The Directors of your Company are pleased to present before you the29TH ANNUAL REPORT on the business and operations of the Company together with annualaudited financial statements of the Company for the financial year ended March 31 2020.
Onward Technologies with its HQ at Worli Mumbai supports leadingglobal companies from its 5 Sales offices in Chicago Detroit Cleveland London &Frankfurt & state of the art development and design centers from offshore in ChennaiPune & Mumbai. We have assembled a young but experienced team that translates visioninto reality with flawless execution & capabilities across the Digital Transformationsuite Embedded Systems Engineering Services Data Analytics Artificial Intelligence andMachine Learning for Fortune 1000 companies across multiple industries.
To recap for our shareholders over the last 6 years we completed amajor investment in upgrading our infrastructure globally adapted our business model tobetter serve our customers aligned the global team to our primary target markets of NorthAmerica Europe and India attracted 2100+ high quality professionals to join our teamacross offices & become a preferred vendor for 80+ clients across North AmericaEurope and India. Now our goal is to switch gears & focus on building and scaling thisstrong foundation.
The Board of Directors of your company are pleased to share the companyperformance operations details of the last financial year 2019-20 & our plans tobounce back post COVID-19.
The summarized financial performance of your Company is as follows:
(Amount in Lakhs)
|Particulars || |
|For the year ended 31.3.2020 ||For the year ended 31.3.2019 ||For the year ended 31.3.2020 ||For the year ended 31.3.2019 |
|Sales and other income (Net) ||27260.47 ||26220.69 ||12878.94 ||12320.29 |
|Profit before finance cost depreciation and exceptional items ||2443.56 ||2360.12 ||2336.55 ||2002.44 |
|Finance costs ||346.42 ||274.17 ||317.65 ||207.22 |
|Depreciation ||1132.81 ||565.99 ||908.69 ||481.23 |
|Operating profit ||964.33 ||1 519.96 ||1110.21 ||1313.99 |
|Exceptional items ||- ||- ||- ||- |
|Profit before tax ||964.33 ||1519.96 ||1110.21 ||1313.99 |
| || || || || |
|Current tax ||480.00 ||524.39 ||365.42 ||440.74 |
|- Deferred Tax ||(139.44) ||(17.84) ||(74.21) ||(61.77) |
|Total tax expense/(credits) ||340.56 ||506.55 ||291.21 ||378.97 |
|Profit after tax ||623.77 ||1 013.41 ||819.00 ||935.02 |
Your Company's Total Revenue has gone up in FY 2019-20 to Rs. 272.60Crores from Rs. 262.20 Crores a growth of 3.97% over the previous financial year. EBDITAof the company also grew steadily to Rs. 24.50 crores as compared to Rs. 23.60 crores inthe previous financial year. EBDITA performance was plateaued due to the following 2reasons which were both onetime impact in Q4: 1) Change in invoicing policy of one largecustomer in India 2) Closure of Product Sales business. On a consolidated level wedeclared Profit after Tax (PAT) for FY 2019-20 at Rs. 6.23 crores.
Our team made significant progress over the last 12 months as wecontinued to transform the entire organization towards Digital and Industry 4.0.
Onward Technologies - Brand
We took up the opportunity in FY 2019 - 20 to focus on understandingour brand perception and positioning in the marketplace. After several conversations withinternal & external stakeholders we articulated what we probably always knew - OnwardTechnologies is looked at as a trusted and reliable partner. This insight has now taken onthe shape of new positioning and renewed vision & mission statements. Your company haspartnerships across geographies and industries some which have been inexistence for overa decade. The intent is to now enhance these partnerships even further. You will see yourcompany become more vocal consistent and assertive in communicating our proposition tothe marketplace. New marketing channels the right communication vehicles and severalactivities are already under development to reach all stakeholders and to re-emphasizethis brand proposition. You will see your company in a new light across all properties - arefreshed website new marketing collateral customer events and many more.
Customers & Growth from Primary Markets: o North America(subsidiary Onward Technologies Inc.):
We continued the momentum in building a strong Leadership team in NorthAmerica to expand relationships with our global clients across multiple industries i.e.Automotive Industrial Equipment Healthcare Medical Equipment and High-Tech. Ourrevenues grew with one of the Big 3 Auto OEMs in the high growth technology areas of ADAS(Active Driver Assistance System) with further push expected in Electrification MobilitySolutions & Digital Manufacturing. We continue to see good opportunities to growfurther in the Michigan state across multiple OEMs and Tierls in these areas. We furtherconsolidated into the food processing & manufacturing industry across the mid-westregion which is a large food supply chain hub. We expect this to become a significantcontributor to our growth in the coming years.
o Europe Region:
We continue to invest in Europe in particular in Germany & UK toexpand both our existing client relationships & adding new customers. Last year hasbeen instrumental in expanding our engagement with a large European Automotive OEM andwinning new customers in high-growth technology areas like ADAS (Active Driver AssistanceSystem) Electrification Mobility Solution & Digital Manufacturing. We alsocelebrated our 10 year relationship with a large Medical Equipment manufacturer who wesupport for design & development in the UK & Europe.
o India Region:
We continue to expand our customer engagements with Fortune 1000 GIC/captive business units in India. FY 2019-20 was a significant year with multiple new winsin Off-highway Agricultural Machinery Construction & Mining Equipment Pharma &Medical Devices Industrial Equipment & Automotive verticals. We became a preferredvendor to 3 large global Automotive OEMs in the areas of Engineering Services ProcessAutomation Electronic & Embedded systems Data Analytics Cloud & DigitalManufacturing. We have also signed multi-year agreements with leading North American andEuropean Engine & Powertrain manufacturing companies. Our focus & investment inbuilding the Data Analytics Practice has enabled us to win multiple new projects withglobal companies and opened up new avenues for growth in the Digital Transformation world.We continue to view India as a high growth region for us with years of investment andrelationship with our customers.
Onward eServices Limited (OeSL) - Wholly Owned Subsidiary
o The domestic IT Services business which is our wholly ownedsubsidiary subsidiary Onward eServices Limited (OeSL) had a positive year with severalwins & preferred vendor status with Fortune 1000 companies in the Data Analyticspractice. On a consolidated performance level OeSL closed FY 2019-20 with Revenues of Rs.59.24 crores & 37 active clients in India. With the changes & investment made inthe last 3 years we expect this business to start delivering EBDITA in the range of 7-9%from FY 2020-21 in line with the industry.
Proposed merger of Onward eServicesLimited (OeSL) into Onward Technologies Limited (OTL)
o The proposed merger of OeSL into OTL will bring integration ofbusiness opportunities combining investment in high growth technology areas as mentionedabove which we can offer to our customers in North America and Europe (along with India).The merger will also bring significant cost & process optimization and savings.
Solutions & Way Forward:
We believe our investments in newer practices such as Data AnalyticsElectronic and Embedded systems Cost Engineering and Process Automation has begun todeliver results. Buoyed by this success and constant listening to our customers who usetechnology levers as value differentiators a separate strategic solutions group has beenformed with the sole intent of building cuffing edge Digital capabilities.
The following are the multifaceted focus of this group:
To provide the next generation services that are complementaryto what we offer to our customers already and to give holistic spectrum of offerings toour customers.
To build right skilled / competent people in technologies andindustry domain areas.
Comprising of both Industry domain experts and technology specialiststhis group gives the required push to everyone to be customer focused and enableFollow the customer" model.
We have already started to see positive outcome in the form ofupskilling eligible existing employees (through training development andindustry-relevant certification) from the traditional IT Services business to newerpractices of Data Sciences Cloud Technologies Artificial Intelligence and MachineLearning.
In order to accelerate our growth in the newer technologies &expanding our North American and European footprint we evaluated several companies foracquisition last year. These potential target companies either brought access to marqueeclients in our primary market and/or niche skills and solutions that were in demand. Webelieve M&A will be an important growth driver for us and our entire leadership teamis evaluating multiple options in this space.
We believe that a nimble company with global outreach like OnwardTechnologies should have world class tools and process for their employees to thrive. Weare cognizant of this fact that automation drives efficiency and brings betterproductivity which has direct bearing to our bottom-line. This year through a mix oftechnologies and process reengineering we will bring in efficiencies to our
HR processes - Simplify and to be employee centric right fromhire to retire
Finance & Commercial Functions - Our entire finance &accounting function will be through a centralized back office team in Pune.
Sales & Marketing - Global CRM solutions to give our salesthe necessary weapon to be more customer focused. Impact of COVID-19
We had a good run towards our operational & financial goal till thelast quarter when the economic impact of COVID-19 took the world by surprise & led toa complete shutdown of majority of our clients in all regions. Our business continuityteam ensured all necessary steps were taken to have minimal loss of productivity andimpact on deliverables. Prompt communication to employees & customers with the wayforward to geffing customer approvals the entire process was done efficiently in earlydays of the lockdown. Our efforts were highlighted by industry bodies like NASSCOM. We arenot out in the clear yet and the complete impact of this unprecedented pandemic is yet tobe quantified across industries and the world in general. We are thankful to all ourclients & entire team who continue to support us remotely in the toughest ofenvironments.
Your Company had declared and paid final dividend in the 28th AnnualGeneral Meefing of the Company held on Thursday July 25 2019. The Company paid dividendof Rs. 23966955 (Rupees Two Crore Thirty Nine Lakhs Sixty Six Thousand Nine Hundred andFifty Five Only) excluding dividend distribufion tax at the rate of Rs. 1.50 (Rupee Oneand Paise Fifty only) per equity share of face value Rs. 10 (Rupees Ten only).
Also the Directors have recommended a dividend of Rs. 1.50 (15%) perequity share of face value Rs. 10 each for the financial year ended March 31 2020which if approved at the ensuing Annual General Meefing will be paid to:
(i) all those equity shareholders whose names appear in the register ofmembers as on July 9 2020 and
(ii) to those whose names appear as beneficial owners as on July 92020 as furnished by the Nafional Securifies Depository Limited and Central DepositoryServices (India) Limited for the purpose.
TRANSFER TO RESERVES
Your Directors does not propose to transfer any amount to its reservesout of the profits of the Company for the year ended March 31 2020.
During the year under review the company has four subsidiaries:
1. Onward eServices Limited (OeSL)
2. Onward Technologies Inc (OTI)
3. Onward Technologies GmbH (OTG)
4. Onward Properties Private Limited (OPPL)
During the year under review Your Company's subsidiary OnwardProperties Private Limited (OPPL) has applied for Fast Track Exit under section 248 ofCompanies Act 2013. The Management is waifing for the Cerfificate for Closure of theCompany from ROC Mumbai which is expected any day post COVID-19.
The brief parficulars of the subsidiaries of your Company as requiredunder AOC-1 is provided as an annexure to this report marked as Annexure-1. Further yourCompany has not incorporated or acquired any subsidiaries or associate companies norCompany has entered into any joint venture during the year under review. Also none ofthe abovemenfioned companies has ceased to be subsidiary of your Company.
BOARD OF DIRECTORS
Composifion of the Board of Directors of the Company as at March 312020 was hereunder:
|Name of the Director ||Designation ||Category |
|Mr. Harish Mehta ||Founder & Execufive Chairman ||Execufive |
|Mr. Jigar Mehta ||Managing Director ||Execufive |
|Mrs. Prachi Mehta ||Director ||Non-Executive |
|Mr. Pranay Vakil ||Independent Director ||Non-Executive |
|Mr. Nandkumar Pradhan ||Independent Director ||Non-Executive |
|Mr. Parish Meghani ||Independent Director ||Non-Executive |
|Mr. Rahul Rathi ||Independent Director ||Non-Executive |
Detailed composition of the Board of Directors including Committeesthereof; and number and dates of meetings held during the financial year is provided inthe Report on Corporate Governance of your Company for the financial year 2019-20.
Mr. Pranay Vakil Mr. Nandkumar Pradhan Mr. Parish Meghani and Mr.Rahul Rathi were the Independent Directors of the Company as on March 31 2020. AllIndependent Directors have given declarations that they meet the criteria of independenceas laid down under Section 149 of the Act which has been relied on by your Company andplaced at the Board Meeting held on May 15 2020.
The Company would like to inform its stakeholders that Mr. Pranay Vakiland Mr. Nandkumar Pradhan have completed their two terms in the Company. Also Mr. ParishMeghani and Mr. Rahul Rathi have completed their first term with the Company. They areeligible and reappointed for their second term subject to shareholders approval.
Your Company introduces two new Independent Directors on Board Mr.Subrata Kumar Mitra and Mr. Jay Sonawala to complete the composition of Board of Directorsaccording to SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Meetings of the Board of Directors:
Your Directors meet at regular intervals in every calendar quarter.Meetings are generally held at the registered office of the Company at Mumbai or atCompany's office at Pune. During the year 4 (four) Board Meetings were convened and heldon the following days:
|Sr. No. Day ||Date ||Venue |
|1 Friday ||May 17 2019 ||Mumbai India |
|2 Thursday ||July 25 2019 ||Mumbai India |
|3 Wednesday ||October 23 2019 ||Mumbai India |
|4 Friday ||January 24 2020 ||Mumbai India |
The intervening gap between the meetings was within the periodprescribed under the Act. Also all the meetings were convened after sending due noticesto the Directors along with agenda and explanatory notes atleast seven days in advancepursuant to the provisions of the Act Secretarial Standard -1 and the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (Listing Obligations) asamended from time to time to enable them to take informed decisions. Requisite quorum wasmet during each of the above meetings. There was no discussion at the meeting which tookplace through video conferencing; the Directors present were available at the venue of themeeting.
Separate meeting of Independent Directors:
Meeting of the Independent Directors of the Company was held onFebruary 21 2020 to review the performance of Non-Independent Directors (including theChairman) and the Board as a whole where all the Independent Directors were present. TheIndependent Directors also reviewed the quality content and timeliness of the flow ofinformation between the management and the Board and its Committees.
Change in Nature of Business :
During the period under review there is no change in nature ofbusiness. The company's revenues are generated 100% from Technology Services only.
Key Managerial Personnel:
Your Company has appointed following key managerial personnel (KMP)during the year under review:
|Sr. No. Name of KMP ||Designation ||Date of appointment |
|1 Mr. Devanand Ramandasani ||Chief Financial Officer ||October 23 2019 |
Further in accordance with the relevant provisions of the Actnecessary declarations and submissions has been made to Registrar of Companies in FormMGT- 14 and Form DIR-12 filing of resolut ons and agreements to Registrar.
Director Retiring by Rotation
In terms of Section 152 of the Act and Articles of Association of theCompany Mrs. Prachi Mehta would retire by rotation at the forthcoming meeting and iseligible for re-appointment. Mrs. Prachi Mehta has offered herself for re-appointment. TheBoard recommends her re-appointment at the ensuing Annual General Meeting as Directorliable to retire by rotation.
Pursuant to the provisions of the Act and Listing Obligations theBoard has carried out an annual performance evaluation of its own performance theDirectors individually as well as the evaluation of the working of its various committees.Independent Directors at their separate meeting held during the year on February 21 2020reviewed the performance of Non-Independent Directors of your Company as well as Chairmanof your Company and the Board as a whole. The online proficiency test for IndependentDirectors is a new parameter to analise their independency and eligibility according toIICA and Independent Directors Databank. Your Directors have successfully registeredthemselves in this Databank.
The Audit Committee of the Board comprised of Mr. Pranay Vakil as theChairman Mr. Nandkumar Pradhan Mr. Parish Meghani and Mr. Rahul Rathi as members as atMarch 31 2020. During the year under review there were no instances of non-acceptance ofany recommendations of the Audit Committee by the Board of Directors of your Company. AsMr. Pranay Vakil and Mr. Nandkumar Pradhan are about to complete their tenures in theensuing AGM the reconstitution in the Committee Composition has taken place and Mr.Subrata Kumar Mitra and Mr. Jay Sonawala have been appointed as new members for Auditcommittee. Mr. Rahul Rathi being chairman of the Committee. w.e.f. third Board Meeting ofthe financial year 2020-21.
During the year the paid up share capital of your Company increasedfrom Rs. 1580.49 lakhs to Rs. 1604.26 lakhs by allotment of 237700 new shares issued offace value Rs. 10 each under Company's Employees Stock Option Plan 2009. Further on April7 2020 your Company had allotted 74600 shares under ESOP scheme and at present thepaid-up share capital is Rs. 1611.72 lakhs divided into 16117170 equity shares of facevalue Rs. 10 each.
The equity shares of your Company are listed on the following stockexchanges under the ISIN INE 229A01017.
BSE Limited: Scrip Code: 517536
The National Stock Exchange of India Limited: Scrip Code: ONWARDTEC
The Company has regularly paid the Annual Listing fees to therespective Stock Exchanges. Annual Custody/Issuer fee for the financial year 2019-20 hasbeen paid by the Company to National Securities Depositories Limited and CentralDepository Services (India) Limited.
Pledge of shares
None of the equity shares of the Directors of your Company are pledgedwith any banks or financial institutions. EMPLOYEE STOCK OPTION SCHEME
Your Company has launched Employee Stock Option Plan 2019 (ESOP 2019)for the benefit of employees of your Company and its subsidiaries. The aforesaid schemewas approved by the members of your Company at the 28th Annual General Meeting held onJuly 25 2019 and the scheme is monitored under the guidance of the members of Nominationand Remuneration Committee of the Board of Directors. The rationale of implementation ofESOP 2019 was to attract motivate and retain talented personnel with the organization forlong time. The total number of warrants approved under the scheme for employees of yourCompany and of its subsidiaries are 875000 with option to convert into 3500000 equityshares (One warrant is equal to four equity shares). The employees working with thesubsidiaries of your Company are also covered under the above scheme.
Your Company had implemented Employee Stock Option Plan 2009 (ESOP2009) for the benefit of employees of your Company and its subsidiaries which has come toan end for new grants issues on March 31 2020. The aforesaid scheme was approved by themembers of your Company at the 18th Annual General Meeting held on August 31 2009 and thescheme is monitored under the guidance of the members of Nomination and RemunerationCommittee of the Board of Directors. All the new grants will be issued under the new ESOPScheme 2019 whereas simultaneously the vesting exercising and allotment under ESOP 2009will continue till all the ESOP grants are exercised subject to options lapsed orforfeited if any.
The disclosures required to be made under relevant provisions of theAct and the SEBI (Share Based Employee Benefits) Regulations 2014 is given as Annexure-2to this report including details on the grant vesting exercise and lapsed options underthe aforesaid scheme.
The members at the 26th Annual General Meeting of the Company held onFriday July 21 2017 had appointed M/s. Price Waterhouse Chartered Accountants LLP (FirmRegistration No. 012754N/ N500016) as Statutory Auditors of the Company to hold officefrom the conclusion of that Annual General Meeting till the conclusion of 31st AnnualGeneral Meeting to be held in the year 2022. Statutory auditors have conducted statutoryaudit of the financials of the Company for the financial year ended March 31 2020 andhave submitted their report to the Board along with the financial statements approved atthe Board meeting held on May 15 2020. The said report is enclosed along with thefinancials of your Company and also forms part of this Annual Report which includes theirremarks and matters of emphasis which are self-explanatory.
The Internal Auditors Mazars Business Advisors Pvt. Ltd. CharteredAccountants Pune have conducted internal audits periodically and submitted their reportsto the Audit Committee. Their reports have been reviewed by the Audit Committee.
Pursuant to the provisions of Section 204 of the Act and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board hadappointed M/s. Nilesh A. Pradhan & Co. LLP Company Secretaries (FCS: 7478 CP No.:7891) to undertake the secretarial audit of your Company for the financial year endedMarch 312020. Their secretarial audit report is annexed herewith this report asAnnexure-3.
Explanations for the observations made by Secretarial Auditor M/sNilesh A. Pradhan & Co. LLP in Secretarial Audit Report:
The intimation was unintentionally delayed and due to unavoidablecircumstances to the Company which the Board has taken into knowledge and consideration.The Company has filed the intimation received well in the timeline prescribed by theProhibition of Insider Trading Regulations 2015 and has been compliant in true manner.
The notices received by the promoters were with respect to FY 2014-15which were acted upon and rectified by paying the penalty levied by SEBI. No interventionor breaching of law was intended. The Promoters have taken the matter seriously andresolved the same after necessary compliances were completed.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Company has an internal control system commensurate with thesize scale and complexity of its operations. Your Company has documented a robust andcomprehensive internal control system for all the major processes to ensure reliability offinancial reporting timely feedback on achievement of operational and strategic goalscompliance with policies procedures laws and regulations safeguarding of assets andeconomical and efficient use of resources. The formalized system of control facilitateseffective compliance as per Listing Obligations and relevant provisions of the Act.
To maintain its objectivity and independence the internal auditfunction reports to the Chairman of the Audit Committee of the Board. The internal auditfunction monitors and evaluates the efficacy and adequacy of internal control system inyour Company its compliance with operating systems accounting procedures and policies atall locations of your Company and its subsidiaries. Based on the report of internal auditfunction process owners undertake corrective action in their respective areas and therebystrengthen the controls. The Internal Auditor of your Company initiates an InternalFinancial Control task wherein the processes of all the activities in the Company arebeing verified and analyzed. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board. The Audit Committee also met yourCompany's Statutory Auditors to ascertain their views on the financial statementsincluding financial reporting system compliance to accounting policies and proceduresthe adequacy and effectiveness of internal controls and systems followed by your Company.
BUSINESS RISK MANAGEMENT
Your Company has formally framed a risk management plan/policy toidentify and assess the risk areas monitor and report compliance and effectiveness of thepolicy and procedure. A detailed exercise is being carried out to identify evaluatemanage and monitoring of both business and non-business risk. This plan seeks to createtransparency minimize adverse impact on the business objectives and enhance yourCompany's competitive advantage. The business risk plan defines the risk managementapproach across the enterprise at various levels including documentation and reporting.The Audit Committee and Board of Directors periodically review the risks and suggest stepsto be taken to control and mitigate the same through a properly defined framework.
The purpose of risk management is to achieve sustainable businessgrowth protect Company's assets safeguard shareholder investments ensure compliancewith applicable laws and regulations and avoid major surprises of risks. The policy isintended to ensure that an effective risk management framework is established andimplemented within the Company.
PARTICULARS OF LOANS GUARANTEES SECURITIES OR INVESTMENTS
Loans guarantees securities and investments covered under Section 186of the Act form part of the notes to the financial statements provided in this AnnualReport. Also details of loans guarantees securities and investments made by the Companyduring the Financial Year 2019-20 are provided as Annexure - 4 of this Report.
Your Company has not accepted any public deposits and as such noamount of principal or interest was outstanding as of the date of the balance sheet.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
All contracts/ arrangements/ transactions entered by your Companyduring the financial year with related parties were on an arm's length basis in theordinary course of business and were in compliance with the applicable provisions of theAct and the Listing Obligations. There are no materially significant related partytransactions undertaken by your Company with the Promoters Directors Key ManagerialPersonnel or other designated persons which may have a potential conflict with theinterest of your Company at large.
All related party transactions are placed before the Audit Committee ofyour Company for its approval. Also the Company had taken an omnibus approval from theAudit Committee in its meeting held on May 15 2020 for routine transactions with relatedparty which are made on an arms' length basis. A statement of all related partytransactions is placed before the Audit Committee for its review on a quarterly basisspecifying the nature value and terms and conditions of the transactions. Your Companyhas also adopted a related party transaction policy. This policy as approved by theBoard is uploaded on your Company's website; www.onwardgroup.com. All transactions areundertaken as per the provisions of the Company's policy.
The related party transactions that were entered during the financialyear 2019-20 are given in the notes to financial statements as per Indian AccountingStandard 24 (IndAS 24)- Related Party Disclosure which form part of the Annual Report.
Further all transactions with related parties have been conducted atan arm's length basis and are in ordinary course of business. Accordingly there are notransactions that are required to be reported in Form AOC-2 in Annexure-5.
INSIDER TRADING POLICY
Onward Technologies' Insider Trading Policy for Regulation of Tradingby Insiders has formulated an Insider Trading Policy for promoters and promoter groupalong with Directors and employees to comply with SEBI (Prohibition of Insider Trading)Regulations 2015. This policy is framed adopting the standards set in the Prohibition ofInsider Trading Regulations to regulate monitor and report trading by its employees toachieve compliance with the said Regulations. The Insider Trading Policy for Regulation ofTrading by Insiders is available on our website (www.onwardgroup.com)
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of Annual Return in form MGT-9is annexed herewith as Annexure-6 to this report. The same is available on our websitewww.onwardgroup.com.
DIRECTOR'S RESPONSIBILITY STATEMENT
The Directors confirm that:
1. In the preparation of the annual accounts the applicable accounfingstandards had been followed along with proper explanaton relatng to material departures;
2. They have selected such account ng policies and applied themconsistently and made judgements and estmates that are reasonable and prudent so as togive a true and fair view of the state of affairs of your Company at the end of thefinancial year and of the profit of your Company for that period;
3. They have taken proper and sufficient care for the maintenance ofadequate account ng records in accordance with the provisions of the Act forsafeguarding the assets of your Company and for prevent ng and detect ng fraud and otherirregularites;
4. They have prepared the annual accounts on a going concern basis;
5. They have laid down internal financial controls to be followed byyour Company and that such internal financial controls are adequate and were operatngeffectvely; and
6. They have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatngeffectvely.
CORPORATE SOCIAL RESPONSIBILITY
According to the provisions of Secton 135 of the Act which relates toCSR they are applicable to your Company from FY 2019-20. Now the CSR Policy has beenadopted which is available on the web link www.onwardgroup.com with specific objectves asprescribed in Schedule VII.
The Board has consttuted Corporate Social Responsibility (CSR)Committee which comprised of Mr. Pranay Vakil as Chairperson; Mr. Harish Mehta and Mrs.Prachi Mehta as members. The Board has also approved a CSR policy on recommendations ofCSR committee. As mentoned above for other Committee members reconstitution for CommitteeCompositions has been undergone and Mr. Harish Mehta has been appointed as the Chairpersonfor CSR Committee.
Corporate Social Responsibility is an integral part of OnwardTechnologies' ethos and policy and it has been pursuing this on a sustained basis throughits social welfare organizaton Onward Foundaton. Similar to business actvites yourCompany aims to become a perfect partner to the communites it is a part of. Your Company'sCSR policy focuses on using the capabilites of business to uplift the community by makingsignificant contributions monetary and through effort to make educaton accessible andrelevant for future generations.
Your Company undertook various actvites through Onward Foundationduring the year in line with its CSR policy and with provisions of Secton 135 ready withSchedule VII of the Companies Act 2013. The actvites included an end-to-end project fromconceptualization to execution at St. Xaviers College Mumbai which included renovation& up gradation of the Audio-Visual Room (now named The Onward Hall) & Sociologydepartment on the ground floor entire common area with a brand new garden VolleyballCourt along with providing equipment towards improving infrastructure standards with atotal investment of Rs. 28.48 lakhs. This was contributed 50% by Onward Technologies and50% by the Promoter family directly. Our Mumbai team also participated in the MumbaiMarathon and ran for Akanksha Foundation (www.akanksha.org) and contributed towards causeof building networks of innovative schools that empowers children to maximize theirpotential and that influences systemic reform. The Annexure-7 for our CSR Actvites andpolicies has been given post Board's Report.
DISCLOSURES UNDER THE ACT
1. Material changes and commitment affecting financial position:
The Company has undergone a material change and commitments which couldaffect your Company's financial position and which has occurred between the end of thefinancial year and date of this report. Your Company has applied for acquiring and mergingits wholly owned subsidiary Onward eServices Limited into Parent Company- OnwardTechnologies Limited. This scheme of arrangement if passed by the NCLT Bench will beeffected from the appointed date i.e. January 1 2020 and hence the impact will result onthe financial position of the Company postmerger. Your Company is strong and determinedand healthy for such acquisitions and the acquisition will lead to synergies in thesegment of business finance as well as compliances.
2. Shares with differential rights:
Your Company has not issued any shares with differential rights andhence no information as per provisions of Section 43 (a) (ii) of the Act read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules 2014 is furnished.
3. Sweat Equity Shares:
Your Company has not issued any sweat equity shares during the yearunder review and hence no information as per provisions of Section 54 (1) (d) of the Actread with Rule 8 (13) of the Companies (Share Capital and Debenture) Rules 2014 isfurnished.
4. Reporting of frauds:
The Statutory Auditors of the Company has not reported any frauds byCompany's employees or officers in financial or business operations of the Company duringthe year under review pursuant to provisions of Section 143 (12) of the Act.
5. Material Transactions:
Your Company did not carry any material transaction during the yearunder review and hence there were no particular changes in the business of your Company.
6. Material Orders:
Significant and material orders passed by the regulators or courts ortribunals:
Your Directors state that no disclosure or reporting is required as nosignificant or material orders were passed during the year under review by the regulatorsor courts or tribunals which impact the going concern status and Company's operations infuture during the year under review.
7. Maintenance of Cost Records:
Maintenance of cost records under sub-section (1) of section 148 of theCompanies Act 2013 are not applicable to the business activities as carried out by theCompany.
8. Secretarial Standards:
Your Directors confirm that the mandatory Secretarial Standards issuedby the Institute of Company Secretaries of India have been complied with.
DISCLOSURES AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
Your Company has zero tolerance for sexual harassment at workplace andhas adopted a policy on prevention prohibition and redressal of sexual harassment ofwomen in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the Rules thereunder for preventionand redressal of complaints of sexual harassment at workplace. Your Company is committedto providing equal opportunities without regard to their race caste sex religioncolour nationality disability etc. All women associates (permanent temporarycontractual and trainees) as well as any women visiting your Company's office premises orwomen service providers are covered under this policy. All employees are treated withdignity with a view to maintain a work environment free of sexual harassment whetherphysical verbal or psychological.
A committee has been set up to redress complaints in this regard.Details of the events which took place during the year are hereunder:
|Sr. No. Particulars ||Events |
|1 Number of Complaints of Sexual Harassment pending at the beginning of the year ||Nil |
|2 Number of Complaints of Sexual Harassment received during the year ||Nil |
|3 Number of Complaints of Sexual Harassment disposed off during the year ||NA |
|4 Number of Complaints of Sexual Harassment pending for more than 90 days ||NA |
|5 Nature of Action taken by the Employer or District Officer ||NA |
|6 No. of Awareness Program about Sexual Harassment Policy conducted and held at workplace ||4 (Four) |
No action was required to be taken by the Company as there were nocomplaints relating to sexual harassment received during the year under review. YourDirectors further state that during the year under review there were no cases filedpursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report on the business outlookand performance review for the year ended March 31 2020 as stipulated in Regulation 34 ofthe Listing Obligations is presented in a separate report which forms part of thisReport.
Your Company has taken appropriate steps and measures to comply withall the applicable provisions of the Listing Obligations on Corporate Governance. Adetailed report on Corporate Governance along with a certificate of statutory auditors ofyour Company also forms part of this Report.
Green Initiatives in Corporate Governance:
In line with the 'Green Initiative' your Company has effectedelectronic delivery of notice of Annual General Meeting and annual report to thoseshareholders whose email ids were registered with the respective depository participantsand downloaded from the depositories viz. National Securities Depository Limited/CentralDepository Services (India)
Limited. The Act and the underlying rules as well as ListingObligations permit the dissemination of financial statements in electronic mode to theshareholders. Your Directors are thankful to the shareholders for actively participatingin the green initiative and seek your continued support for implementation of the same.
CONVERSION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGSAND OUTGO
|A ||Con ||servation of Energy: || |
| ||1 ||The steps taken or impact on conservation of energy ||Your Company requires energy for its operations and the Company is making all efforts to conserve energy by monitoring energy costs and periodically reviews of the consumption of energy. It also takes appropriate steps to reduce the consumption through efficiency in usage and timely maintenance / installation / upgradation of energy saving devices. |
| ||2 ||The steps taken by your Company for utilizing alternate sources of energy |
| ||3 ||The capital investment on energy conservation equipments |
|B ||Technology Absorption Adoption and Innovation: |
| ||1 ||The efforts made towards technology absorption ||Your Company uses latest technology and equipments into the business. Further your Company is not engaged in any manufacturing activities. |
| ||2 ||The benefits derived like product improvement manufacturing activities cost reduction product development or import substitution |
| ||3 ||In case of imported technology (imported during the last three years reckoned from the beginning of the financial year) |
a) The details of technology imported
b) The year of import
c) Whether technology been fully absorbed?
d) If not fully absorbed areas where absorption has not taken place and the reasons thereof
| ||4 ||The expenditure incurred on Research and development ||Your Company has not spent any amount towards research and developmental activities and has been active in harnessing and tapping the latest and the best technology in the industry. |
C. Foreign exchange earnings and outgo: (OTL - Standalone)
| ||2019-20 ||2018-19 |
|Foreign exchange earnings ||4235.38 Lakhs ||4490.86 Lakhs |
|Foreign exchange outgo ||1398.47 Lakhs ||1537.10 Lakhs |
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 of the Act read withRule 5 (1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is furnished herewith in Annexure-8.
Further the information required pursuant to Section 197 of the Actread with Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 in respect of employees of your Company and Directors is furnished hereunder:
|Name and Designation ||Harish Mehta Executive Chairman ||Jigar Mehta Managing Director |
|Nature of employment whether contractual or otherwise ||Permanent ||Permanent |
|Qualification & Experience & Age ||Qualification: M.S. ELECTRICAL Experience: 41 years Age: 73 years ||Qualification: Bachelor's in Business Administration with double major in Marketing and Management information system (MIS) Boston University USA |
Experience: 19 years Age: 40 years
|Date of Commencement of Employment ||July 18 1991 ||May 16 2016 |
|The last employment held by employee before joining Company ||NA ||NA |
|% of equity shares held by employee in the Company ||216528 (1.34%) ||576299 (3.59%) |
|Whether the employee is a relative of any Director Manager of the Company. If yes provide the details ||Relative of Mr. Jigar Mehta Managing Director and Mrs. Prachi Mehta Director of the Company ||Relative of Mr. Harish Mehta Executive Chairman and Mrs. Prachi Mehta Director of the Company |
Details of remuneration paid for the financial year ended March 312020 to Executive Directors:
|Name of the Director ||Mr. Harish Mehta (Executive Chairman) ||Mr. Jigar Mehta (Managing Director) |
|Fixed Components || || |
|Basic Pay ||141.69 ||36.00 |
|Allowances (HRA Transport Allowance LTA Supplementary Allowances) ||- ||41.70 |
|Medical Reimbursement ||- ||0.15 |
|Employer's Contribution toward Provident Fund ||- ||4.68 |
|Variable Components || || |
|Perquisite ||27.73 ||- |
|Compensation or Incentives ||50.00 ||50.00 |
|Total ||219.42 ||132.53 |
Your Company recognizes the importance of aligning the businessobjectives with specific and measureable individual objectives and targets. Your Companyhas therefore formulated the criteria for rewarding its Directors key managerialpersonnel and other employees keeping in view the following objectives:
Ensuring that the level and composition of remuneration isreasonable and sufficient to attract retain and motivate to run the Companysuccessfully.
Ensuring that relationship of remuneration to performance isclear and meets the performance benchmarks.
Ensuring that remuneration involves a balance between fixed andincentive pay reflecting short and long-term performance objectives appropriate to theworking of the Company and its goals.
Your Company's remuneration policy is directed towards rewardingperformance based on review of achievements periodically. The same is in consonance withthe existing industry practice. The same is available on the website www. onwardgroup.com
Extracts of the Remuneration Policy
The Remuneration Policy of Onward Technologies Limited (theCompany") is designed by the Nomination and Remuneration Committee (NRC) of theCompany to attract motivate and retain manpower in a competitive market. The RemunerationPolicy applies to the Company's Senior Management including its Key Managerial Person andBoard of Directors and other employees.
Remuneration to Non-Executive Directors:
The Non-Executive Directors of the Company are paid remuneration by wayof siffing fees only for attending the meetings of the Board of Directors and itsCommittees. The siffing fees paid to the Non-Executive Directors for attending meetings ofBoard of Directors and Audit Committee of Board of Directors shall be Rs. 0.75 lakhs andRs. 0.50 lakhs per meeting respectively. Also siffing fees for attending Nomination andRemuneration Committee and Stakeholders' Relationship committee meetings shall be Rs. 0.05lakhs per meeting. Beside the siffing fees they are also entitled to reimbursement ofexpenses. The Non-Executive Directors of the Company are not paid any other remunerationor commission. The
sitting fees of the Non-Executive Directors for attending meetings ofBoard of Directors and the Committees of Board of Directors may be modified or implementedfrom time to time only with the approval of the Board in due compliance of the provisionsof the Act.
Remuneration to Executive Directors Key Managerial Personnel (KMPs)& Senior Management Personnel (SMPs):
The Company has a credible and transparent framework in determining andaccounting for the remuneration of the Managing Director / Whole Time Directors (MD/WTDs)Key Managerial Personnel(s) (KMPs) and Senior Management Personnel(s) (SMPs). Theirremuneration shall be governed by the external competitive environment track recordpotential individual performance and performance of the Company as well as industrystandards. The remuneration determined for MD/WTDs KMPs and SMPs are subjected to theapproval of the Board of Directors subject to compliance of the provisions of the Act. Theremuneration for the KMP and the SMP at the time of the appointment has to be approved bythe Board but any subsequent increments shall be approved by the Managing Director of theCompany as per the HR policy of the Company and ratified by the Board.
As a policy none of the Executive Directors are paid sitting fees.
Senior Management Personnel:
Persons/Officers of the Company having following designations shall betermed as Senior Management Personnel of the Company:
1. Chief Executive Officer (CEO)
2. Chief Financial Officer (CFO)
3. Executive Vice president (EVP)
4. Senior Vice president (SVP)
Further Company's policy on Directors' appointment and remunerationincluding criteria for determining qualifications positive attributes and independence ofDirectors is also available on Company's website; www.onwardgroup.com.
The Directors hereby put on record their sincere gratitude towards thecontinued assistance and co-operation extended to your Company by its customersstakeholders suppliers banks financial institutions and various government authoritiestowards the growth of your Company.
The Directors also place on record their deep sense of appreciation forthe dedicated services rendered by the employees of your Company.
| || |
For and on behalf of the Board of Directors
| ||of Onward Technologies Limited || |
| ||Harish Mehta ||Jigar Mehta |
|Place: Mumbai ||Executive Chairman ||Managing Director |
|Date: May 15 2020 ||DIN :00153549 ||DIN : 06829197 |