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Aurionpro Solutions Ltd.

BSE: 532668 Sector: IT
NSE: AURIONPRO ISIN Code: INE132H01018
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OPEN 253.95
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VOLUME 2520
52-Week high 390.40
52-Week low 150.15
P/E 22.01
Mkt Cap.(Rs cr) 581
Buy Price 0.00
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Sell Price 0.00
Sell Qty 0.00
OPEN 253.95
CLOSE 249.45
VOLUME 2520
52-Week high 390.40
52-Week low 150.15
P/E 22.01
Mkt Cap.(Rs cr) 581
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Aurionpro Solutions Ltd. (AURIONPRO) - Director Report

Company director report

To the Members of

Aurionpro Solutions Limited

The Directors present Twenty Fourth Annual Report of the Company together with itsaudited financial statements for the year ended 31st March 2021.

1. FINANCIAL STATEMENT

The highlights of the Standalone Financial Statement are as under:

(Rs.in lakhs)

Particulars 31 March 2021 31 March 2020
Income
Revenue from operations 19170.65 28543.58
Other income 330.18 1107.27
Total Income 19500.83 29650.85
Expenses
Operating Expenses 5313.24 12628.38
Change in Inventories of Raw Material Finished Goods and Stock-in-Trade 383.22 1032.79
Employee Benefits Expense 7624.57 8336.02
Finance Costs 1399.53 1598.43
Depreciation and Amortisation Expense 1123.68 1469.26
Other Expenses 1714.03 2957.59
Total Expenses 17558.27 28022.47
Profit before Exceptional Items and Tax 1942.56 1628.38
Exceptional Items 3903.40 -
Profit / (Loss) before Tax (1960.84) 1628.38
Income tax expense:
(a) Current tax 354.12 520.85
(b) Deferred Tax Charge 138.26 78.93
Profit/(Loss) After Tax (2453.22) 1028.60
Other Comprehensive Income / (Loss) 226.74 (84.54)
Total Comprehensive Income / (Loss) (2226.48) 944.06

The highlights of the Consolidated Financial Statement are as under:

(Rs. in lakhs)

Particulars 31 March 2021 31 March 2020
Income
Revenue from operations 37401.77 46976.08
Other income 297.45 978.79
Total Income 37699.22 47954.87
Expenses
Operating expenses 10791.45 17992.00
Change of Inventories of raw material finished goods and stock-in-trade 63.70 764.94
Employee benefits expense 14978.15 14920.55
Finance costs 1579.78 1822.42
Depreciation and amortization expenses 13939.06 3968.75
Other expenses 3191.97 4849.15
Total Expenses 44544.11 44317.81
Profit / (Loss) before Share of Profit of Associates Exceptional Items and Tax (6844.89) 3637.06
Share of Profit of Associates - 40.78
Profit / (Loss) before Exceptional Items and Tax (6844.89) 3677.84
Less: Exceptional item 4618.37 -
Profit / (Loss) before tax (11463.26) 3677.84
Income tax expense: - -
(a) Current tax 738.95 428.21
(b) Deferred tax credit (445.66) (169.46)
Profit / (Loss) after tax (11756.55) 3419.09
Profit / (Loss) before Tax from Discontinued Operations (7443.82) (249.99)
Tax Expenses of Discontinued Operations - -
Profit / (Loss) after Tax from Discontinued Operations (7443.82) (249.99)
Other Comprehensive Income (net of tax) 274.29 (25.75)
Total Comprehensive Income / (Loss) (18926.08) 3143.35

2. MATERIAL CHANGES & COMMITMENTS

Divestment of Cybersecurity Business:

The Board of Directors at its meeting held on 06th May 2021 announcedexit of the Company from cybersecurity business by divesting the entire stake held byAurionpro in Cyberinc Corp USA. The shareholders' approval for the transaction is alsobeing obtained. The deal for the divestment of all stake held by Aurionpro in its cybersecurity business is valued at a consideration of US$ 9.6 Million (approx. Rs. 71 crores)which is net off all taxes and obligations. Out of the total consideration Rs. 45 croreswill be received upfront and remaining amount to be received in tranches over a year uponfulfilment of contractual warranties and earn out. The accounting impact of the divestmenthas been accounted under the 'impact of Discontinued OperationsRs.in the standalone andconsolidated audited financial statements for the year ended 31st March 2021.

There are no other material changes or commitment affecting the financial position ofthe Company between the end of the financial year and the date of the report.

3. DIVIDEND AND RESERVES

The economic environment continues to be uncertain in the wake of pandemic. Furtherwhile the operations of the Company remain healthy and profitable the consolidatedfinancial performance for the year ended 31st March 2021 after exceptionalitems and amortizations has resulted in the loss. Further the proceeds from thedivestment of cybersecurity business would be utilized to reduce debt burden. Thereforein the context of such scenario the Board of Directors adopting conservative strategydecided not to recommend any dividend for the FY 21.

The profit/(loss) after tax for the year ended 31st March 2021 was Rs.(2453.22) lakhs and the same has been transferred to the Retained Earnings.

4. STATE OF COMPANY'S AFFAIRS

The year gone by was the most disruptive but it also offered the company anopportunity to reflect and re-assess its strategies. We adopted a three pronged strategyto focus attention on our core high margin businesses to undertake measures to improveoperational efficiencies & cost rationalisation. The aim was to build robustoperations with sustained revenue growth and profitability. While initial COVID relatedlockdowns impacted us reflecting impact on our top line we were able to maintain almostthe same EBIDTA in absolute terms despite dip in revenue. Our EBIDTA margins improved to22.4%. We are confident to maintain margins in the current year with sustained quarterlyrevenue growth.

On the business front despite significant initial impacts on kiosks business Bankingand Fintech remained resilient to clock healthy performance. During the year we signedsome large deals with the leading banks in APAC as well as large PSU banks in India. Weare witnessing good momentum in this segment and strong outlook going forward. In theSmart City and Smart Mobility segment the fresh surge of the pandemic in the domesticmarket would cause some delay in few new orders however momentum continues to remainstrong in other markets. We have signed some key partnerships in this segment which mayboost our expansion in newer geographies particularly in the developed markets. Theincreasing adoption of contactless digital technologies coupled with strong resolve ofthe governments worldwide to increase capex on infrastructure has created huge marketopportunities in this segment and we are confident of a strong rebound in this segment. Wehave a slew of product launches planned this year most importantly we will startlaunching cloud offerings for our Banking product portfolio. In mobility space two newproducts launches are planned over next few months. This will cement our position as themost innovative player in the mobility business. Further we will also be investing increating a future offering of mobility as a service platform. Additionally our foray intodata centre business is starting to bear fruits and will emerge as strong growth area forthe company in coming years with huge opportunities for this business in India and acrossother emerging markets.

With streamlined balance sheet we expect significant improvement in all the financialratios this year onwards and with strong growth ahead generating free cash and efficientmanagement of capital we expect to have a lean & healthy balance sheet supporting ourlong term growth vision.

5. CAPITAL

During the year no further capital was raised by the Company. The Company with anobjective to retain and attract talent in the organization had launched Employee SharePurchase Scheme 2017 ("ESPS") during the year 2017-18. The ESPS 2017 has beenframed and implemented in compliance with the SEBI (Share Based Employee Benefits)Regulations 2014. During the year the Company did not allot shares under the ESPS 2017.As on the date of this Report 550765 shares are available for further Grant.

6. SUBSIDIARIES/ JOINT VENTURES

The Board of Directors at their meeting held on 06th May 2021 had approvedCompany's exit from Cyber Security business by divesting entire stake in the USA basedsubsidiary Cyberinc Corporation Inc. subject to Members approval which was being soughtfrom the Members through postal ballot. Note: As on the date of dispatch of this AnnualReport the Members have approved the divestment vide the resolution passed by the Membersthrough postal ballot the results of which were declared on 14th June 2021.

Pursuant to the provisions of Section 129(3) of the Companies Act 2013 ("theAct") a statement containing the salient features of financial statements of theCompany's subsidiaries in Form No. AOC-1 is attached to the financial statements of theCompany.

7. ANNUAL RETURN

The Annual Return of the Company as on 31st March 2021 in Form MGT - 7 inaccordance with Section 92(3) of the Act read with the Companies (Management andAdministration) Rules 2014 would be available on the website of the Company at i.e.www.aurionpro.com.

8. CORPORATE GOVERNANCE

The Report on corporate governance as per the requirements of Regulation 34 of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 ("the LODR") 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 as required underRegulation 34 (2) (e) of the LODR has been covered in a separate section forming part ofthis Annual Report.

10. CORPORATE SOCIAL RESPONSIBILITY (CSR)

In accordance with the provisions of Section 135 read with Schedule VII of the Act theCompany has adopted a CSR Policy outlining various CSR activities to be undertaken by theCompany. The CSR Policy of the Company is available on the website of the Company atwww.aurionpro.com.

During the year under review the Company has contributed Rs. 55 lakhs (Fifty-Fivelakhs) to the trust which is engaged in the area of Education hostel for students Womanwelfare and empowerment vocational training health awareness etc.

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

Mr. Amit Sheth - Chairman

Dr. Mahendra Mehta - Member

Mrs. Sudha Bhsuhan - Member

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

The disclosures as required under the Companies (Corporate Social ResponsibilityPolicy) Rules 2014 has been enclosed to this Report as "Annexure 1".

11. INTERNAL CONTROL SYSTEM & THEIR ADEQACY

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. DIRECTOR'S RESPONSIBILITY STATEMENT

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

i. in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures if any;

ii. the Directors had 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 2021 and of the profit and loss of the Company for that period;

iii. the Directors had taken proper and sufficient care for the maintenance of adequateaccounting 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 had prepared the annual accounts on a going concern basis;

v. the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively;

vi. the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

13. DIRECTOR'S/KEY MANAGERIAL PERSONNEL (KMP)

• Re-appointment on account of retirement by rotation

In accordance with the provisions of the Act and Articles of Association of thecompany Mr. Amit Sheth retires by rotation and being eligible offers himself forre-appointment.

Based on recommendation of the Nomination and Remuneration Committee The Board hasapproved and recommended his re-appointment subject to the approval of the Members.

The information as required to be disclosed under regulation 36 of the LODR and briefprofile of director in case of re-appointment of director is incorporated in descriptionstatement of AGM Notice forming part of the Annual Report.

• All Independent Directors have given declarations affirming that they meet thecriteria of independence as laid down under Section 149(6) of the Act and Regulation16(1)(b) of the LODR.

• None of the directors of the Company is disqualified under the provisions of theAct or under the LODR. All Independent Directors have provided confirmations ascontemplated under section 149(7) of the Act.

• Key Managerial Person

Pursuant to the provisions of Section 203 of the Act as on the date of this Report theKey Managerial Personnel of the Company comprised of Mr. Paresh Zaveri Chairman andManaging Director Mr. Vipul Parmar Chief Financial Officer and Mr. Ninad Kelkar CompanySecretary. Mr. Vipul Parmar was appointed as Chief Financial Officer w.e.f. 29thJune 2020.

14. PERFORMANCE EVALUATION

The Company's policy relating to the appointment and remuneration of Directors KMPsand other employees including criteria for determining qualifications positive attributesand independence of Directors are covered under the Corporate Governance Report whichforms part of this Annual Report. The Board of Directors annually evaluate its ownperformance and that of its committees and 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 at the Company's website www.aurionpro.com.

15. MEETINGS

During the year under review the Board met four times. For details of meetings of theBoard please refer to the Corporate Governance Report which is part of this report.

16. COMMITTEES

As on the date of this report the Board has following committees applicable under theAct/LODR:

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 a'Whistle Blower policyRs.in order to enable the employees and Directors of the Company toreport their concerns about the management operations and other affairs of the Company.In terms of the Whistle Blower Policy the whistle blowers are provided an access to theAudit Committee to lodge their concerns. This policy is available on the website of theCompany at www.aurionpro.com.

18. RISK MANAGEMENT POLICY

The Company has formulated a comprehensive Risk Management Policy to identify assessand mitigate various risks associated with the Company. The detailed section on businessrisks and opportunities forms part of Management Discussion and Analysis Report whichforms part of the Annual Report.

19. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT

The details of loans guarantees and investments covered under the provisions ofSection 186 of the Act are given under the note no. 40 to the standalone financialstatements forming part of this annual report.

20. PARTICLUARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All the related party transactions entered into during the financial year were on anarm's length basis and were in the ordinary course of business. During the financial yearthe Company has not entered into any contract/arrangement transactions with relatedparties which could be considered material in accordance with the policy of the Company asto related 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 www.aurionpro.com.

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 THEIR REPORTING

M/s. Chokshi & Chokshi LLP Chartered Accountants (Firm Registration No.101872W/W-100045) were appointed as Statutory Auditors of the Company at the twentiethAnnual General Meeting ("AGM") held on 26th September 2017 to holdoffice till the conclusion of Twenty fourth AGM.

M/s. Chokshi & Chokshi LLP Chartered Accountants are eligible to be re-appointedfor a period commencing from the conclusion of Twenty fourth AGM of the Company till theconclusion of Twenty Sixth AGM of the Company in terms of provisions of Sections 139 and141 of the Act.

Accordingly the Board of Directors of the Company as per the recommendations of theAudit Committee recommends the reappointment of M/s. Chokshi & Chokshi LLP CharteredAccountants (Firm Registration No. 101872W/W-100045) as the Statutory Auditors for afurther for a period commencing from the conclusion of Twenty fourth AGM of the Companytill the conclusion of Twenty Sixth AGM of the Company.

M/s. Chokshi & Chokshi LLP Chartered Accountants being eligible forre-appointment under section 139(1) and other applicable provisions has consented to actas the Statutory Auditors of the Company and has also confirmed that their appointment ifmade would be within the limits 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

The Secretarial Audit was carried out by M/s. Milind Nirkhe & Associates CompanySecretary in Practice. The Report of the Secretarial Audit is annexed herewith as"Annexure 2".

The observations raised by the Secretarial Auditor and Board's response thereto are asunder.

1) Observation:

The Company has not appointed Independent Director on the Board of Directors ofUnlisted Material Subsidiary incorporated outside India i.e Cyberinc Corporation Inc USA("Cyberinc") pursuant to Regulation 24(1) Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015.

Company's Response:

Company in its Board meeting held on 06th May 2021 had approved exit fromthe Cyber Security business by divesting entire stake in the Cyberinc subject to Membersapproval which is being sought from the shareholders through postal ballot. Consideringthis appointment of Independent director on the Board of Cyberinc may not be required.

2) Observation:

The Company was not able to conduct audit or limited review of quarterly consolidatedfinancial results at least eighty percent of each of the consolidated revenue assets andprofits respectively as per Reg. 33 (3)(h) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.

Company's Response:

In view of multiple restrictions and lockdowns imposed by various federal and stateauthorities across the globe to contain the COVID-19 spread the full audit/limited reviewof certain subsidiaries for FY 2020-21 could not be conducted. However the company hasendeavoured to comply with the said requirement to the extent in respect of consolidatedrevenue profits/loss (for Profit/loss forty-eight percentages for fourth quarter) andAssets (for assets seventy-two percentage for first quarter and Sixty-Seven percentage forSecond and third quarter.)

24. PARTICLUARS OF EMPLOYEES

I n terms of the provisions 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. Any Member interested in obtaining a copy of the same may write to the CompanySecretary.

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 3".

25. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO

In terms of section 134(3)(m) of the Act read with rule 8 of the Chapter IX of theCompanies (Accounts) Rules 2014 the Directors furnish herein below the requiredadditional 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 adopt 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

(Rs. In lakhs)

Particulars 31 March2021 31 March 2020
Revenue From Operations 3828.37 4062.32
Interest and Other Income 67.81 164.11
Total 3896.18 4226.43

Expenditure in Foreign Currency

(Rs. In lakhs)

Particulars 31 March2021 31 March 2020
Software Hardware and Other Material Cost 648.42 558.40
Travelling Conveyance and Other Expenses 15.05 140.28
Total 663.47 698.68

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 under review the Company has not received any complaintsunder the policy.

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

There are no significant and material orders passed by the Regulators/Courts whichwould impact the going concern status of the Company and its future operations.

28. COST RECORDS

The Company is not required to maintain cost records specified by Central Governmentunder section 148(1) of the Act.

29. 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.

30. ACKNOWLEDGEMENTS

The Directors would like to place on record their sincere appreciation for thecontinued co-operation support and assistance provided by all the stakeholders includingCompany's employees the financial institutions banks customers vendors members andother government departments and authorities.

For and on behalf of the Board of Directors
Paresh Zaveri Chairman & Managing Director
Place : Singapore
Date : 28th May2021
Registered Office:
Synergia IT Park Plot No. R-270
T.T.C. Industrial Estate Near Rabale
Police Station Rabale Navi Mumbai -400701.

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