkt Cap.(Rs cr) 153
Buy Price 63.50
Buy Qty 400.00
Sell Price 64.60
Sell Qty 1.00
OPEN 75.65
CLOSE 74.65
VOLUME 120091
52-Week high 181.00
52-Week low 59.75
P/E 13.89
Mkt Cap.(Rs cr) 153
Buy Price 63.50
Buy Qty 400.00
Sell Price 64.60
Sell Qty 1.00

Aurionpro Solutions Ltd. (AURIONPRO) - Director Report

Company director report

To the Members of Aurionpro Solutions Limited

The Directors are pleased to present Twenty First Annual Report of theCompany together with its audited financial statements for the year ended 31st March2018.

1. FINANCIAL RESULTS

The financial performance of the Company on Consolidated Basis:

(Rs in Lakhs)

31 March 2018

31 March 2017

Income
Revenue from operations

41854.54

49390.26

Other Income

569.21

846.39

Total Revenue

42423.75

50236.65

Operating Expenses

12922.06

17720.32

Change of Inventories of raw material finished goods and stock-in-trade

(683.11)

(220.69)

Employee benefits expense

17429.41

20957.25

Finance costs

1396.69

1637.28

Depreciation and amortization expenses

3224.65

2952.57

Other expenses

4199.97

6341.54

Total expenses

38489.67

49388.27

Profit before tax minority interest and exceptional item

3934.08

848.38

Add/Less: Exceptional item

-

2759.71

Profit before tax and minority interest

3934.08

3608.09

Income tax expense:
(a) Current tax

1029.94

305.13

(b) MAT credit utilized/entitlement

61.62

186.13

(c) Tax adjustment of earlier years

-

275.37

(d) Deferred tax credit

(946.61)

(410.23)

Profit after tax but before minority interest

3789.13

3251.69

Less: Minority interest

-

-

Profit after tax from Continued Operations

3789.13

3251.69

Profit before Tax from Discontinued Operations

10806.79

1288.30

Tax Expenses of Discontinued Operations

3.171.39

322.19

Profit after Tax from Discontinued Operations

7635.40

966.11

Profit for the period attributable from Continued Operations
(a) Equity holders of the company

2937.20

3470.58

(b) Non Controlling Interest

851.93

(218.89)

Profit for the period attributable from discontinued Operations
(a) Equity holders of the company

5918.69

1031.14

(b) Non Controlling Interest

1716.71

(65.03)

Note:

1) Pursuant to its Order dated July 27 2018 the Hon'ble NationalCompany Law Tribunal Mumbai (NCLT) has sanctioned the Scheme of Demerger (“theScheme) in terms of which certain businesses including Interactive Customer Communication(Interact DX) and Supply Chain Solutions (Logistics) were demerged and transferred intoTrejhara Solutions Ltd. The Appointed Date for the Scheme was March 31 2017. Thereforethe figures stated above are after giving effect of the 'Accounting Treatment' envisagedunder the Scheme.

2) The previous year's figures have been regrouped/re-classifiedwherever required and the same are not comparable due to effect of the Demerger as per theScheme of Demerger.

3) Figures of the Statement of Profit and Loss for the year ended 31March 2017 includes demerged business performance hence current year figures are notcomparable with those for the previous year. (Refer Note 43)

The financial performance of the Company on Standalone Basis:

(Rs in Lakhs)

31March 2018

31 March 2017

Income
Revenue from operations

26793.99

21191.91

Other Income

577.88

816.85

Total Revenue

27371.87

22008.76

Operating Expenses

13448.91

7450.63

Change of Inventories of raw material finished goods and stock-in-trade

(717.20)

120.71

Employee benefits expense

8200.66

8075.19

Finance costs

1020.19

916.99

Depreciation and amortization expenses

1166.92

1329.6

Other expenses

2523.01

2297.32

Total expenses

25642.49

20190.44

Profit before tax minority interest and exceptional item

1729.38

1818.32

Add/Less: Exceptional item

-

-

Profit before tax and minority interest

1729.38

1818.32

Income tax expense:
(a) Current tax

678.69

333.34

(b) MAT credit utilized/entitlement

61.61

186.13

(c) Tax adjustment of earlier years

-

285.71

(d) Deferred tax credit

(237.56)

31.04

Profit After Tax

1226.64

982.10

Note:

1) Pursuant to its Order dated July 27 2018 the Hon'ble NationalCompany Law Tribunal Mumbai (NCLT) has sanctioned the Scheme of Demerger (“theScheme) in terms of which certain businesses including Interactive Customer Communication(Interact DX) and Supply Chain Solutions (Logistics) were demerged and transferred intoTrejhara Solutions Ltd. The Appointed Date for the Scheme was March 31 2017. Thereforethe figures stated above are after giving effect of the 'Accounting Treatment' envisagedunder the Scheme.

2) The previous year figures have been regrouped/re-classifiedwherever required and the same are not comparable due to effect of the Demerger as per theScheme of Demerger.

3) Figures of the Statement of Profit and Loss for the year ended 31March 2017 includes demerged business performance hence current year figures are notcomparable with those for the previous year. (Refer Note 46)

2. MATERIAL CHANGES & COMMITMENTS

SCHEME OF DEMERGER:

The Board of Directors of the Company had on May 9 2017 approved thescheme of arrangement (“the Scheme”) under Section 230-232 of the CompaniesAct 2013 for the demerger of certain businesses of Aurionpro Solutions Limited(hereinafter referred to as (“Aurionpro”) into Trejhara Solutions Limited(“Trejhara”). Subsequently after obtaining approval from the stock exchangesand shareholders (through an NCLT convened meeting held on January 23 2018) the Schemewas approved by the Hon'ble National Company Law Tribunal Mumbai vide its Order datedJuly 27 2018. The same was filed with the Registrar of Companies on August 2 2018 thenthe Scheme became effective.

The 'Appointed Date' as per the Scheme was fixed at March 31 2017with effect from which the 'Demerged Undertaking' which inter alia includes all theoperations including assets and liabilities pertaining to the 'Demerged Business' havebeen transferred to the Trejhara. Accordingly the audited financial statements for theyear ended March 31 2018 in this Annual Report has been published after giving effectof the 'Accounting Treatment' envisaged under the Scheme. The financial statements for theyear ended March 31 2017 have also been re-stated to the extent of the impact of theScheme for comparison purpose.

Apart from above there are no material changes and commitmentsaffecting the financial position of the Company which have occurred between the end offinancial year of the Company to which the financial statements relate and the date ofthis report.

2. DIVIDEND

The Company has witnessed healthy growth in the financial year 2017-18taking note of the same the Board of Directors (“the

st

Board”) has recommended dividend at the rate of Rs 2/- per equityshare (20%) for the financial year ended 31 March 2018.The total payout towards dividendand tax thereon will be Rs 568.42 Lakhs.

The Members may approve the proposed dividend.

3. STATE OF COMPANY'S AFFAIRS

The demerger of the non-core business lines has been completed. Thedemerger was aimed at unlocking value of the demerged businesses as well as other corebusiness of the Aurionpro. The demerger will enable the management to provide focusedattention in terms of management support and investment to each of core businesses of theCompany. After demerger the management has focused on sharpening and strengthening threecore businesses - Cybersecurity Banking & Fintech and Government solutions.

Increase in business of Digital Innovation & Government Serviceshas led to growth in revenue. The Company has enough presence in Government Servicesbusiness and is confident of executing it in the most efficient way and hoping for morebusiness to tick in which will help us grow our top line with accelerated margins. Shifttowards IP Portfolio (Cybersecurity Digital Innovation & Banking and Fintech) has ledto margin expansion going ahead the Board expects the accelerated growth from bettermonitization of the portfolio in existing and new markets.

The details on operational & financial performance are covered atlength in the Management Discussion and Analysis Section forming Part of this Report.

4. FINANCIAL RESOURCES/FUND RAISING (a) ESPS:

During the year with an objective to retain and attract talent in theorganization the Company had launched Employee Share Purchase Scheme 2017 (“ESPS2017”) which was approved by the Members through Postal Ballot results of whichwere declared on 7th September 2017. The ESPS 2017 has been framed and implemented incompliance with the SEBI (Share Based Employee Benefits) Regulations 2014.

In terms of the ESPS 2017 the shares are offered to the eligibleemployees of the Company and its subsidiaries at a face value i.e Rs 10/- per share. TheBoard of Directors (including Committee of the Board empowered for this purpose) has beenempowered to identify eligible employees based on their performance evaluation. Theequity shares issued under the ESPS 2017 are subject to the lock-in for a period of oneyear as per the SEBI (Share Based Employee Benefits) Regulations 2014.

The details of the shares issued and allotted under the ESPS 2017 ason the date of this Report are as under:

Particulars

Outstanding Shares

Total Number of Shares for which In principle approval received from the stock exchanges

1151765

Less: Number of Shares allotted on 28th December 2017

114000

Less: Number of Shares allotted on 10th January 2018

465000

Less: Number of Shares allotted on 19th June 2018

16000

Number of Shares available for further Grant

556765

6. SUBSIDIARIES/JOINT VENTURES/ASSOCIATE COMPANIES

The details of Subsidiaries/Joint Ventures/Associate Companies andchanges thereto if any has been provided in MGT-9 which forms part of this DirectorsReport.

7. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in theprescribed form MGT-9 is annexed herewith as “Annexure 1”.

8. CORPORATE GOVERNANCE

The Report on corporate governance as per the requirements ofRegulation 34 of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 forms part of this Annual Report. Further therequisite certificate from M/s. Milind Nirkhe & Associates Practicing CompanySecretaries confirming the compliance with the conditions of corporate governance hasbeen included in the said Report.

9. MANAGEMENT DISCUSSION AND ANALYSIS (MDA)

Management Discussion and Analysis for the year under review asrequired under Regulation 34 (2) (e) of the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 has been covered in aseparate section forming part of this Annual Report.

10. CORPORATE SOCIAL RESPONSIBILITY (CSR)

In accordance with the provisions of Section 135 read with Schedule VIIof the Companies Act 2013 the Company has adopted a CSR Policy outlining various CSRactivities to be undertaken by the Company. The CSR Policy of the Company is available onthe website of the Company at www.aurionpro.com.

During the year under review the Company has contributed Rs 40 Lakhstowards the activities in the area of education and academics and the institution workingtherefor.

The Board has constituted a 'CSR committee' which comprises offollowing directors:

Ms. Carol Realini - Chairperson Dr. Mahendra Mehta - Member Mr. AmitSheth - Member Mr. Samir Shah - Member

The CSR Committee inter alia determines the budget for funding variouscharitable activities and the recommends the contributions to be made to variousinitiatives.

The disclosures as required under Rule 9 of the Companies (CorporateSocial Responsibility Policy) Rules 2014 has been enclosed to this Report as “Annexure2”.

11. INTERNAL CONTROL SYSTEM & THEIR ADEQUACY

The Company has an internal control system which commensurate with thesize scale and nature of its operations. The Internal Audit Team monitors and evaluatesthe efficacy and adequacy of internal control system in the Company its compliance withoperating systems accounting procedures and policies of the Company. The Company is notrequired to maintain cost records specified by Central Government under section 148(1) ofthe Companies Act - 2013.

12. DIRECTORS' RESPONSIBILITY STATEMENT

In terms of the provisions of Section 134(3)(c) of the Act the Boardconfirm that:

i) in the preparation of the annual accounts the applicable accountingstandards had been followed along with proper explanation relating to material departuresif any;

ii) the Directors had selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company at the end of thefinancial year 31st March 2018 and of the profit and loss of the Company for that period;

iii) the Directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of CompaniesAct 2013 for safeguarding the assets of the Company and for preventing and detectingfraud and other irregularities;

iv) the Directors had prepared the annual accounts on a going concernbasis; and

v) the Directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively.

vi) the Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.

13. DIRECTORS/KEY MANAGERIAL PERSONNEL (KMP)

(a) Board of Directors:

Pursuant to the provision of Section 152(6) of the Companies Act 2013and article 127 of the Articles of Association of the

Company Mr. Sanjay Desai Director is retiring by rotation and beingeligible offers himself for reappointment at the ensuing Annual General Meeting.

All Independent Directors have given declarations affirming that theymeet the criteria of independence as laid down under Section 149(6) of the Companies Act2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.

The information as required to be disclosed under regulation 36 of theListing Regulations in case of reappointment of director is provided in CorporateGovernance Report forming part of the Annual Report.

During the year under review Mr. Hariharan Sambhashiva resigned fromthe Directorship with effect from 30th May 2018 due to his pre-occupation and otherprofessional commitments. The Directors place on record their sincere appreciation towardsthe services rendered by Mr. Hariharan Sambhashiva during his tenure as director of theCompany.

(b) KMP

During the year at the meeting held on August 28 2018 Mr. SachinSangani was appointed as the Chief Financial Officer of the Company. In the same meetingMr. Samir Shah CEO & Director was also designated as a Key Managerial Personalongwith Mr. Sachin Sangani CFO and Mr. Ninad Kelkar Company Secretary.

14. PERFORMANCE EVALUATION

The Company's policy relating to appointment and remuneration ofDirectors KMPs and other employees including criteria for determining qualificationspositive attributes and independence of Directors are covered under the CorporateGovernance Report which forms part of this Annual Report.

The Board of Directors annually evaluate its own performance and thatof its committees and individual Directors.

The Board has formulated the Nomination and Remuneration Policy forselection and appointment of Directors senior management personnel and theirremunerations. http://www.aurionpro.com/investors/.

15. MEETINGS

During the year under review the Board met eight times and the gapbetween two meetings did not exceed 120 days.

16. COMMITTEES

As on the date of this report the Board has four committees-

i) Audit Committee; ii) Nomination and Remuneration/CompensationCommittee; iii) Stakeholder Relationship/Investor Grievance and Share Transfer Committee;and iv) Corporate Social Responsibility Committee.

The detailed information in relation to these committees includingcomposition and the terms of reference and other details are provided in CorporateGovernance Report.

17. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has established the necessary vigil mechanism and has putin place a 'Whistle Blower policy' in order to enable the employees and Directors of theCompany to report their concerns about the management operations and other affairs of theCompany. In terms of the Whistle Blower Policy the whistle blowers are provided an accessto the Audit Committee to lodge their concerns. This policy is available on the website ofthe Company at http://www.aurionpro.com/investors/.

18. RISK MANAGEMENT POLICY

The Company has formulated a comprehensive Risk Management Policy toidentify assess and mitigate various risks associated with the Company. This policy isavailable on the website 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 theprovisions of Section 186 of the Companies Act 2013 if any are given under the notes tothe standalone financial statements forming part of this annual report.

20. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All the related party transactions entered into during the financialyear were on an arm's length basis and were in the ordinary course of business. During thefinancial year the Company has not entered into any contract/arrangement transactionswith related parties which could be considered material in accordance with the policy ofthe Company as to related party transactions. The details of all related partytransactions are placed before the Audit Committee for approval. The policy as to

Related Party Transactions as approved by the Board is available onthe Company's website at http://www.aurionpro.com/investors/.

The details of transactions entered into with the related parties aredisclosed in the notes to the stand alone financial statements forming part of this AnnualReport.

21. PUBLIC DEPOSITS

During the year the Company has neither invited nor accepted anypublic deposits.

22. AUDITORS AND AUDIT REPORT:

M/s. Chokshi & Chokshi LLP were appointed as the StatutoryAuditors of the Company at the Annual General Meeting Held on September 26 2017 for aterm of 4 years.

The Statutory Auditors of the Company has stated in their report thatduring the course 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 2013and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014Secretarial Audit was carried out by M/s. Milind Nirkhe & Associates CompanySecretary in Practice. The Report of the Secretarial Audit is annexed herewith as “Annexure3”.

The qualifications raised by the Secretarial Auditor and Board'sresponse thereto are as under.

Qualification: The Board of Directors of the Company consists of Seven(7) Directors consisting of 3 Non- Executive Directors 1 Executive Director and 3Independent Directors. Presently the composition of the Board of Directors is not inconformity with Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.

Response: The Board has taken cognizance of this and the Board shall bere-constituted soon as per the requirements of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.

24. PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 197(12) of the Act read with theRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 a statement showing the names and other particulars of theemployees drawing remuneration in excess of the limits set out in the said rules isprovided in a separate annexure forming part of this Report. Having regard to theprovision of the first proviso to Section 136(1) of the Act the Annual Report excludingthe aforesaid information is being sent to the Members of the Company. In terms of Section136 the said annexure is open for inspection at the Registered Office of the Company. AnyMember interested in obtaining a copy of the same may write to the Company Secretary.

The disclosures pertaining to the remuneration and other details asrequired under section 197(12) of the Act read with Rule 5(1) of the of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 have been provided inthe Annual Report as “Annexure 4”.

25. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO

In terms of section 134(3)(m) of the Companies Act 2013 read withrule 8 of the Chapter IX The Companies (Accounts) Rules 2014 the Directors furnishherein below the required additional information:

Conservation of Energy:

Although the operations of the Company are not energy intensive themanagement is highly conscious of the criticality of the conservation of energy at alloperational levels. The requirement of disclosure of particulars with respect toconservation of energy 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 arenot provided.

Technology Absorption:

The Company continues to adopt latest technologies and innovations forimproving the productivity and quality of its products and service offerings. The Companyis also partnering with major technology providers in global markets.

Foreign Exchange Earnings and Outgo:

The details of foreign exchange earned and spent by the Company duringthe year are given below:

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

The Company has in place necessary policy as required under the SexualHarassment of Women at the Workplace (Prevention Prohibition & Redressal) Act 2013.The Internal Complaints Committee (ICC) has been set up to redress complaints receivedregarding sexual harassment. All employees (permanent contractual temporary trainees)are covered under this policy. During the year under review the Internal ComplaintsCommittee had received one complaint of the nature covered under the said Act and the samewas redressed. There are no pending cases.

27. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators /Courts which would impact the going concern status of the Company and its futureoperations.

28. DISCLAIMER AND FORWARD LOOKING STATEMENT

The statements in the Board's Report and the Management Discussion& Analysis describing the Company's objectives expectations or forecasts may beforward-looking within the meaning of applicable securities laws and regulations. Actualresults may differ materially from those expressed in the statement. Important factorsthat could influence the Company's operations include global and domestic demand andsupply input costs availability changes in government regulations tax laws economicdevelopments within the country and other factors such as litigation and industrialrelations.

29. ACKNOWLEDGEMENTS

The Directors would like to place on record their sincere appreciationfor the continued co-operation support and assistance provided by all the stakeholdersincluding the financial institutions banks customers vendors members and othergovernment departments and authorities.

For and on behalf of the Board of Directors

Paresh Zaveri

Amit Sheth

Samir Shah

Chairman

Co-Chairman & Director

Chief Executive Officer

Navi Mumbai

Registered Office:

Synergia IT Park Plot No. R-270 T.T.C. Industrial Estate Near Rabale

Police Station Rabale Navi Mumbai -400701

Date: 06 August 2018