OnMobile Global Ltd Directors Report.

Dear Shareholders,

The Board of Directors are pleased to present the 20th Annual Report on the business and operations of the Company together with the audited standalone and consolidated financial statements for the year ended March 31, 2020.

RESULTS OF OPERATIONS FOR THE YEAR 2019-20

Summary of the operations of the Company on standalone basis and consolidated basis for the financial year 2019-20 is as follows:

(In Rs Million)

Particulars

Standalone

Consolidated

2019-20 2018-19 2019-20 2018-19
Revenue from operations 2,038.41 2,295.20 5,724.24 5,938.64
Earnings/(Loss) before other income, depreciation and amortization, finance charges, Exceptional item and tax (14.64) (64.18) 408.89 357.65
Exceptional item 36.71 12.70 (82.00) -
Profit/(Loss) before other income, depreciation and amortization, finance charges and tax (51.35) (76.88) 490.89 357.65
Profit/(Loss) before tax 83.42 373.41 434.73 313.12
Profit/(Loss) for the year (15.15) 328.02 275.83 188.87
Total Comprehensive Income for the year (10.35) 337.21 422.10 62.09
Equity Share Capital 1,056.96 1,056.96 1,056.96 1,056.96
Other Equity 6,022.91 6,213.00 4,843.32 4,600.96
Networth 7,079.87 7,269.96 5,900.28 5,657.92
Net Block 112.10 142.18 341.81 426.15
Net Current Assets 1,914.65 2,571.69 2,779.05 2,713.86
Cash and Cash Equivalents (including other bank balances and current and non-current investments) 1,847.78 2,223.29 2,744.86 2,722.54
Earnings/ (Loss) per share (Diluted) (In ?) (0.14) 3.10 2.61 1.79

BUSINESS PERFORMANCE / FINANCIAL OVERVIEW Standalone Financials

During 2019-20, the Company recorded net revenue of Rs 2,038.41 million, as compared to Rs 2,295.20 million in 2018-19. The Profit after tax of the Company is Rs (15.15) million in 2019-20 as compared to Rs 328.02 million in 2018-19. The diluted Earnings Per Share (EPS) is Rs (0.14) per share in 2019-20 as compared to Rs 3.10 per share in 2018-19.

Consolidated Financials

During 2019-20, the Company recorded consolidated net revenue of Rs 5,724.24 million, as compared to Rs 5,938.64 million in 2018-19. The consolidated Profit after tax of the Company for the year 2019-20 is Rs 275.83 million as compared to Rs 188.87 million in 2018-19. The consolidated diluted Earnings Per Share (EPS) for the year 2019-20 is Rs 2.61 as compared to Rs 1.79 per share in 2018-19.

Appropriations

Dividend

Your directors are pleased to recommend the following dividend for the financial year ended March 31,2020 which is payable on obtaining the shareholders approval in the 20th Annual General Meeting scheduled on September 28, 2020:

Particulars of dividend Par value Percentage Dividend amount per equity share (?) Date of Recommendation Book Closure Date
Final Dividend 10.00 15% 1.50 June 22, 2020 September 22, 2020 to September 28,2020 (both days inclusive)

The total dividend payout amount for the year inclusive of dividend distribution tax is estimated to be Rs 158.54 million.

Barring unforeseen circumstances, the Board intends to maintain similar or better levels of dividend payout over the next few years. However, the actual dividend payout in each year will be subject to the investment requirements and any other strategic priorities identified by the Company.

After providing for the dividend, the Company proposes to retain Rs 3116.83 million in the Statement of Profit and Loss. The Company is not proposing to transfer any amount to reserves from the profits of the financial year 2019-20.

Liquidity

As on March 31, 2020 the Company had liquid assets including investments in fixed deposits, mutual funds and non-convertible debentures of Rs 2,744.86 million.

CHANGES TO THE SHARE CAPITAL

There was no allotment of equity shares during the year under review. The issued and paid-up share capital of the Company as on March 31, 2020 stands at Rs 1,056,962,020.

BUY BACK

The Board of Directors at their meeting held on April 09, 2020, have approved buy back of equity shares of the Company from the Open Market through the Stock Exchange Mechanism up to an aggregate amount of Rs 54.10 Crore which represents 7.778% and 9.999% of the aggregate of the total paid-up equity capital and free reserves (including securities premium) of the Company based on the audited standalone and consolidated financial statements respectively of the Company for last financial year ended on March 31, 2019 (subject to a maximum of 19,321,429 equity shares) for a price not exceeding Rs 28/- per share. A Public Announcement dated April 14, 2020 for the said buyback was published in Financial Express (All editions), Jansatta (All editions) and Hosadigantha (Bengaluru edition) while the same was also filed with SEBI, NSE and BSE. The buyback offer opened on April 24, 2020 and is ongoing. As on June 22, 2020, the Company has bought back and extinguished 2,158,982 equity shares and the revised paid up equity share

capital of the Company as on June 22, 2020 stand reduced to 1,035,372,200/- comprising of 103,537,220 equity shares of 10/- each fully paid up.

SIGNIFICANT EVENTS: 2019-20

In FY19-20, we continued to expand and diversify into new products and channels, building additional features and capabilities, significantly on the digital ecosystem. We created new relationships in the non-operator space across (Original Equipment Manufacturers) OEMs and multiple wallet service providers. We also won significant new deals across the world while also renewing most of our existing contracts which were due this year. In addition to this we made an investment into a Canadian gaming service provider which we believe will give us significant value addition as we expand our portfolio across gaming services.

Products

In tones we crossed 11 million installs and also upgraded to version 2.0 in multiple markets, with a fresh user interface, enhancing the user experience and extending newer features like personalized recommendations to users. We also extended our customer base in tones to cover over 80% of the GCC market. In India we added newer charging channels like wallets to overcome the challenges of insufficient balance in the operator billing model.

A major new growth avenue was services for kids which saw us launching in 2 countries in Europe with a subscription based kids centric app. This will continue to grow in the coming year as we are seeing good traction on this service. Driving and increasing engagement with users was key mantra and our contest product led the way in this direction. OEM for mobile handsets included our contest framework within their eco-systems to ensure and increase consumer engagement. In addition to this we also enhanced the capabilities of the platform to supported freemium and ad-supported revenue models.

In videos and editorials, we revamped the entire portal for Telefonica Emocion and also included marque customers like Nubico and Tinder into the list of partners for whom we opened APIs on our billing and subscriber lifecycle management platform, so that they could extend operator billing as a channel for charging their customers.

Partnerships

OnMobile collaborated with Samsung to build and manage its Contests ecosystem on the Samsung MyGalaxy App. With an objective to increase user interaction with the service, time spent and to drive engagement, OnMobile has integrated its contests platform to provide an intuitive and rewarding experience to the MyGalaxy app users. The Samsung MyGalaxy app offers a unique all-in-one experience including videos, music, games, news and personalized offers and updates. The mobile contests platform by OnMobile offers a wide range of interesting and contextual topics to challenge yourself and win, with instant gratifications, fair winner selection and real prizes, paramount for user engagement.

OnMobile partnered with Gionee, owned by the Jaina Group, to launch its Digital Entertainment platform to provide an intuitive and rewarding experience to Gionee users to increase engagement and generate incremental revenue. Gionee, known for its new generation of mobile phones which redefines life

in every way has entered into an agreement with OnMobile to launch its portfolio of products including Contests, Games, Themes, Tones, and Videos.

OnMobile integrated with PhonePe, Indias leading digital payments platform to launch a gaming app on the PhonePe Switch platform. PhonePe Switch is a one-click entry point to a world of apps on the PhonePe app. It allows customers to seamlessly switch between PhonePe and their favourite food, grocery, shopping and travel apps from within the PhonePe app itself. OnMobile launched its gaming service on this platform with an objective to drive engagement for PhonePes users and also allowing end users an additional channel to consume our products and services

Acquisitions / Investment

OnMobile did a significant investment into Rob0 a Canadian Software as a Service (SaaS) company which provides gaming service providers a deep insight into their user behavior. They use proprietary AI to understand the user interaction with games and demonstrate where they tend to drop off. This allows games creators to improve the stickiness of their games. This helps in significantly increasing revenue, engagement and retention across any kind of games.

INFORMATION ABOUT SUBSIDIARY/JOINT VENTURE/ ASSOCIATE COMPANIES

As on March 31, 2020, the Company has thirty eight (38) subsidiary companies and one (1) associate company.

During the year 2019-20, Company incorporated a subsidiary, OnMobile Bangladesh Technologies Private Limited in Bangladesh on April 10, 2019.

A subsidiary of the Company in Mexico, OnMobile Servicios Corporativos De Telefonia SA De CV was merged with another subsidiary of the Company in Mexico, Servicio De Telefonia OnMobile De CV with effect from December 18, 2019.

The following subsidiaries / branch offices of OnMobile Global Limited were closed during the year:

1. OnMobile Global Czech Republic S.R.O. (closed w.e.f. August 29, 2019)

2. OnMobile Global Limited-India Sucursala Bucuresti - Romania branch (closed w.e.f. September 04, 2019)

3. OnMobile Global Limited - UK Branch (closed w.e.f. January 02, 2020)

In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared consolidated financial statements of the Company and all its subsidiary companies, which forms part of the Annual Report. A statement containing salient features of the financial statements of the subsidiaries of the Company in Form AOC-1 is given in Annexure I.

In accordance with third proviso of Section 136(1) of the Companies Act, 2013, the Annual Report of the Company, containing therein its standalone and the consolidated financial statements has been placed on the website of the Company, www.onmobile.com. Further, as per fourth proviso of the said Section, audited annual accounts of each of the subsidiary companies have also been placed on the website of the Company, www.onmobile.com. These documents will also be available for inspection during business hours at the registered office of the Company at Bengaluru, India.

NEW LOCATIONS

During the year under review, a branch of the Company located in Nepal has been shifted to a new address.

Similarly, there has been a change in the registered office address of OnMobile USA LLC, OnMobile Live Inc., OnMobile Zambia Telecom Limited, OnMobile Uganda Limited, OnMobile Brasil Sistemas De Valor Agregado Para Comunicacoes Moveis Ltda, 2dayUK Limited, and Fonestarz Media Group Limited, subsidiaries of the Company.

The new addresses can be seen under the Contact information section.

MATERIAL CHANGES FOR THE PERIOD BETWEEN END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT

There have been no material changes for the period between end of the financial year 2019-20 and the date of this report affecting the financial position of the Company.

OPERATIONAL EFFICIENCY

OnMobile has institutionalized CSI (Continual Service Improvement) process in order to provide better turn around time ( TAT), to reduce risks and build operational efficiency. While doing this OnMobile has adopted to best practices such as ISO 27001 and ITIL standards. The following efforts have been jointly driven by operations, delivery and engineering teams:

General Data Protection Regulation (GDPR)

The teams have implemented the various processes and technical controls to further enhance the compliance to GDPR requirements in Europe. These controls include AAA, antivirus, log review, VAPT, periodic audits, across installations in EU region. All team member involved in handling personal data for EU customers have provided awareness training on the requirements.

ISO Certification

Process excellence is an ongoing endeavor at OnMobile. Operations and delivery teams adherer to ISO 27001:2013 standards for information security. As a continual improvement measure, OnMobile has undergone and completed a surveillance audit by DNV during the second quarter of 2019 without any major findings.

Automation & Optimization

While continuing our efforts towards automation of repetitive tasks, we have put in place a team of expert focused towards automation opportunities. This continued effort has resulted in operational efficiencies in terms of reduction of manual activities and accuracy in deliverables. In addition, we have worked towards realigning some of the teams to enhance operational efficiency and decrease the TAT.

Risk Mitigation Efforts

The operations team along with the delivery has taken up multiple risk mitigation exercises to reduce the down time. This includes building system redundancies; tie up with AMC vendors for better TAT, enhancing the monitoring capabilities and audits of critical systems. This has resulted in reduction in TAT for high severity incidents thus reducing the business impacts.

INFRASTRUCTURE

OnMobile has 12 offices across the globe with a total of 120,000 square feet of office space. The offices are catalogued as leased office, business center & virtual office. OnMobile headquarters - Electronic City phase 1 Bengaluru - is the largest facility with 98,000 square feet of office space. All OnMobile offices are well equipped with reliable infrastructure & working atmosphere amid high level of security and safety proficiency. Consistent and scheduled precautionary measures are in place to circumvent downtime and to ensure business continuity. We operate the facilities in a manner that complies with the applicable local laws and regulations.

CORPORATE SOCIAL RESPONSIBILITY

OnMobile continue to support both Society to Aid the Hearing Impaired (SAHI) and VAANI, NGOs which work in the space of communication and enablement of hearing-impaired kids in Hyderabad, Telangana and remote parts of Karnataka. We continued to invest in employee and community engagement through various activities like kids day / distribution of hearing aids etc. which saw high level of interaction and involvement from both the kids and employees.

Our contribution towards cochlear implants, post-surgical rehabilitation, identification of the needy, distribution of hearing aids, life skill trainings like self-defense, tailoring and computers were the key highlights this year.

The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013. The CSR Committee charter and the CSR Policy of the Company are available in the website at the below link:

http://www.onmobile.com/sites/default/files/cg_policy/

Corporate_Social_Responsibility_Policy.pdf

Particulars required to be disclosed pursuant to the Companies (Corporate Social Responsibility Policy) Rules, 2014 are given in Annexure VIII to the Boards report.

RESEARCH AND DEVELOPMENT

The year 2019-20 was centered on innovating on our digital offerings from the previous year, primarily integrating the services with non-operator wallet and mobile marketing tools to improve the reach of our products and services. This allowed us to launch services like digital entertainment platform for a leading wallet service provider in Bangladesh. With additional innovations like ad funded and freemium models we were able to extend our products to many first time users in the market.

Another key addition to the platform was deep integration with analytics tools. This allowed us to get a deeper understanding of the user behavior, improve engagement with contextual notifications and enhance the user experience.

Ringback Tones (RBT)

PWA New digital store front

Progressive Web Apps are the websites which delivers an app- like experience to the users. At their base they are a webpage, but in their design they feel like an app. They embrace various aspects of modern web development in a mobile-first world. They are more reliable, fast and responsive. PWAs offer an alternative approach, improving an apps cross-platform performance across web and mobile. Compared to native RBT apps, they use up much less storage space on a users device. PWA users also have the option to save the RBT app to their home screen without the hassle of a full download.

Mobile marketing tools

Mobile marketing is a multi-channel, digital marketing strategy intended at reaching a target audience on their smartphones, tablets, and/or other mobile devices, via websites, SMS, social media, and apps.

SDK Library integration with other Mother Portals

SDK are light versions of the app which processes easily for everyone involved because everything is pre-built. They do not adversely impact a mobile devices CPU, battery, or data consumption. With an RBT SDK, we have improved control over the elements of our user interface that show up in other / operator self-care apps. SDKs are mostly all in one solutions; they do not require integration with other components or significant design that can slow down the development process.

Ringtone Integrations (combined with RBT)

The main objective of integrating ringtone is to capitalize on the SEO traffic that is 10X of the RBT traffic. This will help in increasing organic leads and in future getting them converted as Paid users. Ringtone feature combined with RBT aids in additional engagement and going beyond the digital capabilities of Tones.

Videos, Editorials & Subscriptions

Revamped the Videos and Editorial service portal with a modern look and feel. Reorganized the categorization of services to address the current market needs. Integrated with leading OTT partners in the European market to allow their services to be billed via operator billing systems.

Migrated the service portal to https to be in line with the regulatory requirements and safe browsing standards, with this move all services can now be SEO compliant and can benefit from new technologies like PWA and AMP etc, leading to higher visibility when a user does a search.

Contests

With a clear strategy to pivot to a digital centric offering in contests we worked on identifying and developing the building blocks which are key to success in this eco-system. Contests opened up a new revenue line with an ad-funded model in addition to the standard subscription based service. To meet non-operator business requirements and explore freemium models a new product construct was developed aligned with international ad- service provider integration standards, this includes support for banners, native ads and pop-ups. With the content rich requirements in digital, contest framework has been augmented with new formats such as image based, carousel, scratch card and other innovative formats

Capability to send push notifications to service engagement was introduced. Real time scoring and leader board was introduced. The service offering was also integrated with analytics tools to understand the user behavior and insights.

Games

In gaming, our focus has been on designing and architecting a new Cloud Gaming platform. This platform relies on running games on a cloud hosted infrastructure at its core followed by encoding the gameplay into a video stream which is then relayed to users using a technology called WebRTC, the same one that is used in Google Meet, which enables fast and reliable connection. In our development journey, we have worked on some industry-first capabilities with support from global leaders like Google and Amazon, very critical for delivering the cutting-edge mobile- first experience we have envisioned.

Other Platforms

Billing Platform - The ONMOPAY Billing front-end, combined with PRISM (Billing, Subscription and Lifecycle Management Platform), was augmented to include capabilities to support digital marketing campaigns along with attribution, fraud management and campaign Analytics. In addition to this we also added backend integrations with major wallets in Asia to enable customers to be able to purchase services and content via additional channels over and above operator wallets

Digital Entertainment Store - We created a platform to act as a

single destination for multiple content services to be hosted for operators and service providers as a unified offering to their end user in the Asian markets. This platform extended capabilities to support onboarding multiple content partners and OTT brands while providing the consumer a simpler user experience. This platform also extended common features across multiple content service providers like Try and Buy, Search and the ability to consume the content from the home page itself.

MADE Streaming Platform - We included the service capability of streaming into our platform portfolio. This will help us migrate from third party streaming service providers to the inhouse developed platform, which will aid in reducing the cost and provide faster turnaround in feature requirements. The streaming service has also been integrated with leading CDN services providers to ensure that content can be delivered and efficiently and faster to the end consumer.

IMPACT OF COVID-19 ON BUSINESS

Information regarding the impact of the Covid-19 pandemic on worldwide operations and financials of OnMobile is as follows:

OnMobile has witnessed an impact on its revenue in certain geographies due to non-availability of recharges in the case of pre-paid mobile connections & reduction in marketing spend adversely impacting new customer acquisitions. These disruptions are expected to have a marginal adverse impact on our Q1 FY20-21 revenue.

The Company has initiated several measures to mitigate this revenue impact and its consequential impact on profits. As a result of these measures, impact on Q1 FY20-21 profits is not expected to be material.

The Company does not plan to undertake any material employee reduction or salary reduction in Q1. Most of the Companys offices were shut due to government mandated lockdown restrictions but there has been no material impact on operations and customer servicing and all regular activity continued without interruption by implementing effective work from home measures. All internal controls and financial reporting systems continue to be fully operational.

The Company has not faced any liquidity issues and there has been no material delay in receiving collections from customers. The Company does not have any contract / agreement where non-fulfilment of the obligations of any party will have a significant impact on the Companys business.

OnMobile will continue to provide further updates in case of any material change witnessed in its operations / financials.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of corporate governance. The Company meets the standards and guidelines set by the Securities and Exchange Board of India on corporate governance and have implemented all the stipulations prescribed. A detailed report on Corporate Governance as stipulated under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of the Annual Report. Certificate(s) from the Auditors of the Company, M/s. B S R & Co. LLP, Chartered Accountants and Parameshwar G. Hegde of M/s. Hegde & Hegde, Company Secretaries, confirming compliance of conditions of Corporate Governance as stipulated under the aforesaid Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 are annexed to the Corporate Governance Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In accordance with Part B of Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Management Discussion and Analysis Report is presented in a separate Section forming part of the Annual Report.

BUSINESS RESPONSIBILITY REPORT

OnMobile is included in the list of top 1000 companies of National Stock Exchange of India Limited (NSE) as per the market capitalization as on March 31,2020.

Accordingly, the Company has prepared Business Responsibility Report in line with the format suggested by Securities and Exchange Board of India vide Circular No. CIR/CFD/ CMD/10/2015 dated November 04, 2015, which is annexed to this Annual Report.

DIRECTORS AND KEY MANANGERIAL PERSONNEL Re-appointment

Pursuant to provisions of Sections 196, 197 and 203 read with Schedule V and all other applicable provisions of the Companies Act, 2013 and subject to the approval of the Central Government, Frangois-Charles Sirois was re- appointed as the Executive Chairman of the Company, at the 19th Annual General Meeting of the Company held on September 17, 2019 for a period of Five (5) years w.e.f November 1, 2019. An application has been made to Central Government on October 25, 2019 seeking approval for the appointment of Frangois as Executive Chairman.

As per the provisions of Companies Act, 2013, Francois-Charles Sirois retires by rotation as Director at the ensuing AGM and being eligible, seeks re-appointment.

Pursuant to the provisions of Section 149 of Companies Act, 2013, Sanjay Kapoor was appointed as Independent Director

for a period of three years at the AGM 2017. Since his first tenure is getting completed, it is proposed to re-appoint him as Independent Director of the Company for further period of three years at the forthcoming AGM.

Resignation

Chris Vital Arsenault resigned from the position of Independent Director of the Company w.e.f. closing of business hours of April 29, 2020.

Sanjay Baweja resigned from the position of Independent Director of the Company w.e.f. closing of business hours of May 29, 2020.

Chief Financial Officer

Ganesh Murthy resigned from the position of Chief Financial Officer w.e.f. May 31,2020.

Sanjay Baweja was appointed as Chief Financial Officer of the Company w.e.f. June 01,2020

AUDITORS AND AUDITORS REPORT

Statutory Auditors

In terms of provisions of Section 139 of the Companies Act, 2013 and the rules made thereunder M/s. BSR & Co. LLP, Chartered Accountants (Firm Registration No. 101248W/W-100022), were appointed as Statutory Auditors of the Company by the shareholders at the 17th AGM held on September 06, 2017 to hold office until the conclusion of the 22nd Annual General Meeting to be held in calendar year 2022. The Company has received a certificate form the auditors confirming that they are not disqualified from continuing as Auditors of the Company.

The requirement for ratification of appointment of auditors by the members at every AGM is done away with vide Ministry of Corporate Affairs notification dated May 07, 2018.

Secretarial Auditors

The Board of Directors of the Company had appointed Parameshwar G Hegde of M/s. Hegde & Hegde, Company Secretaries to conduct the Secretarial Audit pursuant to the provisions of Section 204 of the Companies Act, 2013 for the financial year ended March 31, 2020.

Secretarial Audit Report obtained pursuant to section 204 of the Companies Act, 2013 and Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with SEBI Circular No. CIR/CFD/CMD1/27/2019 dated February 08, 2019 is appended as Annexure X.

Further, pursuant to above said SEBI circular, listed entities shall additionally, on an annual basis, require a check by the Practicing Company Secretary on compliance of all applicable SEBI Regulations and circulars/ guidelines issued thereunder, consequent to which, the Practicing Company Secretary shall submit a report to the listed entity in the manner specified in this circular. The Company has obtained annual secretarial compliance report from Parameshwar G Hegde of M/s. Hegde & Hegde, Company Secretaries for the financial year ended march 31, 2020 and same has been submitted to the stock exchanges within the stipulated time, copy of which is appended to the Report on Corporate Governance.

Comments on Auditors Report

There are no qualifications, reservations or adverse remarks or disclaimers made by Statutory Auditors of the Company in the Audit Report and by the Secretarial Auditor in the Secretarial Audit Report for the financial year ended March 31, 2020.

MCA Inspections/ Show Cause & Adjudication Notices/ Compounding Applications

Referring to the Inspection of Books of account and other records of the Company during the years 2015-16 and 2016-17 by the Ministry of Corporate Affairs, the Company has received the five show cause notices and one adjudication notice during FY 2018-19 for alleged violation of few sections of the Companies Act, 1956 and the Companies Act, 2013.

On Adjudication Notice:

The Company and officers in default appeared before the Registrar of Companies, Bengaluru (ROC) on the scheduled date February 18, 2018. After the hearing, the ROC vide Order No. ROCB/Sec 454(3)/ADJ/027860 dated March 15, 2019 imposed an aggregate penalty of INR 25,000 on the Company and the officers in default. Company and the officers in default had paid the compounding amounts and completed other necessary filing formalities. Details of the penalty and payment confirmations have been provided in extract of Annual Return in Annexure VI.

On 5 Show Cause Notices:

Company submitted responses to ROC, Bengaluru on all the 5 Show cause notices denying the alleged violations as not material/ very technical in nature and requested to drop the proceedings. However, in case if the ROC would not be satisfied with Companys explanations, to avoid prosecution proceedings in the economic offences court, Company and officers in default filed compounding applications with MCA.

Regional Director, Hyderabad of MCA called for hearings on 28.08.2019, 21.10.2019 and 08.11.2019. The Legal counsel and the Company secretary represented the Company and officers. After the hearings, the Regional Director, Hyderabad passed the compounding orders imposing the penalties. Company and the officers in default had paid the compounding amounts and completed other necessary filing formalities. Details of the penalty and payment confirmations have been provided in extract of Annual Return in Annexure VI.

As of now, only one matter is pending before the Regional Director in the matter of Section 121 of the Companies Act, 2013.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, the directors to the best of their knowledge and belief confirm that:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

ii. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the

end of the financial year and of the profit and loss of the Company for that period.

iii. They have 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 the Company and for preventing and detecting fraud and other irregularities.

iv. They have prepared the annual accounts on a going concern basis.

v. Internal financial controls have been laid down and they were adequate and operating effectively.

vi. Proper systems to ensure compliance with the provisions of all applicable laws have been devised and such systems were adequate and were operating effectively.

NUMBER OF MEETINGS OF THE BOARD

The Board met five times during the financial year 2019-20 viz., May 24, 2019, August 01, 2019, September 17, 2019, October 30, 2019 and February 06, 2020. The maximum interval between any two meetings did not exceed 120 days.

COMMITTEES OF THE BOARD

As on March 31,2020, the Board had five Committees:

1. Audit Committee

2. Nomination and Compensation Committee

3. Stakeholders Relationship Committee

4. Corporate Social Responsibility Committee

5. Risk Management Committee

Details of all the Committees along with their charters, composition and meetings held during the year, are provided in the "Report on Corporate Governance" as part of this Annual Report.

BOARD INDEPENDENCE

The Company has received necessary declarations from each of the Independent Directors of the Company under Section 149(7) of the Companies Act, 2013 that the Independent Director meet the criteria of independence laid down in Section 149(6). The definition of Independence of Directors is derived from Regulation 16(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) and Section 149(6) of the Companies Act, 2013. Further, the Company has received declaration under Regulation 25(8) of Listing Regulations from each Independent Director of the Company.

Based on the confirmation / disclosures received from the Directors and on evaluation of the relationships disclosed, as on March 31, 2020 the following non-executive Directors are independent in terms of the aforesaid Listing Regulations and Section 149(6) of the Companies Act, 2013:

a) Rajiv Khaitan

b) Nancy Cruickshank

c) Sanjay Baweja#

d) Chris Arsenault*

e) Sanjay Kapoor

f) Gianluca DAgostino

*Resigned from the Board w.e.f. April 29, 2020.

#Resigned from the Board w.e.f. May 29, 2020.

COMPANYS POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Nomination and Remuneration Policy of the Company on Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub-section (3) of Section 178, is appended as Annexure II to this Report and is placed on the website of the Company at the below link:

http://www.onmobile.com/sites/default/files/cg_policy/

Nomination_and_Remuneration_Policy.pdf

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The details in respect of internal financial control and their adequacy are included in the Management Discussion and Analysis, which is forming part of the Annual Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

The details of the loans and guarantees given and the investments made pursuant to Section 186 of the Companies Act, 2013 during the year under review are given below:

Sl. No Name of the entity Relation Amount Rs (in Million) Particulars of loans, guarantees and investments Purpose for which the loan, guarantee and investment are proposed to be utilized
1 OnMobile Global Spain, S.L.U. Subsidiary 314.64 Loan Provided Working Capital of its subsidiary

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1)

The particulars of contracts or arrangements with related parties referred to in Section 188(1), as prescribed in Form AOC - 2 of the rules prescribed under Chapter IX relating to Accounts of Companies under the Companies Act, 2013, is appended in Annexure III to this report.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

The Company, being a service provider organization, most of the information as required under Section 134(3)(m) read with Companies (Accounts) Rules, 2014 is not applicable. However, the Company endeavors to effectively utilize and conserve energy by using improved technology in its infrastructure such as lighting and paper usage.

FOREIGN EXCHANGE EARNINGS AND OUTGO

(In Rs Million)

Description

Year ended

March 31,2020 March 31,2019
Foreign exchange earnings 1094.63 1,324.73
Foreign exchange outgo 392.81 639.05

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Companys operations in future. Details of pending litigations and tax matters are disclosed in the financial statements.

DIVIDEND DISTRIBUTION POLICY

As per Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the top 500 listed companies shall formulate a dividend distribution policy. Accordingly, the policy was adopted by the Board vide resolution dated March 22, 2017 to set out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders. The policy is enclosed as Annexure IV to the Boards report and is also available on the Companys website at the below link:

http://www.onmobile.com/sites/default/files/cg_policy/

Dividend_Distribution_Policy.pdf

RISK MANAGEMENT POLICY

The Board of Directors at their meeting held on October 30, 2014 constituted a Risk Management Committee. The Company has formulated a risk management policy to facilitate setting up a framework for risk assessment and minimization procedures. A copy of the risk management policy is appended in this report as Annexure V and is placed on the website of the Company at the below link:

http://www.onmobile.com/sites/default/files/cg_policy/Risk_

Management_Policy.pdf

SECRETARIAL STANDARDS

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings of the Board of Directors and General Meetings.

VIGIL MECHANISM

The Company has established a Whistle Blower Policy for Directors and employees to report their genuine concern. The details of the same are explained in the Report on Corporate Governance.

DISCLOSURE AS REQUIRED UNDER SECTION 22 OF SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company is in compliance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules made thereunder. Details of complaints during the year have been disclosed in the Report on Corporate Governance.

INTERNAL COMPLAINTS COMMITTEE

The Company is in compliance with provisions relating to the constitution of Internal Complaints Committee (ICC) under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has in place an Anti-Sexual Harassment Policy in accordance with the said Act.

Internal Complaints Committee was constituted by the Company for redressal of complaints for the specified workplace. The Committee comprises of the following:

• Presiding Officer - Presiding Officer is a woman employee

• Advisor - The committee also has an external member (woman) who is familiar with issues relating to sexual harassment

• Committee Members -The committee comprises of 60% women and 40% men

• Office of Internal Complaints Committee - The office is responsible for managing the Committees operations

EVALUATION OF PERFORMANCE OF BOARD/COMMITTEES/INDIVIDUAL DIRECTORS AND CHAIRPERSON

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Board has carried out an annual evaluation of performance.

Nomination and Compensation Committee specified that (i) the Board Evaluation process for FY 2019-20 should be carried out internally by the Board of Directors and (ii) recommended the criteria for evaluation at different levels in the form of Survey questionnaires in alignment with Guidance Note on Board Evaluation issued by Securities and Exchange Board of India.

Survey questionnaires were circulated to all the Board members with set of questions to assess the performance under each of the following categories:

(i) The Board as a whole

(ii) Various Committees of the Board

(iii) Independent Directors and

(iv) Chairperson of the Board.

The Board reviewed and analyzed the responses to the questionnaire and accordingly completed the Board evaluation process for the financial year 2019-20

EXTRACT OF ANNUAL RETURN

As required pursuant to section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT- 9 is enclosed as Annexure VI to this report.

PARTICULARS OF EMPLOYEES

The table containing the names and other particulars of employees in accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended as Annexure VII (A) to the Boards Report

A statement showing details of top ten employees in terms of remuneration, every employee employed throughout the financial year and in receipt of remuneration of Rs 1.02 crore or more per annum or employed for part of the year and in receipt of Rs 8.5 lakh or more per month and employees posted outside India drawing more than Rs 60 lakh per annum, under Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is enclosed as Annexure VII (B) to Boards Report.

DEPOSITS

The Company has not accepted deposits during the year under review falling within the purview of Section 73 of the Companies Act, 2013 and the Rules thereunder.

EMPLOYEE STOCK OPTION SCHEMES

Pursuant to the provisions of Section 62(1 )(b) read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014, the Company approved following Employee Stock Option Schemes i.e. Employee Stock Option Plan-I 2003, Employee Stock Option Plan-II 2003, Employee Stock Option Plan-III 2006, Employee Stock Option Plan-I 2007, Employee Stock Option Plan-II 2007, Employee Stock Option Plan-I 2008, Employee Stock Option Plan-II 2008, Employee Stock Option Plan-III 2008, Employee Stock Option Plan-IV 2008, Employee Stock Option Plan-I 2010, Employee Stock Option Plan-II 2010, Employee Stock Option Plan I 2011, Employee Stock Option Plan I 2012 and Employee Stock Option Plan I 2013 for granting stock options to its employees.

All the schemes endeavor to provide incentives and retain employees who contribute to the growth of the Company. A summary disclosure in compliance with Companies (Share Capital and Debentures) Rules, 2014 and Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, forms part of this report as Annexure IX and the complete details have been disclosed under Notes to the financial statements which form part of the Annual Report. During the year under review, there has been no variation in the terms of ESOP schemes and the disclosure on employee stock option schemes is placed on the website of the Company as a part of Annual report at the below link:

http://www.onmobile.com/investors

ACKNOWLEDGMENTS

The Board of Directors takes this opportunity to express their appreciation to the customers, shareholders, investors, vendors and bankers who have supported the Company during the year. The Directors place on record their appreciation to the OnMobilians at all levels for their contribution to the Company. The Directors would like to make a special mention of the support/co-operation extended by the various departments of the Government of India, particularly the Special Economic Zone, Central Board of Direct Taxes, Central Board of Indirect Taxes and Customs, the Ministry of Commerce and Industry, the Department of Telecommunications, the Reserve Bank of India, Ministry of Corporate Affairs, Securities and Exchange Board of India, BSE Limited, National Stock Exchange of India Ltd, National Securities Depository Limited and Central Depository Services (India) Limited and look forward to their support in all future endeavors.

For and on behalf of the Board of Directors

Fran^ois-Charles Sirois
Executive Chairman and CEO
Place: Montreal, Canada
Date: June 22, 2020