Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
CONTENTS 2
Corporate Information
3
Letter to the shareholders
4
Notice
14
Directors’ Report
19
Management’s Discussion and Analysis
31
Corporate Governance Report
47
Auditors’ Certificate on Corporate Governance
48
Managing Director’s Certification
49
Auditors’ Report on Accounts
52
Balance Sheet
53
Profit and Loss Account
54
Cash Flow Statement
56
Schedules forming part of the Balance Sheet and the Profit and Loss Account
62
Significant Accounting Policies and Notes on Accounts
73
Balance Sheet Abstract and Company’s General Business Profile
75
Auditors’ Report on Consolidated Financial Statements
76
Consolidated Balance Sheet
77
Consolidated Profit and Loss Account
78
Consolidated Cash Flow Statement
80
Schedules forming part of Consolidated Balance Sheet and Profit and Loss Account
86
Significant Accounting Polices and Notes on Consolidated Accounts
94
Statement pursuant to Section 212 of the Companies Act, 1956
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
COMPANY INFORMATION BOARD OF DIRECTORS Mr. Sanjay A. Desai Mr. Amit R. Sheth Mr. Paresh C. Zaveri Mr. Mitesh R. Majithia Mr. Prem G. Rajani Dr. Nikunj Kapadia Dr. Mahendra F. Mehta Mr. Sandeep Daga
: : : : : : : :
Executive Chairman Managing Director Promoter Non Executive Director Non Executive Non Independent Director Independent Director Independent Director Independent Director Independent Director
COMPANY SECRETARY
:
Mr. Mehul Raval
BOARD COMMITTEES: Audit Committee Dr. Mahendra F. Mehta (Chairman) Dr. Nikunj Kapadia Mr. Amit Sheth Mr. Prem Rajani Mr. Sandeep Daga Shareholders' / Investors' Grievance and Share Transfer Committee Dr. Mahendra F. Mehta (Chairman) Mr. Prem Rajani Mr. Sandeep Daga Mr. Amit Sheth Remuneration / Compensation Committee
REGISTERED OFFICE
Mr. Sandeep Daga (Chairman) Mr. Prem Rajani Dr. Nikunj Kapadia Dr. Mahendra F. Mehta Mr. Amit Sheth
404, 4th Floor, Winchester, High Street, Hiranandani Business Park, Powai, Mumbai 400 076.
STATUTORY AUDITORS:
REGISTRARS & TRANSFER AGENTS
Chaturvedi & Shah Chartered Accountants, Mumbai
Bigshare Services Private Limited E-2, Ansa Industrial Estate, Saki Naka, Andheri (E), Mumbai 400 072.
INTERNAL AUDITORS D. Kothary & Co. Chartered Accountants, Mumbai
BANKERS HDFC Bank Ltd. State Bank of India Yes Bank Limited Bank of India
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AURIONPRO SOLUTIONS LIMITED
LETTER TO THE SHAREHOLDERS Dear Shareholders, I am pleased to report that your Company has continued to demonstrate the robustness of its business model with a strong annual performance for the year 2008-09. Focus on the chosen industry verticals & endeavor to improve its performance in businesses in all geographies, helped ensure moderate growth rates in revenue & maintain profitability despite adverse global macroeconomic conditions. Aurionpro Solutions Limited and its subsidiaries posted a consolidated income of Rs. 275.16 Crores for the financial year ending March 31, 2009. However the standalone income of the Company saw a meager dip in revenues from operations aggregating to Rs. 56.95 crores as compared to Rs. 60.11 crores with the previous year, resulting in an annual deficit of 5.26 percent. The consolidated profit after tax stood at Rs. 40.83 crores and stan alone profit after tax was Rs. 17.01 crores. As per our dividend policy, your directors recommend a final dividend of Rs. 1.75 per share, making it a total dividend of 17.5% for the year. Awards and accolades affirmed our market leadership yet again. The Company bagged 6th ranking in the Technology Fast 50 India 2008 awards among the top-50 India-based Fast 50 winners and bagged 74th ranking in Fast 500 Pacific Asia Region by Deloitte Touche Tohmatsu. During the year, Aurionpro acquired and integrated SENA Systems Inc, USA having its headquarters in New Jersey, USA and with offshore delivery centre in Pune. SENA is focused on an Identity and Access Management (I&AM) space catering mainly to securities needs of BFSI sector. We believe that tough times don't last, tough people do. At a time like this our collective endeavour as an organization is to build businesses for the long haul only reasserts itself. In the past too, there have been sharp swings in business cycles and each time in the past we have emerged fitter and stronger. Aurionpro Solutions Limited succeeded on improving its deep and enduring relationships with marquee customers enabled the Company to maintain a healthy project pipeline and keep the order books full. Our success was defined by a number of factors -robust strategies, consistent execution and innovative technology. One of the fundamental contributor to our success has been our people. Their dedication, resourcefulness and sheer ingenuity were on display throughout the year. Aurionpro's efforts to become a “People-centric” organizationencompassing innovative HR strategies, Best Practices and unique approaches to attracting and retaining talentbore fruit, with the Company continuing to attract high caliber professionals at all levels. At the end of the financial year, Aurionpro's employee numbers stood to more than 800 as on 31st March, 2009. I would like to express my sincere appreciation to our employees who deliver the value experience to our customers and stakeholders each day. Their dedication and hard work are invaluable contribution to your company's performance. I would also like to thank our management team, who will continue to play critical roles in executing Aurionpro's comprehensive growth strategy. I would like to thank our Board of Directors including our independent Directors for their support and inputs. Your board continues to show its commitment in complying with the standards of corporate Governance. The Board has and will take steps and measures in fulfilling its responsibility and in ensuring transparency with regard to the financial statements, internal control and investor related information. A sense of achievement and satisfaction meets us as we put fiscal 2009 behind. We are confident that year 2009-10 will be another year of growth and a time for Aurionpro to demonstrate its unique advantages and show its potential. The fundamentals of our Company remain robust and even keep us excited about what lies ahead of us, this year and for the long term. Thank you once again for your time and your continued patronage to Aurionpro. With best wishes and warm regards, Sanjay Desai Executive Chairman
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AURIONPRO SOLUTIONS LIMITED
NOTICE th
NOTICE is hereby given that the 12 Annual General Meeting of Aurionpro Solutions Limited will be held at Hotel Suncity Residency, 16th Road, MIDC, Marol, Andheri (East), Mumbai 400 093 on Wednesday, 30th September, 2009, at 3.00 p.m. to transact the following business: ORDINARY BUSINESS 1.
To receive, consider, approve and adopt the audited Balance Sheet as at 31st March 2009, the Profit and Loss Account for the year ended on that date and the Reports of the Directors and Auditors thereon.
2.
To declare a dividend for the year ended 31st March 2009.
3.
To appoint a Director in place of Mr. Sandeep Daga, who retires by rotation and is eligible for re-appointment.
4.
To appoint a Director in place of Mr. Mitesh Majithia who retires by rotation and is eligible for re-appointment.
5.
To appoint auditors to hold office from the conclusion of the 12th Annual General Meeting till the conclusion of the next Annual General Meeting and to fix their remuneration.
SPECIAL BUSINESS 6.
To consider and, if thought fit, to pass with or without modification, the following Resolution as an Ordinary Resolution: “RESOLVED THAT in accordance with the provisions of article 136 of the Articles of Association of the Company and provisions of sections 198, 269, 309, 310, 311 and 314 read with Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956 and in partial modification of members resolution dated 28th September, 2007, dealing with payment of remuneration of Mr. Amit R. Sheth, Managing Director of the Company, the Company hereby accords its approval for revision of remuneration with effect from 1.09.2009 for the residual period of his current term of office upto 31st March 2010, on the terms as mentioned herein below: Remuneration will be Rs. 50 Lacs (Rupees Fifty Lacs Only), and would be eligible for following perquisites, commission and other facilities: a)
Medical Benefits, Group Hospitalisation Benefits, personal accident insurance
b)
Leave Travel Allowance
c)
Privileged Leave and encashment of unutilized privileged Leave upon the end of the term
d)
Bonus and such other perquisites as determined by the Board from time to time and as per rules of the Company prescribed in this regard.
Commission: 1% Commission of Net profits shall be payable as per provisions of Section 349 & 350 of the Companies Act, 1956. All other terms and conditions of remuneration remain unchanged. RESOLVED FURTHER THAT the Board be and is hereby authorized to do all acts, deeds, matters and things as may be deemed necessary in this regard.” 7.
To consider and, if thought fit, to pass with or without modification, the following Resolution as an Ordinary Resolution: “RESOLVED THAT in accordance with the provisions of article 136 of the articles of association of the Company and provisions of sections 198, 269, 309, 310, 311 and 314 read with Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956 and in partial modification of members resolution dated 28th September, 2007, dealing with payment of remuneration of Mr. Sanjay Desai, Executive Chairman of the Company, the Company be and hereby accord its approval, for revision of remuneration with effect from 1.09.2009 for the residual period of his current term of office upto 31st March 2010, on the remuneration and other perks decided as below: Remuneration of Rs. 25 Lacs (Rupees Twenty Five Lacs Only) and would be eligible for following perquisites, commission and other facilities: a)
Medical Benefits, Group Hospitalisation Benefits, personal accident insurance
b)
Leave Travel Allowance
c)
Privileged Leave and encashment of unutilized privileged Leave upon the end of the term
d)
Bonus and such other perquisites as determined by the Board from time to time and as per rules of the Company prescribed in this regard.
Commission: 1% Commission of Net profits shall be payable as per provisions of Section 349 & 350 of the Companies Act, 1956. 4
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AURIONPRO SOLUTIONS LIMITED
All other terms and conditions of remuneration remain unchanged. RESOLVED FURTHER THAT the Board be and is hereby authorized to do all acts, deeds, matters and things as may be deemed necessary in this regard.” 8.
To consider and if thought fit, to pass with or without modification(s) the following Resolution as Special Resolution: “RESOLVED THAT in accordance with the provisions of Section 81(1A) and all other applicable provisions, if any, of the Companies Act, 1956 (“the Act”) and the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (“the Guidelines”) or any statutory modification(s) or re-enactment of the Act or the Guidelines, the provisions of any other applicable laws and regulations, the Articles of Association of the Company and Listing Agreements entered into by the Company with the Stock Exchanges where the securities of the Company are listed and subject to any applicable approval(s), permission(s) and sanction(s) of any authorities and subject to any condition(s) and modification(s) as may be prescribed or imposed by such authorities while granting such approval(s), permission(s) and sanction(s) and which may be agreed to and accepted by the Board of Directors of the Company (hereinafter referred to as “the Board” which term shall include 'Employees Stock Compensation Committee' of the Board), consent of the Company be and is hereby accorded to the Board to grant, offer and issue, in one or more tranches, to such eligible employees of the Company whether working in India or out of India and Directors of the Company whether Whole Time Directors or otherwise (hereinafter referred to collectively as the “Employees”), as may be decided by the Board, Options exercisable by the Employees under a Scheme titled “The ASL ESOS 2009” (hereinafter referred to as “the Scheme”) to subscribe to such number of equity shares and/or equity linked instruments which could give rise to the issue of equity shares (hereinafter referred to collectively as “the Securities”) of the Company not exceeding in aggregate 10 % of the issued, subscribed and paid-up equity shares of the Company as on 31st July, 2009, i.e. up to 14,79,941 equity shares, at such price and on such terms and conditions as may be determined by the Board in accordance with the Guidelines or any other applicable provisions as may be prevailing at that time. RESOLVED FURTHER THAT the Board be and is hereby authorised to formulate, evolve, decide upon and bring into effect the Scheme on such terms and conditions as contained in the Explanatory Statement to this item in the Notice and to make any modification(s), change(s), variation(s), alteration(s) or revision(s) in the terms and conditions of the Scheme from time to time including but not limited to, amendment(s) with respect to vesting period and schedule, exercise price, exercise period, eligibility criteria or to suspend, withdraw, terminate or revise the Scheme etc. RESOLVED FURTHER THAT the Securities may be allotted in accordance with the Scheme either directly or through an existing trust or a trust which may be setup in any permissible manner and that the Scheme may also envisage for providing any financial assistance to the trust to enable the trust to acquire, purchase or subscribe to the Securities of the Company. RESOLVED FURTHER THAT any new equity shares to be issued and allotted as aforesaid shall rank pari passu inter se with the then existing equity shares of the Company in all respects. RESOLVED FURTHER THAT the Board be and is hereby authorised to take necessary steps for listing of the Securities allotted under the Scheme on the Stock Exchanges where the securities of the Company are listed as per the provisions of the Listing Agreements with the Stock Exchanges concerned, the Guidelines and other applicable laws and regulations. RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board be and is hereby authorised to do all such acts, deeds, matters and things as it may, in its absolute discretion, deem necessary, expedient or proper and to settle any questions, difficulties or doubts that may arise in this regard at any stage including at the time of listing of the Securities without requiring the Board to secure any further consent or approval of the Members of the Company to the end and intent that they shall be deemed to have given their approval thereto expressly by the authority of this resolution.”
9.
To consider and if thought fit, to pass with or without modification(s) the following Resolution as a Special Resolution: “RESOLVED THAT in accordance with the provisions of Section 81 (1A) and all other applicable provisions, if any, of the Companies Act, 1956 (“the Act”) and the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (“the Guidelines”) or any statutory modification(s) or re-enactment of the Act or the Guidelines, the provisions of any other applicable laws and regulations, the Articles of Association of the Company and Listing Agreements entered into by the Company with the Stock Exchanges where the securities of the Company are listed and subject to any applicable approval(s), permission(s) and sanction(s) of any authorities and subject to any condition(s) and modification(s) as may be prescribed or imposed by such authorities while granting such approval(s), permission(s) and sanction(s) and which may be agreed to and accepted by the Board of Directors of the Company (hereinafter referred to as “the Board” which term shall include 'Employees Stock Compensation Committee' of the Board), consent of the Company be and is hereby accorded to the Board to extend the benefits of the “The ASL ESOS- 2009” referred to in the resolution under Item No. 8 in this Notice and duly passed at this Meeting, also to such eligible employees of the future subsidiaries and the present subsidiaries of the Company namely Aurionpro Solutions Pte. Limited, Singapore, Aurionpro Solutions Inc, USA, Aurionpro Solutions, SPC Bahrain, Bahrain, Auroscient Outsourcing Limited, India, Aurionpro Solutions (HK) Limited, Hong Kong, E2E Infotech Limited, United
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AURIONPRO SOLUTIONS LIMITED
Kingdom, E2E Infotech (India) Private Limited, India, Integro Technologies Pte Limited, Singapore, Integro Technologies SDN, BHD., Malaysia, Aurofidel Outsourcing Limited, India, SENA Systems, Inc, USA, and SENA Systems Private Limited, India, whether working in India or out of India and Directors of the present and future subsidiaries of the Company whether Whole Time Directors or otherwise, as may be decided by the Board and / or such other persons, as may from time to time, be allowed under prevailing laws and regulations on such terms and conditions as may be decided by the Board. RESOLVED FURTHER THAT for the purpose of giving effect to the above resolution, the Board be and is hereby authorised to do all such acts, deeds, matters and things as it may, in its absolute discretion, deem necessary, expedient or proper and to settle any questions, difficulties or doubts that may arise in this regard at any stage including at the time of listing of the Securities without requiring the Board to secure any further consent or approval of the Members of the Company to the end and intent that they shall be deemed to have given their approval thereto expressly by the authority of this resolution.” 10. To consider and if thought fit, to pass with or without modification(s) the following Resolution as a Special Resolution: “RESOLVED THAT in accordance with the provisions of Section 81(1A) and other applicable provisions, if any, of the Companies Act, 1956 (“Act”), Foreign Exchange Management Act, 1999 (including any statutory modification(s) or re- enactment thereof for the time being in force), and the applicable Rules, Guidelines, Regulations, Notifications and Circulars, if any, and the Listing Agreements, entered into by the Company with the Stock Exchanges where the shares of the Company are listed and subject to such approvals, consents, permissions and sanctions of the Government of India (“GOI”), Reserve Bank of India (“RBI”), Foreign Investment Promotion Board (“FIPB”), Securities and Exchange Board of India (“SEBI”), Registrar of Companies (“RoC”) and subject to such consents and such other approvals as may be necessary and subject to such conditions and modifications as may be considered necessary by the Board of Directors (hereinafter referred to as “the Board” which term shall be deemed to include any Committee thereof for the time being exercising the powers conferred on the Board by this resolution) or as may be prescribed or made, in granting such consents and approvals and which may be agreed to by the Board, which the Board be and is hereby authorised to accept, if it thinks fit in the interest of the Company, the consent of the Company be and is hereby accorded to the Board to offer, issue and allot in one or more tranches, whether Indian Rupee denominated or denominated in foreign currency, in the course of domestic / international offerings (in or more foreign markets) to any person including Domestic / Foreign Investors, Foreign Institutional Investors, Non-Resident Indians, Companies, Body Corporates, Trusts, Mutual Funds, Banks, Insurance Companies, Pension Funds, individuals, employees of the Company or otherwise, whether shareholders of the Company or not (collectively referred to as the “Investors”, including any combination thereof), through a public issue, rights issue, preferential issue and / or on a private placement basis, with or without over-allotment option, Equity Shares, debentures or bonds, whether non-convertible or Partly / Optionally / Fully Convertible and / or securities linked to Equity Shares or securities issued by way of Qualified Institutional Placement in terms of the Chapter XIII- A of the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000 including but not limited to Global Depository Receipts (GDRs) and / or American Depository Receipts (ADRs) and / or Foreign Currency Convertible Bonds (FCCBs) and / or any Other Financial Instruments (OFIs) and / or any securities convertible into equity shares at the option of the Company and / or holders of the securities, and / or securities linked to equity shares and / or securities with warrants including any instruments or securities representing either equity shares and / or bonds with or without Share Warrants attached (collectively referred to as “Securities”, including any combination thereof), secured or unsecured listed on any stock exchange inside India or any international stock exchange outside India, through an offer document and / or prospectus and / or offer letter, and / or offering circular, and / or listing particulars, as the Board in its sole discretion may at any time or times hereafter decide, including the discretion to determine the categories of Investors to whom the offer, issue and allotment shall be made to the exclusion of all other categories of Investors at the time of such issue and allotment considering the prevailing market conditions and other relevant factors wherever necessary in consultation with the Lead Managers, to be issued either for cash or for consideration other than cash including shares of another company, whether in India or abroad, at such price (whether at a discount or premium to the market price) as per applicable regulations from time to time duly adjusted for any stock split, consolidation, issue of bonus shares etc. in such manner, including through book building process, provided however the total amount (including if the Securities have been issued at a premium) raised through the aforesaid Securities should not, together with the over-allotment / green shoe option, if any, exceed USD 50 million (United States Dollars Fifty million only) or its Indian Rupee equivalent. RESOLVED FURTHER THAT in accordance with the provisions of Section 81(1A) and other applicable provisions, if any, of the Act, the provisions of Chapter XIIIA of the SEBI (Disclosure and Investor Protection) Guidelines, 2000 (“SEBI DIP Guidelines”), the provisions of the Foreign Exchange Management Act, 1999 and the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000, the Board of Directors may at their absolute discretion, issue, offer and allot equity shares / fully convertible debentures (FCDs) / partly convertible debentures (PCDs) or any securities other than warrants, which are convertible into or exchangeable with equity shares at a later date, for and upto the amount of USD 50 million (United States Dollars Fifty million only) or its Indian Rupee equivalent, inclusive of premium to Qualified Institutional Buyers pursuant to a qualified institutional placement, as provided for under Chapter XIII A of the SEBI DIP Guidelines. 6
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AURIONPRO SOLUTIONS LIMITED
RESOLVED FURTHER THAT where securities which are convertible into or exchangeable with equity shares at a later date in terms of Chapter XIII A of the SEBI DIP Guidelines, as specified above, the relevant date for the purpose of pricing of the securities shall be as per Chapter XIII A of the SEBI DIP Guidelines as amended from time to time. RESOLVED FURTHER THAT without prejudice to the generality of the above, the aforesaid Securities may have such features and attributes or any terms and conditions in accordance with international practices to provide for the tradability and free transferability thereof as per prevailing capital markets practices and regulations, including, but not limited to, the terms and conditions in relation to security, rate of interest, issue of additional Equity Shares, variation of the conversion price of the Securities during the duration of the Securities, payment of interest, additional interest, premium on redemption, prepayment and any other debt service payments whatsoever. RESOLVED FURTHER THAT in case of any equity linked issue / offering, including without limitation, any GDR / ADR / FCCB offering, the Board be and is hereby authorised to issue and allot such number of equity shares as may be required to be issued and allotted upon conversion, redemption or cancellation of any such Securities referred to above or as may be issued / allotted in accordance with the terms of issue / offering in respect of such Securities and such equity shares shall rank pari-passu with the existing equity shares of the Company in all respects except if provided otherwise under the terms of issue / offering and in the offer document and / or prospectus and / or offer letter and / or offering circular and / or listing particulars. RESOLVED FURTHER THAT the Company and / or any entity, agency or body authorised and / or appointed by the Company, may issue depository receipts representing the underlying Securities issued by the Company in negotiable, registered or bearer form with such features and attributes as are prevalent in international capital markets for instruments of this nature and to provide for the tradability and free transferability thereof as per international practices and regulations (including listing on one or more stock exchange(s) inside or outside India) and under the forms and practices prevalent in the international markets. RESOLVED FURTHER THAT for the purpose of giving effect to the above, the Board, in consultation with the Lead Managers, Underwriters, Advisors and / or other persons as appointed by the Company, be and is hereby authorised to determine the form and terms of the issue(s), including the class of investors to whom the Securities are to be allotted, number of Securities to be allotted in each tranche, issue price (including premium, if any), face value, premium amount on issue / conversion of Securities / exercise of warrants / redemption of Securities, rate of interest, redemption period, number of equity shares or other securities upon conversion or redemption or cancellation of the Securities, the price, premium or discount on issue / conversion of Securities, rate of interest, period of conversion, fixing of record date or book closure and related or incidental matters, listings on one or more stock exchanges in India and / or abroad, as the Board in its absolute discretion deems fit. RESOLVED FURTHER THAT such of these Securities as are not subscribed may be disposed off by the Board in its absolute discretion in such manner, as the Board may deem fit and as permissible by law. RESOLVED FURTHER THAT for the purpose of giving effect to the above resolution, the Board be and is hereby authorised to do all such acts, deeds, matters and things as it may, in its absolute discretion deem necessary or desirable, including without limitation to settle any question, difficulty or doubt that may arise in regard to the offer, issue and allotment of the Securities. RESOLVED FURTHER THAT the Board be and is hereby authorised to accept any modification in the proposal as may be required by the authorities involved in such issues but subject to such conditions as the SEBI / GOI / RBI or such other appropriate authorities, inside or outside India, may impose at the time of their approval and as agreed to by the Board. RESOLVED FURTHER THAT the Board be and is hereby entitled to appoint or enter into and execute all such arrangements / agreements, with any Lead Manager(s) / Underwriter(s) / Banker(s) / Guarantor(s) / Depository(ies) / Listing Agent(s) / Trustee(s) / Legal Counsel / Custodian(s) / Process Agent(s) / Advisor(s) and all such agencies or entities, inside or outside India, as may be involved or concerned in such issue / offering of Securities and to remunerate all such agencies and entities as may be involved in cash or otherwise including by way of payment of commission, brokerage, fees, expenses incurred in relation to the issue / offering of Securities and other expenses, if any or the like, subject to applicable laws and regulations. RESOLVED FURTHER THAT the Board be and is hereby authorised to delegate all or any of the powers herein conferred above to any Committee of Directors or any one or more Directors / Executives of the Company. 11. To consider and if thought fit, to pass with or without modification(s) the following Resolution as an Ordinary Resolution: “RESOLVED THAT pursuant to Section 94 and other applicable provisions, if any, of the Companies Act, 1956, the approval of the shareholders be and is hereby granted for increase in Authorised Share Capital of the Company from Rs.18,00,00,000/(Rupees Eighteen crores only) consisting of 1,80,00,000 Equity Shares of Rs.10/- (Rupees Ten Only) each to Rs. 25,00,00,000/(Rupees Twenty Five crores only) consisting of 2,50,00,000 Equity Shares of Rs.10/- (Rupees Ten Only) each.” RESOLVED FURTHER THAT consequent to increase in the present Authorised Share Capital of the Company, Clause V of the Memorandum of Association of the Company be replaced and substituted with the following new clause V:
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AURIONPRO SOLUTIONS LIMITED
“The Authorised Share Capital of the Company shall be Rs.25,00,00,000 (Rupees Twenty Five Crores Only) divided into 2,50,00,000 Equity Shares of Rs.10/- (Rupees Ten Only) each, with the rights, privileges and conditions attaching thereto as are provided in the Articles of Association of the Company with the power to increase and reduce the capital of the company and to divide the shares in the capital for the time being into several classes and to attach thereto respectively such preferential, deferred, qualified or special rights, privileges or conditions as may be determined by or in accordance with the Articles of Association of the Company for the time being and to vary, modify or abrogate any such rights, privileges or conditions in such manner as may be permitted by the Companies Act, 1956, or provided in the Articles of Association of the Company for the time being.” RESOLVED FURTHER THAT each of the Directors of the Company or any Committee be and is hereby severally authorised to do all such acts, matters, deeds and things necessary or desirable in connection with or incidental to giving effect to the above resolution, including but not limited to filing of necessary forms with the Registrar of Companies and to comply with all other requirements in this regard.” 12. To consider and if thought fit, to pass with or without modification(s) the following Resolution as an Ordinary Resolution: “RESOLVED THAT the consent of the Company be and is hereby granted, in accordance with Section 293(1)(d) and all other applicable provisions, if any, of the Companies Act, 1956 and the Articles of Association of the Company, to the Board of Directors of the Company, to borrow any sum or sums of money from time to time at their discretion, for the purpose of the business of the Company, which together with the monies already borrowed by the Company, (apart from temporary loans obtained from the Company's Bankers in the ordinary course of business) may exceed at any time, the aggregate of the paid-up capital of the Company and its free reserves (that is to say, reserves, not set apart for any specific purpose) by a sum not exceeding Rs. 500 crores and that the Board of Directors be and is hereby empowered and authorized to arrange or fix the terms and conditions of all such monies to be borrowed from time to time as to interest, repayment, security or otherwise as it may think fit.” RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board be and is hereby authorised to do all such acts, deeds, matters and things as it may in its absolute discretion deem necessary, proper, or desirable and to settle any question, difficulty, doubt that may arise in respect of the borrowing(s) aforesaid and further to do all such acts, deeds and things and to execute all documents and writings as may be necessary, proper, desirable or expedient to give effect to this resolution.” 13. To consider and if thought fit, to pass with or without modification(s) the following Resolution as an Ordinary Resolution: “RESOLVED THAT the consent of the Company be and is hereby granted, in accordance with Section 293(1)(a) and all other applicable provisions, if any, of the Companies Act, 1956, to the Board of Directors to mortgage and/or charge, in addition to the mortgages and/or charges created/to be created by the Company, in such form and manner and with such ranking as to priority and for such time and on such terms as the Board may determine, all or any of the movable and /or immovable, tangible and/or intangible properties of the Company, both present and future and/or the whole or any part of the undertaking(s) of the Company together with the power to take over the management of the business and concern of the Company in certain events of default, in favour of the lender(s), agent(s), trustee(s) for securing the borrowings of the Company availed/to be availed by way of loan(s) (in foreign currency and/or rupee currency) and securities (comprising fully/partly convertible debentures and/or non-convertible debentures with or without detachable or non-detachable warrants and/or secured premium notes and/or floating rates notes/ bonds or other debt instruments), issued /to be issued by the Company, from time to time, subject to the limits approved under Section 293(1)(d) of the Companies Act, 1956, together with interest at the respective agreed rates, additional interest, compound interest in case of default, accumulated interest, liquidated damages, commitment charges, premia on prepayment, remuneration of agent(s)/ trustee(s), premium (if any) on redemption, all other costs, charges and expenses, including any increase as a result of devaluation/revaluation /fluctuation in the rates of exchange and all other monies payable by the Company in terms of loan agreement(s), heads of agreement(s), debenture trust deed or any other document entered into/to be entered into between the Company and the lender(s)/agent(s)/trustees, in respect of the said loans/ borrowings/debentures and containing such specific terms and conditions and covenants in respect of enforcement of security as may be stipulated in that behalf and agreed to between the Board of Directors or Committee thereof and the lender(s)/ agent(s)/trustee(s).” “RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board or Committee thereof be and is hereby authorized to finalize, settle and execute such documents/deeds/writings/papers/agreements as may be required and to do all acts, deeds, matters and things, as it may in its absolute discretion deemed necessary, proper or desirable and to settle any question, difficulty or doubt that may arise in regard to creating mortgage/charge as aforesaid and also to delegate all or any of the above powers to the Committee of Directors or the Managing Director or the Principal Officer of the Company and generally to do all acts, deeds and things that may be necessary, proper, expedient or incidental for the purpose of giving effect to the aforesaid Resolution.” Notes: 1.
A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF/HERSELF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY. THE PROXY, IN ORDER TO BE EFFECTIVE, MUST BE DEPOSITED AT THE REGISTERED OFFICE OF THE COMPANY NOT LESS THAN 48 HOURS BEFORE THE COMMENCEMENT OF THE MEETING. 8
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2.
An explanatory statement pursuant to Section 173(2) of the Companies Act, 1956 in respect of item nos. 6,7,8,9,10,11,12 and 13 is annexed.
3.
A brief profile of Mr. Sandeep Daga and Mr. Mitesh Majithia and names of companies in which they are Directors/ committee members are given in the Corporate Governance Report, which forms part of the Annual Report.
4.
Corporate members intending to send their authorised representatives to attend the Meeting are requested to send a certified copy of the Board Resolution authorizing their representative to attend and vote on their behalf at the Meeting.
5.
The Register of Members and the Share Transfer Register will be closed from Friday, 25th September 2009 to Wednesday, 30th September 2009, both days inclusive.
6.
Dividend for the year ended 31st March 2009, if declared at the Annual General Meeting, shall be paid within the prescribed time limit, to those members, whose names appear: a.
As beneficial owners at the end of business day on Thursday, 24th September 2009 as per lists furnished by NSDL and CDSL in respect of shares held in electronic form.
b.
On the register of members of the Company as on Thursday, 24th September 2009 in respect of shares held in physical form.
7.
In order to enable the Company to remit dividend through Electronic Clearing Service (ECS), members are requested to provide details of their bank accounts indicating the name of the bank, branch, account number and the nine-digit MICR code (as appearing on the cheque). It is advisable to attach a photocopy of the cheque leaf/cancelled cheque leaf. The said information should be submitted on or before Thursday, 24th September, 2009 to the Company if the shares are held in physical form and to the concerned Depository Participant (DP), if the same are held in electronic form. Payment through ECS shall be subject to availability of ECS Centers and timely furnishing of complete and correct information by members.
8.
Members are advised to encash dividend warrants promptly.
9.
Members are advised to avail of nomination facility in respect of shares held by them.
10. Members are requested to: a.
Intimate the Company, changes, if any, in their registered addresses at an early date for shares held in physical form. For shares held in electronic form, changes if any may be communicated to respective Dps.
b.
Quote ledger folio numbers/DP ID and Client ID numbers in all their correspondence.
c.
To avoid inconvenience, get the shares transferred in joint names, if they are held in a single name and/or appoint a nominee.
d.
Bring with them at the meeting a copy of the Annual Report and Attendance Slip.
11. Members desirous of obtaining any information concerning the accounts and operations of the Company are requested to address their communications to the Registered Office of the Company, so as to reach at least seven days before the date of the meeting, so that the required information can be made available at the meeting, to the extent possible. 12. Members, who hold shares in electronic form, are requested to bring their Client ID and DP ID numbers at the meeting for easier identification. 13. In terms of Section 205A and 205C of the Companies Act, 1956 the amount of dividend remaining unclaimed or unpaid for a period of seven years from the date of transfer to the unpaid dividend account is required to be transferred to the Investor Education and Protection Fund. Therefore, the members who have not en-cashed the dividend warrants for the financial year ended 31st March, 2006, 31st March, 2007 and 31st March, 2008 are requested to send back their warrants or make their claims to our Registrar & Share Transfer Agent viz., Bigshare Services Private Limited, E-2, Ansa Industrial Estate, Andheri (East), Mumbai 400 072. By Order of the Board of Directors Mehul Raval Company Secretary Mumbai, 01st September, 2009 Registered Office: 404, 4th Floor, Winchester, Hiranandani Business Park, Powai, Mumbai 400 076.
9
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
EXPLANATORY STATEMENT PURSUANT TO SECTION 173 (2) OF THE COMPANIES ACT, 1956. ITEM NO.6 & 7 At the Annual General Meeting of the company held on 28th May 2005, the members had appointed Mr. Amit R. Sheth as Managing Director and Mr. Sanjay A. Desai as Executive Chairman for a period of 5 yrs and had approved their terms of remuneration for a period of 2 years with effect from 1st April 2005 till 31st March 2007. Therefore, the Company in its 10th Annual General Meeting had renewed their remuneration for the residual period. Considering the growth and performance of the company, the board of directors ('board') deemed it necessary for revision of remuneration payable to Mr. Amit R. Sheth and Mr. Sanjay A. Desai. The board has therefore, as per the recommendations of Remuneration/Compensation committee of the directors has revised their terms of remuneration for the residual period of their current term of office upto 31st March 2010. All other terms and conditions of the appointment of Mr. Amit R. Sheth and Mr. Sanjay A. Desai, as approved earlier by the members shall remain unchanged. Your directors, therefore, recommend the resolution for your approval. Copies of the draft supplemental agreements entered into with Mr. Amit R. Sheth and Mr. Sanjay A. Desai and the earlier resolutions relating to their appointments and remuneration are open for inspection of the members at the registered office of the company between 11.00 a.m. and 1.00 p.m. on any working day excluding Saturdays up to the date of ensuing AGM on 30th September 2009. Mr. Amit R. Sheth and Mr. Sanjay A. Desai are interested in the resolution pertaining to the revision in the terms of their remunerations as aforesaid. None of the other directors is concerned or interested in the resolution. ITEM NO. 8 & 9 The Company recognizes that in an increasingly competitive environment, people are key resources. The Company therefore understands that rewarding its key and high performing employees is critically imperative to its continued success. Consequently, the management is further keen to offer stock Options to its key employees and / or Directors; and to key employees and / or Directors of its subsidiaries. It understands that a stock option plan would be ideal to ensure retention of qualified, talented and competent key personnel and to keep them continuously motivated to create value for them. As required by the guidelines, the Board hereby place before the members for approval of the proposal of Issue of Employee Stock Option pursuant to The ASL ESOS- 2009 (hereinafter referred to as the “the Scheme”) of which salient features are as under: (A) Total number of Options to be granted The Options to be granted under the Scheme shall not result in issue of equity shares exceeding 10% of the issued, subscribed and paid-up equity shares of the Company as on 31st July, 2009, i.e. up to 14,79,941 equity shares. (B) Identification of classes of employees entitled to participate in the Scheme Such eligible employees, including Directors, of the Company and its future subsidiaries and its present subsidiary companies namely Aurionpro Solutions Pte. Limited, Singapore, Aurionpro Solutions Inc, USA, Aurionpro Solutions, SPC Bahrain, Bahrain, Auroscient Outsourcing Limited, India, Aurionpro Solutions (HK) Limited, Hong Kong, E2E Infotech Limited, United Kingdom, E2E Infotech (India) Private Limited, India, Integro Technologies Pte Limited, Singapore, Integro Technologies SDN, BHD., Malaysia, Aurofidel Outsourcing Limited, India, SENA Systems, Inc, USA, and SENA Systems Private Limited, India, as may be decided by the Board, from time to time, shall be entitled to participate in the Scheme. Under the prevailing Guidelines, an employee who is a promoter or belongs to the promoter group will not be eligible to participate in the Scheme. A Director, who either by himself or through his relative or through any body corporate, directly or indirectly holds more than 10% of the outstanding equity shares of the Company, will also not be eligible to participate in the Scheme. The Options granted under the Scheme shall not be renounced, transferred, pledged, hypothecated, mortgaged or otherwise alienated in any other manner. (C) Transferability of employee stock options The stock options granted to an employee will not be transferable to any person and shall not be pledged, hypothecated, mortgaged or otherwise alienated in any manner. However, in the event of the death of an employee stock option holder while in employment, the right to exercise all the options granted to him till such date shall be transferred to his legal heirs or nominees. (D) Requirements of vesting, period of vesting and maximum period of vesting There shall be a minimum period of one year between the grant of Options and vesting of Options. The maximum vesting period shall extend up to four years from the date of grant of Options, unless otherwise decided by the Board.
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Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
The vesting will be in the following graduated scale and subject to the terms and conditions of vesting, as stipulated under the scheme by the Board/Committee: a)
1st Vesting: 20% of options granted at the end of 1st year from the date of grant or any extended period as may be determined by the Board/Compensation Committee;
b)
2nd Vesting: 30% at the end of second year from the date of grant or any extended period as may be determined by the Board/Compensation Committee; and
c)
3rd Vesting: 50% at the end of third year from the date of grant.
(E) Maximum period within which the options shall be vested The Board will decide the maximum period within which the option shall be vested in an employee at the time of issue of the option. The maximum vesting period shall extend up to four years from the date of grant of Options, unless otherwise decided by the Board. (F) Exercise price or pricing formula The exercise price for the purpose of the grant of Options shall be the market price i.e. the latest available closing price prior to the date of the grant as quoted on National Stock Exchange of India Limited. (G) Exercise period and the process of exercise The Maximum Exercise period shall be 1 year from the date of vesting and on the expiry of 1 year the right to exercise the Options shall lapse. Once the Options become vested in an employee he may exercise the Options at various points of time within the Maximum Exercise Period i.e. he would be entitled to subscribe to the Equity shares. The Options will be exercisable by the Employees by a written application to the designated officer of the Company, in such manner, and on execution of such documents, as may be prescribed by the Board. (H) Appraisal process for determining the eligibility of employees to participate in the Scheme The Company has a formal performance appraisal system established whereby performance of the employees is assessed each year on the basis of various functional and managerial parameters. The appraisal process is revised at regular intervals in line with the emerging global standards. The Employees would be granted Options based on performance linked parameters such as work performance, technical knowledge, period of service, designation and such other parameters as may be decided by the Board from time to time. The Board may its discretion extend the benefits of the Scheme to a new entrant. (I) Maximum number of Options to be issued per employee and in aggregate The number of Options that would be granted to an employee under the Scheme shall be decided by the Board. However, Options to be granted to a single employee shall not result into equity shares exceeding 1% of the issued, subscribed and paid-up equity st shares of the Company as on 31 July, 2009. The aggregate of all such grants shall not result into equity shares exceeding 10% of the issued, subscribed and paid-up equity shares of the Company as on 31st July, 2009. The number of options that may be granted to any specific employee under the Scheme shall not be equal to or exceed 1% of the st issued and paid-up capital (excluding outstanding warrants and conversions) of the Company as on 31 July, 2009. The maximum number of shares that can be issued under the Scheme to Non-Executive Directors of the Company in a financial year and in aggregate shall not exceed the limit prescribed under the Guidelines. (J) Accounting methods/policies The Company and its subsidiary companies shall conform to the accounting policies specified in Clause 13.1 of the Guidelines, and/or such other guidelines as may be applicable, from time to time. (K) Method of valuation of Options The Company shall use the intrinsic value method for valuation of the Options. The difference between the employee compensation cost so computed and the employee compensation cost that shall have been recognized, had the fair value of the Options been recognized, shall be disclosed in the Directors' Report and the impact of such difference on profits and on EPS of the Company shall also be disclosed in the Directors' Report. Clause 6.1 of the Guidelines requires that any employee stock option scheme must be approved by way of a special resolution. Further, as the Scheme will entail further shares to be offered to persons other than existing Members of the Company, consent of members is required by way of a special resolution pursuant to the provisions of Section 81 of the Companies Act, 1956 (the Act).
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Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Accordingly, the resolution set out at Item No. 8 is being placed for approval of Members pursuant to the provisions of Section 81 of the Act and Clause 6 of the Guidelines and all other applicable provisions of laws. As per Clause 6.3 of the Guidelines, a separate special resolution is required to be passed, if the benefits of the scheme are to be extended to employees of the holding or subsidiary companies. Further, as the Scheme will entail further shares to be offered to persons other than existing Members of the Company, consent of Members is required by way of a special resolution pursuant to the provisions of Section 81 of the Act. Accordingly, the resolution set out at Item No. 9 is being placed for approval of Members pursuant to the provisions of Section 81 of the Act and Clause 6 of the Guidelines and all other applicable provisions of laws. The Options to be granted under the Scheme shall not be treated as an offer or invitation made to public for subscription in the securities of the Company. The Board recommends the Special Resolutions set out at Item Nos. 8 and 9 for approval of Members. None of the Directors of the Company is, in any way, concerned or interested in the Resolutions, except to the extent of the Options may be offered to them under the Scheme. ITEM NO. 10 Your Company has been considering expanding its business including by way of acquisition. The proposed resolution will enable your Company to issue / offer equity and / or equity related instruments / Depository Receipts / Foreign Currency Convertible Bonds (FCCB), or such other instrument as may be finalized by the Board or Committee thereof in the course of domestic / international offering, in the aggregate amount not exceeding USD 50 million or equivalent sum in Indian Rupees/in any other currency in the manner set out in the resolution. The issue proceeds will enable the Company inter alia finance acquisitions, other strategic initiatives and / or other general corporate purposes. The detailed terms and conditions for the offer will be determined in consultation with the Advisors, Lead Managers and Underwriters and such other authority or authorities as may be required, considering the prevailing market conditions and other regulatory requirements. The Special Resolution seeks to empower the Board of Directors to issue securities in such tranche at such time or times, at such price or prices and to such persons including institutions and/or corporate bodies and/or individuals or otherwise as the Board may in its absolute discretion, deem fit and / or also to undertake a qualified institutional placement with qualified institutional buyers as defined by SEBI DIP Guidelines. The Board of Directors may in their discretion adopt this mechanism as prescribed under Chapter XIIIA of the SEBI DIP Guidelines for raising funds for the Company, without seeking fresh approval from the shareholders. As the pricing of the offering cannot be decided except at a later stage, it is not possible to state the price or the exact number of securities or shares to be issued. However, the same would be in accordance with SEBI Guidelines and / or Issue of Foreign Currency Convertible Bonds and Ordinary Shares (through Depository Receipt Mechanism) Scheme, 1993 as amended from time to time or any other guidelines / regulations as may be applicable. For the reasons stated aforesaid, an enabling resolution is being passed to give adequate flexibility and discretion to the Board to finalise the terms of the issue. Under Section 81 of the Companies Act, 1956 (the Act) shareholders' approval by a special resolution is required for issue of shares to persons other than existing shareholders of the Company. Similarly Listing Agreement provides inter alia that the Company in the first instance should offer all securities to be issued by the Company for subscription pro-rata to the existing equity shareholders unless the shareholders in a General Meeting decide otherwise. The said special resolution, if passed, shall have the effect of allowing the Board on behalf of the Company to issue and allot the securities otherwise than on pro-rata basis to the existing shareholders. Therefore, consent of the shareholders is being sought pursuant to the provisions of Section 81 and other applicable provisions of the Act. The Board of Directors believes that such issue is in the interest of the Company and therefore recommends the resolution for your approval. None of the Directors of the Company, except to the extent of any securities may be offered to them, is concerned or interested in this resolution. ITEM NO. 11 The authorised share capital of the Company, at present, is Rs. 18 crores, consisting of 1,80,00,000 equity shares of Rs.10/- each. At present the paid-up equity share capital of the Company is Rs. 14.79 crores, consisting of 1,47,99,417 Equity shares of Rs.10/- each. As Company is proposing to issue equity shares/ securities as detailed under item No.8, 9 and 10 the same will increase the issued and paidup equity share capital of the Company beyond the existing authorised share capital and therefore authorised share capital needs to be increased to accommodate the said issue. 12
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
The proposed increase in the authorised share capital of the Company to Rs. 25 crores, consisting of 2,50,00,000 Equity shares of Rs. 10/- each, requires the approval of the Members in the General Meeting by way of an Ordinary Resolution. The Board therefore submits the resolution for your consideration and recommends to be passed as an Ordinary resolution. None of the directors are concerned or interested in the proposed resolution. ITEM NO. 12 The members of the Company in the Annual General Meeting dated 28th September 2007, had approved under section 293(1)(d) of the Companies Act, 1956, borrowings by the Board of Directors in excess of Paid-up Share Capital of the Company and its Free Reserves, subject to maximum outstanding amount at any time not exceeding Rs. 200 crores. In view of Company's growing needs for funding its increasing business operations and future growth plans, it would necessitate restructuring of the borrowing limits by authorizing the Board of Directors to borrow monies which may exceed at any time the aggregate of the paid-up capital of the Company and its free reserves but not exceeding Rs. 500 crores. The Board of Directors accordingly recommend the resolution set out at Item No. 12 of the accompanying Notice for the approval of the Members. None of the Directors is, in any way, concerned or interested in this resolution. ITEM NO. 13 The borrowings by a Company, in general, is required to be secured by mortgage or charge on all or any of the movable or immovable properties of the Company in such form, manner and ranking as may be determined by the Board of Directors of the Company from time to time, in consultation with the lender(s). The mortgage and/or charge on any of the movable and/or immovable properties and/or the whole or any part of the undertaking(s) of the Company, to secure borrowings of the Company or of any of its holding, subsidiary, affiliate or associate company, with a power to the charge holders to take over the management of the business and concern of the Company in certain events of default, may be regarded as disposal of the Company's undertaking(s) within the meaning of Section 293(1)(a) of the Companies Act, 1956. Hence, it is necessary for the Members to pass a resolution under the said Section. The Board of Directors accordingly recommend the resolution set out at Item No. 13 of the accompanying Notice for the approval of the Members. None of the Directors of the Company is, in any way, concerned or interested in the said resolution. By Order of the Board of Directors Mehul Raval Company Secretary Mumbai, 01st September, 2009 Registered Office: 404, 4th Floor, Winchester, Hiranandani Business Park, Powai, Mumbai 400 076.
13
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
DIRECTORS' REPORT To the Members, Your Directors have pleasure in presenting the 12th Annual Report of the Company together with its Audited Profit and Loss Account for the year ended 31st March, 2009 and the Balance Sheet as on that date: 1.
FINANCIAL RESULTS Consolidated Financials of the Company and its subsidiaries: (Rs. in crore)
Total Revenue Profit before interest, depreciation and tax Less: Interest and Finance Charges Less: Depreciation and amortization Profit before tax Less: Provision for taxation (including Current Tax, Deferred tax, Fringe Benefit Tax and Tax adjustments of earlier years) Net Profit after tax Less: Minority Interest Add: Surplus brought forward from previous year Add: Prior year adjustments Amount available for Appropriation Appropriations: Transfer to General Reserve & Statutory Reserve Proposed dividend on Equity Shares Corporate Tax on dividend Balance carried to Balance Sheet
Year ended March 31, 2009 275.16 68.43 1.45 19.07 47.91
Year ended March 31, 2008 176.55 47.27 1.96 7.33 37.98
7.07 40.83 0.52 46.78 0.20 87.29
6.87 31.10 0.35 20.83 0.35 51.93
1.50 2.89 0.49 82.42
2.47 2.29 0.39 46.78
Total Income increased to Rs. 275.16 crore from Rs. 176.55 crore in the previous year, at a growth rate of 55.85%. The profit before tax at Rs.47.91 crore as against Rs. 37.98 crore in the previous year represents an increase of 26.15% over the previous year. The profit after tax increased by 31.27% as compared to the previous year. Financials of the Company on a standalone basis: (Rs. in crore)
Total Revenue Profit before interest, depreciation and tax Less: Interest and Finance Charges Less: Depreciation and amortization Profit before tax Less: Provision for taxation (including Current Tax, Deferred tax, Fringe Benefit Tax and Tax adjustments of earlier years) Net Profit after tax Add: Surplus brought forward from previous year Amount available for Appropriation Appropriations: Transfer to General Reserve Proposed dividend on Equity Shares Corporate Tax on dividend Balance carried to Balance Sheet
14
Year ended March 31, 2009 56.95 29.45 1.94 6.37 21.14
Year ended March 31, 2008 60.11 27.70 1.89 3.64 22.17
4.12 17.01 27.00 44.01
4.66 17.51 13.50 31.18
1.50 2.89 0.49 39.14
1.50 2.29 0.39 27.00
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
2.
DIVIDEND Your Directors are pleased to recommend dividend of Rs.1.75/- per equity share of Rs.10/- each, on the enhanced equity capital. The total cash outflow on account of the dividend including tax thereon would be Rs 3.03 crore. The dividend pay out for the year under review has been formulated in accordance with the Company's policy of striving to pay stable dividend, keeping in view the need for funds for its growth plans.
3.
TRANSFER TO RESERVES We propose to transfer Rs. 1.50 crore to the general reserve. An amount of Rs. 39.14 crore is proposed to be retained in the Profit and Loss Account.
4.
BUSINESS OVERVIEW Your Company's operations got significantly impacted in January and February 2009 due to delays in budgeting exercises by our customers. However, since March, the company is seeing revival and firming up of technology spent and it augurs well for us in the current year. Your Company entered into a joint venture with IP Commerce to build payment-enabled applications tailored to the needs of small and medium businesses in the U.S. Under the terms of the venture, the two companies will jointly identify market opportunities to address a rapidly growing need in the small and medium sized business market for new electronic commerce transaction solutions. Additionally, the companies will provide product management and support services over the next two years.
5.
FINANCIAL RESOURCES a)
b)
Preferential Issue i)
The members of the Company at the Extra Ordinary General Meeting held on 7th March, 2007 and the Board of Directors at their meeting held on 22nd March, 2007, had approved allotment of 8,85,000 convertible warrants into equity shares of face value of Rs.10/- each at a price of Rs.252/- for a cash at a premium of Rs.242/- per equity share. The Company had issued and allotted 7,35,000 equity shares against the said 8,85,000 convertible warrants and the balance 1,50,000 convertible warrants were allotted by the Company at its meeting held by Board of Directors on 19th September, 2008.
ii)
The Board of Directors of the Company at their meeting held on 31st July, 2008, preferentially allotted 2,75,000 equity shares of face value of Rs. 10/- each at a price of Rs. 425/- per share and at a premium of Rs. 415/- per equity share for consideration other than cash to the Principal Stock holders of SENA Systems Inc, USA and advisors for acquisition of SENA Systems Inc.
ESOP The Board of Directors at their Board Meeting held on 04th September, 2008 and the members at the 11th Annual General Meeting held on 30th September, 2008, approved the issue of 14,64,941 equity shares under Employees Stock Option Scheme - 2008 to eligible permanent employees including Directors of the Company and its subsidiary companies to participate in the future growth of the Company. The Company has received in-principal approval from Stock Exchanges for issue and allotment of 10,00,000 equity shares under the said Scheme. The Remuneration/Compensation Committee in its meeting held on 01st June, 2009 approved the grant of 10,00,000 options. The exercise price for the purpose of the grant of options was taken as the market price i.e. available closing price prior to the date of the grant as quoted on National Stock Exchange. Accordingly in accordance with ESOS of the Company, the employees as on date have been offered options as per eligible criteria fixed under the scheme. Against each of the above, eligible employee is entitled to acquire one equity share of Rs. 10/each of the company at a price mentioned against the option. The minimum vesting period shall be one year from the date of grant. Against each option 20% can be exercised by the end of first year from the date of grant of options i.e. after 31st May, 2010, 30% can be exercised at the end of second year from the date of grant of the options i.e. after 31st May, 2011 and balance 50% can be exercised at the end of third year from the date of grant of the options i.e. after 31st May, 2012. 15
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
c)
Loan Funds During the year, the Company availed of additional term loans of Rs. 5.50 crore from the State Bank of India and Rs. 6 crore from the Yes Bank, which were utilized for the investment in subsidiaries and working capital requirements of the Company.
6.
SUBSIDIARY COMPANIES Presently your Company has twelve subsidiaries. Two of the subsidiaries viz, Coban Corporation, USA and SPS Corporation, USA got merged into Aurionpro Solutions INC, USA with effect from 01st April, 2009. In terms of approval granted by the Central Government vide order No. 47/412/2009-CL-III dated 10th June, 2009 pursuant to Section 212(8) of the Companies Act, 1956, the Balance Sheet, Profit and Loss Account, Reports of the Board of Directors and Auditors of the following subsidiaries have not been attached to the Balance Sheet of the Company. These documents will be made available upon request by any member of the Company interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection by any investor at the Registered Office of the Company and that of the respective subsidiary companies. However, as directed by the Central Government, the financial data of the subsidiaries has been furnished under 'Details of Subsidiary Companies' forming part of the Annual Report: i) ii) iii) iv) v) vi) vii) viii) ix) x) xi) xii) xiii) xiv)
Aurionpro Solutions Pte. Ltd., Singapore Integro Technologies Pte. Ltd, Singapore Integro Technologies SDN. BHD Aurionpro Solutions INC, USA Aurionpro Solutions SPC, Bahrain E2E Infotech Limited, UK E2E Infotech (India) Pvt Ltd Aurionpro Solutions (Hong Kong) Limited Auroscient Outsourcing Private Limited, India AuroFidel Outsourcing Limited, India SENA Systems INC, USA SENA Systems Pvt Ltd, India Coban Corporation, USA SPS Corporation, USA
A Statement containing particulars pursuant to the provisions of Section 212(1)(e) of the Companies Act, 1956, in respect of the above subsidiaries forms part of this Annual Report. In compliance with Clause 32 of the Listing Agreement, audited consolidated financial statements of the Company and its subsidiaries also form part of this Annual Report. 7.
CORPORATE GOVERNANCE The Report on Corporate Governance as per the requirements of Clause 49 of the Listing Agreement forms part of the Annual Report. The requisite Certificate from the Auditors, M/s. Chaturvedi & Shah, confirming the compliance with the conditions of Corporate Governance as per the requirements of Clause 49 is annexed to this Report.
8.
MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT (MDA): Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.
9.
DIRECTORS' RESPONSIBILITY STATEMENT In terms of the provisions of Section 217(2AA) of the Act, your Directors confirm that: i)
in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
ii)
the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are
16
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
reasonable and prudent, so as to give a true and fair view of the state of affairs of your Company at the end of the financial year and of the profit of your Company for that year; iii)
the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities; and
iv)
the Directors had prepared the annual accounts on a 'going concern' basis.
10. DIRECTORS In terms of Article 151 of the Articles of Association of the Company, Mr. Sandeep Daga and Mr. Mitesh Majithia, Directors, retire by rotation and being eligible, are liable for reappointment at the ensuing Annual General Meeting. Brief resume of the Directors, nature of their expertise in specific functional areas and names of Companies in which they are directors and members/ Chairman of committees, as stipulated by Clause 49 of the Listing Agreement are provided in the Corporate Governance Report forming part of the Annual Report. Further, there are no inter-se relationships between the Board members. 11. MERGER OF WHOLLY OWNED SUBSIDIARIES Two subsidiaries of the Company viz, SPS Corporation and Coban Corporation had entered into an Agreement and Plan of merger on 24th March, 2009 to get merged with Aurionpro Solutions Inc, USA. According to the terms of merger, all the issued and outstanding shares of Common stock of SPS Corporation and Coban Corporation shall be cancelled and the Company in consideration shall receive 2,10,631 shares for SPS Corporation and 67,270 shares for Coban Corporation of Aurionpro Solutons Inc, USA, the surviving company. 12. UTILIZATION OF PROCEEDS RECEIVED FROM INITIAL PUBLIC OFFER (IPO) AND PREFERENTIAL ISSUE a)
Your Company successfully concluded its Initial Public Offer (IPO) of 30,00,247 Equity Shares of Rs. 10/- each, issued at an Issue price of Rs.90/- per share for cash at a premium of Rs.80/- per share in October, 2005.The Company has been listed on the Bombay Stock Exchange Limited and the National Stock Exchange of India Limited on 25th October, 2005. The unutilized proceeds raised from IPO was Rs. 23.92 lacs and is lying as Fixed Deposit in the Bank.
b)
During the year, your Company issued 12,62,500 equity shares to promoters, promoter group and other strategic investors for cash consideration of Rs. 425/- per share and raised Rs. 53.65 crores. Further the Company raised Rs. 3.40 crore from preferential allotment, pending conversion of 1,50,000 warrants, for a cash consideration of Rs. 252/- per share. Your Company has utilized entire proceeds received from above preferential allotments in building long term infrastructure and in growth capital.
13. AWARD Your Company has been ranked in the Deloitte Technology Fast 50 and Fast 500 Awards for the second consecutive year. Deloitte Touche Tohmatsu's Global Technology, Media & Telecommunications Industry Group ranked Aurionpro 06th on the list of India's Fast 50 and 74th in the ratings for all of Asia Pacific. Deloitte noted that winners of its Technology Fast 500 Asia Pacific 2008 Awards experienced the highest level of growth in the history of the rankings while most other industries and markets have been struggling amid a slumping global economy. 14. FIXED DEPOSITS The Company has not accepted fixed deposits. 15. AUDITORS M/s. Chaturvedi & Shah, Chartered Accountants, Statutory Auditors, retire at the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment.
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Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
16. PARTICULARS OF EMPLOYEES Information as prescribed by Section 217(2A) of the Act, read with Companies (Particulars of Employees) (Amendment) Rules, 2002 is given as an annexure to this Report. However, pursuant to the provisions of Section 219(1) (b) (iv) of the Act, the Report and Accounts are being sent to all the members excluding the aforesaid annexure. Members interested in the said information may write to the Company Secretary at the registered office of the Company. 17. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO In terms of section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, the Directors furnish herein below the required additional information: ► Conservation of Energy: Although the operations of the Company are not energy intensive operations, it continues to adopt energy conservation measures at all operational levels. The requirement of disclosure of particulars in the prescribed format with respect to conservation of energy as prescribed in Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is not applicable to the Company and hence not provided. ► Research & Development (R&D): Your Company is predominantly a service provider and therefore has not set up a formal R&D unit, however continuous research and development is carried out at various development centers as an integral part of the activities of the Company. ► Technology Absorption: Your Company has not imported any technology during the year under review. ► Foreign Exchange Earnings and Outgo: (Rs. In Crore) Particulars Earning in foreign Currency (on accrual basis): Software Services Expenditure in foreign Currency (on accrual basis): Staff Cost Software development & other expenses
2008-09
2007-08
37.96
36.79
0.46 0.27
2.24 0.45
18. ACKNOWLEDGEMENTS Your Directors would like to express their appreciation of the assistance and co-operation received from the banks, financial institutions, Government authorities, Software Technology Park-Mumbai, customers, vendors and investors during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by your Company's employees. For and on behalf of the Board of Directors Sanjay Desai Executive Chairman Mumbai, 31st July, 2009 Registered Office: 404, 4th Floor, Winchester, Hirandani Business Park, Powai, Mumbai 400 076
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Amit Sheth Managing Director
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS OVERVIEW The financial statements have been prepared under the historical cost convention, on accrual basis of accounting, in compliance with the requirements of the Companies Act, 1956, the Generally Accepted Accounting Principles (GAAP) in India and mandatory accounting standards issued by the Institute of Chartered Accountants of India (“ICAI”). The management of Aurionpro Solutions Limited accepts responsibility for objectivity and integrity of these financial statements, as well as for various estimates and judgments used therein. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis, in order that the financial statements reflect in a true and fair manner, the state of affairs and profits for the year. The management of Aurionpro Solutions Limited is committed to improve the level of transparency and disclosure and for same an attempt has been made to disclose here under, information about the company, its business, operations, outlook, risks and financial condition. The forward looking statements contained herein are subject to certain risks and uncertainties, including but not limited to the risks inherent in the company's growth strategy, dependency on certain clients, and dependency on availability of qualified technical personnel and other factors discussed in this report. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect Management's Analysis only as of the date hereof. A) INDUSTRY STRUCTURE AND DEVELOPMENTS: The RBI's mid-term policy review in October 2008 had estimated real GDP growth for FY 2008-09 in the range of 7.5-8.0%. However at a policy review in January 2009, RBI cut its GDP growth forecast to 7%, with a downward bias. The global financial crisis, slowing down in domestic demand and falling commodity prices are expected to impact GDP growth further in FY 2009-10. RBI expects real estate, aviation, financial services, hotel and tourism to slowdown further while telecommunication and railway transportation are expected to grow at a decent pace. A moderate decline in IT sector is also likely due to the global slowdown. The combined effect of job cuts, production slowdown and stagnant US and European economies is widely expected to have a significant effect on the Indian economy. The domestic economic scenario, while still better in many ways from many other global economies, continues to show a downward trend.
Exports, industrial production, FDI, excise duty collections have all registered negative growth according to the data released by the RBI in January 2009.
Capital inflows have reduced sharply and financial markets will continue to remain volatile during 2009-10.
Banking sector has taken a conservative approach towards lending, especially to the corporate sector in view of heightened business uncertainty.
Manufacturing activity has seen a negative growth of 1.2% in October 2008 and it is expected to decrease further because of reduction in domestic demand and a heavy shrinkage in new export orders pressurized by global recessionary forces.
The World IT -BPO Outlook: According to Nasscom's Analysis, 2008 was a year of transformation for the Indian IT BPO sector as it began to re-engineer challenges posed by macro-economic environment, with the worldwide spending aggregate estimated to reach nearly USD 1.6 trillion, a growth of 5.6 per cent over the previous year. - Global market
Software and services touched USD 967 billion, an above average growth of 6.3 per cent over past year.
Worldwide BPO grew by 12 per cent, the highest among all technology related segments.
Hardware spend is estimated to have grown by 4 per cent from USD 570 billion nearly USD 594 billion in 2008.
- Market Scenario
Though the demand side challenges have emerged in terms of reduction in discretionary IT spending, the upside is that outsourcing can help organizations to work through financial and competitive challenges.
2008 was a strong year as number of contracts, total contract value and annualized contract values exceeded as compared to 2007.
Among all users, above average growth was witnessed in the Government, Healthcare and manufacturing segments. 19
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Indian IT-BPO: Progressive Growth According to Nasscom, Indian IT-BPO grew by 12 per cent in FY2009 to reach USD 71.7 billion in aggregate revenue. Software and services exports (includes exports of IT services, BPO, Engineering Services and R&D and Software products) reached USD 47 billion, contributing nearly 66 per cent to the overall IT-BPO revenue aggregate.
IT-BPO exports (including hardware exports) reached USD 47.3 billion in FY2009 as against USD 40.9 billion in FY2008, a growth of 16 per cent.
While the US (60 per cent) and the UK (19 per cent) remained the largest IT-BPO export markets in FY2008, the industry footprint is steadily expanding to other geographies - with exports to Continental Europe in particular growing at a CAGR of more than 51 per cent over FY2004-2008.
The industry's vertical market exposure is well diversified across several mature and emerging sectors. Banking, Financial Services and Insurance (BFSI) remained the largest vertical market for Indian IT-BPO exports, followed by Hi-tech/Telecom which together accounted for 61 per cent of the Indian IT-BPO exports in FY2008.
Domestic IT market (including hardware) reached USD 24.3 billion in FY2009 as against USD 23.1 billion in FY2008, a growth of 5.3 per cent. Hardware grew at 2.6 per cent; Software and services spending supported by increasing adoption, grew by almost 8 per cent.
Direct employment in Indian IT-BPO crossed the 2.2 million mark, an increase of about 226,000 professionals over FY2008; indirect job creation is estimated at about 8 million.
IT services (incl. engineering services, R&D, Software products) exports, BPO exports and Domestic IT industry provides direct employment to 947,000, 790,000 and 500,000 professionals respectively.
As a proportion of national GDP, the sector revenues have grown from 1.2 per cent in FY1998 to an estimated 5.8 per cent in FY2009. Net value-added by this sector, to the economy, is estimated at 3.5-4.1 per cent for FY2009.
Exports - Contributing 66 per cent to the overall revenue aggregate, exports remained the mainstay of the Indian IT-BPO growth story. Software and services exports, accounting for over 99 per cent of the total exports, reached USD 47 billion and directly employed over 1.7 million professionals in FY2009.
Trends in Indian Market Technology adoption in the domestic market also reported steady gains in FY2008-09. This segment is expected to reach INR 1,113 billion (USD 24.3 billion) in FY2009-10, reporting healthy growth across all key segments. Domestic IT services spends are estimated to grow 20 per cent to touch INR 380 billion (USD 8.3 billion) terms and are showing strong signs of increasing sophistication as building enterprise IT infrastructures and applications, networking and communication become key priorities for India Inc. Software and BPO spending growth in the domestic market is being supported by increasing adoption. While the software product segment registered a growth 15 per cent (INR 103 billion, USD 2.3 billion), domestic BPO segment recorded the fastest growth of about 40 per cent to reach INR 88.7 billion (USD 1.9 billion). Hardware segment reached INR 541 billion (USD 11.8 billion) in FY2009, a growth of 17 per cent over FY2008. Moving forward: towards Future The global technology related spending is expected to reduce for the first 2-3 quarters of 2009 on account of the downturn but is expected to pick up in 2010.
Greater focus on cost and operational efficiencies in the recessionary environment is expected to enhance global sourcing.
There would be pricing pressures coupled with contract renegotiations due to the economic uncertainty. India Inc would remain focused on tactical measures to achieve cost savings and greater productivity.
Services and software segments are estimated to cross USD 1.2 trillion by 2012. This is more than the 5.2 per cent growth expected in the total IT spending.
The worldwide BPO market is expected to grow at a CAGR of 11.9 per cent to reach USD 181 billion by 2012, while ITO market is expected to grow at a CAGR of 6.9 per cent and reach USD 275 billion by 2012.
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The industry will continue to diversify in terms of geographies, verticals and service lines.
SMBs are expected to emerge as a significant opportunity due to lower IT adoption currently.
Lack of working age population in the developed economies and a significant long term cost arbitrage indicates India's sustained cost competitiveness.
Service providers are expected to enhance focus to domestic market to de-risk business and tap into the local growth opportunities.
India Inc. is likely to increase its focus on developing a comprehensive risks framework and identify steps in managing them.
Key stakeholders needs to work seamlessly so as to maximize the opportunity and highlight India on the global map, as the industry is expected to be India's growth engine. B.
THE COMPANY'S OPERATIONS AND MAJOR OFFERINGS Major Markets: Our project teams have developed and implemented key projects in Corporate, Transaction banking and Treasury for reputed banks. Our expertise has helped us in successfully completing many prestigious projects and due to which, we have emerged as potential leaders for developing and implementing solutions for various clients. Major markets:
South East Asia Middle East Europe India US UK Africa
Employee Competency Our competent staff works under the guidance and support of a senior management team, which includes dynamic entrepreneurs having a strong banking background. It's our team of leaders who ensure smooth transition of workflow along with full support to the staff which helps in growth of the business at a rapid pace. Country-wise break up of the resources working with AurionPro solution:
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AURIONPRO SOLUTIONS LIMITED
The Product Basket:
Payments: In Payments, we have integrated suite which enables financial institutions to streamline and accelerate payments across a range of networks and channels, including ACH, Check 21, Card Processing/ associations and Mobile Payments. Solutions and offerings integrated with banks to offer best innovative customer products with extended to customer on across channels.
Risk management: Risk management is accessing and quantifying business risks, and taking measures to control or reduce them. Risk management helps in avoiding the risks, reducing the negative effect of the risk, or accepting some or all of the consequences of a particular risk. AurionPro provides consultancy and implementation services in Risk management domain to banks and financial institutions, which includes building framework, application implementation and also continuously evolving structure. Our Financial risk management focuses on risks that can be managed using traded financial instruments. Some of our offerings and partner solutions in this include: o o o o o
AMLPro KYCPro Market Risk Credit Risk Operational Risk
Cash Management: Cash Management is a comprehensive selection of Cash Management products and services like iCashPro, payPro, collectPro, reconPro, divPro, PDCPro, mandatePro and Currency Chest Management System to fit the needs of corporate clients.
Financial Supply Chain Management: Financial Supply Chain Management (FSCM) means complete end-to-end management of the entire working capital management system. The product fscmPro is a supply chain management system that acts as a platform for the suppliers and dealers to come together and conduct the procurement process and sales efficiently. It helps in reducing the hurdles like ordering time, communication, advertising and inventory maintenance.
Treasury: Treasury is where all of the inflows and outflows of funds are monitored. Treasury includes pricing and marketing of wholesale liabilities, trading in foreign exchange, trading in money markets, bonds and derivatives and risk management. We offer the below comprehensive treasury solutions: o
DealPro: Provides seamless straight through processing by bridging the gap between the branch and treasury.
Financial planning: Financial planning means channelizing money into planned investments. Our partner product OmniMax provides a comprehensive system for banks and financial institutions that eases manual tasks and provides for a fast, efficient and reliable output. OmniMax manages the huge client database, tracks and maintains current and archives on financial/investment advice and works in synchronization with other mandatory systems at the bank's end.
Loan origination: In the loan origination arena, we offer 'the SmartLender Suite' comprising of the SmartLender Retail and SmartLender Corporate products. Within each of these products are standalone modules which may be implemented in the following stages: o o o o o
Credit Processing System Credit Control System Credit Administration System Collateral Management System SmartLender Data Warehouse
Collateral Management: SmartLender Collateral and Limits Management System is one of the most sophisticated credit portfolio risk management systems in the world today. It sets the foundation for meeting the highest standards of Basel II compliance as it addresses the key risk components of the AIRB approach.
Internet Banking: Internet Banking involves using the Internet for delivering user-friendly banking products and services to customers in an easy and reliable way. We offer the both Corporate Internet Banking and Retail Internet Banking to our prestigious customers. 22
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Our Service Basket:
Outsourced Product Development: Product Development Services include Product Conceptualization, Product Realization, Product Development, Product Testing and QA, Product Progression, Product Maintenance and Support, Product Extensions and Reengineering & Product Migration and Transition.
Application Development and Maintenance: Sophisticated application development and maintenance services to build and maintain your custom enterprise application or maintain your implementation of leading commercial applications.
Performance Assurance: Performance assurance is our structured approach for planning, analyzing, and improving the performance, scalability, and stability of Web-based applications.
Enterprise Content Management: Enterprise Content Management (ECM) system captures, manages, stores, preserves, and delivers content and documents. We have the potential of leading your ECM implementation through a series of services that span the entire ECM lifecycle.
Technology Solutions: 1.
Risk and Fraud: Offers comprehensive solutions that address the dynamics of fraud, money laundering, and other illegal transactions. Some of the solutions are: o o o
C.
Velocities Engine The aurionPro Fraud Engine Know Your Customer
DISCUSSION ON FINANCIAL PERFORMANCE ON STAND ALONE BASIS WITH RESPECT TO OPERATIONAL PERFORMANCE Revenue The revenues of the Company are derived from software products and projects and services. During the year the total revenue was Rs. 56.95 crore against Rs. 60.11 crore for the previous year representing a decrease of 5.26%. General and Administrative Expenses Our general and administrative expenses comprise compensation to our employees in Corporate Office - Finance, HR, Administration and other general functions; travel, communication, legal and professional charges, repairs and maintenance, provision for doubtful debts, bad debts and other allocated infrastructure expenses. During the year, the general and administrative expenses were Rs. 12.23 crore as against Rs. 20.12 crore in the previous year. Operating Profit During the year our operating Profit increased Rs.1.75 crore or 6.32 % from Rs. 27.70 crore on March 31, 2008 to Rs. 29.45 crore on March 31, 2009. Interest and Depreciation Interest cost has increased from Rs. 1.89 crore in previous year to Rs.1.94 crore during the year. The increase in the interest costs has been due to new term loan taken during the year by company. Depreciation on fixed assets was Rs. 6.37 crore for the year as against Rs.3.64 crore during the year. As percentage of revenue, depreciation was 11.19 % and 6.05% for the year and previous year respectively. Increase in depreciation charge for the year by Rs. 2.73 crore is attributable to increase in various fixed Assets. Other Income Other Income primarily consists of interest and dividend income and short term capital gains on sale of current investment. Other income for the year was Rs.0.16 crore compared to Rs.0.09 crore for the previous year. Provision for Income Tax Our provision for current tax was Rs. 2.41 crore as against Rs. 2.54 crore for the previous year. The decrease in provision for Tax was due to reduction in profits during the year. 23
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Your Company currently enjoys benefits of tax holidays notified by the Government of India for the export of software services from STPI due to which your company enjoys significantly low tax liability, which may increase post, the expiry of tax holiday. Net Profit after tax Our Net Profit after tax for the year was Rs. 17.01 crore i.e. 29.87% of revenue, against the net income of Rs.17.51 crore, 29.13% of revenue, during the previous year. FINANCIALS Share Capital & Equity Warrants: The Company has only one class of shares namely equity shares. During the year the Company issued 12,62,500 fully paid up Equity shares of Rs. 10/- each at a premium of Rs. 415/- on 11th June, 2008 and 2,75,000 fully paid up equity shares of Rs. 10/- each at a premium of Rs. 415/- on 31st July, 2008 without receiving any consideration and 1,50,000 fully paid up equity shares of Rs. 10 each at premium of Rs. 242/- each against conversion of warrants on 19th September, 2008 and pursuant to allotment, there was an increase in the paid-up equity capital of the Company from 1,31,11,917 Equity shares to 1,47,99,417 shares amounting to Rs. 14,79,94,170/-. Further the Company had also issued 19,35,000 equity warrants on 11th June, 2008 and are pending for conversion for an equal number of equity shares of Rs. 10/- each at price of Rs. 425/- per share. Share Premium Share premium as at March 31, 2009 was Rs. 146.93 crore as compared with Rs. 79.50 crore as at 31st March, 2008. The balance in the share premium increased by Rs. 67.43 crore during the year ended 31st March, 2009 on account of allotment 12,62,500 fully paid up Equity shares of Rs. 10/- each at a premium of Rs. 415/- on 11th June, 2008, 2,75,000 fully paid up equity shares of Rs. 10/- each at a premium of Rs. 415/- on 31st July, 2008 on account of acquisition and 1,50,000 fully paid up equity shares of Rs. 10 each at premium of Rs. 242/- each against conversion of warrants on 19th September, 2008 . Reserves and Surplus Reserves and Surplus as at 31st March, 2009 increased to Rs.190.30 crore as compared with Rs.109.22 crore as at 31st March, 2008. Subsidiaries During the year the Company acquired a wholly owned foreign subsidiary namely SENA Systems Inc, USA. Paid-up Share Capital of the Subsidiaries as on 31st March, 2009 and the profits/losses of the Subsidiary Companies are fully reflected in consolidated accounts of the Company and Subsidiaries. General Reserve During the year ended 31st March, 2009 there was an addition of Rs. 1.50 crore due to appropriation of profit made during the year to General Reserve Account. Secured Loans Secured Loans as at 31st March, 2009 were Rs. 40.46 crore as against Rs. 48.23 crore as at 31st March, 2008. Loans and Advances There was an increase in Loans & advances given from Rs. 36.64 crore on 31st March, 2008 to Rs. 94.49 crore on 31st March, 2009. The increase is primarily due to advance given to various subsidiaries as working capital. Inventories Unbilled revenue represents amounts recognized based on services performed in accordance with contract terms and where invoices have not been raised. Unbilled revenue increased to Rs. 3.12 crore at 31st March, 2009 as against Rs. 3.87 crore as at 31st March, 2008. Fixed Assets The Gross Block of Fixed Assets increased by Rs. 6.04 crore from Rs. 35.66 crore as on 31st March,2008 to Rs. 41.70 crore on 31st March,2009. This significant increase is mainly due to addition in the Computers, Computer software's, Furniture and Fixtures, Office equipment.
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Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Sundry Debtors Our Sundry Debtors (net of provision) as on 31st March, 2009 were Rs.19.90 crore against Rs. 24.54 crore on 31st March, 2008. In the opinion of management, all the Sundry Debtors are good, recoverable and necessary provision has been made for debts considered to be bad and doubtful. The level of sundry debtors is normal and is in tune with business requirements and trends. Cash and bank balances The cash and bank balances lying with the company as on 31st March,2009 was Rs. 5.14 crore as against Rs. 20.42 crore in the previous year. Current Liabilities and Provisions The current Liabilities increased by Rs. 0.88 crore from Rs.6.51 crore on 31st March,2008 to Rs. 7.39 crore on 31st March,2009. Provisions decreased by Rs. 0.64 crore from Rs.4.57 crore on 31st March, 2008 to Rs. 3.93 crore on 31st March, 2009. Investments There was an increase of Rs. 38.82 crore in the investments from Rs. 68.77 crore on 31st March, 2008 to Rs.107.59 crore on 31st March, 2009.The increase is mainly due to investments in newly acquired fully own subsidiaries during the year. D. OPPORTUNITIES AND THREATS Despite the global economic uncertainties there are still opportunities for IT investment in relation to credit risk management for Basel II compliance. Aurionpro foresees an excellent demand for SmartLender Corporate Loan Origination as well as SmartLender Collateral & Limits Management systems in South East Asia, Taiwan and China. There are also opportunities for SmartLender Retail Loan Origination System for the leading banks in the above-mentioned countries. At the same time given our enlarged customer base there are also requests to enhance the existing systems installed by Integro. This applies to both credit risk management and internet banking. Last but not least, we have begun exploring opportunities in the Middle East market. Overall, we expect our top line for the coming fiscal year to be equal if not better than the past fiscal year, barring unforeseen circumstances. Opportunities: Expand geographically: AurionPro Solution has formed a strong foothold and expertise niche BFSI and tech domain, and has successfully completed projects in APAC, Middle East, US and Europe for leading banks and institutions. It is now in the process of establishing its base in the UK and Africa. It is strengthening its hold in African markets as that region has more than 1500 banks (Very few MNC banks like CITI Bank, Barclays, standard chartered, Standard Bank, etc. have operational base/branches across Africa) with its regional establishments in East, West, South, North and Central African countries providing sales and technical support from within the region, and spiraling our payments market. Our aim is to be a leading supplier of software products in the African Banking Domain by the year 2010 with its regional establishments in East, West, South, North and Central African countries providing sales and technical support from within the region. A definite opportunity lies in the US and UK in the form of:
Major Banks to improve IT Standards, to expand business portfolio to face predicted future & foreign competition
Greater thrust on reduction of credit risks and implementation of Basel II guidelines in progress as per the Central bank Guidelines
Work on improved functioning of banks with regard to Finance & Credit, Treasuries & Cash management there by encouraging the banks to go for IT up-gradation and implementation of banking software's with better functionalities
Focus shift to grow Opportunities for Cash Management, Treasury and Lending business
Increase in business from existing and new clients: Our goal is to build enduring relationships with both existing and new clients. With existing clients, we aim to expand the nature and scope of our engagements by increasing the size and number of projects and extending the breadth of our service offerings. For new clients, we seek to provide value-added solutions by leveraging our in-depth industry expertise and expanding the breadth of services offered to them beyond those in the initial engagement.
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Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Emphasis on Research & Development for Sustained Competitive Advantage Research and development is an integral part of a company and helps in the sustained development of a company. Any new software product design and development is always a vital factor in the survival and growth of a company and Aurionpro has always kept this factor in mind and made remarkable customizations in its product portfolio to meet the changing requirements of its clients. The banking industry is changing at a fast pace and we must continually revise the design and range of products to fulfill the needs of its clients. This is necessary due to:
Continuous technology change and development
Many other competitors in the market
Changing preference of clients
Apart from its conventional relationship with scientific and technological development, research and development has also a unique economic significance. Investment in the research and development by any company generally reflects its compliance to forego current operations or profit so that it can improve its future products or returns that come to it by the end of the whole process. It also shows its capabilities to conduct research and development by a company and what a difference it can provide to it customers when there are already so many competitors in the market. Our approach to R&D is to jointly develop products with our customers. This is to tap on their in-depth expertise and their first hand operation experience. This will ensure the usability of our product and also provide an accompanying reference site for marketing purpose. Three new products have been launched in this manner. The first one is a Default & Recovery System, which we developed jointly with a leading bank in Singapore. The second one is a new generation, state-of-the-art Retail Loan Origination System developed jointly with an international bank. The third one is also a new generation SME Loan Origination System which we developed jointly with a regional bank based in Singapore. All the products are launched and are currently available. Invest in infrastructure and employees: We intend to continue to invest in physical and technological infrastructure to support our growing worldwide development and sales operations and to increase our productivity. To enhance our ability to hire and successfully deploy increasingly greater numbers of technology professionals, we will invest in recruitment and training, and maintain a rewarding work environment. During fiscal 2009, we screened over 1504 employment applications, tested over 1315 applicants, interviewed over 935 applicants and made approximately 331 offers of employment. These statistics do not include our other subsidiaries. Enhanced product portfolio: dealPro dealPro is a best-of-the-breed, web-based, online Trading and Distribution Application built on an open technology platform with very rich functionalities. dealPro primarily caters to Banks, Non Banking Financial Companies (NBFCs), Mutual Funds, Insurance Companies, Corporate Treasuries, and other Financial Institutions. Benefits:
Increase in cross sell opportunity, decrease in time-to-market of Services & Products and enhanced profitability with improved pricing.
With dealPro's unique features, White labeling of the dealPro platform offers Organizations with the opportunity for differentiated products and services offerings.
Enhanced operational and process efficiency.
fscmPro fscmPro integrates the bank's customers (i.e. corporates, suppliers & buyers) to share and exchange information seamlessly across the supply chain for an efficient Supply Chain Management with transparent workflow and enhanced Working Capital. It not only fortifies the business performance but also enrich the cash resources for rapid growth and innovation. Benefits:
Enhanced certainty over the cash flow
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AURIONPRO SOLUTIONS LIMITED
Integrated financial activities
Reduction in working capital
Reduction in operating expenses
Enhanced brand visibility: We continue to invest in the development of our premium brand identity in the marketplace. Our branding efforts include participating in media and industry analyst events, sponsorship of and participation in targeted industry conferences, trade shows, recruiting efforts, community outreach programs and investor relations. We use different marketing strategies for brand visibility. Some of them are:
Coverage Strategy
Product Strategy
Pricing Strategy
Promotional Strategy
Review Mechanism
Each of these helps us further in building our products and making them a success in the market. Our Strategy We, at AurioPro follow a simple strategy that helps the company in sustained development. Firstly, we derive a system by analyzing the market and deeply studying the customer needs. Market research is carried out, which strongly determines what is needed in an exact way, and then new software is developed that looks into the market requirement. The technology up-gradations are also done in for the older products. Finally, a varied product range is developed that caters to all types of the production processes and are as efficient as possible. All the products that aurionPro provides are technically superior than others in the market, hence possessing a natural advantage in the market place and thus being proven successful. Our products have marked its footprints in major markets across world and increased our client base, which in turn has helped the company in generating huge revenue over the years and also in the overall growth and improbable development of the company. Further we continue to introduce new corporate & consumer banking products that create huge potential business for our software products. E.
OUTLOOK, RISKS AND CONCERNS This section contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors.
Our revenues and expenses are difficult to predict and can vary significantly from period to period, which could cause our share price to decline.
We may not be able to sustain our previous profit margins or levels of profitability.
The economic environment, pricing pressure and rising wages in India and overseas could negatively impact our revenues and operating results.
Our revenues are highly dependent on clients primarily located in the East Asia and Africa, as well as on clients concentrated in Banking and logistic industries. Economic slowdowns or factors that affect the economic health of these countries and industries may affect our business.
Any inability to manage our growth could disrupt our business and reduce our profitability.
Intense competition in the market for technology services could affect our cost advantages, which could reduce our share of business from clients and decrease our revenues.
Our revenues are highly dependent upon a small number of clients, and the loss of any one of our major clients could significantly impact our business.
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Legislation in certain of the countries, in which we operate, may restrict companies in those countries from outsourcing work overseas.
Our success depends largely upon our highly skilled technology professionals and our ability to hire, attract and retain these personnel.
Our success depends in large part upon our management team and key personnel and our ability to attract and retain them.
Our failure to complete fixed-price, fixed-time frame contracts within budget and on time may negatively affect our profitability.
Our client contracts can typically be terminated without cause and with little or no notice or penalty, which could negatively impact our revenues and profitability.
Our engagements with customers are singular in nature and do not necessarily provide for subsequent engagements.
Our client contracts are often conditioned upon our performance, which, if unsatisfactory, could result in less revenue than previously anticipated.
Some of our long-term client contracts contain benchmarking provisions which, if triggered, could result in lower future revenues and profitability under the contract.
Our business will suffer if we fail to anticipate and develop new services and enhance existing services in order to keep pace with rapid changes in technology.
Compliance with new and changing corporate governance and public disclosure requirements adds uncertainty to our compliance policies and increases our costs of compliance.
Disruptions in telecommunications, system failures, or virus attacks could harm our ability to execute our Global Delivery Model, which could result in client dissatisfaction and a reduction of our revenues.
We may be liable to our clients for damages caused by disclosure of confidential information, system failures, errors or unsatisfactory performance of services.
We are investing substantial cash assets in new facilities and physical infrastructure, and our profitability could be reduced if our business does not grow proportionately.
We may be unable to recoup our investment costs to develop our software products.
We may engage in acquisitions, strategic investments, strategic partnerships or alliances, or other ventures that may or may not be successful.
Our net income would decrease if the Government of India reduces or withdraws tax benefits and other incentives it provides to us or when our tax holidays expire or terminate.
In the event that the Government of India or the government of another country changes its tax policies in a manner that is adverse to us, our tax expense may materially increase, reducing our profitability.
Currency fluctuations may affect the results or our operations.
We operate in jurisdictions that impose transfer pricing and other tax-related regulations on us, and any failure to comply could materially and adversely affect our profitability.
Wage pressures in India may prevent us from sustaining our competitive advantage and may reduce our profit margins.
Terrorist attacks or a war could adversely affect our business, results of operations and financial condition.
The markets in which we operate are subject to the risk of earthquakes, floods and other natural disasters.
Regional conflicts in South Asia could adversely affect the Indian economy, disrupt our operations and cause our business to suffer.
Changes in the policies of the Government of India or political instability could delay the further liberalization of the Indian economy and adversely affect economic conditions in India, which could impact our business and prospects. 28
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F.
Our international expansion plans subject us to risks inherent in doing business internationally.
Internal Control systems and their adequacy The company has put in place an adequate system of internal control commensurate with its size and nature of business. These systems provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes, safeguarding of assets of the company and ensuring compliance with corporate policies. The company has a dedicated Internal Audit Team which ensures that:
Adequate processes, systems, internal controls are implemented and these controls are commensurate with the size and operations of the company.
Transactions are executed in accordance with policies and authorization.
Resources have been deployed as per the business plan, policies and authorization.
The company's audit committee reviews adherence to internal control systems, internal audit reports, risk management and legal compliances. This committee reviews all quarterly and yearly results of the company and recommends the same to Board for their approval. G. Material developments in human resources / industrial relations front, including number of people employed Recruitment and managing our people It is the policy of aurionPro to ensure that all recruitment activities are fair and non-discriminatory and both identify and address individual development needs, potential and opportunities. Recruitment should also recognise the opportunities, initiatives and changing skill profiles throughout the Group. Hiring is one area where the interference of external factors is minimal. Hence the HR department can use its discretion in framing its hiring policy and using various selection tools for the best results. These caselets discuss the importance of having an effective recruitment and hiring policy. We prefer freshers in our organization and therefore campus selections are held all over India for the primary work with thorough selection process of aptitude tests and technical knowledge. Panel for interview is decided for final selection. Engineering colleges are targeted for the Campus. Requisition is raised from the department with proper approval from the Head to the Human Resource team to elevate it further and close the requirement. Recruitment is centralized for domestic and most of the global requirements. Selected candidate proceed further with offer letter and pre post recruitments activities. Company is strongly determined to add upcoming and experienced talent through sourcing for developmental growth. We received 1504 applicants during the last year, tested over 1315, interviewed over 935 applicants and offered jobs to 331. Training & Development Training program in aurionPro provides a central focus for recommending and providing interventions that address Organizational goals. Training are provided for the skills necessary to enhance and increase the efficiency and effectiveness of associates .A Learning culture is promoted which will provide opportunities for growth and development for all the associates in Aurionpro. We have development programs aimed towards making the company “learning organization” where growth is measured not just by “profits” but also as the synergetic growth of each of associates. By thorough follow up, Training needs are identified and delivery of same in behavioral and technical backgrounds is done. We believe through training, there is an improvement in employee morale and performance, limits employee turnover, increase performance of our organization and achieve the objectives. Thus our objectives covers organizational, individual, functional and societal. Compensation Management The compensation policy and the reward system of an organization are viewed by the employees as indicators of the management's attitude and concern for them. Today, aurionPro try more to assess the worth of an individual in terms of his performance and contribution to the organization. These caselets discuss the importance of a compensation system that is competitive and attractive for the employees and at the same time, profitable for the organization.
29
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Performance Management System Performance management is intended to be an ongoing process of communication between the supervisor and the employee, focused on helping the employee achieve his or her best workplace results. An effective performance management system in aurionPro accomplishes the following goals:
Provides direction and clarifies performance expectations.
Provides feedback and coaching to the staff member concerning job performance, both what is done well and what needs improvement.
Identifies training and professional development needs.
Serves as documentation of performance.
Serves as data for human resource decisions.
The underlying principles that guide the performance management in aurionpro are that:
Performance management is a shared commitment to high performance.
Performance management balances autonomy and accountability at the individual and organizational levels.
Performance and continuous learning are encouraged and supported.
The Company have successfully completed the Midterm and Annual cycle of appraisal for 2008-09 by setting up the individual goals aligned to organizational goal. Award & Recognition Aurionpro recognizes that rewards play a big part in aligning the needs of organization and its people. Our award policy is intended to recognize & appreciate outstanding contributions that further the goals & objectives of aurionpro. It states that all employees should be rewarded fairly according to their sustained contributions and outstanding performances. Award & recognition consists of monetary and non monetary benefits. Recognition of the outstanding performance of associates across the units is done through appreciation, awards & certificates. The purpose is to provide a statement of the intent of the reward strategy, policies & practices in aurionpro in terms of its context within our mission and vision. Our objective is to encourage and motivate associates to achieve improving performance in pursuance of the organization's goals. It helps in fostering an environment of shared success and commitment. It provides continuum of opportunities to acknowledge and recognize associates. Employee Engagement An employee engagement strategy helps to create a community at workplace and not just the workforce. We believe when employees are effectively and positively engaged, they form emotional connection with the company. This affects their attitude towards both colleagues and clients improves customer satisfaction and services levels. Beyond recruitment and induction, employee engagement activities also include communication activities, activities to build the culture of our company, team building activities and leadership development activities and many more. For and on behalf of the Board of Directors Place: Mumbai Date : 31st July, 2009
Sanjay Desai Executive Chairman
30
Amit Sheth Managing Director
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Corporate Governance Report 1.
Company's Philosophy on Corporate Governance
Corporate Governance is about commitment to values and ethical business conduct. It is about how an organization's corporate resources and management strategies are directed towards maximizing value for all stakeholders. Aurionpro continues to focus on good corporate governance, in line with local and global standards, its primary objective is to create and adhere to corporate culture of conscience, integrity, transparency and accountability for efficient and ethical conduct of business for meeting its obligations towards shareholders and other stakeholders. The Company recognizes that strong corporate governance is indispensable to resilient and vibrant capital markets and is therefore an important instrument of investor protection. Good Corporate Governance has been a cornerstone of the entire management process, the emphasis being on professional management, with a decision making model based on decentralization, empowerment and meritocracy. Aurionpro believes that all our operations and actions must serve the underlying goal of value creation, over a sustained period of time. In our endeavor to practice sound governance principles, we are guided by following core principles: 1.
Transparency & maintaining high disclosure levels. To maintain the highest standards of transparency in all aspects of our interactions and dealings and to ensure timely dissemination of all price sensitive information and matters of interest to our stakeholders.
2.
Accountability. To demonstrate highest level of personal responsibility and continually affirm that employees are responsible to themselves for the pursuit of excellence.
3.
Compliances To comply with the laws in all the Countries in which the Company operates.
4.
Ethical conduct To conduct the affairs of the company in an ethical manner.
5.
Stakeholders' interests To promote the interests of all stakeholders including of customers, shareholders, employees, lenders, vendors, governments and the community. A Code of Business Conduct & Ethics has been adopted for Directors and the Senior Management and posted on the website of the Company (www.aurionpro.com). All Board members and senior management have affirmed compliance with the code for the period ended 31st March 2009. A detailed Management Discussion and Analysis report forms part of this Annual Report.
2.
Board of Directors
The Company's Board of Directors consists of a judicious mix of Executive, Non Executive as well as Independent Directors. The Directors possess rich experience in varied fields ranging from Information Technology (IT), banking, administration, legal and finance. The experience and wisdom of the Directors, who are stalwarts in their respective fields, have proved to be invaluable to the Company.
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Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Attendance of Directors at Board Meeting, last Annual General Meeting (AGM) and number of other Directorships and Chairmanships/Memberships of Committees of each Director in various Companies: Sl. Name of the director No.
Whether Promoter/ Executive/ Independent
No. of Board Meetings held during the year
Held
Attended
Attendance Number of Member/ at the last Directorships Chairman AGM in other of Committees public other than companies those of the Company
1
Mr. Sanjay Desai Executive Chairman
P. & E. D.
13
12
Yes
1
-
2
Mr. Amit Sheth Managing Director
P. & E. D.
13
13
Yes
2
2/1
3
Mr. Bhavesh R. Talsania, Whole Time Director
P. & E. D.
13
--
NA
-
-
P & N.E.D.
13
--
No
-
-
4
(upto 30 th August, 2008) Mr. Paresh C. Zaveri Director
5
Dr. Nikunj Kapadia Director
I. D.
13
--
No
-
-
6
Mr. Prem G. Rajani Director
I.D.
13
12
Yes
5
1
7
Dr. Mahendra F. Mehta Director
I. D.
13
13
No
1
-
8
Mr. Sandeep R. Daga Director
I. D.
13
13
No
2
-
9
Mr. Mitesh R. Majithia Director
I.D
13
--
No
-
-
Notes: 1.
P. & E.D.: Promoter Executive Director, P & N.E.D.: Promoter Non Executive Director and I.D.: Independent Director.
2.
The Directorship held by Directors as mentioned above, do not include Alternate Directorships and Directorships of Foreign Companies, Section 25 Companies and Private Limited Companies.
Board Meetings The Board of Directors is the apex body governing the Company for overseeing the overall functioning of the Company. The Board provides and evaluates the strategic direction of the Company, management policies and their effectiveness and ensures that the longterm interests of the shareholders are being served. The Chairman and Managing Director are assisted by senior managerial personnel in overseeing the functional matters of the Company. Minutes of the meetings of the Board are circulated to all Directors and confirmed at the subsequent Board meeting. Copies of the minutes of the Committees of Directors are circulated at Board meetings. Details of Board Meetings Board meetings were held at least once in every quarter and the time gap between two meetings was not more than four months. During the year, thirteen Board meetings were held on 03rd April, 2008, 29th April, 2008, 02nd June, 2008, 11th June, 2008, 28th July, 2008, 31st July, 2008, 04th September, 2008, 07th September, 2008, 19th September, 2008, 31st October, 2008, 19th December, 2008, 30th January, 2009 and 27th February, 2009.
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Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Remuneration paid to Executive Directors during the year ended 31st March 2009 Particulars of Remuneration (Fixed Component)
Mr. Sanjay Desai Chairman Executive
Mr. Amit Sheth Managing Director
750,250
1,985,400
Salary Commission Other Allowances Provident Fund Total
Mr. Bhavesh R. Talsania Whole Time Director (up to 30.08.2008) 902,400
-
-
-
15,000
15,000
6,250
3,900
9,360
9,360
769,150
2,009,760
918,010
Note: Mr. Sanjay Desai, Executive Chairman and Mr. Amit Sheth, Managing Director is in whole time employment of the Company and their employment is contractual in nature. Mr. Bhavesh Talsania resigned as Whole Time Director with effect from 30th August 2008. Mr. Sanjay Desai and Mr. Amit Sheth hold office up to 31st March, 2010. Brief Profiles, other Directorships and Committee Memberships etc. of Directors: Mr. Sanjay Desai Executive Chairman Mr. Sanjay Desai,46, a Chartered Accountant and an alumnus of IIM, Bangalore brings with him 21 years of varied and rich experience across banking business development, product management, operations, quality assurance and systems. During his vast international as well as domestic experience in leadership positions, Mr. Desai has transformed not only the organizations and departments he has headed but also deeply impacted the industry sector he has been associated with. He is a true visionary who could see the key role, IT would have on global banking and insurance and could therefore leverage his organizations to best utilize this opportunity. He gained global banking and technology insights through his stints with the Citigroup and brings in specific experience of the Middle East market. Prior to joining Aurionpro as Promoter Director, Mr. Desai was Director-Incubation Business in BFL MphasiS. He has been with our Company since 2003. Mr. Desai holds 8,00,085 equity shares of Rs. 10/- each in the Company. Sl. List of other Directorships No. 01 Aurofidel Outsourcing Limited, Director
Chairman/Member of the Committees of the Board of the Companies in which he is a Director None
02
Kairo Leaf Analytics Private Limited, Director
None
03
Auroscient Outsourcing Private Limited, Director
None
04
SENA Systems Private Limited Director
None
Mr. Amit Sheth Managing Director Mr. Amit Sheth, 42, a Mechanical Engineer and Management graduate, has over 16 years of experience in corporate finance, equities and technology. Mr. Sheth, a natural entrepreneur, co-founded Aurionpro in 1997. His innovative thinking and calculated risk taking ability have been vital to the rapid growth of Aurionpro. At Aurionpro, Mr. Sheth continues to be the key driver of growth strategies for banking and financial services sector world-wide. In addition to general management and strategic planning, Mr. Sheth is also responsible to form strategic partnerships and alliances, including M&A's. He has a deep understanding of banking process and operations, and has a strong network of relationships in the banking sector in Asia.
33
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
His greatest strength lies in the unique combination of skills - in dealing with people as well as numbers. He is the member of the Audit Committee, Shareholders'/Investors' Grievance and the Remuneration/Compensation Committee of the Company. Mr. Sheth holds 7,86,704 equity shares of Rs. 10/- each in the Company. Sl. List of other Directorships No. 01 Mega Fin (India) Limited, Independent Director
Chairman/Member of the Committees of the Board of the Companies in which he is a Director Chairman of Shareholders/ investors Grievance Committee and Member of Audit Committee
02
Aurofidel Outsourcing Limited, Director
None
03
Auroscient Outsourcing Private Limited, Director
None
04
SENA Systems Private Limited Director
None
05
Aurionpro Solutions SPC, Bahrain, Director
None
06
Coban Corporation, USA, Director
None
07
SPS Corporation, USA, Director
None
08
E2E Infotech Limited, U.K. Director
None
09
Aurionpro Solutions (Hong Kong) Limited, Hong Kong, Director
None
10
Aurionpro Solutions Pte. Limited, Singapore, Director
None
11
SENA Systems Inc, USA Director
None
Mr. Paresh Zaveri Promoter, Non-Executive Director Mr. Paresh Zaveri, 42, an Engineer and Management graduate, has over 16 years of experience in the areas of corporate finance, supply chain and general management. He is a co-founder of our company and has been and continues to remain the strategic architect of overall growth of company's business world-wide. He has contributed significantly in building the company's services business in the logistics and supply chain domain in the far Eastern Markets. He has also been instrumental in setting up financial control and planning systems in the Company. He is based in Singapore. Mr. Zaveri holds 14,76,240 equity shares of Rs.10/- each in the Company. Sl. List of other Directorships No. 01 Aurionpro Solutions Pte Limited, Singapore, Director 02 MM Global Service Pte Limited, Singapore, Director 03 Pooja International Pte Limited, Singapore, Director
Chairman/Member of the Committees of the Board of the Companies in which he is a Director None None None
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Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Sl. List of other Directorships No. 04 Thames Partners Pte Limited, Singapore, Director 05 Ayana – Logic Pte Limited, Singapore, Director 06 Aurionpro Services Pte Limited, Singapore, Director 07 SPS Corporation, USA, Director 08 E2E Infotech Limited, U.K. Director 09 Aurionpro Solutions (Hong Kong) Limited, Director 10 Cyberlog Technologies International Pte Limited, Singapore Director 11 SENA Systems Private Limited, India Director 12 SENA Systems, Inc, USA Director
Chairman/Member of the Committees of the Board of the Companies in which he is a Director None None None None None None None None None
Dr. Nikunj Kapadia Independent Director Dr. Nikunj Kapadia, 47, is an Associate Professor of Finance at the Isenberg School of Management, University of Massachusetts, Amherst. He holds a Ph. D. in Finance from the Stern School of Business, New York University, and a MBA from the Indian Institute of Management, Bangalore. As visiting faculty, he has taught at New York University, University of Maryland, China-Europe International Business School, and the Indian School of Business. He has published articles in the Journal of Finance, Review of Financial Studies, Journal of Derivatives, and the Journal of Alternative Investments. He has served on the editorial board of the Financial Analyst Journal. Dr. Kapadia is the recipient of the Isenberg School Teaching Award for 2007-08, Isenberg School Research Award for 2006-07, Western Finance Association's Caesarea Best Paper in Risk Management award for 2005, and a 2004 Fellow of the Federal Deposit Insurance Corporation. Prior to joining the University of Massachusetts, he was with Bear Stearns, New York. He is a member of the Audit Committee, the Shareholders' / Investors' Grievance Committee and Share Transfer Committee and the Remuneration/Compensation Committee of the Company. Dr. Kapadia holds 6,000 equity shares of Rs.10/- each in the Company. Mr. Prem Rajani Independent Director Mr. Prem Rajani, 42, L.L.B and Solicitor, has over 19 years of work experience in the legal field and is a Founder Partner of Rajani Associates. He has passed the Solicitors examination of both, the Bombay Incorporated Law Society and the Law Society, London. From the inception of his career, he has excelled in all the roles that he performed, be it as a legal trainee at Jamshedji Rustomji Devidas Jani & Merchant, Solicitors or at Dhru & Company, Solicitors as a Solicitor Assistant. He then had the privilege of working with Crawford Bayley & Co., Solicitors, for 7 years where he was elevated to the post of Senior Associate. Mr. Rajani is the founder and partner of Rajani Associates, which is a law firm specialising in rendering legal services in various branches of law, including Companies Act, SEBI Act, Securities Contract Regulation Act, Exchange Control Regulations (FERA, replaced by FEMA), IDRA, Investment Policy, Anti Trust Regulations (MRTP), etc. He is a member of the Audit Committee, the Shareholders' / Investor Grievance and Share Transfer Committee and the Remuneration/Compensation Committee of the Company.
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Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Mr. Rajani does not hold any equity share in the Company. Sl. List of other Directorships No. 01 Neemtek Organic Products Limited, Director 02 Networth Stock Broking Limited, Independent Director 03 BPL Mobile Communications Limited, Director 04 India Land & Properties Limited, Director 05 Arc-tec Systems Limited, Director 06 Prima Vetcare Private Limited, Director 07 Holm KK Extrusions Private Limited, Director 08 Focus Point Consulting Services Private Limited, Director 09 JYD Management Services Private Limited, Director 10 Dawnay Day AV Trustee Company Private Limited, Director 11 Santa Securities Private Limited, Director
Chairman/Member of the Committees of the Board of the Companies in which he is a Director None Member of Audit Committee None None None None None None None None None
Dr. Mahendra F. Mehta Independent Director Dr. Mahendra F. Mehta, 60, has been associated with consulting & executive education since February, 2002, focusing primarily on Analytics, Mathematical finance, Treasury Management, Financial Risk Management, Derivatives, Portfolio Management that includes Market, Credit and Operational Risk Management including development, implementation of policies, processes and procedures in the business. He has excelled in consulting and executive education in these areas, around the world, including at Citibank. He conducts regular short term courses in more than 22 countries spanning the continents of Europe, Asia and Africa - including Dubai, United Kingdom, Turkey, Egypt, South Africa, Saudi Arabia, Poland, Hungary, Spain, Bahrain & Qatar. In his earlier tenure at Citibank, NA, Mumbai (India), Dr. Mehta was Head of Analytics and was involved in the development of machine based learning & trading strategies, portfolio optimization techniques in Foreign Exchange, interest rate and European & American equity markets. He has also been associated with Saudi American Bank in Riyadh for a few years where he transformed the Derivatives Business as its Head. He was much appreciated by students during his stint as a visiting faculty at Swiss Federal Institute of Technology, Zurich, Switzerland. Dr. Mehta has Ph D in Electrical Engineering from Indian Institute of Technology, Mumbai, India. He is the Chairman of the Audit Committee and the Shareholders' / Investors' Grievances and Share Transfer Committee. Dr. Mehta, holds 2,77,838 equity shares of Rs.10/- each in the Company. Sl. List of other Directorships No. 01 Neural Technologies and Software Private Limited, Director 02 Neural Risk Consulting Private Limited, Director 03 Nine Rivers Capital Holdings Private Limited, Director 04 Ele Jewels Exports Limited, Director
Chairman/Member of the Committees of the Board of the Companies in which he is a Director None None None None
36
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Mr. Sandeep Daga Independent Director Mr. Sandeep Daga, 41, is a B.E. (Electronics) and M.M.S. (Finance) by qualification. He has over 17 years of work experience in the areas of private equity and corporate finance. He is currently the co-founder and Director of Nine Rivers Capital Holdings Private Limited (“NRC”), a SMEs focused private equity firm that acts as an investment manager / investment advisor to local and global investors. Formerly he has worked as a Director with Frontline Venture Services Private Limited & Head Investments with ICICI Econet Ltd (now a part of ICICI Ventures). He is the Chairman of the Remuneration/Compensation Committee. Mr. Daga holds 2,15,659 equity shares of Rs.10/- each in the Company. Sl. List of other Directorships No. 01 Alfa Transformers Limited, Independent Director 02 Park Controls & Communications Limited, Director 03 Pranav Construction Systems Private Limited, Director 04 Nine Rivers Capital Holdings Private Limited, Director 05 KPIN Capital Advisors Private Limited, Director 06 KPIN Real Estate Ventures Private Limited, Director 07 Professional Hostel Pune Private Limited, Director
Chairman/Member of the Committees of the Board of the Companies in which he is a Director None None None None None None None
Mr. Mitesh R. Majithia Non Executive, Non Independent Director Mr. Mitesh R. Majithia,37, a B.E. in Mechanical Engineering from R.V.C.E., Bangalore, has over 11 years of IT experience and has worked in the Software industry and has excelled in roles at each level right from developer, technical leader to sales engineer, Vice President and CEO of a software consulting firm. Mr. Majithia holds 1,25,000 equity shares of Rs. 10/- each in the Company. 3.
Audit Committee:
The Audit Committee comprises of Dr. Mahendra F. Mehta, (Chairman), Dr. Nikunj Kapadia, Mr. Prem Rajani, Mr. Sandeep Daga independent directors and Mr. Amit Sheth, Managing Director. Mr. Mehul Raval, Company Secretary is the Secretary of the Committee w.e.f. 18th February, 2009. Ms. Kinjal Shah was its Secretary till 13th January, 2009. Chief of the finance function, representatives of accounts, Statutory Auditors and Internal Auditors are invited at its meetings. The Audit Committee assists the Board in its responsibility for overseeing the quality and integrity of the accounting, auditing and reporting practices of the Company and its compliances with the legal and regulatory requirements. The committee's purpose is to oversee the accounting and financial reporting process of the Company, the audits of the Company's financial statements, the appointment, independence and performance of the statutory auditors, the performance of internal auditors and the Company's risk management policies. The Committee performs the functions enumerated in Clause 49 of the Listing Agreement and Section 292A of the Companies Act, 1956. The matters deliberated upon by the Committee include: 1)
Overseeing and reviewing the Company's financial reporting process.
2)
Fixation of audit fees and approval of various payments to statutory auditors for other services rendered by them.
3)
Reviewing with the management and auditors, the periodical and annual financial statements before submission to the Board for approval, with particular reference to: a)
Confirmation of matters enumerated in the Director's Responsibility Statement pursuant to the provisions of Section
37
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
217(2AA) of the Companies Act, 1956. b)
Changes in accounting policies and practices and reason for the same.
c)
Major accounting entries involving estimates based on the exercise of judgment by management.
d)
Significant adjustments in the financial statements, arising out of audit findings.
e)
Compliance with listing and other legal requirements relating to financial statements.
f)
Disclosure of related party transactions.
g)
Qualifications in the draft audit report, if any.
4)
Reviewing with the management, performance of statutory and internal auditors.
5)
Reviewing with the management, the quarterly financial statements before submission to the Board for approval.
6)
Reviewing the adequacy of internal audit function, including the structure of the internal audit department, coverage and frequency of internal audit.
7)
Discussing with internal auditors, significant findings and follow up thereon.
8)
Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain areas of concern.
9)
Reviewing the statement of utilization of proceeds of Initial Public Offer (IPO) and preferential allotment.
10) Assess whether there were any defaults in the payment to the depositors, debenture holders, members (in case of non payment of declared dividend) and creditors. 11) Reviewing of functioning of Whistle Blower Mechanism The Committee also reviews other matters as required by the Listing Agreement and other laws, rules and regulations. Details of Audit Committee Meetings During the year, six meetings of the Audit Committee were held on 29th April, 2008, 31st July, 2008, 04th September, 2008, 07th September, 2008, 31st October, 2008 and 30th January, 2009 and the attendance was as follows: Sl. No. 1. 2. 3. 4. 5.
4.
No. of Meetings Held Attended 6 6 6 6 6 -6 4
Name of the director Dr. Mahendra F. Mehta Mr. Amit Sheth Dr. Nikunj Kapadia Mr. Sandeep Daga (w.e.f. 31/07/2008) Mr. Prem Rajani
6
6
Shareholders'/Investors' Grievance and Share Transfer Committee:
The Shareholders'/Investors' Grievance and Share Transfer Committee comprises of Dr. Mahendra F. Mehta (Chairman), Mr. Sandeep Daga and Mr. Prem Rajani, independent directors and Mr. Amit Sheth, Managing Director. During the year, Mr. Bhavesh Talsania had resigned as Director of the Company, w.e.f. 30th August, 2008, and therefore Mr. Amit Sheth was appointed in his place as the member of the committee w.e.f. 04th September, 2008. Further Mr. Sandeep Daga was also appointed as member w.e.f. 04th September, 2008. Mr. Mehul Raval, Company Secretary is the Compliance Officer w.e.f. 18th February, 2009. Ms. Kinjal Shah was the Compliance Officer till 13th January, 2009. The Committee reviews matters including the transfer / transmission, splitting of shares, mailing of annual reports, payment of dividend, communication with members, transfer of unclaimed amounts to Investor Education and Protection Fund, dematerialization / rematerialization of shares and other depository related activities, regulatory compliances etc.
38
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
During the year, following complaints / grievances were received and resolved to the satisfaction of investors: No. of complaints received
No. of complaints resolved
Non Receipt Of Dividend Warrant
1
1
No. of pending complaints Nil
Non Receipt Of Demat Rejected S/C's
1
1
Nil
Total
2
2
Nil
Type of complaints
There were no outstanding complaints as on March 31, 2009. No request for dematerialization/rematerialization remained unattended for more than two weeks, during the year. Details of the Shareholders'/Investors' Grievance and Share Transfer Committee Meetings During the year, one meeting of the Shareholders'/Investors' Grievance and Share Transfer Committee was held on 15th April, 2008 and the same was attended by Mr. Mahendra Mehta and Mr. Prem Rajani. 5.
Remuneration/ Compensation Committee:
The Remuneration/ Compensation Committee comprises of Mr. Sandeep Daga (Chairman), Mr. Prem Rajani, Dr. Nikunj Kapadia, Dr. Mahendra Mehta, independent directors and Mr. Amit Sheth, Managing Director. During the year, Dr. Mahendra Mehta was appointed as its member w.e.f. 31/07/2008. The Committee performs, inter alia, the functions specified in Clause 49 of the Listing Agreement and Schedule XIII of the Companies Act, 1956. The Company's remuneration policy is in line with the general trend in information technology sector. Factors such as the key position, experience and expertise, leadership qualities, responsibilities shouldered by the individual, as also the volume of the Company's business and profits earned by it are taken into consideration while fixing remuneration packages of Executive Directors. The terms of reference of the Committee also includes formulation of Employees Stock Option Scheme and considering grant of stock options to the employees of the Company and its subsidiaries under the Employees Stock Option Scheme(s) approved by the members in the Annual General Meeting dated 30th September, 2008. No meetings were held during the year under review. 6.
General Body Meetings:
Details of the last three Annual General Meetings are given below: Year
Day, Date and Time
Location
2005-06
Wednesday, 18th October, 2006
AIPMA House, A-52, Street No.1, M.I.D.C.,
at 10.30 a.m.
Marol, Andheri (East), Mumbai – 400 093
Friday, 28th September, 2007
Hotel Suncity Residency, 16th Road, MIDC,
at 11.00 a.m.
Marol, Andheri (East), Mumbai – 400 093
Tuesday, 30th September, 2008
Hotel Suncity Residency, 16th Road, MIDC,
at 3.00 p.m.
Marol, Andheri – (East), Mumbai – 400 093
2006-07 2007-08
No. of Special Resolutions passed Five Two Two
No business was required to be transacted through postal ballot at the above meetings. 7.
Disclosure:
(i)
There are no materially significant transactions with the related parties viz. Promoters, Directors or the Management, their Subsidiaries or relatives, conflicting with the Company's interest. Suitable disclosures as required by the Accounting Standard (AS18) have been made in the Annual Report.
(ii) There are no pecuniary relationships or transactions of Non-Executive Directors vis-à-vis the Company, which have potential conflict with the interests of the Company. (iii) The Company has complied with the requirements of the Stock Exchange, SEBI and other statutory authorities on all matters relating to capital markets during the last three years and they have not imposed any penalties on, or passed strictures against the
39
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Company. (iv) The Company does not have any material unlisted subsidiary and hence is not required to have an Independent Director of the Company on the Board of such subsidiary. The minutes of the subsidiary companies are periodically placed before and reviewed by the Board of Directors of the Company. (v) A mechanism is in place to inform the Board about the Risk Assessment and Minimization procedures and periodical reviews to ensure that the Executive Management controls risks. (vi) Pursuant to the provisions of sub-clause V of the revised Clause 49 of the Listing Agreement, the Managing Director has issued a certificate to the Board, for the year ended 31st March 2009. (vii) The Company has placed before the Audit Committee and the Board of Directors particulars of utilization of proceeds received from IPO pursuant to Clause 49(IV)(D), 43 & 43A of the Listing Agreement and the details of the same were submitted to Stock Exchanges along with financial results of the Company. (viii) The Company has adopted the Whistle Blower policy pursuant to which employees can raise their concerns relating to fraud, malpractice or any other activity or event which is against the Company's interest. No employees have been denied access to the Audit Committee in this regard. As regards the other non-mandatory requirements, the Board has taken cognizance of the same and shall consider adopting the same as and when necessary. 8.
Means of Communication:
Quarterly, half-yearly and annual financial results of the Company are communicated to the stock exchanges immediately after the Board takes them on record and thereafter published in prominent English (Business Standard/Free Press Journal) and Marathi (Lokmat/Nav Shakti) newspapers. The results are also posted on the Company's website namely, www.aurionpro.com. 9.
General Information:
Company Registration Details: The Company is registered in the State of Maharashtra. The Corporate Identity Number (CIN) allotted to the Company by the Ministry of Corporate Affairs (MCA) is L99999MH1997PLC111637.
Annual General Meeting: The 12th Annual General Meeting will be held at 3.00 p.m. on 30th September 2009, at Hotel Suncity Residency, 16th Road, MIDC, Marol, Andheri (East), Mumbai 400 093.
Financial Calendar: (tentative)
First quarter results
:
July, 2009
Second quarter results
:
October, 2009
Third quarter results
:
January, 2010
Fourth quarter results
:
April, 2010
Annual General Meeting
:
September, 2010
Book Closure: The Register of Members and the Share Transfer Register will remain closed from Friday, 25th September 2009 to Wednesday, 30th September 2009, both days inclusive. Dividend for the year ended 31st March 2009, if declared at the Annual General Meeting, shall be paid to:
a)
beneficial owners at the end of business day on Thursday, 24th September 2009 as per lists furnished by NSDL and CDSL in respect of shares held in electronic form; and
b)
persons whose names would appear on the Register of Members as at the end of the business day on Thursday, 24th September, 2009 in respect of shares held in physical form.
Dividend Payment Date: Dividend, if declared, shall be paid within the prescribed time limit. Dividend shall be remitted through Electronic Clearing Service (ECS) at approved locations, wherever ECS details are available with the Company, and in other cases, through demand drafts/warrants payable at par.
40
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Shares Listed At: The equity shares of the Company are listed at: Bombay Stock Exchange Limited (BSE) Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai Samachar Marg, Mumbai - 400 001.
National Stock Exchange of India Ltd (NSE) Exchange Plaza, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051.
Stock Code: Bombay Stock Exchange Limited (BSE)
532668
National Stock Exchange of India Limited (NSE)
AURIONPRO
Demat ISIN Number in NSDL & CDSL for Equity Shares
INE132H01018
Market Price Data BSE Month
NSE
High (Rs.)
Low (Rs.)
April- 2008
435.00
300.00
438.70
300.00
May- 2008
405.00
377.60
405.00
375.00
June- 2008
398.00
331.85
396.90
331.15
July- 2008
344.00
276.20
350.00
276.00
Aug- 2008
325.00
270.00
317.00
271.00
Sep- 2008
325.00
240.00
323.10
250.00
Oct- 2008
259.50
116.00
260.00
111.00
Nov- 2008
170.00
125.30
188.90
127.10
Dec- 2008
153.85
130.05
140.00
133.00
Jan- 2009
140.00
82.50
139.65
90.20
Feb- 2009
88.95
73.25
92.00
79.45
March- 2009
80.00
54.20
80.00
56.00
(Source: BSE & NSE websites)
41
High(Rs.)
Low (Rs.)
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Trading Volumes The traded volumes of shares at BSE and NSE are: Month
BSE (Shares)
NSE (Shares)
Total (Shares)
April- 2008
30375
12446
42821
May- 2008
16252
6423
22675
June- 2008
22271
21927
44198
July- 2008
86493
19788
106281
Aug- 2008
68619
3895
72514
Sep- 2008
21178
61636
82814
Oct- 2008
746252
163257
909509
Nov- 2008
51963
8182
60145
Dec- 2008
2947
241
3188
Jan- 2009
51322
691
52013
Feb- 2009
24117
2111
26228
212544
23944
236488
1334333
324541
1658874
March- 2009 TOTAL
(Source: BSE & NSE websites)
Share Price Performance in comparison to broad-based indicates BSE Sensex and NSE Nifty (Month-end closing) Aurionpro share price compared with BSE Sensex and NSE Nifty (Month-end closing) BSE Month
Share Price
Sensex
Share Price
NSE Nifty
April- 2008
399.30
17287.31
405.00
5165.90
May- 2008
391.20
16415.57
381.00
4870.10
June- 2008
340.00
13461.60
331.15
4040.55
July- 2008
291.15
14355.75
290.00
4332.95
Aug- 2008
305.00
14564.53
305.00
4360.00
Sep- 2008
259.40
12860.43
260.00
3921.20
Oct- 2008
151.00
9788.06
165.00
2885.60
Nov- 2008
140.00
9092.72
127.95
2755.10
Dec- 2008
131.65
9647.31
139.65
2959.15
Jan- 2009
87.05
9424.24
90.20
2874.80
Feb- 2009
76.95
8891.61
79.45
2763.65
March- 2009
60.00
9708.50
60.00
3020.95
(Source: BSE & NSE websites)
NSE
Registrar and Transfer Agent Bigshare Services Private Limited, E/2, Ansa Industrial Estate, Sakivihar Road, Sakinaka, Andheri 400 072 Tel: +91-22-28470652, 40430200 Fax: +91-22-2847 5207 e-mail:
[email protected] Website: www.bigshareonline.com 42
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Share Transfer System: The Shareholders' / Investors' Grievance and Share Transfer Committee approve transfer of shares. During the year the Committee did not received any transfer requests. Valid share transfer documents are processed and duly endorsed share certificate are dispatched to the respective transferees, within prescribed time. In terms of Clause 47(c) of the Listing Agreement, a practicing Company Secretary audits share transfer process, every six months, and issue a certificate, which is submitted to the stock exchanges.
Allotment of Equity Shares: i)
The members of the Company at the Extra Ordinary General Meeting held on 24th May, 2008 and the Board of Directors at their meeting held on 11th June, 2008, had approved allotment of 12,62,500 Equity Shares of face value of Rs. 10/- each at a price of Rs. 425/- for cash at a premium of Rs. 415/- per equity share. Also the Board had issued 19,35,000 convertible warrants into equity shares of face value of Rs. 10/- each at a price of Rs. 425/- for cash at a premium of Rs. 415/- per equity share. The company had received 10% proceeds for the allotment of said warrants. As on 31st March 2009 the convertible warrants are outstanding for conversion.
ii)
The Board of Directors of the Company at their meeting held on 31st July, 2008, preferentially allotted 2,75,000 equity shares of face value of Rs. 10/- each at a price of Rs. 425/- for a premium of Rs.415/- per equity share for consideration other than cash pursuant to Agreement and Plan of merger dated 31st March, 2008 entered between AurionPro Solutions Limited (the Company), SENA Systems Inc, Aurionpro I Acquisition Corp, Aurionpro II Acquisition Corp and the Principal Stock holders of SENA Systems, Inc for acquisition of SENA Systems, Inc. USA.
iii) The members of the Company at the Extra Ordinary General Meeting held on 7th March, 2007 and the Board of Directors at their meeting held on 22nd March, 2007, had approved allotment of 8,85,000 convertible warrants into equity shares of face value of Rs.10/- each at a price of Rs.252/- for a cash at a premium of Rs.242/- per equity share. Last year, the Company had issued and allotted 7,35,000 equity shares against the said 8,85,000 convertible warrants and the balance 1,50,000 warrants were converted into equity shares by the Board of Directors of the Company at their meeting held on 19th September, 2008.
Shareholding Profile as on 31st March 2009: i)
Distribution of Shareholding: Range
Holders
% of Total Holders
Total capital in Rupees
% of Total Capital
1
-
5000
2,396
83.43
2396980
1.62
5000
-
10000
139
4.83
1146020
0.77
10001
-
20000
99
3.45
1575440
1.06
20001
-
30000
34
1.18
858940
0.58
30001
-
40000
28
0.97
977560
0.66
40001
-
50000
25
0.87
1204930
0.81
50001
-
100000
27
0.94
2081230
1.40
100001
-
above
124
4.32
137753070
93.08
2872
100
147994170
100.00
TOTAL
43
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
ii)
Shareholding Pattern Category of members
% of shares held
Promoters
29.19
Mutual Funds
3.31
Financial Institutions / Banks
1.21
Foreign Institutional Investors
8.52
Bodies Corporate
7.92
Public
28.87
NRIs
15.75
NRIs Company
4.35
Foreign Nationals
0.88
Total
100.00
iii) Holding Profile Mode
Demat
(%)
Physical
(%)
Total
Shares
13793652
93.20
1005765
6.80
14799417
2849
99.20
23
0.80
2872
Members
0.8%
44
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Dividend Profile Financial Year
Dividend Declared
Date of declaration
Dividend Payment Date
2007-08
Rs. 1.75/- per equity share of Rs. 10/- each
30.09.2008
29.10.2008
2006-07
Rs. 1.50/- per equity share of Rs. 10/- each
28.09.2007
27.10.2007
2005-06
Re. 1/- per equity share of Rs. 10/- each
18.10.2006
17.11.2006
Dematerialization of Shares and Liquidity The Company's shares are traded compulsorily in dematerialized form and are available for trading with both the depositories, namely, National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited. During the year, the Company has confirmed electronically 09 demat requests and 01 remat requests in respect of 354386 equity shares and 01 equity shares, respectively.
Secretarial Audit Report In accordance with SEBI guidelines, quarterly Secretarial Audit is undertaken by a Practicing Company Secretary for reconciling the total admitted capital with the records of the depositories, viz. National Securities Depositories Limited (NSDL) and Central Depository Services (India) Limited (CDSL). The Secretarial Audit Report inter alia, certifying that the shares in demat mode and in physical form tally with the issued/paid up capital, the Register of Members is duly updated, etc; is submitted to BSE and NSE on a quarterly basis.
Code of Conduct for prevention of Insider Trading The Code of Conduct pursuant to the provisions of the SEBI (Prohibition of Insider Trading) Regulations 1992 has been put in place and followed in spirit. Initial / continual disclosures, trading window closures and other requirements envisaged under the Code are being complied with.
Status of Unclaimed Dividend Year of Dividend
Date of Declaration of Dividend
Date of transfer to unpaid/unclaimed Dividend Account
Amount unclaimed as on 31st March, 2009
07.11.2008
Due Date for transfer to Investor Education & Protection Fund 06.11.2015
2007-08
30.09.2008
2006-07
28.09.2007
04.11.2007
03.11.2014
Rs. 18,105/-
Rs. 1,81,622/-
Plant Locations In view of the nature of the Company's business viz. Information Technology Services, the Company operates from various offices in India and abroad and does not have any manufacturing plant.
Contact Persons for Enquires Mr. Mehul Raval Email:
[email protected]
Address for Correspondence Aurionpro Solutions Limited Registered Office: 404, 4th Floor, Winchester, Hiranandani Business Park, Powai, Mumbai 400 076. Tel: +91 22 6770 7700/7701 Fax: +91 22 6770 7722
45
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Exclusive email id for investor grievance Pursuant to Clause 47(f) of the Listing Agreement, the following dedicated e-mail id has been designated for communicating investors' grievances:
[email protected] For and on behalf of the Board of Directors Amit Sheth Managing Director
Mumbai, 30th June, 2009
46
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
AUDITOR'S CERTIFICATE ON CORPORATE GOVERNANCE To, The Members of Aurionpro Solutions Limited We have examined the compliance of conditions of Corporate Governance by 'Aurionpro Solutions Limited', for the year ended on 31st March, 2009 as stipulated in Clause 49 of the Listing Agreement of the said Company with the Stock Exchanges. The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination has been limited to a review of the procedures and implementations thereof adopted by the Company for ensuring compliance of conditions of Corporate Governance as stipulated in the said Clause. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion and to the best of our information and according to explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the Clause 49 of the above mentioned Listing Agreement. We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company. For Chaturvedi & Shah Chartered Accountants LALIT R. MHALSEKAR Partner Membership No. 103418 Date: 30th June, 2009 Place: Mumbai
47
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
MANAGING DIRECTOR’S CERTIFICATION 30th June, 2009 The Board of Directors Aurionpro Solutions Limited Mumbai 400 076 I, Amit Sheth, Managing Director do hereby certify to the Board that: a)
I have reviewed the Balance Sheet and the Profit and Loss Account (consolidated and stand alone), and all the schedule and notes on accounts, as well as the cash flow statements, for the year ended 31st March, 2009 and that to the best of my knowledge and belief: (i)
the said statements do not contain any false, misleading or materially untrue statements or figures or omit any material fact, which may make the statements or figures contained therein misleading; and
(ii) the said statements together present a true and fair view of the Company's affairs and are in compliance with the existing accounting standards, applicable laws and regulations. b)
There are, to the best of my knowledge and belief, no transactions entered into by the Company during the year that are fraudulent, illegal or violative of the Company's code of conduct.
c)
I accept the responsibility for establishing and maintaining internal controls for financial reporting and that I have: (i)
designed and ensured that such disclosure controls and procedures to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us, particularly during the period in which the report is being prepared; and
(ii) evaluated the effectiveness of the internal control systems of the Company pertaining to financial reporting and have disclosed to the Auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which I am aware and the steps I have taken or propose to take to rectify these deficiencies. d)
I have indicated to the Auditors and the Audit Committee: (i)
there has been no significant changes in internal control during the year.
(ii) there has been no significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and (iii) there has been no commitment of any fraud, whether or not significant, that involves management or other employees who have significant role in the company's internal controls. e)
I hereby declare that all board members and senior management personnel have affirmed compliance with the Code of Conduct for the year. For Aurionpro Solutions Limited Amit Sheth Managing Director
48
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
AUDITORS' REPORT TO THE MEMBERS OF AURIONPRO SOLUTIONS LIMITED 1.
We have audited the attached Balance Sheet of Aurionpro Solutions Limited ('the Company') as at March 31, 2009, the related Profit and Loss Account for the year ended on that date and also the Cash Flow Statement for the year ended on that date both annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.
2.
We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
3.
As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) (Amendment) Order 2004 (together the 'Order'), issued by the Central Government of India in terms of Section 227 (4A) the Act, and on the basis of such checks as we considered appropriate, and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable to the Company.
4.
Further to our comments in the Annexure referred to in paragraph 3 above, we report that: a.
We have obtained all the information and explanations, which to the best of our knowledge and belief, were necessary for the purposes of our audit;
b.
In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;
c.
The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;
d.
In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in Section 211 (3C) of the Act;
e.
On the basis of written representations received from the directors, as on March 31, 2009, and taken on record by the Board of Directors, we report that none of the directors of the Company is disqualified as on March 31, 2009 from being appointed as a director in terms of Section 274(1)(g) of the Act;
f.
In our opinion and to the best of our information and according to the explanations given to us, the said financial statements read together with the notes thereon and attached thereto, give the information required by the Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: (i)
in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2009;
(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and (iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date. For CHATURVEDI & SHAH Chartered Accountants LALIT R. MHALSEKAR Partner Membership No. 103418 Place: Mumbai Date: 30th June,2009
49
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Annexure referred to in paragraph 3 of Auditors' Report of even date to the members of Aurionpro Solutions Limited on the Financial Statements for the year ended March 31, 2009 1.
The Company has maintained proper records to show full particulars, including quantitative details and situation, of its fixed assets. We have been informed that the fixed assets of the Company are physically verified by the Management during the year according to a phased program designed to cover all the items, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. Pursuant to the program, physical verification was carried out during the year and no material discrepancies were noticed.
2.
During the year, the company has not disposed off substantial part of fixed assets.
3.
As the company is engaged in the development of computer software there is no physical inventory in existence and hence the question of physical verification and comparison with the inventory records does not arise.
4.
(a) The Company has granted unsecured loans to nine companies (eight wholly owned subsidiaries) covered in the register maintained under Section 301 of the Act. The maximum amount involved during the year and the year-end balance of such loan is Rs. 727,718 thousands and Rs. 653,339 thousands respectively. (b) In our opinion, the rate of interest, wherever applicable and other terms and conditions of such loan are not prima facie prejudicial to the interest of the Company. (c) There is no repayment schedule for the principal and interest amount, wherever applicable and are repayable on demand.
5.
The Company has not taken unsecured loans from the companies covered in the register maintained under Section 301 of the Act.
6.
In our opinion and according to the information and explanation given to us, there is adequate internal control procedure commensurate with the size of the Company and the nature of its business with regard to the purchase of fixed assets and sale of services.
7.
(a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of the contracts or arrangements that need to be entered into the register maintained under section 301 have been so entered. (b) In respect of transactions made in pursuance of such contracts or arrangements have been entered into during the financial year are reasonable except in some of the transactions, for which no comments is being made owing to the unique and specialized nature of the items involved and absence of any comparable prices. For price justification reliance is placed on the information and explanation given by the management.
8.
The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Act and the rules framed there under.
9.
In our opinion, the Company's present internal audit system needs to be strengthened to make it commensurate with its size and nature of its business.
10. As per the information given to us by the management of the company, no cost records have been prescribed by the Central Government of India under Section 209(1)(d) of the Act. 11. According to the books and records as produced and examined by us in accordance with generally accepted auditing practices in India and also based on Management representations, undisputed statutory dues in respect of Provident Fund, Employees' State Insurance dues, Income Tax, Service Tax and Cess and other material statutory dues have generally been regularly deposited by the Company during the year with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the above for a period of six months from the date they became payable. 12. As at March 31, 2009, there have been no disputed dues, which have not been deposited with the respective authorities in respect of Income Tax, Wealth Tax, Excise Duty, Service Tax and Cess.
50
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
13. The Company has neither accumulated losses as at March 31, 2009, nor it has incurred any cash losses either during the financial year ended on that date or in the immediately preceding financial year. 14. According to the records of the company, it has not defaulted in repayment of its dues to any financial institution or bank or debenture holders during the year. 15. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. 16. In our opinion, considering the nature of activities carried on by the Company during the year, the provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund / societies are not applicable to it. 17. The Company has not dealt or traded in shares, securities, debentures or other investments during the year. 18. In our opinion and according to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions during the year. 19. In our opinion and according to the information and explanations given to us , the term loans have been generally applied for the purpose for which they were raised other than amounts pending utilization , which have been parked as temporary Inter Corporate Deposit since realized. 20. On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis, which have been used for long-term investment. 21. During the year under consideration , the Company has made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act , 1956. in our opinion, each of the transactions has been made at price; which are not prejudicial to the interest of the Company. 22. The Company has not issued any debentures during the year. 23. The Company has raised money by way of public issue in the financial year 2005-06. The end use of the money raised has been disclosed in the note 16 of schedule 14 (B) and the same have been verified by us. 24. As per the information and explanations given to us and on the basis of examination of records, no material fraud on or by the Company was noticed or reported during the year. For CHATURVEDI & SHAH Chartered Accountants LALIT R. MHALSEKAR Partner Membership No. 103418 Place: Mumbai Date: 30th June,2009
51
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Balance Sheet As On 31st March, 2009 Schedule I SOURCES OF FUNDS (1) Shareholder's Funds: a Share Capital b Equity warrants ( issued & subscribed) (Refer note no.14 (III) of part B of schedule 14) c Reserves and Surplus
(Rs. in 000) As At 31-03-2008
As At 31-03-2009
1
147,994 82,238
2
1,902,960
131,119 3,780 1,092,218 2,133,192
(2) Loan Funds: a Secured Loans b Unsecured Loans (3) Deferred Tax Liability (Net) (Refer note no 11 of part B of schedule 13) TOTAL FUNDS EMPLOYED II APPLICATION OF FUNDS (1) Fixed Assets: a Gross Block b Less: Depreciation c Net Block d Capital Work In progress (2) Investments (3) Current Assets, Loans and Advances: a Inventories b Sundry Debtors c Cash & Bank Balances d Loans and Advances Less : Current Liabilities and Provisions a Current Liabilities b Provisions Net Current Assets TOTAL FUNDS APPLIED Significant Accounting Policies and Notes To Accounts
1,227,117
3 404,553 -
482,283 404,553 52,704
482,283 37,674
2,590,449
1,747,074
4 417,038 124,808 292,230 109,000
356,564 61,144 295,420 20,000 401,230 1,075,877
5 6
315,420 687,672
31,223 199,014 51,365 944,924 1,226,526
38,680 245,431 204,215 366,444 854,770
73,902 39,282 113,184
65,052 45,736 110,788
7
1,113,342 2,590,449 14
For Chaturvedi & Shah Chartered Accountants
For and on behalf of board
Lalit R. Mhalsekar Partner Membership No.: 103418
Sanjay A.Desai Executive Chairman and Director Amit R. Sheth Managing Director
Dated : 30th June, 2009 Place: Mumbai
Mehul J. Raval Company Secretary
52
743,982 1,747,074
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Profit And Loss Account For The Year Ended 31st March, 2009 Schedule INCOME Software Services and products Other Income Total Income EXPENDITURE (Increase) / Decrease in Stock Staff Cost Software Development and Other Expenses Depreciation & Amortisation Interest Expense Total Expenditure Profit Before Tax Provision for Taxation Current Tax Fringe Benefit Tax Deferred Tax Tax adjustment of earlier years(net) Profit after Tax Profit brought forward from the Previous Year Addition of Profit on account of amalgamation Amount available for distribution & appropriation. Appropriations Proposed Dividend Corporate Tax on Dividend Transferred to General Reserve Balance carried over to Balance Sheet
8 9
10 11 12
Earning Per Share Basic Diluted Significant Accounting Policies and Notes To Accounts
13
Year ended 31.03.2009
(Rs. in 000) Year ended 31.03.2008
567,918 1,604 569,522
600,152 927 601,079
7,457 145,265 122,350 63,664 19,432 358,168 211,354
(18,739) 141,662 201,155 36,416 18,870 379,364 221,715
24,106 1,017 15,030 1,067 170,135 269,995 440,130
25,416 933 20,291 175,075 134,982 1,784 311,841
28,852 4,903 15,000 391,375 440,130
22,946 3,900 15,000 269,995 311,841
11.82 11.82
14.06 14.06
14
For Chaturvedi & Shah Chartered Accountants
For and on behalf of board
Lalit R. Mhalsekar Partner Membership No.: 103418
Sanjay A.Desai Executive Chairman and Director Amit R. Sheth Managing Director
Dated : 30th June, 2009 Place: Mumbai
Mehul J. Raval Company Secretary
53
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Cash Flow Statement For The Year Ended 31st March, 2009 As At 31.03.2009 Net Profit / (Loss) before Taxation A. Cash Flow from Operating Activities : Adjustment for : Depreciation & amortisation Loss on Sale of Fixed Assets Interest Expenses Interest Income
211,354
Dividend on Investment Gain on Investment Unrealised Currency Translation (Gain)/Loss Credit Balance written back Bad debts written off
(Rs.in 000) As At 31.03.2008 221,713
63,664 64,118 (44,686)
36,416 7,369 32,299 (13,429)
(1,122) (2) (117,370) (480) 15,966
(11) (301) 11,804 (615) 2,677 (19,912) 191,442
Operating Profit before working capital changes Adjustment for : Change in Inventories Change in Sundry Debtors Change in Loans & Advances Change in Current Liabilities
7,457 43,551 14,826 20,558
76,209 297,922 (18,739) (151,357) (12,315) 5,680
86,392 277,834 (34,256) 243,578
Cash generated from operations Income Tax paid Net Cash Flow from Operating Activities
B. Cash Flow from Investing Activities : Purchase of Fixed Assets and change in Work in Progress Purchase of Investment Sale proceeds of Investment ICD given ICD refunded Working Capital Loan given Working Capital Loan returned Interest received Net Cash from Investment Activities
(191,021) (432,832) 191,122 (290,000) 52,500 (351,195) 120,931 22,495
(169,547) (362,432) 4,488 (22,500) 22,500 (187,780) 9,310 12,775 (878,000)
54
(176,731) 121,191 (13,043) 108,148
(693,186)
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Cash Flow Statement (Contd...) As At 31.03.2009 C. Cash Flow from Financing Activities : Increase in capital including premium Equity Warrants Issued / Converted Increase / Decrease in Term Loan Secured Loan repaid Secured Loan taken Interest and Finance Charges paid Dividend paid Dividend tax paid Net Cash from from Financing Activities Net (Decrease)/Increase in cash and cash equivalent Cash and cash equivalent at the beginning of the year Addition on account of merger Exchange difference on translation of foreign currency cash and cash equivalents Cash and cash equivalent at the end of year Net (Decrease) / Increase as above
(Rs.in 000) As At 31.03.2008
574,363 78,458
185,220 (18,522)
(343,361) 265,000 (63,488) (25,718) (4,402)
(25,821) 402,900 (28,454) (18,210) (3,098) 480,852 (153,570) 204,215 -
494,015 (91,023) 300,904 5,666
720 51,365 (153,570)
204,215 (91,023)
For Chaturvedi & Shah Chartered Accountants
For and on behalf of board
Lalit R. Mhalsekar Partner Membership No.: 103418
Sanjay A.Desai Executive Chairman and Director Amit R. Sheth Managing Director
Dated : 30th June, 2009 Place: Mumbai
Mehul J. Raval Company Secretary
55
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Schedule Annexed to and forming part of the Accounts for the year ended 31st March, 2009 1000 SCHEDULE 1 - SHARE CAPITAL AUTHORISED 1,80,00,000 (p.y.1,40,00,000) Equity Shares of Rs. 10/- each fully paid up ISSUED SUBSCRIBED AND PAID UP 1,47,99,417 (p.y. 1,31,11,917) Equity Shares of Rs.10/- each fully paid up Of the above : (i) 70,53,399 Equity Shares of Rs.10/- each fully paid up have been alloted as bonus Shares by capitalisation of Share Premium account and Profit & Loss Account. (ii) 13,42,438 equity Shares of Rs.10/- each fully paid up were issued on Preferential allotment. 7,35,000 equity Shares of Rs.10/- each fully paid up were issued as conversion of Share warrants on Preferential allotment. 12,62,500 equity Shares of Rs.10/- each fully paid up were issued on Preferential allotment. (Refer note no 15 i of part B of Schedule 14) 2,75,000 equity shares of Rs.10/- each fully paid up has been alloted for consideation other than cash (Refer note no 13 d of part B of Schedule 14) 1,50,000 equity Shares of Rs.10/- each fully paid up were issued as conversion of Share warrants on Preferential allotment. (Refer note no 14 iii of part B of Schedule 14) (iii) 2,25,000 equity shares of Rs.10/- each fully paid up has been alloted for consideation other than cash SCHEDULE 2 - RESERVES AND SURPLUS Capital Reserve Share Premium Balance as per last Balance Sheet Add:- Premium recd on account of Amalgamtion Add: Premium recd on issue of equity Shares (Refer note no 13 d,14 & 15 iii of part B of Schedule 14) General Reserve Balance as per last Balance Sheet Add: Transfer during the year
794,965 674,363
As At 31-03-2009
(Rs.in 000) As At 31-03-2008
180,000
140,000
147,994
131,119
147,994
131,119
251
251
-
529,705 6,390 258,871
1,469,328 27,006 15,000
Profit and Loss Account SCHEDULE 3 - LOAN FUNDS A) SECURED LOANS From Banks - Car Loan (Secured by Hypothication of Car in favour of bank) From Banks - Term Loan & Overdraft (Secured by Hypothecation of Plant & Machinary and further secured by personal guarantees of 3 directors in favour of bank)
56
794,966 12,006 15,000
42,006 391,375 1,902,960
27,006 269,995 1,092,218
-
535
404,553
481,748
404,553
482,283
13,667
Leasehold Improvements
57 174,766
Previous Year
196,655
60,475
( * The Balance life as on 31.03.2009 is ranging between 1 to 5 years)
Capital Work In Progress
356,564
Total
27,021
845
184
250
251
-
-
-
-
-
-
15,108
-
-
-
-
-
-
-
356,564
417,038
109,055
14,511
1,376
5,766
2,592
16,687
267,051
32,442
61,144
22,453
3,784
170
406
575
1,564
32,192
36,416
63,664
20,410
3,062
65
270
246
1,053
38,558
-
-
-
-
-
-
7,714
-
-
1,192
Office Equipments
82,034
5,516
Air - Conditioner
-
-
-
Software*
2,592
Motor Car
122
-
(Rs.in 000)
61,144
124,808
42,863
6,846
235
676
821
2,617
70,750
109,000
295,420
292,230
66,193
7,666
1,141
5,089
1,771
14,070
196,300
20,000
-
295,420
59,582
9,883
1,022
5,110
2,017
15,001
202,805
DEPRECIATION NET BLOCK For the Sale/ As At As At As At Year Discard 31.03.2009 31.03.2009 31.03.2008 Adjustment
-
16,565
Furniture & Fixtures
32,053
GROSS BLOCK Acquired as Sale/ As At Upto per scheme Discard 31.03.2009 01.04.2008 of Amal- adjustment gamation
Intangible Asset
234,998
As At Addition 01.04.2008
Computers
Tangible Assets
Particulars
SCHEDULE 4 - FIXED ASSETS
SCHEDULE ANNEXED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31st MARCH, 2009
AURIONPRO SOLUTIONS LIMITED Annual Report 2008 - 2009
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Schedule Annexed to and forming part of the Accounts for the year ended 31st March, 2009
(Rs.in 000) As At 31-03-2008
As At 31-03-2009 SCHEDULE 5 - INVESTMENTS (A) Long Term Investments Trade ( Unquoted) - at Cost, fully paid up In Subsidiaries (wholly owned) (a) Aurionpro Solutoins Inc.(USA) 1,20,000 (20,000) shares of Capital stock with no par value (Refer note no 13 e of part B of Schedule 14) (b) Aurionpro Solutions Pte.Ltd.( Singapore) 5,43,799 (5,43,799) ordinary shares of SGD 1 each (c) Aurionpro Solutions SPC (Bahrain) 2,500 (2,500) equity shares of BHD 100 each (d) Auroscient Outsourcing Pvt.Ltd(India) 10,000 (10,000) equity shares of Rs.10 each. (e) SPS Corporation (USA) 1,000 (1,000) shares of Capital Stock with no par Value (Refer note no 13 a of part B of Schedule 14) (f) Coban corporation (USA) 9,450 (9,450) shares of Comman Stock of USD 0.0001 each (Refer note no 13 b of part B of Schedule 14) (g) Aurionpro Solutions (HK) Ltd. (Hongkong) 1 (1) Ordinary share of 1 HKD each (Rs. 0 is equal to Rs. 5/-) (h) E2E Infotech Limited ( UK ) 10,000 (Nil) ordinary shares of GBP 1 each (i) Integro Technologies Pte.Ltd ( Singapore) 98,01,136 (98,01,136) ordinary share of 0.10 SGD each 33,99,166 (33,99,166) ordinary share of 0.40 SGD each 3,08,521 (3,08,521) ordinary share of 0.44 SGD each (Refer note no 13 c of part B of Schedule 14) (j) Sena System inc (100 (Nil) shares of Capital stock with no par value) (Refer note no 13 d of part B of Schedule 14) (k) Auro Fidel (5,00,000 (Nil) equity shares of Rs.10 each.)
68,674
16,890
14,676
14,676
29,775
29,775
100
100
224,220
148,287
50,434
40,790
0
0
119,813
119,813
358,027
313,838
201,655
-
5,000
1,072,374
Non - Trade ( Unquoted) - at Cost, fully paid up (a) Janaseva Sahakari Co-op Bank Ltd. (25 (25) equity shares of Rs.20 each) (b) Megavisa Marketing Solutions Ltd. (1,75,108 (1,75,108) equity shares of Rs.10 each)
1
1
3,502
3,502 3,503 1,075,877
58
684,169
3,503 687,672
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Schedule Annexed to and forming part of the Accounts for the year ended 31st March, 2009 SCHEDULE: 6 - CURRENT ASSETS, LOANS AND ADVANCES CURRENT ASSETS A) INVENTORIES Work - In - Progress (As certified and valued by the management) B) SUNDRY DEBTORS : ( Unsecured Considered good) (i) Outstanding Debtors - More than Six Months 77,405 - Other Debts 121,609 (above includes due from subsidiaries 69,555 thousands ( p.y. Rs. 118,649 thousand )) C) CASH AND BANK BALANCE (i) Cash on Hand 506 (ii) Balance with Bank (a)With Schedule Bank - Current Account. 46,557 - Deposits Account. 4,302
As At 31-03-2009
(Rs.in 000) As At 31-03-2008
31,223
38,680
32,276 213,155 199,014
245,431
524
99,045 104,646 51,365
LOANS, ADVANCES AND DEPOSITS (Unsecured, considered good) (i) Advances recoverable in cash or in kind or for value to be recd (ii) Loans to Employees (iii) Deposits : a. Inter Corporate Deposit b. Other Deposits (iv) Advance to Subsidiary Companies
204,215
15,091 2,759
30,227 3,197
262,653 11,080 653,341
3,162 12,076 317,782 944,924 1,226,526
SCHEDULE : 7 - CURRENT LIABILITIES & PROVISIONS A) CURRENT LIABILITIES : (i) Sundry Creditors : Micro, Small & Medium Enterprises Amount due to others (refer note 8 of part B of Sch.14) (ii) Other Liability (iii) Unearned Revenue (iv) Advance from Trade Debtors B) PROVISIONS : (i) Provision for Taxation ( Net of Advance Tax) (ii) Proposed Dividend (iii) Corporate Tax on Dividend (iv) Provision for Expenses (v) Unclaimed Dividend (vi) Provision for Gratuity
1 25,985
58,717 25,986 34,344 231 13,341 73,902
3,491 25,899 4,402 2,518 199 2,773
58,717 5,858 477 65,052 12,624 22,946 3,900 3,783 18 2,464
39,282 113,184
59
366,444 854,770
45,736 110,788
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Schedule Annexed to and forming part of the Accounts for the year ended 31st March, 2009 SCHEDULE 8 - SOFTWARE SERVICES & PRODUCTS Domestic Overseas
SCHEDULE 9 - OTHER INCOME Excess provision written back (P.Y.@is equal to Rs.303/-) Credit Balance written back Income from Investments - Profit on sale of investments - Dividend SCHEDULE 10 - STAFF COST Salary, wages and bonus ( Including Directors Remuneration of - Rs.3,697 thousands (p.y.Rs.4,716 thousands) ) Contribution to Provident Fund Staff Welfare SCHEDULE 11 - SOFTWARE DEVELOPMENT AND OTHER EXPENSES Contract Fees Software Consultancy & Devlopment Charges Rates & Taxes Recruitment Charges Electricity Expenses Rent Insurance Repairs & Maintenance Travelling Expenses Internet Charges Auditors Remuneration Bad Debts W/off (Including Advances) Legal & Professional Fees Telephone Expenses Loss on Sale/discarded of assets Currency Translation Differences Miscellaneous Expenses
60
As At 31-03-2009
(Rs.in 000) As At 31-03-2008
188,282 379,636 567,918
232,200 367,952 600,152
480
@ 615
2 1,122 1,604
301 11 926
130,960
126,188
11,966 2,339 145,265
11,792 3,682 141,662
2,416 206,808 2,088 1,511 5,284 16,782 112 401 13,126 2,132 2,000 15,966 8,149 4,277 (162,397) 3,695 122,350
3,228 106,849 1,842 1,347 5,986 13,626 285 1,757 11,851 2,666 1,700 2,677 8,159 2,110 7,369 19,315 10,388 201,155
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Schedule Annexed to and forming part of the Accounts for the year ended 31st March, 2009 SCHEDULE 12 - BANK INTEREST Interest Expense Finance Charges Interest on Bank Overdraft Interest on Term Loan Interest on Car Loan Total Bank Interest Expense Interest Income Interest On Bank FDR Interest On Inter Corporate Deposit Interest on Branch Accounts Interest on Staff Loan Interest on LIC Gratuity Fund Total Bank Inteerst Income Net Bank Interest Expense SCHEDULE 13 - EARNING PER SHARE Basic & Diluted Earning per Share: Profit for Basic & Diluted Earning per Share: ( Rs.in thousands) Weighted average number of Equity Shares Basic Diluted Nominal value of equity share Basic Earning Per Share Diluted Earning Per Share
61
As At 31-03-2009
(Rs.in 000) As At 31-03-2008
12,058 1,279 50,766 15 64,118 2,988 41,133 34 347 184 44,686 19,432
7,097 2,503 22,628 71 32,299 12,660 430 7 332 13,429 18,870
170,135
175,075
14,392,396 14,392,396 10 11.82 11.82
12,448,190 12,598,190 10 14.06 14.06
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Schedule 14: Significant Accounting Policies and Notes to Accounts A.
Significant Accounting Policies
1.
Method of Accounting The financial statements are prepared under historical cost convention and in accordance with the generally accepted accounting principles in India and provisions of the Companies Act,1956 read with the Companies ( Accounting Standards) Rules, 2006 ( Accounting Standards Rules).
2.
Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenues and expenses and disclosure of contingent liabilities on the date of financial statements. The recognition, measurement, classification or disclosures of an item or information in the financial statements have been made relying on these estimates to a greater extent.
3.
Revenue Recognition Revenue from software development and consulting services is recognized either on time and material basis or fixed price basis, as the case may be. Revenue on time and material contracts is recognized as and when the related services are performed. Revenue on fixed-price contracts is recognized on the percentage of completion method under which the sales value of performance, including earnings thereon, is recognized on the basis of cost incurred in respect of each contract as a proportion of total cost expected to be incurred. Revenue from sale of licenses of software products and other products is recognized on delivery/ installation, as the case maybe. Maintenance revenue in respect of software products is recognized as and when invoice raised on the client over the period of the underlying maintenance agreement. Revenue is recorded net service tax & Vat. Revenue from Call center & Business process Outsourcing Operations arised from both time based and unit price client contracts. Such revenue is recognized on completion of the related services and is billable in accordance with the specific terms of contracts with clients.
4.
Fixed Assets Tangible: Fixed Assets are stated at cost, which comprises of purchase consideration and other directly attributable cost of bringing the assets to its working condition for the intended use. Intangible: Costs that are directly associated with identifiable and unique software products controlled by the Company, whether developed in-house or acquired, and have probable economic benefits exceeding the cost beyond one year are recognized as software products.
5.
Depreciation / Amortization Software Products are amortized over a period of Five years as considered appropriate by the management. Leasehold improvements are amortized over primary period of lease. Depreciation on other fixed assets is provided on straight-line method over useful life of assets at the rates and in the manner as prescribed in Schedule XIV to the Companies Act, 1956. Subsequent upgrades of hardware are entirely charged off to revenue in the year of purchase.
6
Investments Investments are classified into long-term investments and current investments based on the management's intention at the time of purchase. Long-term investments are carried at cost and provision is made to recognize any decline, other than temporary, in the value of such investments, determined separately for each investment. Current investments are carried at the lower of the cost and fair value and provision is made to recognize any decline in the carrying value. The comparison of cost and fair value is done separately in respect of each category of investments.
7
Accounting for Taxes on Income Provision for current income tax is made on the basis of the estimated taxable income for the current accounting period in accordance with the Income - tax Act, 1961. Provision for fringe benefit tax is made on the basis of expenses incurred on employees/ other expenses as prescribed under the Income Tax Act, 1961.
62
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Deferred tax resulting from timing differences between accounting and tax profits is accounted for under the liability method, at the current rate of tax, to the extent that the timing differences are expected to crystallize. Deferred tax assets are recognized and carried forward only if there is a virtual/ reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each balance sheet date. Where there is Unabsorbed Depreciation or carry forward loss under tax laws, Deferred Tax Asset are recognized only if there is virtual certainty of realization of Assets. 8
Translation of Foreign Currency Items Transactions in foreign currency are recorded at the rate of exchange in force on the date of the transactions. Monetary assets and liabilities denominated in foreign currency are translated at the exchange rate prevalent at the date of the Balance Sheet, Non Monetary items are carried at cost. The resultant gain/loss are recognized in the Profit & Loss Account. Overseas investments are recorded at the rate of exchange in force on the date of allotment/ acquisition.
9
Accounting of Employee Benefits The Company has for its employees in India, benefits such as Gratuity and Provident Fund. Provision for gratuity is made on the basis of actuarial valuation and charged to Profit and Loss account. The Company's contribution to the provident fund along with the employee share of provident fund deducted from the salary is paid into Employee Provident Fund of Government of India. The Company's contribution to EPF is charged to revenue.
10
Provisions and Contingent Liabilities The Company recognizes a provision when there is a present obligation as a result of a past event that probably requires outflow of resources, which can be reliably estimated. Disclosures for a contingent liability is made, without a provision in books, when there is an obligation that may, but probably will not, require outflow of resources.
11
Impairment of Assets The Company assesses at each balance sheet date whether there is any indication that any asset may be impaired. If any such indication exists, the carrying value of such assets is reduced to its recoverable amount and the amount of such impairment loss is charged to profit and loss account. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, then such loss is reversed and the asset is restated to that effect.
12
Borrowing Costs Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use or sale or those assets that are not ready for their intended use or sale when acquired. All other borrowing costs are charged to revenue in the period in which they are incurred.
13
Operating lease Lease arrangement where the risk and rewards incidental to ownership of an assets substantially vest with lessor, are recognized as operating lease. Lease rentals under operating leases are recognized in the profit & loss over the period of lease.
14
Preliminary & Shares Issue Expenses Preliminary expenses and share issue expenses are written off in the years in which incurred.
15
Work in progress: Work in progress is valued at cost plus indirect expenses allocated.The allocation of indirect expenses is based on the technical evaluation of the projects by the management.
B.
Notes to Accounts
1.
The Previous year's figures have been regrouped and rearranged wherever found necessary. Figures in bracket indicate previous year figures. Figures below five hundred indicated as “@”.
2.
The balances of sundry debtors and creditors are subject to confirmation.
3.
Unearned Revenue : Unearned Revenue as at 31st March, 2009 amounting to Rs.231 thousands (P.Y. Rs.477 thousands) primarily consist of client billing on fixed price and fixed time frame contract for which related cost have not yet been incurred.
63
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
4.
Operating Leases: The Company has various operating leases for office facilities and related Facilities that are renewable after the expiring of primary period of Lease at the option of Lessor and Lessee. Rental expenses for operating leases included in the income statement for the year is Rs. 16,782 thousands (P.Y. Rs.13,644 thousands) As of 31st March 2009 future minimum lease payments for non-cancellable operating leases are as under
5
Particulars
Total
Not later than one year
Total value of minimum lease payment
35,524
14,455
(Rs.in 000)
Later than one year but not later than five year 21,069
Later than five years NIL
Quantitative Detail: The company is primarily engaged in the development and maintenance of computer software. The production and sale of such software cannot be expressed in any generic unit. Hence, it is not possible to give the quantitative details of sales and other information as required under paragraphs 3, 4C and 4D of part II of Schedule VI of Companies Act, 1956.
6
7
Earning in foreign Currency (on accrual basis)
(Rs.in 000)
Particulars
2008-09
2007-08
Software Services
379,637
367,952
Expenditure in foreign Currency (on accrual basis)
(Rs.in 000)
Particulars
2008-09
2007-08
4,600
2,734
Software Development and Other Expenses
22,392
4,522
Total
26,993
7,257
Staff Cost
8
Disclosure under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) Under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) which came into Force form 2nd October, 2006 certain disclosures are required to be made relating to MS&ME. On the basis of the information and records available with the Company, the following disclosuresare made for the amounts due to the MS&ME. (Rs. In '000) As at 31st March, 2009 (a) Principal amount due to any supplier as at the year end
1
(b) Interest due on the principal amount unpaid at the year end to any supplier
-
(c) Amount of Interest paid by the Company in terms of section 16 of the MSMED, along with the amount of the payment made to the supplier beyond the appointed day during the accounting year
-
(d) Payment made to the enterprises beyond appointed date under Section 16 of MSMED
-
(e) Amount of Interest due and payable for the period of delay in making payment, which has been paid but beyond the appointed day during the year but without adding the interest specified under MSMED
-
(f)
-
The amount of interest accrued and remaining unpaid at the end of each accounting year
This being the first year of register of the supplier under MSMED, the previous period figures are not relevant.
64
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
9
Managerial Remuneration (excluding Contribution to Gratuity on retirement) paid/payable to directors: Particulars Salaries Contribution to Provident Fund Total
10
2008-09
2007-08
3,674
4,688
23
28
3,697
4,716
Auditors Remuneration (Excluding Services Tax)
(Rs.in 000)
Particulars
11
(Rs.in 000)
2008-09
2007-08
For Audit Fees
1,450
1,250
For Tax Audit
250
250
For Other Services
300
200
For Certification Charges
355
305
2,355
2,005
Deferred taxation in respect of timing difference arising on account of: Particulars
(Rs.in 000) 2008-09
2007-08
55,361
41,917
2,657
4,243
52,704
37,674
Tax Liability on account of: Depreciation / Amortization Deferred Tax Assets on account of : Disallowance under the Income tax Act,1961 Net Deferred Tax Liability
12
The Company prepares consolidated accounts along with it's subsidiaries as per Accounting Standard (AS-21) and hence the disclosure requirements of Accounting Standard (AS-17 “Segment Reporting” issued by The Institute of Chartered Accountants of India is given in “Consolidated Financial Statement”.
13
Acquisition/Merger of Subsidiaries:a.
The Company in September, 2006 entered into Share Purchase Agreement (SPA) effective retrospectively from 1st April, 2006 with the owner of SPS Corporation, USA to acquire all the 1000 shares of SPS Corporation, USA for a consideration of USD 4,997,800 payable in three trenches out of which 1st tranche & 2nd tranche consideration has been paid & the part payment of 3rd tranche amounting to USD 940,000 (Rs.47,435 thousands) out of USD1,499,340 has been made & the shares have been transferred in the company name. The Company has made the provisions for the balance payment of the 3rd tranche and the shares have been transferred in the company name.
b.
The Company in October, 2006 entered into Share Purchase Agreement (SPA) with the owner of Coban Corporation, USA to acquire all the 9450 shares of Coban Corporation, USA for a consideration payable in two trenches out of which 1st tranche consideration of USD 900,000 has been paid in accounting year 2007-08 and Final consideration of USD 225,000 has been paid ( Rs.9,643 thousands) after taking into consideration the achievement criteria as per the Share Purchase Agreement in current year. Accordingly, the Company became 100% owner and acquired 9450 shares of Coban Corporation, USA.
c.
The Company in December, 2007 entered into Share Purchase Agreement (SPA) with the owner of Integro Technologies Pte.Ltd, Singapore to acquire all the 16,886,029 shares of Integro Technologies Pte.Ltd, Singapore at an agreed price of SGD 16,000,000 in three trenches. The Company has paid 1st tranche amounting to SGD 11,500,00 (Rs.313,837 thousands) and acquired 13,508,823 shares (80% of the total paid up capital of Integro Technologies Pte.Ltd, Singapore). The Company during the financial year made part payment of SGD 1,350,000 (Rs. 44,190 thousands) related to 2nd tranche payment of SGD 2,000,000 for acquisition of 1,688,603 shares and balance of SGD 650,000 (Rs.22,650 thousands) was paid subsequently.
65
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
The 3rd tranche amounting to SGD 2,500,000 for acquisition of balance 1,688,603 shares will fall due after 24 calendar months of the agreement date. d.
The Company had incorporated two wholly owned subsidiaries namely Aurionpro I Acquisition Corp. and Aurionpro II Acquisition Corp. on 20th March, 2008 under the Laws of state of New Jersey for the purpose of acquisition of SENA Systems INC., USA. The Company entered into an Agreement on 31st March, 2008 for the overseas merger of M/s Aurionpro I Acquisition Corp. with Sena Systems Inc, USA. As per the agreement Aurionpro Subsidiary I merged with SENA Systems, Inc on 31st July,2008. As part of Merger Consideration, Aurionpro Solutions Limited, being the 100% holding Company of Aurionpro Subsidiary I received 976,164 consideration shares of Sena Systems INC and against same Aurionpro Solutions Limited as part of merger process paid USD 2,000, 000 cash to Sena shareholders and option holders and the Company had issued 275,000 shares to shareholders of SENA Systems Inc. including Wizarth. (the advisors) Sena System Inc got merged into Aurionpro II Acquisition Corp. on 13th August,2008. After mergering of Aurionrpro Acquisition I and Aurionpro Acquisition II in to Sena Systems INC. The Sena Systems INC became the subsidiary of the Company. The Company allotted 275,000 Equity shares on preferential basis of face value of Rs. 10/- each at a price of Rs. 425/- per share i.e. at a premium of Rs. 415/- per share, for consideration other than cash, being consideration for acquisition of SENA Systems Inc, USA.
14
e.
The Company in March 2009, entered into Stock Subscription Agreement (SSA) with Aurionpro Solutions INC, USA for infusion of additional capital of 200,000 shares of Aurionpro Solutions INC, USA at a purchase price of USD 10 per share for an aggregate purchase price of USD 2,000,000, out of which the Company has paid USD 1,000,000 (Rs. 51,784 thousands) during the year towards acquisition of 100,000 shares of Aurionpro Solutions INC.
f.
Two subsidiaries of the Company viz, SPS Corporation and Coban Corporation had entered into an Agreement on 24th March, 2009 and from 1st April, 2009 get merged with Aurionpro Solutions Inc, USA. According to the terms of merger, all the issued and outstanding shares of Common stock of SPS Corporation and Coban Corporation shall be cancelled and the Company in consideration shall receive 210,631 shares for SPS Corporation and 67,270 shares for Coban Corporation of Aurionpro Solutions Inc, USA, the surviving company.
The Company has converted the balance 150,000 convertible warrants out of 885,000 convertible warrants issued on 22nd March, 2007 into Equity Share capital of the Company in the following manner: I.
629,663 fully paid up Equity shares of Rs.10 each against Convertible Warrants at a premium of Rs.242/- at the Board meeting held on 6th November 2007.
II.
105,337 fully paid up Equity shares of Rs.10 each against Convertible Warrants at a premium of Rs.242/- at the Board meeting held on 31st January 2008.
III. Balance of 150,000 fully paid up Equity shares of Rs.10 each against Convertible Warrants at a premium of Rs.242/- at the Board meeting held on 19th September 2008. IV. The above proceeds of Rs.37,800 thousands has been used for setting up of new centres, long term capital requirement, expanding products and sales investments. 15
In terms of the approval of the shareholders obtained at the Extra Ordinary General Meeting of the Company held on 24th May, 2008, the Company has allotted following securities on 11th June 2008: I.
1,262,500 Equity shares of Rs. 10/- each on a preferential basis to promoters, promoter group and strategic investors at a price of Rs. 425 per share.
II.
1,935,000 Convertible warrants of Rs. 10/- each to promoters, promoter group and strategic investors at a price of Rs. 425 per share. The Company has received Rs. 42.50 per warrant, being the 10% upfront money against the allotment of warrants.
III. The proceeds of Rs. 618,800 thousands received from the above allotment have been utilized for long term facilities of its subsidiaries, repayment of bank loans and working capital requirements. The Balance has been temporarily utilized in Inter Corporate deposits (Since Realized). 16
The Company had raised Rs.270,022 thousands through Initial Public offering (IPO) in October 2005, which comprised of
66
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
3,000,247 equity shares of face value of Rs. 10 each issued at a premium of Rs.80 per share. The proceeds from IPO have been utilized by the Company as under: (Rs.in 000) Particulars 26.10.2005 to 26.10.2005 to 31.03.2009 31.03.2008 Expansion of facilities 67,746 67,746 Certification 517 517 Investments 130,000 130,000 Establishment of Overseas Office 35,505 35,505 Public Issue Expenses 15,015 15,015 Incremental Working Capital 18,847 18,847 Balance lying as Deposit with Banks 2,392 2,392 Total 270,022 270,022 17
Capital commitments and contingent Liabilities:
(Rs. in 000) 2008-09
2007-08
159,061
292,961
2,994
3,845
Capital Commitments Estimated amount of contracts remaining to be be executed on capital account and not provided for so Contingent Liabilities Outstanding guarantees given by banks
18
The particulars of dividends declared and paid to non resident shareholders for the year 2007-08 are as under: Particulars
2008-09
2007-08
60
65
Number of shares held by them
2,201,674
2,772,346
Amount of dividend (INR)
3,852,930
4,158,519
(For 2007-08)
(For 2006-07)
Number of Non-Resident shareholders
Of the above, the Company has remitted (USD 20,544.50) Rs.1,064,000/- in foreign currency on account of dividends during the year to Two Non Resident shareholders holding 608,000 shares & remittance to other shareholders in Indian currency. 19
Employee Benefits:Gratuity : In accordance with the applicable Indian Laws, the Company provides for gratuity, a defined benefit retirements plan (Gratuity Plan) for all employees .The Gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on respective employee's last drawn salary and for the years of employment with the company. The following table set out the status of the gratuity plan as requires under AS 15 Particulars I)
Reconciliation of opening and closing balances of the present value of the defined benefit Obligation Obligation at period beginning Interest Cost Current Service Cost Past Service Cost (Non Vested Benefit) 67
As at 31st March, 2009
(Rs in 000's) As at 31st March, 2008
2,463 299 1,323 000
1,767 196 832 000
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Past Service Cost (Vested Benefit) Liability Transfer in Liability Transfer Out Benefit Paid Actuarial (gain)/loss on obligations Obligation at Period end II) Change in Plan assets Fair value of Plan Assets at the beginning of the year Expected Return on Plan Assets Contributions Transfer from other Company Transfer to other Company Benefit Paid Actuarial gain/(loss) on Plan Assets Fair value of Plan Assets at the End of the year III) Reconciliation of present value of the obligation and the fair value of the Plan assets Liability at the end of the Year Fair value of Plan Assets at the End of the year Difference Unrecognized Past Service Cost Unrecognized Transition Liability Amount Recognized in the Balance sheet IV) Gratuity Cost for the Period Current Service Cost Interest Cost Expected Return on Plan Assets Past Service Cost (Non Vested Benefit) Recognized Past Service Cost (Vested Benefit) Recognized Recognition of Transition Liability Actuarial (gain)/loss Expenses Recognized in P & L V) Investment Details of plan assets 100% of the Plan assets are invested in Insurer Managed funds VI) Actual return on Plan assets VII) Assumptions Discount Rate Prev Rate of Return on Plan Assets Prev Salary Escalation Prev Attretion Rate Previous Year Discount Rate Current Rate of Return on Plan Assets Current Salary Escalation Current Attretion Rate Current Year
000 000 000 (109) (1,204) 2,773
000 000 000 (302) (028) 2,463
2,103 164 000 000 000 (109) 20 2,178
1,107 172 1,189 000 000 (302) (063) 2,103
2,773 2,178 (595) 000 000 (595)
2,464 2,103 (361) 000 000 (361)
1,323 299 (164) 000 000 000 (1,224) 234
832 196 (172) 000 000 000 034 890
184
108
8.00% 8.00% 5.00% 2.00% 7.75% 8.00% 5.00% 2.00%
8.00% 8.00% 5.00% 8.00% 8.00% 5.00%
The estimates, of future salary increases, considered in actuarial valuation, take into account inflation, seniority promotion and other relevant factors such as supply and demand factors in the employment market.
68
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
20
Related Party Transactions (in respect of related parties as of the date of this report): A.
B.
Name of the related parties: i. Key Managerial Personnel: a) Amit R Sheth - Managing Director b) Sanjay A Desai Executive Chairman & Director ii Subsidiaries : a)
AurionPro Solutions Pte Ltd, Singapore (from 1st April,2003)
b)
AurionPro Solutions, INC USA. (from 7th November,2006)
c) d)
AurionPro Solutions, SPC Bahrain (from 1st April, 2006) Auroscient Outsourcing Pvt. Ltd. (from 10th July, 2006)
e)
SPS Corporation, USA (from 1st April, 2006)
f)
Coban Corporation, USA (from 1st October, 2006)
g)
E2E Infotech Ltd, UK (from 1st July, 2007)
h)
AurionPro Solutions (HK) Ltd, Hong Kong (from 1st October, 2007)
i)
Integro Technologies Pte Ltd, Singapore (from 7th December, 2007)
j)
AuroFidel Outsourcing Limited (from 8th March, 2008)
k)
Sena Systems INC (from 1st April,2008)
Transactions with related parties:
(Rs.in 000)
Particulars
2008-09
2007-08
Remuneration (Including PF)
3,697
4,716
Dividend
4,129
2,677
262,914
187,759
1,043,875
684,168
70,960
117,449
653,341
317,782
13,341
-
Investments in Equity
359,707
469,105
Working Capital Loan given
351,195
188,299
Working Capital Loan returned
120,931
9,829
Reimbursable expenses incurred for related parties
4,909
511
Reimbursable expenses incurred by related parties
1,657
-
-
1,734
Key Managerial Personnel:
Subsidiaries: Income/Expenses Sale of Services Closing Balances: Investments in Equity Debtors Working Capital Loan Trade Advances Transaction:
Other Related Parties : AurionPro Services Pvt .Ltd. Transaction: Dividend paid
69
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
C.
Out of the above items transaction in excess of 10% of the related part transactions are as under: Particulars
(Rs.in 000) 2008-09
2007-08
2,010
1,995
Bhavesh Talsania
918
1,810
Sanjay Desai
769
912
Particulars
2008-09
2007-08
61,130
50,097
157,107
97,228
SPS Corporation, USA
-
20,757
E2E Infotech Ltd, UK
-
19,677
76,590
59,704
-
30343
100,233
39,276
Auroscient Outsourcing Pvt. Ltd
68,896
46,053
Aurofidel Outsourcing Ltd.
47,772
-
21,490
-
-
9,310
Auroscient Outsourcing Pvt. Ltd
40,000
-
Aurofidel Outsourcing Ltd
44,341
Key Managerial Personnel Remuneration (Including PF) Amit Sheth
Subsidiaries Income: a.
Sales of Services AurionPro Solutions , INC USA AurionPro Solutions, SPC Bahrain
Transaction during the year a.
Working Capital Loan Given Auriopro Solutions Pte Ltd., Singapore AurionPro Solutions, INC USA AurionPro Solutions, SPC Bahrain
b.
Working Capital Loan Returned Aurionpro Solutions Pte Ltd., Singapore SPS Corporation, USA
c.
Reimbursable Expenses incurred Aurionpro Solutions , INC USA
1,897
52
-
459
Aurofidel Outsourcing Limited
1,645
-
AurionPro Solutions, SPC Bahrain
1,327
-
47,435
-
-
119,813
Integro Technologies Pte Ltd.
44,190
313,838
Aurionpro Solutions , INC USA
51,784
-
201,655
-
Aurionpro solutions Pte.Ltd, Singapore
d.
Investment in Equity SPS Corporation E2E Infotech Ltd, UK
Sena System Inc, USA
70
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
e.
Dividend paid Aurionpro Services Pvt. Ltd.
-
1,734
Amit Sheth
1,674
1,165
Bhavesh Talsania
1,056
1,055
Sanjay Desai
1,400
457
SPS Corporation, USA
195,722
148,287
E2E Infotech Ltd, UK
119,813
119,813
Integro Technologies Pte Ltd.
358,027
313,838
Sena Systems Inc, USA
201,655
Closing Balances: a.
b.
Investment in Equity
Debtors Aurionpro Solutions, INC USA
-
18,671
Aurionpro Solutions SPC, Bahrain
-
78,174
E2E Infotech Ltd, UK
-
20,003
19,871
-
Aurionpro solutions Pte.Ltd, Singapore
174,954
88,975
Aurionpro Solutions SPC, Bahrain
214,347
76,688
Aurionpro Solutions, INC USA
83,813
49,676
Aurosceint Outsourcing Pvt. Ltd.
80,615
51,719
Aurionpro solutions Pte.Ltd, Singapore c.
Working Capital Loan
21. Employee Stock Option Scheme (ESOS) The Company in the 11th Annual General Meeting had obtained approval from the shareholders for issue of shares under Employee Stock Option Scheme to its employees and employees of subsidiary Companies. The said scheme was filed with the Stock exchanges and in-principal approval from NSE was received on 27th May, 2009 and from BSE was received on 28th May, 2009. The Remuneration/Compensation Committee in its meeting held on 01st June, 2009 approved the grant of options. The exercise price for the purpose of the grant of Options was taken as the market price i.e. available closing price prior to the date of the grant as quoted on National Stock Exchange. Accordingly in accordance with ESOS of the Company, the employees as on date have been offered options as per eligible criteria fixed under the scheme. Against each of the above, eligible employee is entitled to acquire one equity share of Rs. 10/- each of the company at a price mentioned against the option. The minimum vesting period shall be one year from the date of grant. Against each option 20% can be exercised by the end of first year from the date of grant of options i.e. after 31st May, 2010, 30% can be exercised at the end of second year from the date of grant of the options i.e. after 31st May, 2011 and balance 50% can be exercised at the end of third year from the date of grant of the options i.e. after 31st May, 2012. 22
Segment Performance: Disclosure as per Accounting standard (“AS 17 of Segment Reporting”) is reported in consolidated accounts of the company. Therefore, the same has not been separately disclosed in line with the provision of AS.
23
In the opinion of the Board, the investments, current assets, loans and advances are realizable at a value, which is at least equal to the amount at which these are stated, in the ordinary course of business and provision for all known and determined liabilities are adequate and not in excess of the amount reasonably stated.
71
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
24
Disclosures of Loans and Advances to Subsidiaries (Pursuant to Clause 32 of the Listing Agreement) Sr.
Amount Outstanding As at
Name
(Rs.in 000)
Maximum amount Outstanding during the year
31.03.2009
31.03.2008
2008-09
2007-08
174,954
88,975
174,954
88,975
1.
AurionPro Solutions Pte. Ltd. (Singapore)
2.
AurionPro Solutions, INC. (USA)
83,812
49,676
83,812
49,676
3.
AurionPro Solutions, SPC Bahrain (Single Person Company)
214,347
76,688
214,347
76,688
4.
Auroscient Outsourcing Pvt. Ltd.
80,615
51,719
114,529
51,719
5.
SPS Corporation, USA
30,003
26,688
33,255
39,096
6.
Coban Corporation, USA
30,366
23,780
30,366
25,528
7.
Aurionpro Solutions (HK) Ltd. (Hong Kong)
336
256
336
256
8.
Aurofidel Outsourcing Ltd
3,789
-
41,002
-
9.
Sena Systems Inc, USA
35,117
-
35,117
-
653,339
317,782
727,718
331,938
Total
As at the year-end, the Company (a) has no associates (b) has loans and advances in the nature of loans, wherein there is no repayment schedule. (c) has loans and advances in the nature of loans to the above Companies in which directors are interested. Signatures to Schedule “I” to “XIII”
For Chaturvedi & Shah Chartered Accountants
For and on behalf of the board
(Lalit R. Mhalsekar) Partner Membership No.: 103418 Mumbai,
Sanjay A. Desai Executive Chairman and Director Amit R. Sheth Managing Director
Dated : 30th June, 2009 Place : Mumbai
Mehul J. Raval Company Secretary
72
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
(11) Additional information as required under Part IV of schedule Vi to the Companies Act, 1956
BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE (Rs.in 000) I II
III
IV
V
Registration Details Registration No. L99999MH1997PLC111637 State Code 11 Capital Raised during the year (Amount in Rupees) Public Issue NIL Bonus Issue Right Issue NIL Private Placement Position of Mobilisation and Deployment of Funds (Amount in Rupees) Total Liabilities 2,703,630 Sources of Funds Paid up Capital 147,994 Equity Warrents 82,238 Reserve & Surplus 1,902,960 Application of Funds Net Fixed Assets 401,230 Net Current Assets 1,113,342 Accumlated Losses NIL Performance of Company Turnover 567,918 Profit & Loss Before Tax 211,354 Earning per share 11.82 Generic name of the Principal Products / Services of Company Item Code No. (ITC Code) 85249009 Computer Software Product Description
Balance sheet NIL 574,363 Total Assets 2,703,630 Secured Loans 404,553 Unsecured Loans Deferred Tax Liability 52,704 Investment 1,075,877 Misc. Expenditure -
Total Expenditure 358,168 Profit & Loss after Tax 170,135 Dividend Rate 17.50%
For Chaturvedi & Shah Chartered Accountants
For and on behalf of board
Lalit R. Mhalsekar Partner Membership No.: 103418
Sanjay A.Desai Executive Chairman and Director Amit R. Sheth Managing Director
Dated : 30th June,2009 Place: Mumbai
Mehul J.Raval Company Secretary
73
31.03.2009
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Consolidated Financial Statements
74
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
AUDITORS' REPORT ON CONSOLIDATED FINANCIAL STATEMENT TO THE BOARD OF DIRECTORS OF AURIONPRO SOLUTIONS LIMITED We have audited the attached Consolidated Balance Sheet of Aurionpro Solutions Limited (“the Company”) and its subsidiaries (collectively referred to as the 'Group') as at 31st March, 2009, and also the Consolidated Profit and Loss Account and the Consolidated Cash Flow Statement for the year ended on that date annexed thereto. 1.
These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards in India. These Standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are prepared, in all material respects, in accordance with an identified financial reporting framework and are free of material misstatements. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements. We believe that our audit provides a reasonable basis for our opinion.
2.
We did not audit the financial statements and other financial information of certain subsidiaries, whose financial statements reflect total assets of Rs 4,17,852 thousands as at 31st March 2009 and total revenues of Rs.2,61,224 thousands and net cash inflow of Rs.31,461 thousands for the year ended on that date. These financial statements have been audited by other auditors whose reports have been furnished to us and in our opinion, in so far as it relates to the amounts included in respect of these subsidiaries, is based solely on the report of the other auditors.
3.
We have relied on the unaudited financial statements of the subsidiaries whose financial statements reflect total assets of Rs.14,33,057 thousands as at 31st March 2009, total revenue of Rs 21,83,723 thousands and net cash inflow amounting to Rs.29,239 thousands for the year ended on that date. These unaudited financial statements as approved by the respective Board of Directors of these companies have been furnished to us by the management, and our report in so far as it relates to the amounts included in respect of the subsidiaries is based solely on such approved financial statements.
4.
We report that the consolidated financial statements have been prepared by the Company in accordance with the requirements of Accounting Standard (AS) 21, 'Consolidated Financial Statements', issued by the Institute of Chartered Accountants of India and on the basis of the separate audited financial statements of the Company and its subsidiaries included in the consolidated financial statements.
5.
Based on our audit as aforesaid, and on consideration of reports of other auditors and accounts approved by the Board of Directors as explained in paragraph 2nd above, and to the best of our information and according to the explanations given to us, the consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India:(a) in the case of the consolidated Balance sheet, of the state of affairs of the Group as at 31st March, 2009; (b) in the case of the consolidated Profit and Loss Account, of the profit of the Group for the year ended on that date; and (c) in the case of the Consolidated Cash Flow Statement, of the Cash Flows of the Group for the year ended on that date.
For Chaturvedi & Shah Chartered Accountants LALIT R. MHALSEKAR Partner Membership No: 103418 Place : Mumbai Dated: 30th June,2009
75
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Consolidated Balance Sheet As On 31st March, 2009 Schedule I SOURCES OF FUNDS (1) Shareholder's Funds: a Share Capital b Equity warrants ( issued & subscribed) (Refer note no.7 (III) of part B of schedule 14) c Reserves and Surplus
(Rs. in 000) As At 31-03-2008
As At 31-03-2009
1
147,994 82,238
2
2,383,661
131,119 3,780 1,303,829 2,613,893
(2) Loan Funds: a Secured Loans b Unsecured Loans (3) Deferred Tax Liability (Net) (Refer note no 6 of part B of schedule 14) (4) Minority Interest (Refer note no 3(c) of part B of schedule 14) TOTAL FUNDS EMPLOYED II APPLICATION OF FUNDS (1) Fixed Assets: a Gross Block b Less: Depreciation c Net Block d Capital Work In progress (2) Goodwill on consolidation (3) Investments (4) Current Assets, Loans and Advances: a Inventories b Sundry Debtors c Cash & Bank Balances d Loans and Advances Less : Current Liabilities and Provisions a Current Liabilities b Provisions Net Current Assets TOTAL FUNDS APPLIED Significant Accounting Policies and Notes To Accounts
1,438,728
3 406,578 28,479
482,283 54,300 435,057 74,126
536,583 50,350
50,173
36,125
3,173,249
2,061,786
4 1,349,794 506,010 843,784 219,362
906,010 260,375 645,635 20,000 1,063,146 720,664 85,554
5 6
665,635 445,319 71,313
31,223 870,241 199,438 517,171 1,618,073
38,680 616,273 289698 208,721 1,153,372
245,111 69,077 314,188
198,298 75,555 273,853
7
1,303,885 3,173,249 14
For Chaturvedi & Shah Chartered Accountants
For and on behalf of board
Lalit R. Mhalsekar Partner Membership No.: 103418
Sanjay A.Desai Executive Chairman and Director Amit R. Sheth Managing Director
Dated : 30th June, 2009 Place: Mumbai
Mehul J. Raval Company Secretary
76
879,519 2,061,786
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Profit And Loss Account For The Year Ended 31st March, 2009 Schedule INCOME Income from operation Other Income Total Income EXPENDITURE (Increase) / Decrease in Stock Staff Cost Software Development and Other Expenses Depreciation & Amortisation Interest Expense Total Expenditure Profit Before Tax Provision for Taxation Current Tax Fringe Benefit Tax Deferred Tax Tax adjustment of earlier years(net) Profit after Tax Less Minority Interest Profit after tax and minority interest Profit brought forward from the Previous Year Add: Prior Period Adjustments Add: Addition of Profit on account of amalgamation
8 9
10 11 12
Amount available for distribution & appropriation Appropriations Proposed Dividend Corporate Tax on Dividend Transferred to General Reserve Transferred to Statutory Reserve Balance carried over to Balance Sheet Earning Per Share Basic Diluted Significant Accounting Policies and Notes To Accounts
13
Year ended 31.03.2009
(Rs. in 000) Year ended 31.03.2008
2,744,068 7,488 2,751,556
1,760,473 5,047 1,765,520
7,457 1,215,427 844,348 190,703 14,558 2,272,493 479,062
(18,739) 729,385 582,204 73,324 19,633 1,385,807 379,713
45,264 1,713 19,476 4,267 408,343 5,192 403,152 467,770 2,000 -
47,127 1,171 20,440 310,975 3,549 307,426 208,399 1,733 1,784
872,922
519,342
28,852 4,903 15,000 824,167 872,922
22,946 3,900 15,000 9,726 467,770 519,342
28.15 28.15
24.85 24.85
14
For Chaturvedi & Shah Chartered Accountants
For and on behalf of board
Lalit R. Mhalsekar Partner Membership No.: 103418
Sanjay A.Desai Executive Chairman and Director Amit R. Sheth Managing Director
Dated : 30th June, 2009 Place: Mumbai
Mehul J. Raval Company Secretary
77
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Cash Flow Statement For The Year Ended 31st March, 2009 As At 31.03.2009 Net Profit / (Loss) before Taxation A. Cash Flow from Operating Activities : Adjustment for : Depreciation & amortisation Loss on Sale of Fixed Assets Interest Expenses Interest Income Dividend on Investment Gain on Investment Unrealized Currency Translation (Gain)/Loss Forex Currency Translation (Gain)/Loss Exchange difference on translation of foreign currency cash and cash equivalents Credit Balance written back Bad debts
479,062
(Rs.in 000) As At 31.03.2008 379,713
190,703 67,799 (53,242) (1,205) (2) (125,158) (53,555)
73,324 7,149 33,062 (13,429) (11) (301) (396) 25,253
(239) (653) 25,800
(2,155) (1,959) 3,904 50,248 529,310
Operating Profit before working capital changes Adjustment for : Change in Inventories Change in Sundry Debtors Change in Loans & Advances Change in Current Liabilities
7,457 (182,336) 25,256 51,881
(18,739) (303,439) (9,622) 79,243 (97,742) 431,568 (56,839) 374,729
Cash generated from operations Income Tax paid Cash Flow from Operating Activities before prior period items B. Cash Flow from Investing Activities : Purchase of Fixed Assets and change in Work in Progress Purchase of Investment Sale in Investment Additional consideration for acquisition of subsidiaries ICD given ICD refunded Interest received Net Cash from Investment Activities
(556,539) (190,000) 191,205 (158,470) (290,000) 52,500 31,050
(252,557) 251,597 (33,265) 218,332
(345,244) (67,810) 4,488 (219,472) (22,500) 22,500 12,775 (920,254)
78
124,441 504,154
(615,263)
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Cash Flow Statement (Contd...) (Rs.in 000) As At 31.03.2008
As At 31.03.2009 C. Cash Flow from Financing Activities : Increase in capital including premium Equity Warrants Issued / Converted Increase / Decrease in Unsecured Loan Secured Loan repaid Secured Loan taken Interest and Finance Charges paid Dividend paid Dividend tax paid Net Cash from from Financing Activities Net (Decrease)/Increase in cash and cash equivalent Cash and cash equivalent at the beginning of the year Add: Adjustment due to acquisition of Subsidiaries Exchange difference on translation of foreign currency cash and cash equivalents Cash and cash equivalent at the end of year Net (Decrease) / Increase as above
574,363 78,458 (25,821) (343,361) 267,025 (67,168) (25,718) (4,402)
153,865 (18,522) 22,257 (25,821) 402,900 (29,218) (18,210) (3,098) 453,376 (92,150) 289,698 1,652
484,153 (87,222) 316,367 58,398
239 199,438 (92,150)
2,155 289,698 (87,222)
For Chaturvedi & Shah Chartered Accountants
For and on behalf of board
Lalit R. Mhalsekar Partner Membership No.: 103418
Sanjay A.Desai Executive Chairman and Director Amit R. Sheth Managing Director
Dated : 30th June, 2009 Place: Mumbai
Mehul J. Raval Company Secretary
79
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Schedule Annexed to and forming part of the Accounts for the year ended 31st March, 2009 SCHEDULE 1 - SHARE CAPITAL AUTHORISED 1,80,00,000 (p.y.1,40,00,000) Equity Shares of Rs. 10/- each fully paid up ISSUED SUBSCRIBED AND PAID UP 1,47,99,417 (p.y. 1,31,11,917) Equity Shares of Rs.10/- each fully paid up Of the above : (i) 70,53,399 Equity Shares of Rs.10/- each fully paid up have been alloted as bonus Shares by capitalisation of Share Premium account and Profit & Loss Account. (ii) 13,42,438 equity Shares of Rs.10/- each fully paid up were issued on as Preferential allotment. 7,35,000 equity Shares of Rs.10/- each fully paid up were issued conversion of Share warrants on Preferential allotment. 12,62,500 equity Shares of Rs.10/- each fully paid up were issued on Preferential allotment. (Refer note no 8 of part B of Schedule 14) 2,75,000 equity shares of Rs.10/- each fully paid up has been alloted for consideation other than cash (Refer note no 3 d of part B of Schedule 14) 1,50,000 equity Shares of Rs.10/- each fully paid up were issued as conversion of Share warrants on Preferential allotment. (Refer note no 7 III of part B of Schedule 14) (iii) 2,25,000 equity shares of Rs.10/- each fully paid up has been alloted for consideation other than cash SCHEDULE 2 - RESERVES AND SURPLUS Capital Reserve Share Premium Balance as per last Balance Sheet Add:- Premium recd on account of Amalgamtion Add: Premium recd on issue of equity Shares (Refer note No. 3(d), 7 & 8 of Part B of Schedule 14) General Reserve Balance as per last Balance Sheet Add: Transfer during the year
As At 31-03-2009
(Rs.in 000) As At 31-03-2008
180,000
140,000
147,994
131,119
2,419
379
794,965 674,363
529,705 6,390 258,870 1,469,328
27,006 15,000
794,966 12,006 15,000
42,006 Statutory Reserves Balance as per last Balance Sheet Add: Transfer during the year (refer note no 10 of part B of schedule 14) Foreign Currency Translation Reserve Profit and Loss Account
13,708 -
SCHEDULE 3 - LOAN FUNDS A) SECURED LOANS From Banks - Car Loan (Secured by Hypothication of Car in favour of bank) From Banks - Term Loan & Overdraft (Secured by Hypothecation of Plant & Machinary and further secured by personal guarantees of 3 directors in favour of bank) B) UNSECURED LOANS From Bank from others
80
27,006 3,982 9,726
13,708 32,033 824,167 2,383,661
13,708 467,770 1,303,827
2,025
535
404,553
481,748
406,578
482,283
26,235 2,244 28,479
43,427 10,873 54,300
24,205
4,826
7,014
8,699
19,574
Furniture & Fixtures
Motor Car
Air - Conditioner
Office Equipments
Leasehold Improvements
81 381,889
350,092
-
246,955
15,724
4,162
3,680
1,016
4,671
73,884
251
-
-
-
-
-
-
-
-
-
( * The Balance life as on 31.03.2009 is ranging between 1 to 5 years)
Capital Work In Progress
16,704 294,667
246,680
-
2,420
1,088
100
-
-
861
12,235
Addition amalgamations
Gross Block Addition Additions on a/c of acquisition
906,010
13,643
Goodwill / Org Cost
Total
535,111
Software
Intangible Asset*
292,937
As At 01.04.2008
Computers
Tangible Assets
Particulars
SCHEDULE 4 - FIXED ASSETS
(17,477)
76,989
278
70,289
643
(269)
(138)
-
1,361
4,825
906,010
1,349,794
13,920
854,775
37,029
12,692
10,556
5,843
31,098
383,881
Deductions/ As At Adjustments 31.03.2009
43,070
260,375
5,252
183,603
6,227
3,749
630
968
4,655
55,290
Upto 01.04.2008
16
153,837
8,852
-
1,051
272
-
-
210
7,303
Addition on a/c of acquisition
73,324
190,703
2,892
117,040
8,577
1,609
1,102
709
2,829
55,945
For the Year
(9,857)
46,082
-
39,605
445
130
(136)
-
520
5,518
Deductions/ Adjustments
Depreciation
260,375
506,010
8,143
341,299
15,521
5,505
1,596
1,677
8,214
124,055
Upto 31.03.2009
(Rs.in 000)
219,362
645,635
843,784
5,778
513,475
21,508
7,187
8,960
4,166
22,884
259,826
As at 31.03.2009
20,000
-
645,635
8,389
351,507
13,347
4,950
6,385
3,858
19,551
237,648
As At 31.03.2008
Net Block
SCHEDULE ANNEXED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2009
AURIONPRO SOLUTIONS LIMITED Annual Report 2008 - 2009
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Schedule Annexed to and forming part of the Accounts for the year ended 31st March, 2009 As At 31-03-2009 SCHEDULE 5 - INVESTMENTS Non - Trade ( Unquoted) - at Cost, fully paid up (a) Janaseva Sahakari Co-op Bank Ltd. (25 equity shares of Rs.20 each) (b) Megavisa Marketing Solutions Ltd. (1,75,108 equity shares of Rs.10 each) (c) Investment made by A urionpro Solutions Pte.Ltd (13,69,315 Covertibale Prefered Stock of Pay Simple LLC, USA representing interest of 7.64% in the corporation) (refer note no 3(g) of part B of schedule 13) (d) Investment made by Aurionpro Solutions INC ( 6,25,000 Comman stock of XTS INC, USA having Par value of USD 0.0001 each) (refer note no 3(h) of part B of schedule 13) (B) Current Investments Non - Trade (quoted) - at Cost, (a) Investment made by E2E Infotech (India ) Pvt.Ltd HDFC Cash Management Fund - Savings Plus Plan Units Current Year - NIL Units(Prev.Yr. 50,285.64 units) (* Agrregate Market Value Rs.Nil (Rs.504) thousands) Market Value of quoted investments Book Value of quoted Investments Book Value of unquoted Investments
82
1
1
3,502
3,502
51,481
43,360
30,570
23,940
85,554
-
(Rs.in 000) As At 31-03-2008
70,803
510
85,554 85,554
510 71,313 504 70,803
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Schedule Annexed to and forming part of the Accounts for the year ended 31st March, 2009 SCHEDULE: 6 - CURRENT ASSETS, LOANS AND ADVANCES CURRENT ASSETS A) INVENTORIES Work - In - Progress (As certified and valued by the management) B) SUNDRY DEBTORS : ( Unsecured Considered good) (i) Outstanding Debtors - More than Six Months 115,265 - Other Debts 754,976
As At 31-03-2009
(Rs.in 000) As At 31-03-2008
31,223
38,680
119,825 496,448 870,241
C) CASH AND BANK BALANCE (i) Cash on Hand (ii) Balance with Bank (a) With Schedule Bank - Current Account. - Deposits Account.
616,273
631
609
191,864 6,943
184,418 104,671 199,438
LOANS, ADVANCES AND DEPOSITS (Unsecured, considered good) (i) Advances recoverable in cash or in kind or for value to be recd (ii) Loans to Employees (iii) Deposits : a. Inter Corporate Deposit b. Other Deposits
289,698
219,355 9,680
129,959 37,380
262,653 25,483
3,162 38,220 517,171 1,618,073
SCHEDULE : 7 - CURRENT LIABILITIES & PROVISIONS A) CURRENT LIABILITIES : (i) Sundry Creditors : Micro, Small & Medium Enterprises Amount due to others
1 115,676
208,721 1,153,372
167,423 115,677 72,266 57,168 245,111
(ii) Other Liability (iii) Unearned Revenue B) PROVISIONS : (i) Provision for Taxation (Net of advance tax) (ii) Proposed Dividend (iii) Corporate Tax on Dividend (iv) Provision for Expenses (v) Unclaimed Dividend (vi) Provision for Gratuity
6,722 25,899 4,402 28,699 199 3,156
16,584 22,946 3,900 29,643 18 2,464 69,077 314,188
83
167,423 10,611 20,264 198,298
75,555 273,853
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Schedule Annexed to and forming part of the Accounts for the year ended 31st March, 2009 SCHEDULE 8 - INCOME FROM OPERATIONS Software Services & products
SCHEDULE 9 - OTHER INCOME Excess provision written back (@ is equal to Rs.303/-) Credit Balance written back Income from Investments - Profit on sale of investments - Dividend Misc . Income
SCHEDULE 10 - STAFF COST Salary, wages and bonus ( Including Directors Remuneration of - Rs.76,167 thousands (p.y.Rs.35,369 thousands) ) Contribution to Provident Fund Staff Welfare
SCHEDULE 11 - SOFTWARE DEVELOPMENT AND OTHER EXPENSES Contract Fees Software Consultancy & Devlopment Charges Rates & Taxes Recruitment Charges Electricity Expenses Rent Insurance Repairs & Maintenance Travelling Expenses Internet Charges Auditors Remunaration Bad Debts W/off Business promotion Legal & Professional Fees Telephone Expenses Loss on Sale/discarded of assets Currency Translation Differences Forex Currency Translation Loss Miscellaneous Expenses
84
As At 31-03-2009
(Rs.in 000) As At 31-03-2008
2,744,068 2,744,068
1,760,473 1,760,473
653
@ 1,959
2 1,205 5,628 7,488
301 11 2,776 5,047
1,188,356
695,373
19,020 8,051
17,227 16,785
1,215,427
729,385
4,546 390,078 4,849 10,742 10,231 61,071 6,416 5,571 76,462 5,234 3,621 25,800 19,705 330,004 12,715 (171,817) (53,556) 102,676 844,348
3,228 295,001 6,232 2,996 7,164 35,453 8,751 10,644 54,709 2,965 2,711 3,904 4,968 38,994 8,442 7,149 19,315 25,251 44,324 582,204
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Schedule Annexed to and forming part of the Accounts for the year ended 31st March, 2009 SCHEDULE 12 - BANK INTEREST Finance Charges Interest on Bank Overdraft Interest on Term Loan Interest on Car Loan Interest on Tax due Interest on Advances taken Total Bank Interest Expense Interest On Bank FDR Interest On Inter Corporate Deposit Interest On Advances Interest on Branch Accounts Interest on Staff Loan Interest on Income tax Refund Interest on LIC Gratuity Fund Total Bank Inteerst Income Net Bank Interest Expense SCHEDULE 13 - EARNING PER SHARE Basic & Diluted Earning per Share: Profit for Basic and Diluted Earning per Share ( Rs.in thousands) Weighted average number of Equity Shares Basic Diluted Nominal value of equity share Basic Earning Per Share Diluted Earning Per Share
85
As At 31-03-2009
(Rs.in 000) As At 31-03-2008
12,063 3,990 50,766 253 482 246 67,800 3,641 41,134 7,831 34 347 72 183 53,242 14,558
7,127 733 25,131 71 33,062 13,096 333 13,429 19,633
403,152
307,426
14,392,396 14,392,396 10 28.15 28.15
12,448,190 12,448,190 10 24.85 24.85
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Schedule 14 : Significant Accounting Policies A.
Significant Accounting Policies to the Consolidated Balance Sheet and Profit and Loss Account
1.
Principles of Consolidation The consolidated financial statements relate to Aurionpro Solutions Limited (“the Company”) and its fourteen subsidiary companies (herein after collectively referred to as “Group”). The consolidated financial statements have been prepared on the following basis. a.
The financial statements of the Company and its subsidiary companies are combined on a line- by- line basis by adding together the book values of like items of assets , liabilities, income and expenses after fully eliminating intra-group balances and intra- group transactions resulting in unrealized profits or losses being eliminated in accordance with Accounting Standard 21-“Consolidated Financial Statements “ issued by the Institute of Chartered Accountants of India.
b.
In case of foreign subsidiaries, revenue items are consolidated at the average rate prevailing during the period. All monetary assets and liabilities are converted at rates prevailing at the end of the year. While non-monetary assets and liabilities are recorded at the exchange rate prevailing on the date of the transaction on closing rate as applicable. Any exchange difference arising on consolidation of integral foreign operation and Non Integral Foreign operations is recognized in the profit and loss account and Foreign Currency Translation Reserve respectively.
c.
Investments in subsidiaries are eliminated and differences between costs of investment over the net assets on the date of investment, or on the date of the financial statements immediately preceding the date of investment, in subsidiary companies is recognized as goodwill or capital reserve, as the case may be.
d.
Minority Interest's share of net profit or Loss of consolidated subsidairies for the period is identified and adjusted against the income of the Group in order to arrive at the net income attributable to the shareholders of the Company.
e.
Minority Interest's share for net assets of consolidated Subsidaries is identified and presented in the consolidated Balance sheet as separate items from liabilities and share holders` equity
f.
As far as possible, the consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances and are presented in the same manner as the Company's Standalone financial statements.
2.
Investments other than investment in subsidiaries are accounted as per Accounting Standard 13 “Accounting for Investments” issued by The Institute of Chartered Accountants of India.
3.
Other Significant Accounting policies 1
Method of Accounting The financial statements are prepared under historical cost convention and in accordance with the generally accepted accounting principles in India and provisions of the Companies Act, 1956 read with the Companies (Accounting standards) rules, 2006 ( Accounting Standards Rules).
2
Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenues and expenses and disclosure of contingent liabilities on the date of financial statements. The recognition, measurement, classification or disclosures of an item or information in the financial statements have been made relying on these estimates to a greater extent.
3
Revenue Recognition Revenue from software development and consulting services is recognized either on time and material basis or fixed price basis, as the case may be. Revenue on time and material contracts is recognized as and when the related services are performed. Revenue on fixed-price contracts is recognized on the percentage of completion method under which the sales value of performance, including earnings thereon, is recognized on the basis of cost incurred in respect of each contract as a proportion of total cost expected to be incurred. Revenue from sale of licenses of software products and other products is recognized on delivery/ installation, as the case maybe. Maintenance revenue in respect of software products is recognized as and when invoice raised on the client over the period of the underlying maintenance agreement. Revenue is recorded net of service tax & Vat.
86
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Revenue from Call center & Business process Outsourcing Operations arised from both time based and unit price client contracts. Such revenue is recognized on completion of the related services and is billable in accordance with the specific terms of contracts with clients. 4
Fixed Assets Tangible: Fixed Assets are stated at cost, which comprises of purchase consideration and other directly attributable cost of bringing the assets to its working condition for the intended use. Intangible: Costs that are directly associated with identifiable and unique software products controlled by the Company, whether developed in-house or acquired, and have probable economic benefits exceeding the cost beyond one year are recognized as software products.
5
Depreciation / Amortization Software Products are amortized over a period of Five years as considered appropriate by the management. Leasehold improvements are amortized over primary period of lease. Depreciation on other fixed assets is provided on straight-line method over useful life of assets at the rates and in the manner as prescribed in Schedule XIV to the Companies Act, 1956. Subsequent upgrades of hardware are entirely charged off to revenue in the year of purchase. Goodwill on merger is amortized over a period of five years.
6
Investments Investments are classified into long-term investments and current investments based on the management's intention at the time of purchase. Long-term investments are carried at cost and provision is made to recognize any decline, other than temporary, in the value of such investments, determined separately for each investment. Current investments are carried at the lower of the cost and fair value and provision is made to recognize any decline in the carrying value. The comparison of cost and fair value is done separately in respect of each category of investments.
7
Accounting for Taxes on Income Provision for current income tax is made on the basis of the estimated taxable income for the current accounting period in accordance with the Income - tax Act, 1961. Provision for fringe benefit tax is made on the basis of expenses incurred on employees/ other expenses as prescribed under the Income Tax Act, 1961. Deferred tax resulting from timing differences between accounting and tax profits is accounted for under the liability method, at the current rate of tax, to the extent that the timing differences are expected to crystallize. Deferred tax assets are recognized and carried forward only if there is a virtual/ reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each balance sheet date. Where there is Unabsorbed Depreciation or carry forward loss under tax laws, Deferred Tax Asset are recognized only if there is virtual certainty of realization of Assets.
8
Translation of Foreign Currency Items Transactions in foreign currency are recorded at the rate of exchange in force on the date of the transactions. Monetary assets & liabilities denominated in foreign currency are translated at the exchange rate prevalent at the date of the Balance Sheet, Non Monetary items are carried at cost. The resultant gain/loss are recognized in the Profit & Loss account. Overseas investments are recorded at the rate of exchange in force on the date of allotment/ acquisition.
9
Accounting of Employee Benefits The Company has for its employees in India, benefits such as Gratuity and Provident Fund. Provision for gratuity is made on the basis of actuarial valuation and charged to Profit and Loss account. The Company's contribution to the provident fund along with the employee share of provident fund deducted from the salary is paid into Employee Provident Fund of Government of India. The Company's contribution to EPF is charged to revenue.
10
Provisions and Contingent Liabilities The Company recognizes a provision when there is a present obligation as a result of a past event that probably requires outflow of resources, which can be reliably estimated. Disclosures for a contingent liability is made, without a provision in books, when there is an obligation that may, but probably will not, require outflow of resources.
87
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
11
Impairment of Assets The Company assesses at each balance sheet date whether there is any indication that any asset may be impaired. If any such indication exists, the carrying value of such assets is reduced to its recoverable amount and the amount of such impairment loss is charged to profit and loss account. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, then such loss is reversed and the asset is restated to that effect.
12 Borrowing Costs Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use or sale of those assets that are not ready for their intended use or sale when acquired. All other borrowing costs are charged to revenue in the period in which they are incurred. 13 Operating lease Lease arrangement where the risk and rewards incidental to ownership of an assets substantially vest with lessor, are recognized as operating lease. Lease rentals under operating leases are recognized in the profit & loss over the period of lease. 14 Preliminary & Shares Issue Expenses Preliminary expenses and share issue expenses are written off in the years in which incurred. 15
Work in progress: Work in progress is valued at cost plus indirect expenses allocated. The allocation of indirect expenses is based on the technical evaluation of the projects by the management.
B.
Notes to Accounts
1.
The Subsidiary companies in the consolidated financial Statements are: Sr
Name of the subsidiary
1 2 3 4 5 6 7 8 9 10 11 12 13 14
Aurionpro Solutions Pte.Ltd Aurionpro Solutions, INC AurionPro Solutions, SPC Bahrain SPS Corporation, USA Auroscient Outsourcing Pvt. Ltd. Coban Corporation, USA E2E Infotech Ltd@ E2E Infotech (India) Pvt. Ltd AurionPro Solutions (HK) Ltd Integro Technologies Pte Ltd@@ Integro Technologies SDN.BHD AuroFidel Outsourcing Limited Sena Systems INC* @@@ Sena Systems Pvt.Ltd.*
Country of Incorporation Singapore #USA Bahrain #USA India #USA United Kingdom India #Hong Kong #Singapore #Malaysia #India #USA India
Date of Acquisition/ Incorporation 01/04/2003 13/12/2005 01/04/2006 01/04/2006 10/07/2006 01/10/2007 01/07/2007 01/07/2007 01/10/2007 07/12/2007 07/12/2007 08/03/2008 01/04/2008 01/04/2008
* Subsidiaries acquired or incorporated during the period. # Subsidiaries consolidated based on unaudited financial statement, certified by the management. @ Holding Company of listed in Sr.No.8. @@ Holding Company of listed in Sr.No.11. @@@ Holding Company of listed in Sr.No.14.
88
Proportion of ownership interest 100% 100% 100% 100% 100% 100% 100% 100% 100% 80% 80% 100% 100% 100%
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
2
The Previous year's figures have been regrouped and rearranged wherever found necessary. Figures below five hundred indicated as “@”.
3
Acquisition/Merger of Subsidiaries:a.
The Company in September, 2006 entered into Share Purchase Agreement (SPA) effective retrospectively from 1st April, 2006 with the owner of SPS Corporation, USA to acquire all the 1,000 shares of SPS Corporation, USA for a consideration of USD 4,997,800 payable in three trenches out of which 1st tranche & 2nd tranche consideration has been paid & the part payment of 3rd tranche amounting to USD 940,000 (Rs.47,435 thousands) out of USD1,499,340 has been made & the shares have been transferred in the company name. The Company has made the provisions for the balance payment of the 3rd tranche and the shares have been transferred in the company name.
b.
The Company in October, 2006 entered into Share Purchase Agreement (SPA) with the owner of Coban Corporation, USA to acquire all the 9,450 shares of Coban Corporation, USA for a consideration payable in two trenches out of which 1st tranche consideration of USD 900,000 has been paid in accounting year 2007-08 and Final consideration of USD 225,000 has been paid ( Rs.9,643 thousands) after taking into consideration the achievement criteria as per the Share Purchase Agreement in current year. Accordingly, the Company became 100% owner and acquired 9,450 shares of Coban Corporation, USA.
c.
The Company in December, 2007 entered into Share Purchase Agreement (SPA) with the owner of Integro Technologies Pte.Ltd, Singapore to acquire all the 16,886,029 shares of Integro Technologies Pte.Ltd, Singapore at an agreed price of SGD 16,000,000 in three trenches. The Company has paid 1st tranche amounting to SGD 1,150,000 (Rs.313,837 thousands) and acquired 13,508,823 shares (80% of the total paid up capital of Integro Technologies Pte.Ltd, Singapore). The Company during the financial year made part payment of SGD 1,350,000 (Rs. 44,190 thousands) related to 2nd tranche payment of SGD 2,000,000 for acquisition of 1,688,603 shares and balance of SGD 650,000 (Rs.22,650 thousands) was paid subsequently. The 3rd tranche amounting to SGD 2,500,000 for acquisition of balance 1,688,603 shares will fall due after 24 calendar months of the agreement date.
d.
The Company had incorporated two wholly owned subsidiaries namely Aurionpro I Acquisition Corp. and Aurionpro II Acquisition Corp. on 20th March, 2008 under the Laws of state of New Jersey for the purpose of acquisition of SENA Systems INC., USA. The Company entered into an Agreement on 31st March, 2008 for the overseas merger of M/s Aurionpro I Acquisition Corp. with Sena Systems Inc, USA. As per the agreement Aurionpro Subsidiary I merged with SENA Systems, Inc on 31st July,2008. As part of Merger Consideration, Aurionpro Solutions Limited, being the 100% holding Company of Aurionpro Subsidiary I received 976,164 consideration shares of Sena Systems INC and against same Aurionpro Solutions Limited as part of merger process paid USD 2,000, 000 cash to Sena shareholders and option holders and the Company had issued 275,000 shares to shareholders of SENA Systems Inc. including Wizarth. (the advisors) Sena System Inc got merged into Aurionpro II Acquisition Corp. on 13th August,2008. After mergering of Aurionrpro Acquisition I and Aurionpro Acquisition II in to Sena Systems INC. The Sena Systems INC became the subsidiary of the Company. The Company allotted 275,000 Equity shares on preferential basis of face value of Rs. 10/- each at a price of Rs. 425/- per share i.e. at a premium of Rs. 415/- per share, for consideration other than cash, being consideration for acquisition of SENA Systems Inc, USA. Goodwill on Consolidation of the said subsidiary has been accounted based on Unaudited financial Statement.
e.
The Company in March 2009, entered into Stock Subscription Agreement (SSA) with Aurionpro Solutions INC, USA for infusion of additional capital of 200,000 shares of Aurionpro Solutions INC, USA at a purchase price of USD 10 per share for an aggregate purchase price of USD 2,000,000, out of which the Company has paid USD 1,000,000 (Rs. 51,784 thousands) during the year towards acquisition of 100,000 shares of Aurionpro Solutions INC.
f.
Two subsidiaries of the Company viz, SPS Corporation and Coban Corporation had entered into an Agreement on 24th March, 2009 and from 1st April, 2009 get merged with Aurionpro Solutions Inc, USA. According to the terms of merger, all the issued and outstanding shares of Common stock of SPS Corporation and Coban Corporation shall be cancelled and the Company in consideration shall receive 210,631 shares for SPS Corporation and 67,270 shares for Coban Corporation of Aurionpro Solutions Inc, USA, the surviving company.
g.
One of the Company's subsidiary namely Aurionpro Solutions Pte.Ltd in October 2007 invested Rs.43,360 thousands in
89
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Senior Unsecured Convertible Promissory Note in Pay Simple LLC (Incorporated under the Laws of state of Delaware, U.S.A). As per the terms of agreement the note has been convertibly subsequently to year end on 1st April, 2008 1,369,315 Series B Convertible Preferred Stock representing an interest of 7.64% interest in the Corporation. h.
One of the company's Subsidiary namely Aurionpro Solutions INC, USA in January 2008 invested Rs.23, 940 thousands in 625,000 Common Stock of XTS Inc (incorporated under the laws of the state Delaware, USA) having Par value of USD 0.0001.
4
The balances of sundry debtors and creditors are subject to confirmation.
5
Unearned Revenue Unearned Revenue as at 31st March, 2009 amounting to Rs.57,168 thousands (P.Y. Rs.20,264 thousands) primarily consist of client billing on fixed price and fixed time frame contract for which related cost have not yet been incurred.
6
Deferred taxation in respect of timing difference arising on account of: Particulars
(Rs. in thousands) 2008-09
2007-08
77009
54593
2883
4243
74126
50350
Deferred Tax Liability on account of: Depreciation / Amortization Deferred Tax Assets on account of : Disallowance under the Income tax Act,1961 Depreciation / Amortization Net Deferred Tax Liability
7
The Company has converted the balance 150,000 convertible warrants out of 885,000 convertible warrants issued on 22nd March, 2007 into Equity Share capital of the Company in the following manner: I.
629,663 fully paid up Equity shares of Rs.10 each against Convertible Warrants at a premium of Rs.242/- at the Board meeting held on 6th November 2007.
II.
105,337 fully paid up Equity shares of Rs.10 each against Convertible Warrants at a premium of Rs.242/- at the Board meeting held on 31st January 2008.
III. Balance of 150,000 fully paid up Equity shares of Rs.10 each against Convertible Warrants at a premium of Rs.242/- at the Board meeting held on 19th September 2008 IV. The above proceeds of Rs.37,800 thousands has been used for setting up of new centres, long term capital requirement, expanding products and sales investments. 8
In terms of the approval of the shareholders obtained at the Extra Ordinary General of the Company held on 24th May, 2008, the Company has allotted following securities on 11th June 2008: I.
1,262,500 Equity shares of Rs. 10/- each on a preferential basis to promoters, promoter group and strategic investors at a price of Rs. 425 per share.
II.
1,935,000 Convertible warrants of Rs. 10/- each to promoters, promoter group and strategic investors at a price of Rs. 425 per share. The Company has received Rs. 42.50 per warrant, being the 10% upfront money against the allotment of warrants.
III. The proceeds of Rs. 618,800 thousands received from the above allotment have been utilized for long term facilities of its subsidiaries, repayment of bank loans and working capital requirements. The Balance has been temporarily utilized in Inter Corporate deposits (Since Realized).
90
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
9
The Company had raised Rs.270022 thousands through Initial Public offering (IPO) in October 2005 , which comprised of 30,00,247 equity shares of face value of Rs. 10 each issued at a premium of Rs.80 per share. The proceeds from IPO have been utilized by the Company as under: (Rs. in thousands) Particulars
26.10.2005 to 31.03.2009 67746 517 130000 35505 15015 18847 2392 270022
Expansion of facilities Certification Investments Establishment of Overseas Office Public Issue Expenses Incremental Working Capital Balance lying as Deposit with Banks Total
26.10.2005 to 31.03.2008 61609 517 79152 35505 15015 18847 59377 270022
10
As required by the Bahrain Commercial Companies Law (issued on June 20,2001), an amount equal to 10 % of the company`s net profit before appropriations is to be transferred to a non-distributable reserve account until such time as minimum of 50% of the Share Capital is set aside , which cannot be utilized for the purpose of distribution, except in the circumstances stipulated in the Bahrain Commercial Companies Law.
11
The Company has identified geographic segments as its primary segment and as the company is dealing only in software development and related activities, there is no business segment as secondary segment as per Accounting Standard (AS) - 17 “Segment Reporting”. Geographic segments of the company are India, USA, Middleast, Singapore and Others. Revenue and expense directly attributable to segments are reported under each reportable segment. Expense incurred in India on behalf of other segments and not directly identifiable to each reportable segment have been allocated to each segment on the basis of associated revenues of each segment. All other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses. Assets and liabilities that are directly attributable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallocable. (Rs.in thousands) Particulars Gross Revenue Inter Segment Revenue Net Revenue Segment Results before Interest and Tax
India 327,397 280,050 6,259 333,655 280,050 (373,246) 63,709
USA 1,236,609 760,027 215,805 92,923 1,452,415 852,950 460,183 47,911
(373,235) 63,709
457,701 47,911
Middleast Singapore 429,971 562,449 289,010 309,367 158,757 18,362 97,228 459 588,728 580,811 386,238 309,826 262,903 100,434 162,842 100,447
Others 187,642 122,018 88,873 19,881 276,515 141,899 86,493 55,469
Interest Segment Results before taxes Provision for Taxation
262,418 162,842
Segment Results after tax
91
108,098 100,447
86,658 55,469
Unallocated (488,057) (210,491) (488,057) (210,491) (43,147) (17,604) 14,558 (33,062) (62,578) (50,667) (70,719) (68,738)
Total 2,744,068 1,760,473 2,744,068 1,760,473 493,621 412,775 14,558 (33,062) 479,062 379,713 (70,719) (68,738) 408,343 310,974
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
Particulars Other Information’s : Segment Assets Segment Liabilities Capital Expenditure (excluding on account of merger/acquisitions)
India
USA
724,949 695,062 53,789 31,582 202,761 118,537
431,644 169,055 104,863 46,446 2,506 2,816
Middleast Singapore 688,587 295,574 15,247 24,135 234,054 129,001
603,971 309,923 53,653 25,662 94,657 27,695
Others
Unallocated
Total
88,025 98,567 38,277 75,367 55 -
959,009 767,458 41,636 51,594 29,974 103,840
3,496,185 2,335,638 307,464 254,787 564,006 381,889
Note:- Income Tax Liability amounting to Rs.6722 (p.y.Rs.16,584) thousands has not been considered as segment liability. Figures in Italic indicate previous year figures. 12
Related Party Transactions (in respect of related parties as of the date of this report): A.
Name of the related parties: i.
Key Managerial Personnel: a) Amit R Sheth - Managing Director b) Sanjay A Desai - Executive Chairman & Director
B.
Transactions with related parties:
(Rs.In thousands)
Particulars
2008-09
2007-08
Remuneration (Including PF)
3697
4716
Dividend
4129
2677
-
1734
Key Managerial Personnel:
Transaction: Dividend paid
C.
Out of the above items transaction in excess of 10% of the related party transactions are as under: (Rs.In thousands) Particulars
2008-09
2007-08
2010
1995
Bhavesh Talsania
918
1810
Sanjay Desai
769
912
Amit Sheth
1674
1165
Bhavesh Talsania
1056
1055
Sanjay Desai
1400
457
-
1734
Key Managerial Personnel: Remuneration (Including PF) Amit Sheth
Dividend Paid
Dividend Paid Aurionpro Services Pvt. Ltd.
92
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
13. In the opinion of the Board, the investments, current assets, loans and advances are realizable at a value, which is at least equal to the amount at which these are stated, in the ordinary course of business and provision for all known and determined liabilities are adequate and not in excess of the amount reasonably stated. Signatures to Schedule “I” to “XIII” For Chaturvedi & Shah Chartered Accountants
For and on behalf of the board
(Lalit R. Mhalsekar) Partner Membership No.: 103418 Mumbai,
Sanjay A.Desai Executive Chairman and Director Amit R.Sheth Managing Director
Dated : 30th June, 2009 Place : Mumbai
Mehul J. Raval Company Secretary
93
4
94
2) For the previous financial years of the subsidiary companies since they became the holding Company's subsidiaries
b. Dealt within the holding company's accounts: 1) For the financial year ended 31st March,2009
Rs. 1,12,992 thousand (BHD 10,53,386)
100%
2) For the previous financial Rs. 3,416 Rs. 4,369 years of the Subsidiary thousand thousand Companies since they (SG$ 3,35,517) (US$ 1,26,517) became the holding Company's subsidiaries
100%
Rs. 1,40,924 thousand (BHD 10,22,455)
100%
Rs. (9,071) Rs. 9,319 thousand thousand (SG$ (-) (US$ 1,34,874) 6,09,802)
a. Not dealt within the accounts of Aurionpro Solutions Limited: For the financial year ended 31st March,2009
The Net aggregate amount of Profits/ (Losses) for the current period of the subsidiary so far as it concerns the members of the holding company
b. Extent of holding
Shares of the subsidiary 5,43,799 1,20,000 Equity 2,500 Equity held by Aurionpro Solutions Equity Shares Shares of Shares Limited at SGD 1 each Capital stock BHD 100 each on the above dates: fully paid up with no par Fully paid up a. Number of shares held value
3
SPS Corporation, USA
Coban Corporation, USA
Rs. 758 thousand
Rs. 852 thousand
100%
10,000 Equity Shares of Rs 10 each Fully paid
Rs. 4,802 thousand (US$ 2,55,532)
Rs. 14,819 thousand (US$ 38,189)
100%
1,000 Equity Shares with no par value
30th June, 2008
Integro Technologies SDN. BHD Malaysia 31st March, 2009
Aurofidel Outsourcing Ltd,India 31st March, 2009
Rs. (15,268) thousand (US$ ()3,67,233)
Rs. (9,291) thousand (US$ ()1,33,133)
100%
Rs. 6,657 thousand ( GBP 90,655 )
Rs. 10,400 thousand ( GBP 1,86,646)
100%
RS.2,464 thousand
Rs. 3,949 thousand
100%
80%
Rs. 56 Rs. 11,775 thousand thousand ( HK$ 10,908) (SG$ 344,697)
Rs. 2,740 Rs. 20,860 thousand thousand ( HK$ (SG$ 659,844) 4,04,442)
100%
Rs. 5,973 thousand (SG$ 174,844)
Rs. 5,098 thousand (SG$ 161,262)
80%
Rs. (358) thousand
Rs. 3,911 thousand
100%
NIL
Rs. 18,923 thousand (US$ 5,94,415)
100%
NIL
Rs. 14,436 thousand
100%
10,000 Equity shares of Rs.10 each Fully Paid.
1st April , 2008
31st March, 2009
Sena Systems Sena Systems Inc, Pvt. Ltd., India USA
100 Equity Shares of without Par value
30th June, 2008
Integro Technologies Pte Ltd,Singapore
1st October , 7th December , 7th December, 2007 2007 2007
31st March, 2009
Aurionpro Solutiins (HK) Ltd,Hong Kong
9,450 Equity 1 0,000 1 Ordinary 98,01,136 100,000 Equity 5,00,000 Equity 10,000 Equity Shares of Ordinary shares of Rs.10 Shares of HKD Ordinary Share shares of RM.1 shares of Rs.10 USD 0.0001 Shares of GBP each Fully Paid. 1 of SGD 0.10 each Fully Paid. each Fully Paid. each Fully 1 each Fully each Fully paid paid up each Fully paid up up paid up 33,99,166 Ordinary Share of SGD 0.40 each Fully paid up. 3,08,521 Ordinary Share of 0.49 SGD each Fully paid up
1st July ,2007
31st March, 2009
E2E Infotech (India) Pvt. Ltd., India
1st April , 2008
1st July ,2007
31st March, 2009
E2E Infotech Ltd,UK
8th March , 2008
1st October, 2006
31st March, 31st December, 31st December, 2009 2008 2008
Aurocient Outsourcing Pvt.Ltd,India
1st April ,2003 7th November, 1st April ,2006 10th July,2006 1st April ,2006 2006
31st March, 2009
Date from which they became subsidiary
31st March, 2009
2
31st March, 2009
Aurionpro Solutions SPC,Bahrain
The Financial year of the Subsidiary Companies ended
Aurionpro Solutions INC,USA
1
Aurionpro Solutions Pte Ltd,Singapore
Particulars
S.N
STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT,1956, RELATING TO COMPANY'S INTEREST IN SUBSIDIARY COMPANIES:
AURIONPRO SOLUTIONS LIMITED Annual Report 2008 - 2009
Annual Report 2008 - 2009
AURIONPRO SOLUTIONS LIMITED
STATEMENT RELATING TO SUBSIDIARY COMPANIES AS ON MARCH 31, 2009 (Rs in 000) S.N
Equity
1
Aurionpro Solutions Pte Ltd. SG$
2
Aurionpro Solutions INC. US$ Aurionpro Solutions SPC. BHD Aurocient Outsourcing Pvt Ltd.
3 4
5 6 7 8 9 10 11 12 13 14
SPS Corporation US $ Coban Corporation US $ E2E Infotech Ltd (GBP) E2E Infotech (India) Pvt. Ltd Aurionpro Solutions (HK) Ltd. HK $ Integro Technologies Pte Ltd (SG$) Integro Technologies SDN. BHD (SG$) Aurofidel Outsourcing Ltd Sena Systems INC US $
Issued & Reserves Subscribed (net of share profit & Capital loss a/c debit 14,676 (361)
Currency
Total Investments Liabilities
Turnover
Profit/ Provisions Profit/ (Loss) for (Loss) before Taxation after Taxation Taxation
Proposed Dividend
173,447
210,613
51,481
53,445
(8,658)
413
(9,071)
-
7,603
-
140,924
-
61,036
14,424
182,672
137,782
30,570
406,964
11,093
3,490
29,775
295,179
657,987
333,033
-
391,671
140,924
-
100
(1,911)
88,625
90,436
-
55,175
5,548
4,696
852
-
45
61,260
154,881
93,576
-
407,373
24,146
8,419
15,727
-
433
(16,965)
30,411
46,942
-
132,190
(9,177)
114
(9,291)
-
742
51,377
88,616
36,497
-
158,940
14,829
4,428
10,400
-
100
8,845
14,922
5,976
-
56,879
5,260
2,302
2,958
-
0
2,796
4,705
1,909
-
22,178
3,240
500
2,740
-
181,487
54,497
285,633
49,649
-
292,042
20,860
20,860
-
1,498
13,384
39,474
24,592
-
225,249
5,608
509
5,098
-
5,000
3,553
38,337
29,784
-
84,076
5,732
1,821
3,911
-
9,535
30,230
121,273
81,628
120
357,825
21,711
2,789
18,923
-
100
22,881
33,222
10,241
-
71,319
14,254
528
13,726
-
Sena Systems Pvt. Ltd.
Note: S.N
Total Assets
Entity
-
Balance sheet Profit & Loss Account Conversion Convertion Rate Rate as at 31.3.2009 (Average rate)
1
SG$
Aurionpro Solutions Pte.Ltd (Singapore)
34.32091
31.61394
2
US$
Aurionpro Solutions INC (USA)
50.95000
45.42500
3
BHD
Aurionpro Solutions SPC (Bahrain)
138.80600
123.13000
4
US$
SPS Corporation (USA)
50.95000
45.42500
5
US$
Coban Corporation (USA)
50.95000
45.42500
6
HK$
Aurionpro Solutions (HK) Ltd (Hongkong)
6.73218
5.93048
7
GBP
E2E Infotech Ltd (United Kingdom)
74.15794
76.88142
8
SG$
Integro Technologies Pte Ltd (Singapore)
34.32091
31.61394
9
SG$
Integro Technologies SDN. BHD (Malaysia)
34.32091
31.61394
10
US$
Sena System INC (USA)
50.95000
45.42500
95
ATTENDANCE SLIP
AURIONPRO SOLUTIONS LTD. Registered Office: 404, 4th Floor, Winchester, Hiranandani Business Park, Powai, Mumbai-400076. PLEASE FILL THE ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE MEETING HALL. Joint shareholders may obtain additional Attendance Slip on request. DP ID*
Master Folio No.
Client ID*
No. of Shares
NAME AND ADDRESS OF THE SHAREHOLDER
I hereby record my presence at the 12TH ANNUAL GENERAL MEETING of the Company held on Wednesday, 30th September, 2009 at 3.00 PM at Hotel Suncity Residency, 16th Road, MIDC, Marol, Andheri (East), Mumbai 400 093.
* Applicable for investors holding shares in dematerialised form.
______________________________ Signature of the Shareholder or proxy
PROXY FORM
AURIONPRO SOLUTIONS LTD. Registered Office: 404, 4th Floor, Winchester, Hiranandani Business Park, Powai, Mumbai-400076. DP ID*
Master Folio No.
Client ID*
No. of Shares
I/We................................................................................................................................................................................................................. of ...........................................................................................being a member/members of Aurionpro Solutions Limited hereby appoint .......................................................................................................................................................................................................................... of ....................................................................................................................................................................................................... or failing him .......................................................................................................................................................................................................................... of ....................................................................................................................... as my/our proxy to vote for me/us and on my/our behalf at the 12TH ANNUAL GENERAL MEETING of the Company to be held on Wednesday, 30th September, 2009 at 3:00 p.m. or at any adjournment thereof. Signed...................................................day of...............................................2009. *Applicable for investors holding shares in dematerialised form.
Affix a 15 paise revenue stamp
NOTE: 1.
The proxy in order to be effective should be duly stamped, completed and signed and must be deposited at the Registered Office of the Company not less than 48 hours before the time for holding the aforesaid meeting. The Proxy need not be a member of the Company.
2.
Members holding shares under more than one folio may use photocopy of this Proxy Form for other folios. The Company shall provide additional forms on request.
