Aurionpro Solutions Ltd Directors Report.

To the Members of Aurionpro Solutions Limited,

The Directors present Twenty Third Annual Report of the Company, together with its audited financial statements for the year ended 31 March, 2020.

1. FINANCIAL STATEMENT

The highlights of the Standalone Financial Statement are as under:

(Rs In lakhs)
Particulars 31 March, 2020 31 March, 2019
Income
Revenue from Operations 26,630.54 33,188.57
Other Income 1,107.27 2,454.58
Total Income 27,737.81 35,643.15
Expenses
Operating Expenses 10,715.34 18,191.41
Change in Inventories of Raw Material, Finished Goods and Stock-in-Trade 1,032.79 (1,385.03)
Employee Benefits Expense 8,336.02 7,574.47
Finance Costs 1,598.43 1,026.09
Depreciation and Amortisation Expense 1,469.26 975.17
Other Expenses 2,957.59 4,364.71
Total Expenses 26,109.43 30,746.82
Profit Before Tax 1,628.38 4,896.33
Tax Expense:
(a) Current tax 520.85 1,596.37
(b) Deferred Tax Charge/ (Credit) 78.93 (392.82)
Profit After Tax 1,028.60 3,692.78
Other Comprehensive Income (net of tax) (84.54) (56.47)
Total Comprehensive Income 944.06 3,636.31

The highlights of the Consolidated Financial Statement are as under:

( Rs In lakhs)
Particulars 31 March, 2020 31 March, 2019
Income
Revenue from Operations 45,502.04 52,215.08
Other Income 978.79 726.81
Total Income 46,480.83 52,941.89
Expenses
Operating Expenses 14,512.31 19,531.21
Change of Inventories of Raw Material, Finished Goods and Stock-in-Trade 764.94 (1,345.70)
Employee Benefits Expense 16,691.19 16,387.89
Finance Costs 1,826.42 1,191.43
Depreciation and Amortisation Expense 4,219.75 3,098.84
Other Expenses 5,079.15 6,560.87
Total Expenses 43,093.76 45,424.54
Profit before Share of Profit of Associates, Exceptional Items and Tax 3,387.07 7,517.35
Share of Profit of Associates 40.78 47.25
Profit before Exceptional Items and Tax 3,427.85 7,564.60
Less: Exceptional Item - -
Profit Before Tax 3,427.85 7,564.60
Tax Expense:
(a) Current Tax 428.21 1,629.11
(b) Deferred Tax Credit (169.46) (136.44)
Profit After Tax 3,169.10 6,071.93
Other Comprehensive Income (net of tax) (25.75) (16.09)
Total Comprehensive Income 3,143.35 6,055.84

2. MATERIAL CHANGES & COMMITMENTS

The pandemic caused due to novel corona virus ("COVID-19") has impacted the economies across the globe. The Board has assessed the impact of COVID-19 on the businesses and there is no impact as of the balance sheet date. The Company continues to provide the services to its customers with some disruptions on account of lock-downs and other restrictions imposed in various geographies. The Company has put in place plans to minimize the adverse impact on both revenue and profitability.

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

3. DIVIDEND AND RESERVES

The Company has consistent track record of payment of dividend. However, in the wake of economic uncertainties and disruptions caused by the COVID-19, the Board of Directors felt it appropriate to conserve its resources in order to meet any unforeseen contingencies. Therefore, the Board of Directors do not recommend any dividend for the financial 2019-20.

The profit after tax for the year ended 31 March, 2020, was Rs 1,028.60 lakhs and the same has been transferred to the Retained Earnings.

4. STATE OF COMPANYS AFFAIRS

The subdued performance during FY 20 was largely attributed to the external uncertainties amid general elections and resultant slowdown in the domestic market during the H1 and disruptions caused globally due to the COVID-19 pandemic in Q4 of the FY 20. The banking sector in general has been facing headwinds and consolidation at PSU banks had slowed down the new business in the Banking & Fintech space. In spite of these challenges, we could register growth in this segment.

The Smart City and Smart Mobility segment witnessed sharp decline which was largely due to the constrained spending capacity of the governments in the wake of general elections and funds crunch due to the general economic downturn in the domestic markets. The clientele in this segment includes various governments and governmental undertakings. The outlook for this segment remains optimistic as the governments are expected to ramp up infrastructure spending in order to boost economic activities and have also expanded fiscal space for this purpose.

On Cyber Security space, we completed a round of investment in Cyberinc during FY20 which also went live with ISLA 5.1. We are also building partnerships and distribution network which is critical to boost the business. The outlook for this segment remains positive as businesses are expected to invest aggressively to ramp up IT infrastructure & security within the organizations.

However, the fundamentals of all our businesses remain strong and we do not foresee any significant impact of the pandemic and economic disruptions caused thereby on the businesses of the Company.

5. CAPITAL

During the year no further capital was raised by the Company. The Company, with an objective to retain and attract talent in the organization, had launched Employee Share Purchase Scheme, 2017 (‘ESPS 2017), during the year 2017-18. The ESPS 2017 has been framed and implemented in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014.

During the year, the Company did not allot shares under the Scheme. Below are the details of the shares issued and allotted under the ESPS, 2017 as on 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 in the year 2017-18 11,51,765
Number of Shares available for further grant at the beginning of the year 2019-20 5,50,765
Less : Number of Shares allotted during the FY 2019-20 Nil
Number of Shares available for further Grant 5,50,765

6. SUBSIDIARIES/ JOINT VENTURES/ASSOCIATE COMPANIES

During the year, Aurionpro Solutions Pte Ltd., a wholly owned subsidiary of Aurionpro Solutions Limited (‘Aurionpro), has completed acquisition of majority stake (51%) in SC Soft Pte. Ltd. ("SC Soft") a Singapore headquartered Automated Fare Collection ("AFC") and smart city solution provider. As on the date of this Report, Aurionpro Solutions Pte Ltd. holds 17,70,000 shares representing 51% stake in SC Soft. The acquisition of SC Soft is a strategic milestone which has strengthened the position of Aurionpro in the rapidly growing AFC Market and has established Aurionpro as a one stop shop having necessary end to end hardware and software required for the implementation of the AFC Systems.

Further, Aurionpro Solutions Pte Ltd., a wholly owned subsidiary of Aurionpro, also completed acquisition of 100% stake in Neo.Bnk Pte. Ltd., a Singapore based technology firm focused on developing micro services based open banking platform.

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

During the year, Servopt Consulting Private Limited a wholly owned subsidiary of the Company has initiated process for its striking off and final order is awaited.

7. ANNUAL RETURN

The extract of the annual return as annexed to this report as Annexure -1. In addition to extract of annual return, the copy of the annual return will be available on the website of the Company i.e. www.aurionpro.com.

8. CORPORATE GOVERNANCE

The Report on corporate governance as per the requirements of Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the LODR"), 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 DISCUSSION AND ANALYSIS (MDA)

10. CORPORATE SOCIAL RESPONSIBILITY (CSR)

In accordance with the provisions of Section 135 read with Schedule VII of the Act, the Company has adopted a CSR Policy outlining various CSR activities to be undertaken by the Company.

The CSR Policy of the Company is available on the website of the Company at www.aurionpro.com.

During the year under review, the Company has contributed Rs 54 lakhs (Fifty Four lakhs) to the trust, which is engaged in the area of Education, hostel for students, Woman welfare 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 the budget for funding various charitable activities and the recommends the contributions to be made to various initiatives.

The disclosures, as required under Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, has been enclosed to this Report as "Annexure 2".

11. INTERNAL CONTROL SYSTEM & THEIR ADEQACY

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)(c) of the Act, the Board confirms that:

i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

ii) the Directors had 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, 2020 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 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 had prepared the annual accounts on a going concern basis;

v) the Directors, had 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 had 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)

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

Re-appointment on account of retirement by rotation

In accordance with the provisions of the Act and Articles of Association of the company, Mr. Ajay Sarupria retires by rotation and being eligible, offers himself for re-appointment.

Re-appointment of Independent Director

The first term of Mr. Frank Osusky, as an Independent Director expires on 21 September, 2020.

The Board is of the opinion that Mr. Frank, Independent Director possesses requisite qualification, experience, expertise and holds high standards of integrity. Based on recommendation of the Nomination and Remuneration Committee, The Board has approved and recommended his re-appointment as an Independent Director for second term of five years subject to the approval of the Members.

All Independent Directors have given declarations afirming that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16(1)(b) of the LODR.

The information as required to be disclosed under regulation 36 of the LODR and brief profile of directors in case of appointment/ reappointment of director is incorporated in explanatory statement of AGM Notice forming part of the Annual Report.

Key Managerial Person

Mr. Hemant Chopra has resigned from the post of Chief Financial Officer of the Company with effect from 12 June, 2020 due to his personal priorities concerning health and desire to pursue other professional aspirations.Mr. Vipul Parmar appointed as a new Chief Financial Officer of the Company with effect from 29 June, 2020.

Pursuant to the provisions of Section 203 of the Act as on the date of this Report, the Key Managerial Personnel of the Company comprised of Mr. Paresh Zaveri, Chairman and Managing Director, Mr. Vipul Parmar, Chief Financial Officer and Mr. Ninad Kelkar, Company Secretary.

14. PERFORMANCE EVALUATION

The Companys policy relating to the 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.

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

The Board has formulated the Nomination and Remuneration Policy for selection and appointment of Directors, senior management personnel and their remunerations. This policy is available at the Companys website www.aurionpro.com.

15. MEETINGS

During the year under review, the Board met four times and the gap between two meetings did not exceed 120 days. For details of meetings of the Board, 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 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 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 has put in place a ‘Whistle Blower policy in order to enable the employees and Directors of the Company 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 www.aurionpro.com.

18. RISK MANAGEMENT POLICY

The Company has formulated a comprehensive Risk Management Policy to identify, assess and mitigate various risks associated with the Company. This policy is available on the website of the company at www.aurionpro.com.

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

The details of loans, guarantees and investments, covered under the provisions of Section 186 of the Act, are given under the note no.40 to the standalone 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 an arms 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 Companys website at www.aurionpro.com.

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 neither invited nor accepted any public deposits.

22. REPORTING OF FRAUD BY AUDITORS

The Statutory Auditors 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

The 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". We refer to the observation in the said report regarding appointment of Independent Director under Regulation 24(1) of the LODR, on the Board of Cyberinc, an Unlisted Material Subsidiary incorporated outside India.

In this connection, the Board wishes to respond that Cyberinc had recently concluded funding round and had roped in new investor by issuance of preferred stock / warrants. Post the funding round, Cyberinc is in the process of reconstituting its Board and the provisions of Regulation 24(1) of the LODR shall be complied with.

24. PARTICLUARS OF EMPLOYEES

In terms of the provisions 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. Any Member interested in obtaining a copy of the same may write to the Company Secretary.

The 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 Act, read with rule 8 of the Chapter IX of 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 adopt 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, 2020 31 March, 2019
Revenue From Operations 4,062.32 4,431.54
Interest and Other Income 164.11 1,802.38
Total 4,226.43 6,233.92

Expenditure in Foreign Currency

(Rs In lakhs)

Particulars 31 March, 2020 31 March, 2019
Software, Hardware and Other Material Cost 558.40 3,261.32
Travelling, Conveyance and Other Expenses 140.28 193.36
Total 698.68 3,454.68

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 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 under review, the Company has not received any complaints under 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 which would 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 Government under section 148(1) of the Act.

29. DISCLAIMER AND FORWARD-LOOKING STATEMENT

The statements in the Boards Report and the Management Discussion & Analysis describing the Companys objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include global and domestic demand and supply, input costs, availability, changes in government regulations, tax laws, economic developments within 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 the continued co-operation, support and assistance provided by all the stakeholders including Companys employees, the financial institutions, banks, customers, vendors, members and other government departments and authorities.

For and on behalf of the Board of Directors

Paresh Zaveri
Chairman & Managing Director
Place : Navi Mumbai
Date : 29th June, 2020
Registered Office:
Synergia IT Park, Plot No. R-270,
T.T.C. Industrial Estate, Near Rabale
Police Station, Rabale, Navi Mumbai -400701.