Onward Technologies Ltd Directors Report.

Dear Members,

On behalf of the Board of Directors, I am happy to present the 30th Annual Report of the Company for the financial year ended March 31, 2021.

FINANCIAL HIGHLIGHTS

Your Companys financial performance for the year ended March 31, 2021 as compared to the previous financial year ended March 31, 2020 is summarized below:

 

( Rs in Lakhs)

Particulars Standalone Consolidated
For the year ended 31.3.2021 For the year ended 31.3.2020 For the year ended 31.3.2021 For the year ended 31.3.2020
Revenue from Operations 17,266.72 18,055.99 24,036.66 27,154.51
Other Income 846.14 651.93 533.52 105.96
Profit before Finance costs, Depreciation and Taxes 2,807.25 2,104.59 2,258.12 2,443.56
Less: Finance costs 207.94 329.38 232.38 346.42
Less: Depreciation 928.48 1,018.96 1,044.47 1,132.81
Profit before Tax 1,670.83 756.25 981.27 964.33
- Current Tax 370.78 365.42 373.56 480.00
- Deferred Tax 33.34 (150.88) (126.08) (139.44)
Total tax expense/(credits) 404.12 214.54 247.48 340.56
Profit after Tax 1,266.71 541.71 733.79 623.77
Other Comprehensive Income 10.79 30.82 (28.89) 182.98
Total Comprehensive Income for the Period 1,277.50 572.53 704.90 806.75

COMPANYS PERFORMANCE OVERVIEW

During the financial year 2020-21:

Revenue from Operations on standalone basis for the year Rs 17,266.72 Lakhs, decreased by 4.37% over the previous year revenue from operations of Rs 18,055.99 Lakhs.

Finance costs for the year Rs 207.94 Lakhs decreased as compared to the previous year of Rs 329.38 Lakhs.

Profit after Tax for the current year is Rs 1,266.71 Lakhs against previous year of Rs 541.71 Lakhs, registering a growth of 133.83%, due to clubbing of operations of Onward eServices Limited, wholly-owned subsidiary of the Company and previous year ended March 31, 2020 figures have also been restated to give the impact of the sanctioned scheme of merger by absorption.

On a consolidated basis, the group achieved revenue from operations of Rs 24,036.66 Lakhs as against Rs 27,154.51 Lakhs – reduction in the revenue of 11.48%. Profit after Tax for the group for the current year is Rs 733.79 Lakhs as against Rs 623.77 Lakhs in the previous year – a growth of 17.64%.

IMPACT OF COVID-19

The country witnessed lockdown being implemented in India in the second fortnight of March 2020. The rapid and devastating spread of the coronavirus brought global business activity to a screeching halt. FY 2020-21 has started off on an unprecedented note with complete lockdown implemented in India as well as lockdowns/business restrictions of varying extent across the larger part of the world, due to the COVID-19 pandemic. Globally across all industries, companies are working hard to recoup revenue losses, manage costs, keep employees safe and at the same time ensure uninterrupted services to the clients. By staying true to its purpose and its values, the top-most priority for the Company was to ensure the safety of its employees. The Company is well prepared to exploit remote collaborative working solutions to their fullest. The health and safety of our employees, partners and customers are of the utmost priority to the Company.

TRANSFER TO RESERVES

Your Company did not transfer any sum to General Reserves for the financial year ended March 31, 2021.

DIVIDEND

Based on the Companys performance, your Directors have recommended a final dividend of Rs 3/- per share for the financial year 2020-21, subject to the approval of the Members. The outflow on account of final dividend amounts to Rs 491.79 Lakhs.

SUBSIDIARY COMPANIES

During the year under review, the Company has four subsidiaries:

1. # Onward eServices Limited (OeSL) [India]

2. Onward Technologies Inc. (OTI) [USA]

3. Onward Technologies GmbH (OTG) [Germany]

4. * Onward Properties Private Limited (OPPL) [India]

There are no associate or joint venture companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act"). There has been no material change in the nature of the business of the subsidiaries.

Updates on the subsidiaries

(#) The Board of Directors of the Company at their meeting held on May 15, 2020, approved the Scheme of Merger by Absorption ("the Scheme") of Onward eServices Limited (OeSL), wholly-owned subsidiary of the Company with the Company in accordance with the provisions of Sections 230 to 232 of the Companies Act, 2013 and other applicable provisions and laws, subject to necessary statutory and regulatory approvals, including approval of the Honble National Company Law Tribunal, (NCLT), Mumbai Bench. The matter was heard by the Honble NCLT and thereafter NCLT sanctioned the Scheme of OeSL with Onward Technologies Limited on March 25, 2021. There is no consideration involved as the entire share capital of OeSL is held by the Company along with its nominees. The appointed date for the Scheme of Merger is January 1, 2020 and Effective Date is May 14, 2021. The proposed Merger is, inter-alia, to maintain a simple corporate structure, eliminate duplicate corporate procedures and reduce multiplicity of legal and regulatory compliances between both the companies.

the company has filed an application under Fast Track Exist for striking-off the name under Section 248 of the Companies Act, 2013. However, we are awaiting the certificate for closure of the company from ROC, Mumbai. Due to COVID-19 pandemic, ROC is taking time to process the strike-off matter.

As per the provisions of Section 129(3) of the Act, a statement containing salient features of the financial statements of the Companys subsidiary (which includes associate companies and joint ventures) in Form AOC-1 is attached as Annexure - 1 to this report.

Pursuant to the provisions of Section 136 of the Act, the financial statements of the Company including consolidated financial statements along with the relevant documents and separate audited financial statements in respect of subsidiaries are available on the website of the Companyhttps://www.onwardgroup. com/investors.php.

FIXED DEPOSITS

In terms of the provision of Sections 73 and 74 of the Act read with the relevant rules, your Company has not accepted any fixed deposits during the year under review.

TRANSFER TO INVESTOR EDUCATION & PROTECTION FUND:

In accordance with the applicable provisions of Companies Act, 2013 (hereinafter referred to as "the Act") read with Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 (hereinafter referred to as the "IEPF Rules"), all unclaimed dividends are required to be transferred by the Company to the IEPF, after completion of seven (7) years. Further, according to IEPF Rules, the shares on which dividend has not been claimed by the shareholders for seven (7) consecutive years or more shall be transferred to the demat account of the IEPF Authority. The details relating to amount of unpaid and unclaimed dividend are provided in the General Shareholders Information Section of Corporate Governance Report forming part of this Annual Report.

SHARE CAPITAL

During the year under review, the Company has issued and allotted 254,500 and 41,700 fully paid-up equity shares of face value Rs 10/- each under its ESOP Scheme 2009 and ESOP Scheme 2019 respectively.

As on March 31, 2021, the issued, subscribed and paid-up capital of the Company is Rs 16,33,87,700/- comprising of 1,63,38,770 Equity Shares of face value of Rs 10/- each.

EMPLOYEE STOCK OPTION SCHEMES

The Company was introduced two employee stock options plans namely Employee Stock Option Plan 2009 (ESOP 2009) and Employee Stock Option Plan 2019 (ESOP 2019) from time to time to motivate, incentivise, attract new talents and inculcate the feeling of employee ownership, and reward employees of the Company and employees of Subsidiaries. The Nomination and Remuneration Committee administers these plans. The stock option plans are in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 ("Employee Benefits Regulations") and Companies Act, 2013, read with the Rules issued thereunder. There have been no material changes to these plans during the financial year.

The disclosures required to be made under relevant provisions of the Act and the SEBI (Share Based Employee Benefits) Regulations, 2014 is given as Annexure – 2 to this report including details on the grant, vesting, exercise, and lapsed options under the aforesaid schemes.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the provisions of the Act, Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "Listing Regulations") and applicable Accounting Standards, the Audited Consolidated Financial Statements of the Company for the financial year 2020-21, together with the Auditors Report forms part of this Annual Report.

CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS

Separate reports on Corporate Governance and Management Discussion and Analysis as required by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ["SEBI (LODR), 2015"] forms part of this Annual Report along with the required Certificate from the Nilesh A. Pradhan & Co. LLP, Pr. Company Secretaries of the Company confirming the compliance of requirements of Corporate Governance as stipulated in the SEBI (LODR), 2015.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

Retirement by rotation

In accordance with the provisions of Section 152 of the Companies Act, 2013, Mrs. Prachi Mehta (DIN: 06811085) retires by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment.

Re-appointment of Mr. Harish Mehta as a Whole-time Director designated as an Executive Chairman

Mr. Harish Mehta was appointed as an Executive Chairman of the Company for a period of five years with effect from May 16, 2016. Based on the recommendation of the Nomination & Remuneration Committee and Board of Directors of the Company, considering his seniority, role played by Mr. Harish Mehta towards the growth of the Company and his rich and varied experience, approval of members is sought for continuation of Mr. Harish Mehta as an Executive Chairman of the Company for a further period of five years.

On the recommendation of the Nomination & Remuneration Committee, the Board of Directors at its meeting held on May 14, 2021, has re-appointed Mr. Harish Mehta (DIN: 00153549) as a Whole-time Director designated as an Executive Chairman of the Company for a further period of five years with effect from May 14, 2021, subject to the approval of the members in the ensuing Annual General Meeting.

Re-appointment of Mr. Jigar Mehta as a Managing Director

Mr. Jigar Mehta was appointed as a Managing Director of the Company for a period of five years with effect from May 16, 2016. On the recommendation of the Nomination & Remuneration Committee, the Board of Directors at its meeting held on May 14, 2021, has re-appointed Mr. Jigar Mehta (DIN: 06829197) as a Managing Director of the Company for a further period of five years with effect from May 14, 2021, subject to the approval of the members in the ensuing Annual General Meeting.

Declaration of Independence by Independent Directors

The Board confirms that all Independent Directors of the Company have given a declaration to the Board that they meet the criterion of independence as prescribed under Section 149 of the Companies Act, 2013 and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Independant Directors Databank :

The Directors have registered themselves at the databank and will appear the examination (the ones eligible) as per the prescribed time.

Key Managerial Personnel

During the year under review, there were no changes in the Key Managerial Personnel of your Company.

PERFORMANCE EVALUATION

Pursuant to the provisions of the Companies Act, 2013, the Board is required to carry out annual evaluation of its own performance and that of its committees and individual Directors. Accordingly, your Company has carried out the performance evaluation as required during the year under review. The Independent Directors at their separate meeting review the performance of: non-independent directors and the Board as a whole, Chairperson of the Company after taking into account the views of Executive Director and Non-Executive Directors, the quality, quantity and timeliness of flow of information between the Company management and the Board to effectively and reasonably perform their duties.

NOMINATION AND REMUNERATION POLICY

The salient features of the Nomination and Remuneration Policy of the Company are set out in the Corporate Governance Report which forms part of this Annual Report. The said Policy of the Company, inter-alia, provides that the Nomination and Remuneration Committee shall formulate the criteria for appointment & re-appointment of Directors on the Board of the Company and persons holding Senior Management positions in the Company, including their remuneration and other matters as provided under Section 178 of the Act and SEBI (LODR), 2015.

The Policy is also available on the website of the Company at https://www.onwardgroup.com/investors.php

MEETINGS OF THE BOARD

5 (five) meetings of the Board of Directors were held during the financial year 2020-21. For further details of the meetings of the Board, please refer to the Corporate Governance Report, which forms part of this Annual Report.

AUDITORS AND INFORMATION ON AUDITORS OBSERVATIONS

Statutory Auditors

M/s. Price Waterhouse, Chartered Accountants LLP (Firm Registration No.012754N/ N500016) were appointed as Statutory Auditors of the Company at the 26th Annual General Meeting held on July 21, 2017, to hold office till the conclusion of the 31st Annual General Meeting held in the year 2022.

M/s. Price Waterhouse has confirmed that they are not disqualified from continuing as Auditors of the Company.

The Statutory Auditors have issued an unmodified opinion on the financial statements for the financial year ended March 31, 2021. The observations made in the Auditors Report read together with relevant notes thereon are self-explanatory and hence do not call for any further explanations or comments by the Board under Section 134 of the Act.

Secretarial Auditors

The Board of Directors of the Company has appointed Nilesh A. Pradhan & Co., LLP, Practicing Company Secretaries, as the Secretarial Auditor to conduct an audit of the secretarial records for the financial year 2020-21.

The Secretarial Audit Report for the financial year ended March 31, 2021 under Act, read with Rules made thereunder and Regulation 24A of the Listing Regulations (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) is set out in the Annexure – 3 to this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Cost Auditors

Maintenance of cost records under Section 148(1) of the Companies Act, 2013 are not applicable to the business activities as carried out by the Company.

RELATED PARTY TRANSACTIONS

All contracts/arrangements/transactions entered into by the Company during the year under review with Related Parties were in ordinary course of business and on arms length basis in terms of provisions of the Act. There are no materially significant related party transactions made by the Company with promoters, key managerial personnel or other designated persons which may have potential conflict with interest of the Company at large except enter into material related party transaction(s) with Onward Network Technologies Private Limited, holding company for buying of an immovable property. In respect of the said transaction, the Company has obtained approval of shareholders through postal ballot. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is set out in Annexure - 4.

A statement of all related party transactions is presented before the Audit Committee on a quarterly basis, specifying the nature and value of the transactions. The details of the related party transactions as per Indian Accounting Standards (IND AS) - 24 are set out in Note - 30 to the Standalone Financial Statements of the Company.

Your Company has formulated a Policy on Related Party Transactions which is also available on Companys website at https://www.onwardgroup.com/investors.php

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Companys internal control systems are commensurate with the nature of its business and the size and complexity of operations. The organisation is appropriately staffed with qualified and experienced personnel for implementing and monitoring the internal control environment. The internal audit function reports to the Audit Committee. Your Company has adopted accounting policies which are in line with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules that continue to apply under Section 133 and other applicable provisions, if any, of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. These are in accordance with Generally Accepted Accounting Principles in India. Changes in policies, if any, are approved by the Audit Committee in consultation with the Auditors. The policies to ensure uniform accounting treatment are prescribed to the subsidiary of your Company. The accounts of the subsidiary company are audited and certified by their respective Auditors for consolidation.

During the year under review, the Company implemented MS D365 Enterprise Resource Planning (ERP) system that connects all parts of the organisation, to record day to day transactions for accounting and financial reporting. The MS D365 ERP system is configured to ensure all transactions are integrated seamlessly, which brings the power of digital intelligence to business decisions.

The statutory auditors of your Company have audited the financial statements and have stated on the Companys internal financial control under Section 143 of Companies Act 2013 in their report. Further, the Company has appointed Ahuja Valecha & Associates LLP as internal auditor of the Company to oversee and carry out internal audit of its activities. The audit is based on an internal audit plan and approved by the audit committee.

WHISTLE BLOWER

Your Company has a Whistle Blower Policy in place as required under Section 177 of the Act and the SEBI (LODR) Regulations, 2015. The mechanism provides for adequate safeguards against victimization of persons who use such mechanism and makes provisions for direct access to the Chairman of the Audit Committee. More details in this regard have been outlined in the corporate governance report annexed to this report. The Policy is disclosed on the Companys website with the following link: https://www.onwardgroup.com/ investors.php

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The details of Loans, Guarantees or Investments covered under the provisions of Section 186 of the Companies Act, 2013 forms part of notes to the Financial Statements.

CORPORATE SOCIAL RESPONSIBILITY

During the financial year ended March 31, 2021, The Company has spent Rs 18.39 Lakhs on the CSR activities. The CSR initiatives of the Company were under the area of education and health. The CSR Policy of the Company is available on the website of the Company at https://www.onwardgroup.com/investors.php

According to the CSR Rules, the Company confirms that there has been no unspent or unallocated money under CSR which is required to be disclosed and transferred to IEPF Fund.

Further, the information pursuant to Section 134(3) (o) of the Companies Act, 2013 and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014 are given in Annexure – 5 to this report outlining the main initiatives during the year under review.

PARTICULARS OF EMPLOYEES

In accordance with the requirements of Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended regarding employees is given in

Annexure – 6.

PARTICULARS OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EARNINGS AND OUTGO:

Particulars required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, regarding conservation of energy, technology absorption, foreign exchange earning and outgo, are given in Annexure – 7 forming part of this report.

SIGNIFICANT / MATERIAL ORDERS PASSED BY THE REGULATORS:

No significant and material orders have been passed by the Regulators/Courts/Tribunals impacting the going concern status and Companys operations in future.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

Your Company has in place a formal policy for the prevention of sexual harassment of its women employees in line with "The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013". The Company periodically conducts sessions for employees across the organization to build awareness about the Policy and the provisions of Prevention of Sexual Harassment Act.

During the year, there were no complaints received relating to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2021 is available on the Companys website on https://www. onwardgroup.com/investors.php

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134 of the Companies Act, 2013, the Board of Directors, to the best of their knowledge states that: a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; b) they have selected such accounting policies and applied them consistently and made judgements and estimates that are 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 the year ended on that date; c) they have taken proper and suficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities; d) the Annual Accounts had been prepared on a going concern basis; e) they have laid down internal financial controls to be followed by the Company and that such internal financial control are adequate and operating effectively and; f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

OTHER DISCLOSURES:

1. During the year under review, there was no change in the nature of business of your Company.

2. There are no material changes and commitments affecting the financial position of your Company which have occurred between the end of the financial year 2020-21 and the date of this report.

3. 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;

4. None of the Auditors of the Company have reported any fraud as specified under the second proviso of Section 143(12) of the Act;

5. The Company has not issued equity shares with differential rights as to dividend, voting or otherwise;

6. The Company has not issued any sweat equity shares to its directors or employees;

7. There was no revision of financial statements and Boards report of the Company during the year under review.

APPRECIATION

Your Directors takes this opportunity to express their deep sense of gratitude to high degree of professionalism, commitment and dedication displayed by employees at all levels. Your Directors also wish to thank its esteemed corporate clients, dealers, agents, suppliers, technology partners, investors, Government Authorities and bankers for their continued support and faith reposed in the Company. Your Directors are deeply grateful to the shareholders for the confidence and faith that they have always reposed in the Company.

For and on behalf of the Board of Directors

Harish Mehta Jigar Mehta
Date : May 14, 2021 Executive Chairman Managing Director
Place: Mumbai DIN: 00153549 DIN: 06829197