AURIONPRO Directors Report

To the Members of Aurionpro Solutions Limited,


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


(Rs. in Lakhs)












































































































31 March 2016



31 March 2015



Revenue



Revenue from operations



16,017.75



26,108.13



(Net of excise duty of Rs. 42.84 (31 March 2015: Rs. 124.09))



Other income



1,572.45



1,319.11



Total revenue



17,590.20



27,427.24



Expenses



Operating expenses



3,223.13



13,994.49



Change in inventories of raw material, finished goods and stock-in-trade



(87.46)



774.53



Employee benefits expense



7,399.63



6,399.18



Finance costs



925.35



1,051.56



Depreciation and amortization



929.15



905.90



Other expenses



3,231.61



2,910.38



Total expenses



15,621.41



26,036.04



Profit before taxation



1,968.79



1,391.20



Income tax expense:



(a) Current tax



450.23



341.92



(b) MAT credit utilized/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



1,228.60



977.07



2. DIVIDEND


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


3. STATE OF COMPANY''''S AFFAIRS


The management has re-organized the company around its strategy of simplifying and sharpening its focus on three core businesses -Enterprise Security, Digital Innovation and Banking industry solutions. The businesses are so structured to give proper autonomy and empowerment to leaders leading the three core businesses. The year saw considerable strengthening of the management team with leadership hires in sales and marketing functions. The Organization has redefined its market positioning in keeping with high impact businesses namely - Digital Innovation, Enterprise Security and Business Optimization and corresponding changes in sales and delivery organization has been rolled out globally.


Aurionpro has also significantly invested in strengthening the company''''s infrastructure in markets as well as for its delivery capabilities. The entire sales operations operate out of Salesforce.com system today, allowing for real-time view into sales pipeline, billing and revenue accrual with predictive business analytics. Company now uses Netsuite for consolidating all of its accounting across business units and has invested in Pardot as its Marketing Automation Tool. Delivery teams have been strengthened in India and a new development center has been established in Leeds in the UK. Adding to its numerous technical and operational certifications, the company also attained PCMM Level 5 certifications for its India and Security practices. The certifications strengthen Aurionrpo''''s credentials, and enable it to provide the highest levels of security and predictability through mature delivery processes.


4. FINANCIAL RESOURCES/FUND RAISING


(a) ESOP


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






























Particulars



Number of Options



Options available under the Scheme



10,00,000



Options granted & vested



(5,00,000)



Options exercised



(2,50,000)



Options lapsed & forfeited



2,50,000



Options outstanding under the Scheme



5,00,000



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 the previous Annual General Meeting dated 22 September 2015, and in terms of the provisions of the Act and the SEBI (Issue of Capital and Disclosure Requirements) 2009 as amended from time to time ("SEBI Regulations"). The details of the equity shares / share warrants 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



2,00,000



220/-



15th October, 2015



SAM Financial Services Pvt. Ltd - Non Promoter



4,00,000



220/-



15th October, 2015



Lakshmi Family Private Trust – NonPromoter



2,00,000



220/-



27th October, 2015



Paresh Zaveri - Promoter



5,00,000



220/-



27th October, 2015



Amit Sheth - Promoter



2,00,000



220/-



27th October, 2015



Indusvaley Holdings Pte Ltd - Non Promoter



5,95,983



220/-



The equity shares so allotted and subject to lock-in and have been priced as stipulated under 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



5,40,000



220/-



15th October, 2015



Lakshmi Family Private Trust - Non Promoter



2,00,000



220/-



27th October, 2015



Paresh Zaveri - Promoter



3,00,000



220/-



27th October, 2015



Amit Sheth - Promoter



2,00,000



220/-



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


5. MATERIAL CHANGES & COMMITMENTS


There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of financial year of the Company to which the 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, if any, have 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 MGT 9 is annexed herewith as "Annexure 1".


8. CORPORATE GOVERNANCE


The Report on corporate governance as per the requirements of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms part of this Annual Report. Further, the requisite Certificate from M/s. Milind Nirkhe & Associates, Practicing Company Secretaries, confirming the compliance with 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 under Regulation 34 (2) (e) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, has been covered in a separate section forming 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 been contributing 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 for undertaking such CSR activities in more organized manner by formulating a CSR Policy and Committee of the Board ("the CSR Committee") for this purpose. The CSR Policy of the Company sets out the broad social objectives towards the accomplishment of which the Company would undertake initiatives. The Board has constituted a CSR Committee, as per Companies (Corporate Social Responsibility Policy) Rules, 2014, which performs the functions 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 Social Responsibility Policy) Rules, 2014 have 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 and nature of its operations. The Internal Audit Team monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting 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 have been followed along with proper explanation relating to material departures, if any;


ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 31 March 2016 and of the profit and loss of the Company for that period;


iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;


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 the Company and that such internal financial controls are adequate and were operating effectively.


vi.) The Directors have devised proper systems to ensure compliance with the provisions of 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 127 of the Articles of Association of the Company, Mr. Amit Sheth, Co-Chairman & Managing Director, retire by rotation and being eligible, offers himself for reappointment at the ensuing Annual General Meeting.


None of the Independent Directors have had any pecuniary relationship or transactions with the Company during Financial Year 2015-16, except to the extent of their directorship. None of the Directors or KMP of the Company is related inter-se. All Independent Directors have given declarations affirming that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(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 20 November 2015. Subsequently, Mr. Ninad Kelkar has been appointed as the Company Secretary and Compliance Officer with effect from 12 January 2016.


14. PERFORMANCE EVALUATION


The Company''''s policy relating to appointment and remuneration of Directors, KMPs and other employees including criteria for determining qualifications, positive attributes and independence of Directors are covered under the Corporate Governance Report which forms part of this Annual Report. It''''s a practice of Board of Directors to annually evaluate its own performance and that of 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 not exceed 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 the terms 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 Whistle Blower mechanism in order to enable the employees and Directors to report 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 the Audit Committee to lodge their 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, assess and 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 of Section 186 of the Companies Act, 2013, are given under the notes to the standalone financial 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''''s length basis and were in the ordinary course of business. During the financial year, the Company has not entered into any contract/arrangement, transactions with related parties which could be considered material in accordance with the policy of the Company as to related party transactions. The details of all related party transactions are placed before the Audit Committee for approval. The policy as to Related Party Transactions, as approved 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 the notes 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 been appointed as Statutory Auditors at the 17th Annual General Meeting ("the AGM") held on 30 September 2014, to hold office for a period of five years till conclusion of the 22nd Annual General Meeting of the Company. As per the provision of Section 139 of the Act, the said appointment is subject to ratification by the members at every AGM. Accordingly, an item for the ratification of appointment of M/s BSR & Co., LLP, and Chartered Accountants has been taken up in the notice of the forth coming AGM for the approval of members. Necessary confirmation regarding eligibility and willingness to accept office has been received from the Statutory Auditors.


The Statutory Auditor of the Company has stated in their report that, during 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,


2013, and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Secretarial Audit was carried out by M/s. Milind Nirkhe & Associates, Company Secretary in Practice. The Report of the Secretarial Audit is annexed herewith as "Annexure 3".


The Following Qualifications have been observed by the secretarial Auditor during the Audit 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 17 of SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015 Directors Reply on the qualifications in Secretarial Audit Report is 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 hopeful of restoring the composition of Board as per the requirement of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.


24. PARTICULARS OF EMPLOYEES


In terms of the provision of Section 197(12) of the Act read with the Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules is provided in a separate annexure forming part of this Report. Having regard to the provision of the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the Members of the Company. In terms of Section 136, the said annexure is open for inspection at the Registered Office of the Company. Any Member interested in obtaining a copy of the same may write to the Company Secretary.


Disclosures pertaining to the remuneration and other details as required 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 in the Annual Report as "Annexure 4".


25. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO


In terms of section 134(3)(m) of the Companies Act, 2013, read with rule 8 of the Chapter IX The Companies (Accounts) Rules, 2014, the Directors furnish herein below the required additional information:


? Conservation of Energy:


Although the operations of the Company are not energy intensive, the management is highly conscious of the criticality of the conservation of energy at all operational levels. The requirement of disclosure of particulars with respect to conservation 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 are not provided.


? Technology Absorption:


The Company continues to latest technologies and innovations for improving the productivity and quality of its products and service offerings. The Company is 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 during the year are given below:


Earnings in foreign currency (Rs. In lakhs)




































Particulars



31 March 2016



31 March 2015



Information technologies



and consultancy services



6,041.50



7,691.25



Interest income on working



capital loan



298.69



309.10



Total



6,340.19



8,000.35



a. Expenditure in foreign currency (on accrual basis)


(Rs. 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



1,085.57



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 (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013


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


27. ACKNOWLEDGEMENTS


The Directors would like to place on record their sincere appreciation for the continued co-operation, support and assistance provided by the financial institutions, banks, 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, adar (W), Mumbai - 400 013.

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