To the Members of Aurionpro Solutions Limited
The Directors are pleased to present Twenty Second Annual Report of the Companytogether with its audited financial statements for the year ended 31st March2019.
1. FINANCIAL RESULTS
The highlights of the Standalone Financial Results are as under:
Amount in INR Lakhs
| ||31st March 2019 ||31st March 2018 |
|Revenue from operations ||33188.57 ||26793.99 |
|Other income ||2454.58 ||427.08 |
|Total income ||35643.15 ||27221.07 |
|Expenses || || |
|Operating expenses ||18191.41 ||13448.91 |
|Change in inventories of raw materials finished goods and stock-in-trade ||(1385.03) ||(717.20) |
|Employee benefits expense ||7574.47 ||8200.66 |
|Finance costs ||1026.09 ||894.91 |
|Depreciation and amortization expenses ||975.17 ||1166.92 |
|Other expenses ||4364.71 ||2497.49 |
|Total expenses ||30746.82 ||25491.69 |
|Profit before taxation ||4896.33 ||1729.38 |
|Income tax expense: || || |
|(a) Current tax ||1596.37 ||740.30 |
|(b) Deferred tax credit ||(392.82) ||(237.56) |
|Profit AfterTax ||3692.78 ||1226.64 |
|Other Comprehensive Income (Net of Tax) ||(56.47) ||(60.99) |
|Total Comprehensive Income for the period ||3636.31 ||1165.65 |
The highlights of the Consolidated Financial Results are as under:
Amount in INR Lakhs
| ||31st March 2019 ||31st March 2018 |
|Income || || |
|Revenue from operations ||52215.08 ||41854.54 |
|Other income ||726.81 ||429.83 |
|Total income ||52941.89 ||42284.37 |
|Operating expenses ||19531.21 ||12922.06 |
|Change in inventories of raw materials finished goods and stock-in-trade ||(1345.70) ||(683.11) |
|Employee benefits expense ||16387.89 ||17429.41 |
|Finance costs ||1191.43 ||1271.38 |
|Depreciation and amortization expenses ||3098.84 ||3224.65 |
|Other expenses ||6560.87 ||4185.91 |
|Total expenses ||45424.54 ||38350.30 |
|Profit/(Loss) before Share of Profit of Associates Exceptional Items and Tax ||7517.35 ||3934.08 |
|Share of Profit of Associates ||47.25 ||- |
|Profit/(Loss) before Exceptional Items and Tax ||7564.60 ||3934.08 |
|Less: Exceptional item ||- ||- |
|Profit before tax ||7564.60 ||3934.08 |
|Income tax expense: || || |
|(a) Current tax ||1629.11 ||1091.56 |
|(b) Deferred tax credit ||(136.44) ||(946.61) |
|Profit afterTax from Continuing Operations ||6071.93 ||3789.13 |
|Profit/(Loss) before tax from Discontinued Operations ||- ||10806.79 |
|Tax Expenses of Discontinued Operations ||- ||3171.39 |
|Profit/(Loss) after Tax from Discontinued Operations ||- ||7635.40 |
|Other Comprehensive Income (Net of Tax) ||(16.09) ||(187.84) |
|Total Comprehensive Income for the period ||6055.84 ||11236.69 |
2. MATERIAL CHANGES & COMMITMENTS
During the year 2017-18 the Company had announced demerger of certain of itsbusinesses viz: Interactive Customer Communication (Interact DX) and Supply ChainManagement Solution (Logistics) into Trejhara Solutions Ltd. The Scheme of Demerger forthis purpose was approved by the Hon'ble National Company Law Tribunal Mumbai and thesame became effective during the year on 2nd August 2018. The Appointed Date for the saiddemerger was 31st March 2017. The accounting effect on account of the said demerger wascarried out in the financial statements for the year ended 31st March 2018.
Further with an objective to reward the shareholders the Board of Directors at itsmeeting held on 25th March 2019 ("Board Meeting") has announced the buyback ofthe Company's fully paid-up equity shares of face value of INR 10/- (Rupees Ten only) each("Equity Shares") via the "open market" route through the stockexchanges for a total amount not exceeding INR 200000000/-. The Buyback of shares wascommenced on 05th April 2019 and the Company will have to complete the same on or before04th October 2019.
Apart from above there are no material changes and commitments affecting thefinancial position of the Company which have occurred between the end of financial yearof the Company to which the financial statements relate and the date of this report.
The Board of Directors ("the Board") after taking into account the growthand investments requirements of the Company has recommended dividend at the rate of Rs.2/- per equity share (20%) for the financial year ended 31st March 2019. The total payouttowards dividend and tax thereon will be Rs. 569.92 Lakhs.
The Members may approve the proposed dividend.
4. STATE OF COMPANY'S AFFAIRS
It is pleasure to state that on the back of new orders strong business growth acrossverticals and operational efficiency the Company has delivered a strong performance forthe year ended 31st March 2019 with a consolidated revenue at Rs. 522 Croreswhich represents a strong Y-o-Y growth of 25%. This is a reflection of our cutting-edgeindustry leading IP which has helped solve challenges for client in the areas of bankingand fintech smart cities smart transportation and cyber security. Overall the Companyexpects continued growth across all the business lines especially in the areas of smartcities and smart mobility.
The details of operational and financial performance are covered at length in theManagement Discussion and Analysis section forming part of this Report.
5. FINANCIAL RESOURCES/ FUND RAISING
The Company with an objective to retain and attract talent in the organization hadlaunched Employee Share Purchase Scheme 2017 ("ESPS 2017") during the year2017-18. The ESPS 2017 has been framed and implemented in compliance with the SEBI (ShareBased Employee Benefits) Regulations 2014.
The details of the shares issued and allotted under the ESPS 2017 as on the date ofthis Report are as under:
|Particulars ||Outstanding Shares |
|Total Number of Shares for which In principle approval received from the stock exchanges in the year 2017-18 ||1151765 |
|Number of Shares available for further grant at the beginning of the year 2018-19 ||572765 |
|Less : Number of Shares allotted on 19th June 2018 ||16000 |
|Less : Number of Shares allotted on 27th October 2018 ||6000 |
|Number of Shares available for further Grant ||550765 |
6. SUBSIDIARIES/ JOINT VENTURES/ASSOCIATE COMPANIES
During the year Aurionpro Solutions Pte Ltd. a wholly owned subsidiary of AurionproSolutions Limited (Aurionpro) has entered into an agreement for acquisition of majoritystake (51%) in SC Soft Pte. Ltd. (SC Soft) a Singapore headquartered Automated FareCollection (AFC) and smart city solution provider. Aurionpro will make investment intranches by subscribing to the fresh equity shares to be issued by the SC Soft and willacquire majority stake by December 2019. As on the date of this Report
Aurionpro Solutions Pte Ltd. holds 708000 shares representing 29.40 % stake in SCSoft. The acquisition of SC Soft will be a strategic milestone as it will help Aurionprostrengthen its leadership in the rapidly growing AFC Market as it will establish Aurionproas a one stop shop having necessary end to end hardware and software required for theimplementation of the AFC Systems.
Further Aurionpro Solutions Pte Ltd. a wholly owned subsidiary of Aurionpro alsoacquired majority stake (51%) in Neo.Bnk Pte. Ltd. a Singapore based technology firmfocused on developing micro
In order to accelerate the sales and marketing development Cyberinc Corporation("Cyberinc") a subsidiary of the Company raised funds by issuing Series B-IIPreferred Stocks to a leading strategic investor along with Aurionpro. While Aurionprocontinues to hold the 80% of the Common stocks of the Cyberinc after taking into accountthe voting rights conferred on the Series B-II shareholders in Cyberinc the controllingstake of Aurionpro stands at 62%.
7. EXTRACT OF ANNUAL RETURN
In addition to the extract of the annual return as annexed to this report the copy ofthe annual return will be available on the website of the Company on http://www.aurionpro.com/investors/.
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 ("LODR") forms part of this Annual Report. Further therequisite certificate from M/s. Milind Nirkhe & Associates Practicing CompanySecretaries confirmingthe compliance with the conditions of corporate governance has beenincluded in the said Report.
9. MANAGEMENT DISCUSSION AND ANANLYSSIS (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 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 the websiteof the Company at https://www.aurionpro.com/investors/.
During the year under review the Company has contributed Rs. 41 Lakhs towards theactivities in the area of education and academics and the institution working therefor.
The Board has constituted a CSR committee' which comprises of followingdirectors:
|Mr. Amit Sheth ||- Chairman |
|Dr. Mahendra Mehta ||- Member |
|Ms. Sudha Bhsuhan ||- Member |
The CSR Committee inter alia determines the budget for funding various charitableactivities and the recommends the contributions to be made to various initiatives.
The disclosures as required under Rule 9 of the Companies (Corporate SocialResponsibility Policy) Rules 2014 has been enclosed to this Report as "Annexure2".
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 had beenfollowed 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 2019 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; and
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)
(a) Board of Directors
At the beginning of the year 2018-19 Mr. Sambhashiva Hariharan and Mr. SanjayDesai Non-Executive Directors resigned from the Company in order to pursue their otherbusiness interest. Mr. Sanjay Desai was also re-classified out of "Promoter andPromoter Group Category" as per his request and with the approval of the StockExchanges as per the SEBI (Listing Obligations and Disclosure) Requirements 2015. Ms.Carol Realini Independent Director also resigned with effect from 31st December 2018 inorder to focus on her other professional commitments. Further in order to strengthen ourfocus on the cyber security business Mr. Samir Shah was designated as the Chief ExecutiveOfficer of Cyberinc Corp our USA based arm. Mr. Samir Shah then stepped down as theDirector and CEO of the Company in order to dedicate his full attention to the Cybersecurity business.
The Board wishes to express its gratitude and place on record its appreciation for thevaluable contribution and guidance provided by these directors during their stint asDirector on the Board of the Company.
Mr. Ajay Sarupria was appointed as an Additional Non-Executive Director witheffect from 27th October 2018. The appointment of Mr. Ajay Sarupria maybeconfirmed by the Members at the forthcoming Annual General Meeting. The detailed profileof Mr. Sarupria have been enclosed to the Notice of the22 nd Annual GeneralMeeting.
Ms. Sudha Bhushan was appointed as the Additional Independent Director witheffect from 25th March 2019. Her appointment maybe confirmed at the forthcoming22 nd Annual General Meeting and she may be appointed as an IndependentDirector for a period upto five years as per the provisions of Section 149 of theCompanies Act 2013. Further Dr. Mahendra Mehta was appointed as an Independent Directorat the 17th Annual General Meeting for a fiv 30 periodof thSeptember 2019. It is proposed to appoint him as an Independent Director for a furtherperiod of five years upto 29th September 2024 at the forthcoming Annual General Meeting.The detailed profiles of Ms. Sudha Bhushan and Dr. Mehta have been appended to the Noticeof the 22nd Annual General Meeting. All Independent Directors have givendeclarations affirming that they meet the criteria of independence as laid down underSection 149(6) of the Companies Act 2013 and Regulation 16(1)(b) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
The information as required to be disclosed under regulation 36 of the ListingRegulations in case of appointment/ reappointment of director is provided in CorporateGovernance Report forming part of the Annual Report.
During the year Mr. Paresh Zaveri Chairman of the Company was appointed asthe Managing Director of the Company with effect from 1st September 2018. Hisappointment was approved by the Members at the previous Annual General Meeting and thesame was subsequently also approved by the Central Government.
Pursuant to the provision of Section 152(6) of the Companies Act 2013 andarticle 127 of the Articles of Association of the Company Mr. Amit Sheth Co- Chairman& Director is retiring by rotation and being eligible offers himself forreappointment at the ensuing Annual General Meeting. The detailed profile of Mr. AmitSheth has been appended to the Notice of the 22nd Annual General Meeting.
During the year Mr. Samir Shah resigned asaDirectorandGlobalChiefExecutiveOfficer(CEO) of the Company with effect from 15thFebruary 2019 in order to devote is full attention to the cybersecurity business of thegroup. He then ceased to be the KMP. Further Mr. Sachin Sangani Chief FinanancialOfficer of the Company also resigned with effect from 30 th June 2019.
Pursuant to the provisions of Section 203 of the Companies Act 2013 as on the date ofthis Report the Key Managerial Personnel of the Company comprised of Mr. Paresh ZaveriChairman and Managing Director and Mr. Ninad Kelkar Company Secretary.
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 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 at the Company's website http://www.aurionpro.com/investors/.
During the year under review the Board met six times and the gap between the twomeetings did not exceed 120 days. For details of meetings of the Board please refer tothe Corporate Governance Report which is part of this Report.
As on the date of this Report the Board has four committees applicable under the 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 aWhistle Blower policy' in order to enable the employees and Directors of the Companyto 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 complaints. This policy is available on the websiteof 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. 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 if any are given under the notes to thestandalone financial statements 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 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 neither invited nor accepted any public deposits.
22. AUDITORS AND AUDIT REPORT
At the twentieth AGM held on 26th September 2017 the Members has approved theappointment of M/s. Chokshi & Chokshi LLP Chartered Accountants (Firm RegistrationNo. 101872W/W-100045) as Statutory Auditors of the Company to hold office for a period offour years from the conclusion of then AGM till the conclusion of the fourth consecutiveAGM (subject to ratification of their appointment by Members at every AGM held hereinafter) if so required under the Act. The requirement to place the matter relating toappointment of auditors for ratification by Members at every AGM has been done away by theCompanies (Amendment) Act 2017 with effect from 7th May 2018. Accordingly no resolutionis being proposed for ratification of appointment of statutory auditors at the ensuing AGMand a note in respect of same has been included in the Notice for this AGM.
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 and introduction ofRegulation 24A in the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 w.e.f. 01.04.2019 every listed entity and its material unlisted subsidiariesincorporated in India shall undertake secretarial audit and shall annex with its annualreport a secretarial audit report given by a company secretary in practice in such formas may be specified with effect from the year ended 31st March 2019.
Secretarial Audit was carried out by M/s. Milind Nirkhe & Associates CompanySecretary in Practice. The Report of the Secretarial Audit is annexed herewith as "Annexure3".
24. PARTICLUARS OF EMPLOYEES
In 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 information is being sent tothe Members of the Company. In terms of Section 136 the said annexure is open forinspection at the Member interested in obtaining a copy of the same may write to theCompany Secretary. Registered The disclosures pertaining to the remuneration and otherdetails as required under section 197(12) of the Act read with Rule 5(1) of the of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 have beenprovided in the Annual Report as "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 required additional information isfurnished here below:
> 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 (on accrual basis)
(Rs. In Lakhs)
|Particulars ||31 March2019 ||31 March 2018 |
|Revenue from operations ||4431.54 ||3853.51 |
|Interest and Other Income ||134.58 ||300.05 |
|Total ||4566.12 ||4153.56 |
Expenditure in foreign currency (on accrual basis)
| || ||(Rs. In Lakhs) |
|Particulars ||31 March2019 ||31 March 2018 |
|Software material and hardware cost ||3105.90 ||1099.05 |
|Travelling and conveyance expenses ||183.80 ||200.23 |
|Total ||3289.70 ||1299.28 |
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 sexualharassment complaints 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. COST RECORDS:
The Company is not required to maintain cost records specified by Central Governmentunder section 148(1) of the Companies Act - 2013.
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.
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 ||Amit Sheth |
|Chairman & Managing Director ||Co-Chairman & Director |
|Place : Navi Mumbai || |
|Date : 8th August 2019 || |
|Registered Office: || |
|Synergia IT Park Plot No. R-270 || |
|T.T.C. Industrial Estate Near Rabale Police Station || |
|Rabale Navi Mumbai -400701 || |