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TRANSCRIPT
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AurionPro Solutions Limited,404, Winchester, High Street,
Hiranandani Business Park, Powai,Mumbai – 400 076. MH – India.
Phone: +91-22-6770 7700/7701 Fax: +91-22-6770 7722www.aurionpro.com
AurionPro Solutions Limited
A n n u a l R e p o r t 2 0 0 9 - 1 0
Contents
01 Universal Banking. We make IT happen13 Key Performance Indicators14 Chairman's Message16 Corporate Information17 Notice29 Directors' Report36 Management Discussion and Analysis44 Corporate Governance Report61 Auditors' Report64 Balance Sheet65 Profit and Loss Account66 Cash Flow Statement68 Schedules Forming Part of the Balance Sheet and Profit & Loss Account89 Consolidated Accounts110 Statement Pursuant to Section 212 of the Companies Act, 1956
In this Annual Report we have disclosedforward-looking information to enableinvestors to comprehend our prospectsand take informed investment decisions.This report and other statements - writtenand oral - that we periodically make con-tain forward-looking statements that setout anticipated results based on the man-agement's plans and assumptions. Wehave tried wherever possible to identifysuch statements by using words such as'anticipate', 'estimate', 'expects', 'projects',
'intends', 'plans', 'believes' and words ofsimilar substance in connection with anydiscussion of future performance.
We cannot guarantee that these forward-looking statements will be realised,although we believe we have been pru-dent in our assumptions. The achieve-ment of results is subject to risks, uncer-tainties and even inaccurate assump-tions.
Should known or unknown risks or uncer-
tainties materialse, or should underlyingassumptions prove inaccurate, actualresults could vary materially from thoseanticipated, estimated or projected.Readers should bear this in mind. Weundertake no obligation to publicly updateany forward-looking statements, whetheras a result of new information, futureevents or otherwise.
Disclaimer
t’s 10:30 am, Mahendra Patel makes his
customary visit to the bank branch near his
house. He goes to the teller and withdraws
Rs. 10,000. He has been doing this for the last
15 years every first Friday of the month.
It’s 6:30 pm and Raj Patel, his son stops his
bike, gets down, withdraws Rs. 2,000 from
ATM and then goes and buys a jeans using his
credit card. A normal day in the life of Raj. Raj
has perhaps not seen the bank since he
opened his account two years back.
Banking has transformed. Move on traditional
banking, Universal banking has arrived.
Banking is convenience. No need to visit the
bank. Need a loan or want to deposit a
cheque, call and the relationship manager will
send someone. Want to know your balance,
just sms. Want to transfer funds, just log on.
Anytime, anywhere banking is the norm.
Though branch based and fund based
banking still exist, the transformation has been
that fee-based banking through convenience
is adding that extra margin to the banks. Every
bank today aspires to offer convenience to
customers.
Technology is the driver. Universal banking is
impossible without technology.
Bank begins by investing in the core
technology.
And then starts adding pieces like credit
cards, wealth management, cash
management, internet banking, treasury,
loans, custodial service etc., to offer a
comprehensive convenience banking platform
to the likes of Mahendra Patel and his son Raj.
And each of the new services needs
integration and alignment.
We make it happen.
That's our space. AurionPro Solutions
operates in the niche space outside of core
banking technology. The BFSI opportunity is
USD 130 billion. AurionPro is part of the USD
100 billion non-core banking opportunity.
We are IP-led. We have our own products. We
also implement others' IP products. We also
develop IP for others. And we also manage
these services through our niche KPO.
We make IT happen.
This is how.
I
1
00
We implemented dealPro at a leading private bank replacing
multiple systems with a single unified application.
3
ur customer is one of the leaders in
banking sector and was in need of a
comprehensive and technology-savvy
banking suite to move towards highly
sophisticated and automatic mode. AurionPro
being a pioneer banking software provider
offered the bank dealPro (Unified Distribution
Platform), which has been benchmarked for
delivering the maximum performance.
The said bank offers various products related to
foreign exchange transactions in Retail and
Corporate segment. The bank followed different
process for these products across branches,
Central Processing Unit - Trade (CPU-Trade),
Foreign Exchange Services (FES) Operations
and Treasury. The bank had multiple systems
which were used for processing these
transactions.
AurionPro implemented dealPro and replaced
these applications with a single unified
application which can process all these product
types in a seamless manner. dealPro, as Unified
Distribution Platform helps the bank in serving its
customers, which includes Individuals, Full-
Fledged Money Changers (FFMC), Authorized
Dealers, Franchisees, Corporates and Tour
Operators with its adept functionalities. dealPro
as a Business Enabler helps the bank in smooth
transaction of its operational processes.
What made dealPro distinct over similar
applications included among others:
It offered a template driven output
Configurable outside the system, easy to
make changes without changing code
New templates can easily be introduced by
doing simple configuration
Reduces implementation/customization cost
Reduces time in term of posting deals
Offers maximum support to bank branches
and thousands of tellers
Dynamic rate engine for pricing all FX
transactions
From the bank's customer point of view, it bridges
branch, treasury department and dealers of
banks alike. It targets Retail and Corporate
customers and caters to various departments of
the bank easily by providing seamless
functioning. dealPro enables technology and
offers operational efficiency and 100% Straight
Through Processing.
O
4
ur client, a prestigious bank has
over USD 12.8 trillion in assets
under custody. It handles more
than USD 3 trillion in worldwide transactions
daily. Our client serves 96% of the world's
Fortune 500 companies and has 10 regional
processing centers worldwide, using global
processing.
The bank had a complex business data
model and massive quantities of data. The
protocols required extensive fine grained
authorization needs. They needed to
respond with speed to its customers and
also adhere to security policies.
The bank's 'want' list included the ability to
audit the usage of services, reconcile them
and charge the customer. The bank needed
a solution that could keep evolving with
changing customer needs. And obviously,
the most important of all, reduce operational
cost and increase revenue.
The bank chose Oracle Entitlements Server
(10g). And chose us to implement it. With
our domain expertise and very clear
understanding of the bank's need, we
implemented diverse integrations that
included SiteMinder, SharePoint,
WebSphere, Hibernate and Database.
We successfully implemented Oracle OES for USD 12.8 trillion
client thereby enhancing responsiveness and reducing
administrative costs!
O
Our implementation ensured that not
only does the solution supports all
Banks' policy requirements but also
delivers on the need for high quality
performance.
This is what the bank experienced post
our implementation:
Reduced administrative costs
Increased responsiveness to
business
Increased revenue due to ability to on-
board users faster
Significantly improved Auditing and
Reporting
Improved service and customer
satisfaction for more profitable and
loyal customers
A total of 10 efficient resources worked
on this project. This is one of the highly
successful OES implementation for
Oracle. Success of this implementation
led to four more implementation
opportunities at the bank for AurionPro.
5
6
ur client is a leading mobile payment
gateway operator in San Francisco.
Our client has been the undisputed
leader in the mobile payment gateway space
much ahead of the competition. They have the
deepest market penetration compared to peers.
This is after AurionPro created a customized
mobile payment gateway solution for them.
The client brief was simple. They wanted to be the
undisputed leader in the mobile payment space.
That's all. And they wanted to implement it swiftly.
We designed, developed and maintained various
core backend payment systems such as credit
card processing, ACH processing, ATM network
interface and System of Records (SOR). We also
integrated the same with various banking partners
O
We successfully delivered a strong and effective back-end payment system for use in mobile
payments for a leading mobile payments company. The client is the undisputed leader in its markets.
00
to enable partnership programs. We
utilized our vast knowledge of the
industry to continuously drive the entire
engineering efforts at the client site
hand-in-hand with products and
marketing groups. We implemented
rapid application development
methodologies with iterative software
engineering models.
The success of the solution led to the
client engaging us to develop the same
for India and launched its service in
India too. This will be followed with
other countries too. Post development,
AurionPro maintains the solution
through its ODC in Mumbai, while
saving the client maintenance costs.
AurionPro has a dedicated and skilled
team consisting of 50 people working
on this project from over 6 months now.
00
We process over 10 lakh transactions per month for a major international bank through our BPO.
ur client is a large international bank in
India. With anywhere banking the bank
collects cheques throughout the
country. AurionPro was chosen to process
cheques for their telecom client for Karnataka. We
started with an office in Bengaluru.
Gradually business gained momentum and
expansion of business followed with processing
telecom cheques and credit card cheques in
various locations in Kerala as well. Subsequently,
thanks to our performance, the client also
entrusted us with Cash Management System
(CMS) business in remote locations in Kerala
which involved cheque pick-up from various
clients and managing banking processes of the
same. We set-up an intra state coordinator
network for this purpose which is now a fully
functional unit and seamlessly managing the CMS
activities, controlled by the Hub office at Cochin.
With business engagements reaching pinnacle
with the International Bank, the Bank then
entrusted us with a telecom client's pre-paid card
processing and another similar telecom operator's
cheque processing at our Thane head office,
Mumbai with an associate office in Malad to
handle the Mumbai western suburbs.
We now have an efficient reporting system in
place providing the bank with timely updates of the
daily activities and adhering to their schedules and
timelines.
The cheque volume handled by AurionPro for the
International Bank are to the tune of 20,000
thousand cheques per month in CMS and around
10 lakh transactions in Telecom.
An engagement that started with 20 members and
now have a total strength of around 120 members
servicing the client across Bengaluru, Thane &
Cochin for various products.
O
9
10
Product Suites and Modules
Risk management is
accessing and quantifying business risks, and taking
measures to control or reduce them. 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 AMLPro,
KYCPro, Market Risk, Credit Risk and Operational Risk. 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 ("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.
In Payments, we have an 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 are integrated with banks to
offer best innovative customer products and extended to customer
across channels.
1. Payments
2. Risk Management
3. Cash Management
4. Financial Supply Chain Management
Treasury operations
includes among other things pricing and
marketing of wholesale liabilities, trading in
foreign exchange, trading in money
markets, bonds and derivatives and risk
management. Our offering 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, Money Changers and other
Financial Institutions. dealPro also has
end-to-end processing capability for
Foreign exchange transactions of various
nature.
Financial planning is a
systematic approach whereby a financial planner helps the
customer to maximize his existing financial resources by utilizing
financial tools to achieve his financial goals.
The Company's partner product OmniMax provides a
comprehensive system for banks and financial institutions that
eases manual tasks and provides a fast, efficient and reliable
output. OmniMax manages huge client databases, tracks and
maintains current and archives on financial/investment advice and
works in synchronization with other mandatory systems at the
bank's end.
In the loan origination arena,
the Company offers 'the SmartLender Suite' comprising of the
SmartLender Retail and SmartLender Corporate products.
Within each of these products there are standalone modules.
S m a r t L e n d e r
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 as a facility is gaining importance day by day and it
involves the use of the internet for delivering user-friendly banking products and services to customers in an
easy, convenient and reliable way, thereby making banking accessible and thus lowering the costs of servicing
a client. The Company also offers both Corporate Internet Banking and Retail Internet Banking as a service.
5. Treasury
6. Financial Planning
7. Loan Origination
8. Collateral Management
9. Internet Banking
11
1. Domain Led Implementation Services
Identity and Access Management
AurionPro has a center of excellence exclusively focused on
Identity & Access Management (IAM) consulting and system
integration services. This division provides the full spectrum of
services to enable customers to plan, assess, select, implement
and integrate complete IAM projects. We have successfully
provided services to Fortune 1,000 conglomerates across North
America, Europe and Asia Pacific regions.
Trading Technology (Integration)
AurionPro has 60 plus consultants in this domain, with
experience ranging from 3 to 15+ years. The pool of functional
consultants have a deep understanding of the domain. The
Company is the only professional service provider to ORC, a
global leader in trading technology. ORC acts as the single front
end to trade across various asset class and connectivity to 160
exchanges globally.
Business Process Management
Our Business process management is a methodical approach,
which helps customers in enhancing the organizations business
processes and workflows.
We increase client capabilities by offering infrastructure
management, the administrative area of concern dealing with
maintenance and optimization of an organization's equipment
and core operations.
Our model comprises of analyzing, stimulation and execution
phases. Our model has the flexibility to handle the business
demands and offer a platform to provide new excellent business
management solutions.
2. Outsourced Product Development
Our current outsourced product development services inter alia
include custom application development (off-shore project
development), services relating to conceptualizing of various
products, and the subsequent development, testing,
progression, maintenance and support, migration and re-
engineering in connection with such products, and resource
augmentation.
Our services have developed as we have moved from a custom
application developer to a niche product focused company in
the BFSI segment. We use a mix of strategic collaborations and
referrals, in addition to having our own offices to build business
in the areas of outsourced development services, testing
services and enterprise application integration services from
overseas clients, mainly in the UK and the USA.
We undertake a sophisticated application development and
maintenance service which entails building and maintaining the
clients' enterprise application or maintaining the clients'
implementation of leading commercial applications. We also
provide services relating to planning, analyzing, improving the
performance, scalability, and stability of web-based applications
that are used by the clients. Further, we provide enterprise
content management, namely a system for capturing,
managing, storing, preserving, and delivering content and
documents.
3. Technology Platformed Banking
Operations
The Company has two 100% owned subsidiaries. These
subsidiaries take care of end-to-end processing solutions for
various banks and NBFCs. They have been able to create
'operations factory' wherein each of the activities is identified,
documented and converted into a process driven by Service
Level Agreements to benefit the clients on cost and quality
processing. These process shops have processes run in a fully
automated environment so that the 'end objective' of State
Through Processing (STP) can be achieved. The subsidiaries
have developed capabilities to adapt to the systems platforms
provided by the clients, if the client insists, in addition to the
systemic platform available through the Company.
12
Services
2007-08 2008-09 2009-10 2007-08 2008-09 2009-10
2007-08 2008-09 2009-10
2007-08 2008-09 2009-10
2007-08 2008-09 2009-10
2007-08 2008-09 2009-10
Total Income
Earnings Per Share
Current Ratio Net Worth
Debt Equity Ratio
PAT
0
2324
0.00
1.00
2.00
3.00
4.00
5.00
6.00
2526272829
0
0.00
0
50
100
150
200
250
300
350
0.050.100.150.200.250.300.350.40
1020304050
100
200
300
400
176.55
24.85
4.21
5.15
2.87143.87
261.38293.02
28.1527.63
0.37
0.17
0.24
275.15337.7
31.0940.83 40.49
Rs.
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13
Dear Shareholders,
AurionPro is not just any other IT company. We are focused and
dedicated to the BFSI space. The Company was started by ex-
bankers and therefore we have significant domain knowledge
and understanding of not just where the BFSI space stands
today, but where we expect it to evolve globally.
AurionPro is a company focused on providing products and
services to BFSI customers globally, enabling their technology
and operations.
AurioPro comes into the BFSI space after banks and institutions
had implemented their core technology piece and are migrating
towards what we call Universal banking (anytime, anywhere,
any medium). AurionPro enables its customers in their evolution
toward Universal Banking by delivering Domain-Specialized
products, e-business services and integration services around
the 'core banking system'. The market has now reached a stage
where it is inevitable for a Bank, not to have this evolved
network of products and services.
We believe that the migration to Universal Banking is inevitable
and is a game changer that was experienced in the developed
countries and is now being experienced in the emerging
countries and soon in the less-developing ones like Africa too.
We are in a sweet spot. Of the BFSI technology spend of USD
14
'In less than four years, we have a customer base of over 100 Banks. As wemove ahead, cross-sell and deep-sell is a significant apparatus to growth. Andwe are experiencing this tipping point.'
15
130 billion, USD 100 billion is our addressable market.
Speed and bouquet of products and services are key to enter
into a client. AurionPro has successfully carved this market
space, through an organic and inorganic growth strategy over
the last four years, continually augmenting its basket of
products and services, successfully transitioning from a
Solutions player to a Product and Services business model.
In less than four years, we have a customer base of over 100
Banks. As we move ahead, cross-sell and deep-sell is a
significant apparatus to growth. And we are experiencing this
tipping point.
Within the market, the financial meltdown in 2007 and 2008
has led to newer market conditions and changing needs,
where Efficiency, ROI, Risk Management, and Financial
Inclusion are now quickly holding Centre-Stage. Our
approach and ambition is to help the BFSI players meet their
customer and business goals in a manner that optimizes
their delivery across the Technology, Operations and
Analytics platform. On the path to deliver such an integrated
value, AurionPro has also equipped itself to enable a
SAAS/Cloud based delivery of financial transactions. We
believe we are one of the very few companies to have the
triple offering of technology-operations-analytics platform
with an existing client base of 100 plus banks in 20
countries. This represents a great opportunity for us to
deepen the relationships and increase our margins. We
have made beginnings in India and plan to support it with
some international wins over next 12 months.
In each of the four verticals, we believe there is a strong
traction.
Product suite
Our product suites and modules are developed to address
banking applications ranging from cash management,
financial supply chain management, treasury, risk
management, financial planning, loan origination, Internet
banking.
We have already established leadership in our Cash
Management, Loans and Internet Banking product suites
with over 45 South and South East Asian Banks as
customers. We see a very high market expansion potential
in the newer Emerging markets of Africa, Middle East and
Eastern Europe for these products. Further, our focus will
also be take newer products - dealPro, fcsmPro and
e-corporate banking to the existing as well as the newer
emerging countries.
Product Implementation
We offer Business Process Management, ("BPM") services,
which primarily pertain to improving the efficiency and
effectiveness of an organization by automating the
organization's business processes. We offer Identity and
Access Management ("IAM") services which pertains to the
processes involved in identification and authorization of
various users across computer networks. We also offer
professional services and integration solutions for electronic
trading and connectivity solutions.
Development of Third Party IP
Being an IP led IT solutions company, we collaborate with
niche domain players to develop products in Risk, Treasury
and Payments market. This has helped us support our
clients' software requirements in various vertical spread
across domains.
Managed Services
With client focus on efficiency and domain understanding
that enhances their revenues, margins and ROI on
technology spend, managed services is emerging as a big
opportunity for us. We expect this business go enter scale in
the next two years.
All of the above put together represent a wide canvas, with
a surfeit of opportunities. The AurionPro management has
pro-actively planned a series of steps to intensify and
augment Management to meet the elevated demands of the
next orbit of Growth. As one of the first steps, Vishwanath
Prabhu has come on Board. Vishwanath is currently
International Head of Consumer Operations for Citigroup
Operations and Technology and is based out of London. He
brings with him 25 years of global experience in technology
and operations, outsourcing, building economies and value
and reducing transaction costs.
The next few years look very promising for AurioPro. The
market is just entering into a sweet spot. Our technology-
operations-analytics platform differentiates us and will help
us cross sell and deep sell. And we now have an
experienced team and more than 100 banks to cater to.
Its time.
Thank you for your support as we continue to build
AurionPro.
Sincerely,
Sanjay Desai
BOARD OF DIRECTORS
Mr. Sanjay Desai
Executive Chairman
Mr. Amit Sheth
Managing Director
Mr. Paresh Zaveri
Promoter Non Executive Director
Mr. Vishwanath Prabhu
Non Executive Non Independent Director
Mr. Prem Rajani
Independent Director
Dr. Nikunj Kapadia
Independent Director
Dr. Mahendra Mehta
Independent Director
Mr. Sandeep Daga
Independent Director
COMPANY SECRETARY
Mr. Mehul Raval
BOARD COMMITTEES
Audit Committee
Dr. Mahendra Mehta (Chairman)
Dr. Nikunj Kapadia
Mr. Amit Sheth
Mr. Prem Rajani
Mr. Sandeep Daga
Shareholders' / Investors' Grievance and Share Transfer Committee
Dr. Mahendra Mehta (Chairman)
Mr. Prem Rajani
Mr. Sandeep Daga
Mr. Amit Sheth
16
Remuneration / Compensation Committee
Mr. Sandeep Daga (Chairman)
Mr. Prem Rajani
Dr. Nikunj Kapadia
Dr. Mahendra Mehta
Mr. Amit Sheth
STATUTORY AUDITORS
Chaturvedi & Shah
Chartered Accountants, Mumbai
INTERNAL AUDITORS
D. Kothary & Co.
Chartered Accountants, Mumbai
BANKERS
ICICI Bank Limited
HDFC Bank Ltd.
State Bank of India
Yes Bank Limited
Bank of India
REGISTERED OFFICE
404, 4th Floor,
Winchester, High Street,
Hiranandani Business Park,
Powai, Mumbai - 400 076.
REGISTRARS & TRANSFER AGENTS
Bigshare Services Private Limited
E-2, Ansa Industrial Estate, Saki Naka,
Andheri - (E), Mumbai - 400 072.
Contents
01 Universal Banking. We make IT happen13 Key Performance Indicators14 Chairman's Message16 Corporate Information17 Notice29 Directors' Report36 Management Discussion and Analysis44 Corporate Governance Report61 Auditors' Report64 Balance Sheet65 Profit and Loss Account66 Cash Flow Statement68 Schedules Forming Part of the Balance Sheet and Profit & Loss Account89 Consolidated Accounts110 Statement Pursuant to Section 212 of the Companies Act, 1956
In this Annual Report we have disclosedforward-looking information to enableinvestors to comprehend our prospectsand take informed investment decisions.This report and other statements - writtenand oral - that we periodically make con-tain forward-looking statements that setout anticipated results based on the man-agement's plans and assumptions. Wehave tried wherever possible to identifysuch statements by using words such as'anticipate', 'estimate', 'expects', 'projects',
'intends', 'plans', 'believes' and words ofsimilar substance in connection with anydiscussion of future performance.
We cannot guarantee that these forward-looking statements will be realised,although we believe we have been pru-dent in our assumptions. The achieve-ment of results is subject to risks, uncer-tainties and even inaccurate assump-tions.
Should known or unknown risks or uncer-
tainties materialse, or should underlyingassumptions prove inaccurate, actualresults could vary materially from thoseanticipated, estimated or projected.Readers should bear this in mind. Weundertake no obligation to publicly updateany forward-looking statements, whetheras a result of new information, futureevents or otherwise.
Disclaimer
AP
RIS
Mso
lutio
n (w
ww
.pris
m.n
et.in
)
AurionPro Solutions Limited,404, Winchester, High Street,
Hiranandani Business Park, Powai,Mumbai – 400 076. MH – India.
Phone: +91-22-6770 7700/7701 Fax: +91-22-6770 7722www.aurionpro.com
AurionPro Solutions Limited
A n n u a l R e p o r t 2 0 0 9 - 1 0