The Board of Directors are pleased to present the 19th Annual Report on thebusiness and operations of the Company together with the audited standalone andconsolidated financial statements for the year ended March 31 2019.
RESULTS OF OPERATIONS FOR THE YEAR 2018-19
Summary of the operations of the Company on standalone basis and consolidated basis forthe financial year 2018-19 is as follows: (In Rs Million)
|Particulars ||Standalone ||Consolidated |
| ||2018-19 ||2017-18 ||2018-19 ||2017-18 |
|Revenue from operations ||2295.20 ||2506.32 ||5938.64 ||6356.05 |
|Earnings/(Loss) before other income depreciation and amortization finance charges ||(64.18) ||(148.30) ||295.98 ||649.28 |
|Exceptional item and tax || || || || |
|Exceptional item ||12.70 ||- ||- ||14.78 |
|Profit/(Loss) before other income depreciation and amortization finance charges and tax tax ||(76.88) ||(148.30) ||295.98 ||634.50 |
| ||373.41 ||421.24 ||313.12 ||277.14 |
|Profit/(Loss) for the year ||328.02 ||388.96 ||188.87 ||113.45 |
|Total Comprehensive Income for the year ||337.21 ||424.47 ||62.09 ||236.72 |
|Equity Share Capital ||1056.96 ||1055.71 ||1056.96 ||1055.71 |
|Other Equity ||6213.00 ||6044.23 ||4600.96 ||4707.31 |
|Networth ||7269.96 ||7099.94 ||5657.92 ||5763.02 |
|Net Block ||142.18 ||259.65 ||929.20 ||321.94 |
|Net Current Assets ||2571.69 ||2895.10 ||2713.86 ||3358.11 |
|Cash and Cash Equivalents (including other bank balances and current investments) ||2223.29 ||1947.45 ||2722.54 ||3051.62 |
|Earnings/ (Loss) per share (Diluted) ||3.10 ||3.71 ||1.79 ||1.08 |
|(In Rs ) || || || || |
BUSINESS PERFORMANCE / FINANCIAL OVERVIEW Standalone Financials
During 2018-19 the Company recorded net revenue of Rs 2295.20 million as compared toRs 2506.32 million in 2017-18. The Profit after tax of the Company is Rs 328.02 millionin 2018-19 as compared to Rs 388.96 million in 2017- 18. The diluted Earnings Per Share(EPS) is Rs 3.10 per share in 2018-19 as compared to Rs 3.71 per share in 2017-18.
During 2018-19 the Company recorded consolidated net revenue of Rs 5938.64 millionas compared to Rs 6356.05 million in 2017-18. The consolidated Profit after tax of theCompany for the year 2018-19 is Rs 188.87 million as compared to Rs 113.45 million in2017-18. The consolidated diluted Earnings Per Share (EPS) for the year 2018-19 is Rs 1.79as compared to Rs 1.08 per share in 2017-18.
Your directors are pleased to recommend the following dividend for the financial yearended March 31 2019 which is payable on obtaining the shareholders' approval in the 19thAnnual General Meeting scheduled on September 17 2019:
|Particulars of dividend ||Par value ||Per- centage ||Dividend amount per equity share ||Date of recom- mendation ||Book Closure Date |
| ||(Rs) || ||(Rs) || || |
|Final Dividend ||10.00 ||15% ||1.50 ||May 24 2019 ||September 11 2019 to September 17 2019 (both days inclusive) |
The total dividend payout amount for the year inclusive of dividend distribution taxwill be Rs 191.13 million.
Barring unforeseen circumstances the Board intends to maintain similar or betterlevels of dividend payout over the next few years. However the actual dividend payout ineach year will be subject to the investment requirements and any other strategicpriorities identified
After providing for the dividend the Company proposes to retain Rs 3290.52 million inthe Statement of Profit and Loss.
The Company is not proposing to transfer any amount to reserves from the profits of thefinancial year 2018-19.
As on March 31 2019 the Company had liquid assets including investments in fixeddeposits and mutual funds of Rs 2711 million.
CHANGES TO THE SHARE CAPITAL
During the year under review the Company allotted 125366 equity shares (includingbonus shares) on the exercise of stock options under its various Employee Stock OptionPlans.
As a result of the aforesaid allotment of equity shares under ESOPs the issued andpaid-up share capital of the Company as on March 31 2019 stands at Rs 1056962020.
SIGNIFICANT EVENTS: 2018-19
ONMO games launch
OnMobile began FY 18-19 with the launch of ONMO Games changing the rules on how gamesare played on mobile phones and tablets. No longer will users pay for premium games orspend money on in-app purchases. With ONMO Games users will have access to one of thelargest collections of premium and freemium games in one service at a low monthlysubscription fee. Ideal for mobile operators users and game developers alike the newONMO Games service is breaking the traditional app store distribution model. A perfectsolution for parents ONMO games allows parents to monitor their children's activityestablish play time limits by the number of hours or time of day and restrict game types.Plus as an added benefit children will no longer be exposed to advertising whensubscribed to this service so parents can rest assured.
As most operators have a Triple play and Quadruple play service and start to offer aFamily plan where one household bill covers multiple lines there is a strong incentive toenhance their offering of premium services. The family-friendly ONMO Games service isideal for telecom operators looking to improve their suite of services to households.
Strategic partnership with bKash
OnMobile entered into a strategic partnership with bKash Limited the largest MobileFinancial Services (MFS) provider in Bangladesh facilitating its customers to purchasepremium mobile entertainment content from OnMobile platform through bKash.
OnMobile Global Limited shall leverage bKash's large consumer base to build and managean all-encompassing & enriching mobile entertainment ecosystem which is untapped sofar and offers a high growth potential. The partnership will enable OnMobile to expand itsservice offerings beyond telecom users by enabling premium mobile entertainment servicesthat are completely absent today in Bangladesh.
Acquisition of Appland AB
OnMobile has acquired Appland AB a Swedish company in October 2018 through OnMobileEurope BV subsidiary of the Company. Appland AB is one of the world's most popular gamesand kids App Clubs subscription services. This acquisition reflects the increasingimportance of OnMobile's strategy to become a leader in the fast-growing mobile gamesmarket and expands its games footprint to all continents. Appland AB is a pioneer incloud-based mobile distribution and monetization and is headquartered in GothenburgSweden. Appland today provides premium games and kids apps as a white-labeled subscriptionservice to more than 80 carriers in over 40 countries. It also offers white-labeleled Appstores with curated international and local content.
Contract renewal with Telefonica Espana
In February 2019 OnMobile Global Limited renewed its contract with Telefonica EspanaS.A.U. (Telefonica) for another five years. Telefonica is one of OnMobile's largestcustomers. OnMobile has been providing videos editorials games and tones and a host ofsimilar services to Telefonica's subscribers since 2012. The long-term contract renewalensures continued revenue growth and is a testimony to the deep and trusted relationshipthat OnMobile has with Telefonica.
In FY 2018-2019 ONMO Tones primary focus was to explore new areas to entertain anddelight people by creating immersive mobile moments while they connect over mobile.
As we enhance our horizon we believe entertainment should go beyond audio tones tovideo tones stories and video ads.
This led us to revamp the baseline RBT mobile application and web apps to build anexperience that is simple intuitive and exciting while creating more value for the enduser. A newly designed Baseline 2.0 RBT android native application was live for VodafoneIndia on play store last year. The new user experience creates unique moments for the userthrough curated music video and content editorials. Music and Video ring tone serviceswere part of the new app to create more value for the end user.
We remain focused on increasing our digital tones service reach through operatorself-care app integrations. We developed RBT SDK for both Android and iOS which wereintegrated to Vodafone India and Idea self-care apps. They are live with significantcontribution to digital RBT service growth.
We worked to build network-independent Video RBT service supporting trending verticalvideo contents. Our customers were interested during the PoC stage itself which was themain driving factor to launch this service in Android RBT application. Monetizing digitalservices through other sources led us to explore video advertisement in the first fewseconds during a mobile call connection stage and expand the scope of ads.
For billions of people around the world sport is a part of the fabric of their dailylife. It is the powerful emotional connect fans have with teams and players that explainswhy as a market sports is growing faster than the global GDP. As per industry reportsmillennials spend 20% of their time on OTT online video services to follow their favoritesport. In addition over 40% millennials and non-millennials feel the need to have asports specific digital subscription product. ONMO Sports is a Progressive Web Application(PWA) a one-stop destination for all sports. The aim is to provide a personalizedexperience and enable consumers to enjoy their favorite sports anywhere and everywhere.
ONMO Sports Portal is tailored with the consumer in mind to cater premium content andgiving them the power of information through detailed match analysis. ONMO Sports offerspremium editorials videos live score and detailed match analysis supported in multiplelanguages such as English Arabic French Portuguese Spanish and much more to ensuremaximum user engagement.
FY 18-19 existing contests were given a digital avatar in terms of Progressive Web App(PWA). It has evolved as a beneficial channel for engaging users with new contests formatsand announcing winners instantly. We introduced thematic contests based on the themes likeIPL Football world cup Diwali and Christmas. We moved beyond the mobile operator to OTTApps which engage with large audiences & gives them the option to vote for theirfavourite contestants for reality & talent shows.
INFORMATION ABOUT SUBSIDIARY/JOINT VENTURE/ASSOCIATE COMPANIES
As on March 31 2019 the Company has 39 subsidiary companies and 1 associate company.
During the year 2018-19 Appland AB (a company incorporated in Sweden) was acquired onOctober 11 2018 and the following subsidiaries of OnMobile Global Limited were closed:
1. Livewire (Australia) Pty Limited (closed w.e.f. September 20 2018)
2. Fonestarz Limited (closed w.e.f. January 22 2019)
3. Fonestarz Media (Licensing) Limited (closed w.e.f. January 22 2019)
4. Fonestarz Media Limited (closed w.e.f. January 22 2019)
5. Daius Limited (closed w.e.f. January 22 2019)
6. PT OnMobile Indonesia (closed w.e.f. 31st August 2017 the appointed date forliquidation).
In accordance with Section 129(3) of the Companies Act 2013 the Company has preparedconsolidated financial statements of the Company and all its subsidiary companies whichforms part of the Annual Report. A statement containing salient features of the financialstatements 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 theAnnual Report of the Company containing therein its standalone and the consolidatedfinancial 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 thesubsidiary companies have also been placed on the website of the Companywww.onmobile.com. These documents will also be available for inspection during businesshours at the registered office of the Company at Bengaluru India.
During the year under review branches of the Company located in Ecuador and Peru havebeen shifted to a new address. Similarly there has been a change in the registered officeaddress of OnMobile Costa Rica OBCR SA OnMobile Uruguay SA OnMobile USA LLC OnMobileLive Inc. and OnMobile SA 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 THEREPORT
There have been no material changes for the period between end of the financial yearaffecting the financial
OnMobile operations team continue to focus on operational efficiency through CSIapproach (Continual Service Improvement). Through knowledge management and risk managementthere is improvement in the service availability and turn around time (TAT). CustomerServices team has implemented monitoring for service performance that helps in proactiveidentification of issues and quick resolution. The Delivery Operations and Engineeringteams jointly drove the following efforts:
General Data Protection Regulation (GDPR)
Implemented process to ensure compliance with the regulatory requirement for GDPR inEurope.
OnMobile continues to strive for process excellence.
Operations team has ensured successful Surveillance Audit for the year 2018 in oureffort to ensure that we retain our ISO 27001:2013 certification from UKAS. The GSOCCross Operator Support and support function teams were audited extensively under the ISO27001:2013 standards framework by DNV. OnMobile has been recommended for recertificationin the audit that was just concluded.
Automation & Optimization
We continue our efforts towards automation of repetitive tasks. The outcome of theprocess was high accuracy reduction in efforts / time. Quality audits were rolled out onadditional processes to identify the gaps and design improvement plans.
OnMobile exhibits more than 19 offices across the globe with 1.20 lakh square feet ofoffice space. The offices are catalogued as virtual office business centers and leasedoffices. OnMobile headquarters - Electronic city Bengaluru - is the largest facility with98 thousand square feet of office space. All OnMobile offices are well equipped withreliable infrastructure & working atmosphere amid high level of security and safetyproficiency. precautionary measures are in place to circumvent downtime and to ensurebusiness continuity. We operate the facilities in a manner that complies with local lawsand regulations. OnMobile provides services to customers pan-India. It has 4 regionalwarehouses catering to internal hardware movement and support operations of around 3000servers and 500 network devices across India. OnMobile is a global establishment withpresence in around 70 countries and enjoys enduring trust with global telecom operators.
CORPORATE SOCIAL RESPONSIBILITY
While we continue to support SAHI in their two major projects namely Gift an ear andGirl child project we formed a new association with a Bengaluru based NGO calledVAANI which works in the space of communication and enablement of hearing impaired kids inthe remote parts of Karnataka. We took our new employee and community engagement2018-19andthedateofthisreport to a whole new level which won us Best StakeholderEngagement' of the Company award in the Corporate Social Responsibility Summit &Awards 2019 conceptualized and curated by UBS FORUMS.
Our contribution towards cochlear implants post-surgical rehabilitationidentification of the needy distribution of hearing aids Teach for Deaf programwere the key highlights this year.
The Company has constituted a Corporate Social Responsibility (CSR) Committee inaccordance with Section 135 of the Companies Act 2013. The CSR Committee charter and theCSR 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 SocialResponsibility Policy) Rules 2014 are given in Annexure VIII to the Boards'report.
RESEARCH AND DEVELOPMENT
The year 2018-2019 was focused towards increasing the digitization of the variousproducts offerings and expansion of products like Contests and Sports into global markets.
Both these products were made available in a fully digital format (Mobile Web) andbackward integrated into the core platforms supporting existing channels. The engineeringteam implemented various tools and processes to increase the speed of service deliveryrequired in the digital world and enable rapid prototyping for faster go to market.
RBT with the digital app as an access channel has also seen a sharp uptake in usersacross the globe and we are constantly working on improving the user experience. Cloudenablement of our platforms also saw significant progress and we have enabled deploymenton our products in the Virtual Infrastructure of operators and public cloud providers.
Ringback Tones (RBT)
We defined 3 clear areas of focus around which product journey for Tones was to bedefined. These were enhancing experience increasing reach & relevance and assessingpivot opportunities using core RBT attributes. These areas of focus were defined based onunderstanding of expectations communicated by telco customers across the globe andconsumer needs identified through Voice of the Customer (VoC) conducted in the past alongwith encouraging results observed in initial efforts carried out in these directions inthe previous year.
Experience - RBT app evolved into a music app with focus on latest design trendsglobal usability practices and best in class feature set. This generated immense usertraction. Our baseline app current counts for more than 10 Million installs on play storewith rating of 4.2+. No other telco digital RBT destination comes anywhere close to thesestats.
Reach & Relevance- Created new use cases by blending Ring Back core attributesand leveraging capabilities offered by prevailing digital environment. This has givenbirth to ideas like App based Video RBT SDK integration in telco self-care apps digitaldisplay ad bundling with core RBT proposition.
SDK has already shown great promise in its first integration with the self-care app ofleading telco's in India.
RBT Pivots - Using core attributes of RBT experience being Incidental and Captivewe worked on creating cohesiveness among different platform components to create single360 degrees propositions for enterprise customers like political parties brands otherideological organizations etc.
ONMO Videos & Subscriptions
As part of the focus on enhancing our platforms for digital content we had worked onthe following enhancements CREATE is a component for building & customizing newdigital portals for videos games & editorial contents. With this we can create andcustomize portals for Operators very quickly.
PROGRAM a content management system for digital content where on one side we focusedon simplifying our traditional content management system workflows by automating a lot ofmanual processes and on the other side we have exposed the CMS through simple and secureAPI's so that digital content products (both mobile web and mobile apps) can be quicklybuilt without worrying about the content management aspects. This platform is alreadygetting used for our recent products like Kids & Sports. ONMOPAY combined with PRISM(Billing Subscription and Lifecycle Management Platform) we created a common billinggateway for operator billing which can be used by any digital product within OnMobile. Theplatform comes with an in-built campaign management UI where you can track & controlall digital marketing promotions. It gives a good view of the marketing spends on acampaign and has features which can be used to control the campaigns in case of badtraffic with its in-built anti-fraud mechanisms. We have already seen some success withthis platform as we have integrated with around 20+ operators across multiple serviceslike Games Sports and Kids.
Many innovations were introduced in contests in the last year. The new mobile webportal was developed and implemented using Progressive Web Apps (PWA) which provided theuser with the ability to experience the service as though they were using an app withoutthe hassle of downloading and installing the same. This also allowed the user to save alight weight icon on their handset which the user could use to return to the contest witha single click. This helped us to deliver immersive user experience as we could launchvarious fire new contest formats like puzzles rapid guess who etc. with an unparalleledApp like experience In addition to this contests PWA was integrated with automated winnerselection tool (AWST). This integration enabled automatic winner selection & immediatewinner announcement on user's dashboard enhancing the playing experience.
The Company is committed to maintain the highest standards of corporate governance. TheCompany meets the standards and guidelines set by the Securities and Exchange Board ofIndia on corporate governance and have implemented all the stipulations prescribed. Adetailed report on Corporate Governance as stipulated under Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirements) Regulations 2015 forms part ofthe 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 CompanySecretaries confirming compliance of conditions of Corporate Governance as stipulatedunder the aforesaid Securities and Exchange Board of India (Listing Obligations andDisclosure 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 ManagementDiscussion and Analysis Report is presented in a separate Section forming part of theAnnual Report.
BUSINESS RESPONSIBILITY REPORT
OnMobile is not included in the list of top 500 companies of National Stock Exchange ofIndia Ltd. (NSE) or BSE Ltd. (BSE) as per the market capitalization as on March 31 2017;March 31 2018 and March 31 2019.
However the Company has prepared Business Responsibility Report on a voluntary basisin line with the format suggested by Securities and Exchange Board of India vide CircularNo. CIR/CFD/CMD/10/2015 dated November 04 2015 which is annexed to this Annual Report.
DIRECTORS AND KEY MANANGERIAL PERSONNEL
Pursuant to the provisions of Section 149 of Companies Act 2013 Gianluca D'Agostinowas appointed as Independent Director at the 18th Annual General Meeting of the Companyheld on September 18 2018 to hold office upto the date of AGM to be held during thecalendar year 2021.
Pursuant to the provisions of Section 149 of Companies Act 2013 Sanjay Baweja wasre-appointed as Independent Director at the 18th Annual General Meeting of the Companyheld on September 18 2018 to hold office upto the date of AGM to be held during thecalendar year 2021. As per the provisions of Companies Act 2013 Francois-Charles Siroisretires by rotation as Director at the ensuing AGM and being eligible seeksre-appointment.
The Board of Directors at their meeting held on May 24 2019 subject to CentralGovernment approval re-appointed Francois-Charles Sirois as Executive Chairman' ofthe Company for a period of five years w.e.f. November 1 2019. Pursuant to the provisionsof Sections 196 197 and 203 read with Schedule V and all other applicable provisions ofthe Companies Act 2013 the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 and Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 approval of the shareholders by specialresolution to the re-appointment of Francois-Charles Sirois as the Executive Chairman ofthe Company is being sought at the forthcoming AGM.
AUDITORS AND AUDITORS' REPORT
In terms of provisions of Section 139 of the Companies Act 2013 and the rules madethereunder 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 the17th AGM held on September 06 2017 to hold office until the conclusion of the 22nd AnnualGeneral Meeting to be held in calendar year 2022. The Company has received a certificateform the auditors confirming that they are not disqualified from continuing as Auditors ofthe Company.
The requirement for ratification of appointment of auditors by the members at every AGMis done away with vide Ministry of Corporate Affairs notification dated May 07 2018.
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 theprovisions of Section 204 of the Companies Act 2013 for the financial year ended March31 2019. Secretarial Audit Report obtained pursuant to section 204 of the Companies Act2013 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 2019is appended as Annexure X.
Further pursuant to above said SEBI circular listed entities shall additionally onan annual basis require a check by the Practicing Company Secretary on compliance of allapplicable SEBI Regulations and circulars/ guidelines issued thereunder consequent towhich the Practicing Company Secretary shall submit a report to the listed entity in themanner specified in this circular. The Company has obtained annual secretarial compliancereport from Parameshwar G Hegde of M/s. Hegde & Hegde Company Secretaries for thefinancial year ended march 31 2019 and same has been submitted to the stock exchangeswithin the stipulated time copy of which is appended to the Report on CorporateGovernance.
Comments on Auditors' Report
There are no qualifications reservations or adverse remarks or disclaimers made byStatutory Auditors of the Company in the Audit Report and by the Secretarial Auditor inthe Secretarial Audit Report for the financial year ended March 31 2019.
Cost records and cost audit
Maintenance of cost records and requirements of cost audit as prescribed underprovisions of section 148(1) of the Companies Act 2013 are not applicable for thebusiness activities carried out by the Company.
MCA Inspections/ Show Cause & Adjudication Notices/ Compounding Applications
Referring to the Inspection of Books of account and other records of the Company duringthe years 2015-16 and 2016-17 by the Ministry of Corporate Affairs the Company hasreceived the following five show cause notices and one adjudication notice during the yearfor alleged violation of few sections of the Companies Act 1956 and the Companies Act2013:
|Sl. No. ||Show cause notice number ||Particulars of violation |
| ||Show Cause notices || |
|1. ||ROC(B)/ DROC(VSJ)/ SCN/027860/3241 dated 31/01/2019 ||Sec 129 of Companies Act 2013 r/w AS-9 non- compliance of provisions of AS-9 regarding accounting and disclosure of FE transactions during the years 2014-15 and 2015-16. |
|2. ||ROC(B)/ DROC(VSJ)/ SCN/027860/3256 dated 31/01/2019 ||Sec 85 of Companies Act 2013-not making complete entries in the Register of charges. |
|3. ||ROC(B)/ DROC(VSJ)/ SCN/027860/3251 dated 31/01/2019 ||Sec 121 of Companies Act 2013 -non filing of e-form MGT-15 for the AGM held for FY 2013-14 (The Company had with GNL-2 as e-form was not available). |
|4. ||ROC(B)/ DROC(VSJ)/ SCN/027860/3266 dated 31/01/2019 ||Sec 217(1) of Companies Act 1956-for non disclosures of lapses under procurement policy relating to procurements from few vendors in Directors Report for the financial year 2012-13. |
|5. ||ROC(B)/ DROC(VSJ)/ SCN/027860/3264 dated 31/01/2019 ||Sec 211 of Companies Act 1956- for excess provision against doubtful debts during FY 2012-13 non- compliance of AS. |
| ||Adjudication Notice || |
|6. ||ROC(B)/LEGAL/ SCN/027860/3237 dated 31/01/2019 ||Sec 12(3)(a) of Companies Act 2013-for fixing name Board at inconspicuous and imperceptible place. |
On Adjudication Notice:
The Company and officers in default appeared before the Registrar of CompaniesBengaluru (ROC) on the scheduled date February 18 2018. After the hearing the ROC videOrder No. ROCB/Sec 454(3)/ADJ/027860 dated March 15 2019 imposed a total penalty of INR25000 on the Company and the officers in default. Details of the penalty payment andfiling confirmations have been provided in extract of Annual Return in Annexure VI.
On 5 Show Cause Notices:
The Company has submitted responses to ROC on all 5 show cause notices denying thealleged violations and requested the ROC to drop the proceedings. However in case ROC isnot satisfied with Company's explanations Company and officers in default have filedcompounding applications with MCA except for HH Haight who is in the process of compilingthe required documents. Details are as follows:
|S. No ||Show cause notice ||Particular ||e-Form ||Date of the e-Form ||SRN |
|1. ||In the matter of Section 129 of the Companies Act 2013 ||Company & P Venkateswara Varaprasad Company Secretary ||Form GNL-1 ||March 08 2019 ||H46655197 |
| || ||Kollurjairam Praveen Kumar Naidu ||Form GNL-1 ||March 11 2019 ||H46850723 |
| || ||Chandramouli Janakiraman Rajiv Pancholy ||Form GNL-1 ||March 12 2019 ||H46927141 |
| || || ||Form GNL-1 ||May 17 2019 ||H59666388 |
|2. ||In the matter of Section 85 of the Companies Act 2013 ||Company & P Venkateswara Varaprasad Company Secretary along ||Form GNL-1 ||March 08 2019 ||H46650396 |
| || || ||Form MGT-15 || || |
| || ||Kollurjairam ||Form GNL-1 ||March 11 ||H46851259 |
| || ||Praveen Kumar || ||2019 || |
| || ||Naidu || || || |
| || ||Rajiv Pancholy ||Form GNL-1 ||May 17 2019 ||H59664730 |
|3. ||In the matter of Section 121 of the Companies Act 2013 ||Company & P V Venkateswara Varaprasad Company Secretary ||Form GNL-1 ||March 08 2019 ||H46645883 |
| || ||Kollurjairam Praveen Kumar Naidu ||Form GNL-1 ||March 11 2019 ||H46845178 |
| || ||Francois-Charles Sirois Director ||Form GNL-1 ||March 18 2019 ||H47528195 |
| || ||Rajiv Pancholy ||Form GNL-1 ||May 17 2019 ||H59666339 |
|4. ||In the matter of Section 217 of the Companies Act 1956 ||Company & Rajiv Khaitan Director ||Form GNL-1 ||March 08 2019 ||H46658662 |
| || ||Chandramouli Janakiraman ||Form GNL-1 ||March 12 2019 ||H46924213 |
| || ||Naresh Somdatt Malhotra ||Form GNL-1 ||March 13 2019 ||H47100391 |
| || ||Harit Nagpal ||Form GNL-1 ||March 15 2019 ||H47275920 |
|5. ||In the matter of Section 211 of the Companies Act 1956 ||Company Rajiv Khaitan Director and P Venkateswara Varaprasad Company Secretary ||Form GNL-1 ||March 08 2019 ||H46661336 |
| || ||Chandramouli Janakiraman ||Form GNL-1 ||March 12 2019 ||H46949681 |
| || ||Naresh Somdatt Malhotra ||Form GNL-1 ||March 13 2019 ||H47099940 |
| || ||Harit Nagpal ||Form GNL-1 ||March 15 2019 ||H47278742 |
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 the directors to the best oftheir knowledge and belief confirm that:
i. In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures.
ii. They have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitand loss of the Company for that period.
iii. They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets 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 were adequate and operatingeffectively.
vi. Proper systems to ensure compliance with the provisions of all applicable laws havebeen 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 2018-19 viz. May 16 2018 July 272018 September 18 2018 October 29 2018 and February 12 2019. The maximum intervalbetween any two meetings did not exceed 120 days.
COMMITTEES OF THE BOARD
As on March 31 2019 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 heldduring the year are provided in the "Report on Corporate Governance" as part ofthis Annual Report.
The Company has received necessary declaration from each Independent Director of theCompany under Section 149(7) of the Companies Act 2013 that the Independent Directors ofthe Company meet the criteria of independence laid down in Section 149(6). Our definitionof Independence' of Directors is derived from Regulation 16(b) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (Listing Regulations')and Section 149(6) of the Companies Act 2013. Further the Company has receiveddeclaration under Regulation 25(8) of Listing Regulations from each Independent Directorof the Company.
Based on the confirmation / disclosures received from the Directors and on evaluationof the relationships disclosed the following Non-Executive Directors are independent interms 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 D'Agostino
COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Nomination and Remuneration Policy of the Company on Directors' appointment andremuneration including criteria for determining qualifications positive attributesindependence of a Director and other matters provided under sub-section (3) of Section178 is appended as they Annexure II to this Report and is placed on the website ofthe 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 adequacy are included in the ManagementDiscussion and Analysis which is forming part of the Annual Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
There were no loans and guarantees given and the investments made pursuant to Section186 of the Companies Act 2013 during the year under review.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION188(1)
The particulars of contracts or arrangements with related parties referred to inSection 188(1) as prescribed in Form AOC - 2 of the rules prescribed under Chapter IXrelating to Accounts of Companies under the Companies Act 2013 is appended in AnnexureIII to this report.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
The Company being a service provider organization most of the information as requiredunder Section 134(3)(m) read with Companies (Accounts) Rules 2014 is not applicable.However the Company endeavors to effectively utilize and conserve energy by usingimproved technology in its infrastructure such as lighting and paper usage.
FOREIGN EXCHANGE EARNINGS AND OUTGO
(In Rs Million)
|Description ||Year ended |
| ||March 31 2019 ||March 31 2018 |
|Foreign exchange earnings ||1324.73 ||1534.97 |
|Foreign exchange outgo ||639.05 ||696.05 |
SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future. Detailsof pending litigations and tax matters are disclosed in the financial is a 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 distributionpolicy. Accordingly the policy was adopted by the Board vide resolution dated March 222017 to set out the parameters and circumstances that will be taken into account by theBoard in determining the distribution of dividend to its shareholders. The policy isenclosed as Annexure IV to the Board's report and is also available on theCompany's 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 RiskManagement Committee. The Company has formulated a risk management policy to facilitatesetting up a framework for risk assessment and minimization procedures. A copy of the riskmanagement policy is appended in this report as Annexure V and is placed on thewebsite of the Company at the below link:http://www.onmobile.com/sites/default/files/cg_policy/Risk_ Management_Policy.pdf
The Company has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India on Meetings of the Board of Directors and General Meetings.
The Company has established a Whistle Blower Policy for Directors and employees toreport 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 atWorkplace (Prevention Prohibition & Redressal) Act 2013 and Rules made thereunder.Details of complaints during the year have been disclosed in the Report on CorporateGovernance.
INTERNAL COMPLAINTS COMMITTEE
The Company is in compliance with provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. The Company has in place an Anti-Sexual HarassmentPolicy in accordance with the said Act.
Internal Complaints Committee was constituted by the Company for redressal ofcomplaints for the specified workplace. The Committee comprises of the following: womanPresiding Officer - Presiding Officer employee
Advisor - The committee also has an external member (a woman) who is familiar withissues 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 thecommittee's operations
EVALUATION OF PERFORMANCE OF BOARD/ COMMITTEES/INDIVIDUAL DIRECTORS AND CHAIRPERSON
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out an annual evaluationof performance.
Nomination and Compensation Committee specified that (i) the Board Evaluation processfor FY 2018-19 should be carried out internally by the Board of Directors and (ii)recommended the criteria for evaluation at different levels in the form of Surveyquestionnaires in alignment with Guidance Note on Board Evaluation' issued bySecurities and Exchange Board of India.
Survey questionnaires were circulated to all the Board members with set of questions toassess the performance under each of the following categories:
(i) The Board as a whole
(ii) Independent Directors
(iii) Chairperson of the Board and
(iv) Various Committees of the Board.
The Board reviewed and analyzed the responses to the questionnaire and accordinglycompleted the Board evaluation process for the financial year 2018-19
EXTRACT OF ANNUAL RETURN
As required pursuant to section 92(3) of the Companies Act 2013 and Rule 12(1) of theCompanies (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 withthe provisions of Section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is appendedas Annexure VII (A) to the Board's Report A statement showing details of top tenemployees in terms of remuneration every employee employed throughout the financial yearand in receipt of remuneration of Rs 1.02 crore or more per annum or employed for part ofthe year and in receipt of Rs 8.5 lakh or more per month and employees posted out sideIndia 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 AnnexureVII (B) to Board's Report.
The Company has not accepted deposits during the year under review falling within thepurview 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 StockOption Schemes i.e. Employee Stock Option Plan-I 2003 Employee Stock Option Plan-II2003 Employee Stock Option Plan-III 2006 Employee Stock Option Plan-I 2007 EmployeeStock Option Plan-II 2007 Employee Stock Option Plan-I 2008 Employee Stock OptionPlan-II 2008 Employee Stock Option Plan-III 2008 Employee Stock Option Plan-IV 2008Employee Stock Option Plan-I 2010 Employee Stock Option Plan-II 2010 ; Employee StockOption Plan I 2011 Employee Stock Option Plan I 2012 and Employee Stock Option Plan I2013 for granting stock options to its employees.
All the schemes endeavor to provide incentives and retain employees who contribute tothe growth of the Company.
A summary disclosure in compliance with Companies (Share Capital and Debentures) Rules2014 and Securities and Exchange Board of India (Share Based Employee Benefits)Regulations 2014 forms part of this report as Annexure IX and the completedetails have been disclosed under Notes to the financial statements which form part of theAnnual Report. During the year under review there has been no variation in the terms ofESOP schemes and the disclosure on employee stock option schemes is placed on the websiteof the Company as a part of Annual report at the below link:http://www.onmobile.com/investors
The Board of Directors takes this opportunity to express their appreciation to thecustomers shareholders investors vendors and bankers who have supported the Companyduring the year. The Directors place on record their appreciation to the OnMobilians atall levels for their contribution to the Company. The Directors would like to make aspecial mention of the support/co-operation extended by the various departments of theGovernment of India particularly the Special Economic Zone Central Board of DirectTaxes Central Board of Indirect Taxes and Customs the Ministry of Commerce theDepartment of Telecommunications the Reserve Bank of India Ministry of CorporateAffairs Securities and Exchange Board of India BSE Limited National Stock Exchange ofIndia 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
Executive Chairman and CEO
Place : Montreal Canada Date : May 24 2019