Aurionpro Solutions Ltd Directors Report.

To the Members of

Aurionpro Solutions Limited,

The Directors present Twenty Fourth Annual Report of the Company, together with its audited 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 19,170.65 28,543.58
Other income 330.18 1,107.27
Total Income 19,500.83 29,650.85
Expenses
Operating Expenses 5,313.24 12,628.38
Change in Inventories of Raw Material, Finished Goods and Stock-in-Trade 383.22 1,032.79
Employee Benefits Expense 7,624.57 8,336.02
Finance Costs 1,399.53 1,598.43
Depreciation and Amortisation Expense 1,123.68 1,469.26
Other Expenses 1,714.03 2,957.59
Total Expenses 17,558.27 28,022.47
Profit before Exceptional Items and Tax 1,942.56 1,628.38
Exceptional Items 3,903.40 -
Profit / (Loss) before Tax (1,960.84) 1,628.38
Income tax expense:
(a) Current tax 354.12 520.85
(b) Deferred Tax Charge 138.26 78.93
Profit/(Loss) After Tax (2,453.22) 1,028.60
Other Comprehensive Income / (Loss) 226.74 (84.54)
Total Comprehensive Income / (Loss) (2,226.48) 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 37,401.77 46,976.08
Other income 297.45 978.79
Total Income 37,699.22 47,954.87
Expenses
Operating expenses 10,791.45 17,992.00
Change of Inventories of raw material, finished goods and stock-in-trade 63.70 764.94
Employee benefits expense 14,978.15 14,920.55
Finance costs 1,579.78 1,822.42
Depreciation and amortization expenses 13,939.06 3,968.75
Other expenses 3,191.97 4,849.15
Total Expenses 44,544.11 44,317.81
Profit / (Loss) before Share of Profit of Associates, Exceptional Items and Tax (6,844.89) 3,637.06
Share of Profit of Associates - 40.78
Profit / (Loss) before Exceptional Items and Tax (6,844.89) 3,677.84
Less: Exceptional item 4,618.37 -
Profit / (Loss) before tax (11,463.26) 3,677.84
Income tax expense: - -
(a) Current tax 738.95 428.21
(b) Deferred tax credit (445.66) (169.46)
Profit / (Loss) after tax (11,756.55) 3,419.09
Profit / (Loss) before Tax from Discontinued Operations (7,443.82) (249.99)
Tax Expenses of Discontinued Operations - -
Profit / (Loss) after Tax from Discontinued Operations (7,443.82) (249.99)
Other Comprehensive Income (net of tax) 274.29 (25.75)
Total Comprehensive Income / (Loss) (18,926.08) 3,143.35

2. MATERIAL CHANGES & COMMITMENTS

Divestment of Cybersecurity Business:

The Board of Directors, at its meeting held on 06th May, 2021, announced exit of the Company from cybersecurity business by divesting the entire stake held by Aurionpro in Cyberinc Corp, USA. The shareholders approval for the transaction is also being obtained. The deal, for the divestment of all stake held by Aurionpro in its cyber security 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 crores will be received upfront and remaining amount to be received in tranches over a year upon fulfilment of contractual warranties and earn out. The accounting impact of the divestment has been accounted, under the impact of Discontinued OperationsRs.in the standalone and consolidated audited financial statements for the year ended 31st March, 2021.

There are no other material changes or commitment 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 economic environment continues to be uncertain in the wake of pandemic. Further, while the operations of the Company remain healthy and profitable, the consolidated financial performance for the year ended 31st March, 2021, after exceptional items and amortizations, has resulted in the loss. Further, the proceeds from the divestment of cybersecurity business would be utilized to reduce debt burden. Therefore, in the context of such scenario, the Board of Directors, adopting conservative strategy, decided not to recommend any dividend for the FY 21.

The profit/(loss) after tax for the year ended 31st March, 2021, was Rs. (2,453.22) lakhs and the same has been transferred to the Retained Earnings.

4. STATE OF COMPANYS AFFAIRS

The year gone by was the most disruptive, but it also offered the company an opportunity to reflect and re-assess its strategies. We adopted a three pronged strategy to focus attention on our core high margin businesses, to undertake measures to improve operational efficiencies & cost rationalisation. The aim was to build robust operations with sustained revenue growth and profitability. While initial COVID related lockdowns impacted us, reflecting impact on our top line, we were able to maintain almost the same EBIDTA in absolute terms despite dip in revenue. Our EBIDTA margins improved to 22.4%. We are confident to maintain margins in the current year with sustained quarterly revenue growth.

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

With streamlined balance sheet, we expect significant improvement in all the financial ratios this year onwards and with strong growth ahead, generating free cash and efficient management of capital, we expect to have a lean & healthy balance sheet supporting our long term growth vision.

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"), 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 ESPS 2017. As on the date of this Report, 5,50,765 shares are available for further Grant.

6. SUBSIDIARIES/ JOINT VENTURES

The Board of Directors at their meeting held on 06th May, 2021 had approved Companys exit from Cyber Security business by divesting entire stake in the USA based subsidiary Cyberinc Corporation Inc. subject to Members approval which was being sought from the Members through postal ballot. Note: As on the date of dispatch of this Annual Report the Members have approved the divestment vide the resolution passed by the Members through 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 ("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.

7. ANNUAL RETURN

The Annual Return of the Company as on 31st March, 2021 in Form MGT - 7 in accordance with Section 92(3) of the Act read with the Companies (Management and Administration) 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 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)

Management Discussion and Analysis for the year under review, as required under Regulation 34 (2) (e) of the LODR has been covered in a separate section forming part of this Annual Report.

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. 55 lakhs (Fifty-Five 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/recommends the budget for funding various charitable activities and the recommends the contributions to be made to various initiatives.

The disclosures, as required under the Companies (Corporate Social Responsibility Policy) 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 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 31st March, 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 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)

• Re-appointment on account of retirement by rotation

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

Based on recommendation of the Nomination and Remuneration Committee, The Board has approved 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 brief profile of director in case of re-appointment of director is incorporated in description statement of AGM Notice forming part of the Annual Report.

• All Independent Directors have given declarations affirming 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.

• 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.

• Key Managerial Person

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. Mr. Vipul Parmar was appointed as Chief Financial Officer w.e.f. 29th June, 2020.

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. 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 following committees applicable under the Act/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 policyRs.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. The detailed section on business risks and opportunities forms part of Management Discussion and Analysis Report, which forms 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 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. 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 twentieth Annual General Meeting ("AGM") held on 26th September, 2017 to hold office till the conclusion of Twenty fourth AGM.

M/s. Chokshi & Chokshi LLP, Chartered Accountants are eligible to be re-appointed for a period commencing from the conclusion of Twenty fourth AGM of the Company till the conclusion of Twenty Sixth AGM of the Company, in terms of provisions of Sections 139 and 141 of the Act.

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

M/s. Chokshi & Chokshi LLP, Chartered Accountants, being eligible for re-appointment under section 139(1) and other applicable provisions, has consented to act as the Statutory Auditors of the Company and has also confirmed that their appointment, if made, would be within the limits prescribed under the Companies Act, 2013.

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 2".

The observations raised by the Secretarial Auditor and Boards response thereto are as under.

1) Observation:

The Company has not appointed Independent Director on the Board of Directors of Unlisted 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.

Companys Response:

Company in its Board meeting held on 06th May, 2021 had approved exit from the Cyber Security business by divesting entire stake in the Cyberinc subject to Members approval, which is being sought from the shareholders through postal ballot. Considering this, 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 consolidated financial results, at least eighty percent of each of the consolidated revenue, assets and profits, respectively as per Reg. 33 (3)(h) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Companys Response:

In view of multiple restrictions and lockdowns imposed by various federal and state authorities across the globe to contain the COVID-19 spread, the full audit/limited review of certain subsidiaries for FY 2020-21 could not be conducted. However, the company has endeavoured to comply with the said requirement to the extent in respect of consolidated revenue, profits/loss (for Profit/loss, forty-eight percentages for fourth quarter) and Assets (for assets seventy-two percentage for first quarter and Sixty-Seven percentage for Second 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) 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 3".

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,2021 31 March, 2020
Revenue From Operations 3,828.37 4,062.32
Interest and Other Income 67.81 164.11
Total 3,896.18 4,226.43

Expenditure in Foreign Currency

(Rs. In lakhs)

Particulars 31 March,2021 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 (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 : Singapore
Date : 28th May,2021
Registered Office:
Synergia IT Park, Plot No. R-270,
T.T.C. Industrial Estate, Near Rabale
Police Station, Rabale, Navi Mumbai -400701.