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Directors Report of OnMobile Global Ltd.

Mar 31, 2016

Dear Shareholders,

The Directors take pleasure in presenting the 16th Annual Report on the business and operations of the Company together with the audited financial statements for the year ended March 31, 2016.

RESULTS OF OPERATIONS FOR THE YEAR 2015-16

Summary of the operations of the Company on standalone basis for the financial year 2015-16 is as follows:

(In Rs, Million)

PARTICULARS 2015-16 2014-15

Revenue from operations 3,331.55 3,460.40

Earnings before other income, 394.16 282.27

depreciation and amortization, finance charges, Exceptional item and tax Exceptional item 2.46 -

Profit before other income, 391.70 282.27

depreciation and amortization, finance charges and tax

Profit before tax 237.58 198.90

Profit for the year 57.35 92.09

Equity Share Capital 1,081.11 1,092.20

Reserves and Surplus 5,888.55 6,177.08

Net worth 6,969.66 7,269.28

Net Block 279.65 1,152.12

Net Current Assets 3,485.82 3,268.77

Cash and Cash Equivalents 840.92 890.27

Earnings per share (Diluted) (In Rs,) 0.51 0.80

BUSINESS PERFORMANCE / FINANCIAL OVERVIEW Standalone Financials

During 2015-16, the Company recorded net revenue of Rs, 3,331.55 million, as compared to Rs, 3,460.40 million in 2014-15. The Profit after tax of the Company is Rs, 57.35 million in 2015-16 as compared to Rs, 92.09 million in 2014-15. The diluted earnings per share (EPS) is Rs, 0.51 per share as compared to Rs, 0.80 per share in 2014-15.

Consolidated Financials

During 2015-16, the Company recorded consolidated net revenue of Rs, 8,157.43 million, as compared to Rs, 8,470.50 million in 2014-15. The consolidated Profit/ (Loss) after tax of the Company for the year 2015-16 is (126.36) million as compared to (323.18) million in 2014-15. The consolidated diluted earnings/ (Loss) per share (EPS) for the year 2015-16 is (1.16) as compared to (2.86) per share in 2014-15.

Appropriations Dividend

Your Directors are pleased to recommend the following dividend for the financial year ended March 31, 2016 which is payable on obtaining the shareholders'' approval in the 16th Annual General Meeting scheduled for September 14, 2016:

Dividend Date of Book Particulars Par Per- amount value recom- Closure of dividend centage per equity (Rs,) mendation Date share (In Rs,)

September 7, 2016 to

Final May 30, September 10.00 15% 1.50 Dividend 2016 14, 2016 (both days inclusive)

The total dividend payout amount for the year inclusive of dividend distribution tax will be Rs, 195.18 million.

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

After providing for the dividend, the Company proposes to retain Rs,2,957.24 million in the Statement of Profit and Loss. The Company is not proposing to transfer any amount to reserves from the profits of the financial year 2015-16.

Liquidity

As on March 31, 2016 the Company had liquid assets including investments in fixed deposits and mutual funds of Rs, 1,573.22 million.

CHANGES TO THE SHARE CAPITAL

During the year under review, the Company allotted 423,660 equity shares (including bonus shares) on the exercise of stock options under its various Employee Stock Option Plans and accordingly the paid up equity share capital of the Company as on March 31, 2016 stands at 108,111,402 equity shares of face value of Rs, 10/- each. (i.e. Rs, 1,081,114,020).

BUY BACK

During the year under review, the Board of Directors at their meeting held on February 4, 2016, have approved buy back of equity shares of the Company from the Open Market through the Stock Exchange Mechanism up to an aggregate amount of Rs, 70 crore i.e. 9.76% of aggregate paid up equity capital and free reserves as on March 31, 2015 (subject to a maximum of 5,600,000 equity shares) for a price not exceeding Rs, 150/- per share. The buyback offer opened on February 22, 2016 and is ongoing. A Public Announcement dated February 11, 2016 for the said buyback was published in Financial Express (All editions), Janasatha (All editions) and Hosadigantha (Bangalore Edition) while the same was also fled with SEBI, NSE and BSE. As on March 31, 2016, the Company has bought back and extinguished 1,532,594 equity shares.

SIGNIFICANT EVENTS: 2015-16 Awards and Recognitions

On Mobile won "HR Best Practice" award at HR Showcase 2015 organized by National Human Resource Development Network

On Mobile Global Limited (NSE: On Mobile) won the prestigious HR Best Practice award for its "Developing capability from within - On Mobile Learning Academy" initiative, at the HR Showcase 2015 organized by National Human Resource Development Network, Bangalore.

The Human Resources team at On Mobile works on a mission "To make motivated talent available for the organization". In order to fulfill this mission, the company launched a unique initiative called On Mobile Learning Academy (OLA), which addresses the need for organizational productivity as well as people''s professional development and employability. OLA has created an internal network of employees who play the crucial role of trainers and mentors. These internal trainers facilitate and provide highly tailored training to ensure increase in employee productivity, as well to increase their future employability and growth potential.

The salient feature of OLA is that it synergizes the growth ambitions of the organization and an individual employee. Adoption of this new approach has already started paying dividends for On Mobile. Over the last year employee productivity as defined by ratio of revenue to manpower cost, has gone up by 23%, along with a 16% increase in employee satisfaction scores.

Winning the prestigious HR Best Practice award for On Mobile Learning Academy is further testimony that this new approach of coupling the growth of the company with the growth of employees is a more rewarding and effective way.

The HR Showcase is a signature event of the National Human Resource Development Network. The 2015 HR Showcase event had 160 nominations out of which 33 practices of 23 companies got shortlisted in the first round and 6 practices were selected for the award in the final round. Criteria for the award were strength of business drivers & rationale, quality of the conceptual framework, practice creativity, rigor of implementation, strength of the business impact and quality of the application and presentation.

Market wins and Expansion

1. On Mobile''s signature Ring back Tone product has witnessed Significant growth over the last year. The customer base for Ring back Tone now exceeds 65 million worldwide. On Mobile''s Ring back Tone delivers more than 500 million music plays every day.

2. On Mobile launched Ring back Tone Services with one of the biggest operators in Italy.

3. On Mobile has secured a 3 years renewal for its Ring back Tone offering with Bharat Sanchar Nigam Limited in South & East Zone with an option to extend for the 4th year as well. As per this agreement On Mobile will continue to provide Ring back Tone to customers of Bharat Sanchar Nigam Limited (A Govt. of India Undertaking) in South & East Zones with innovative ways to customize their calling experience for the next 3 years with an option to extend for the 4th year as well.

4. On Mobile crossed a Significant Milestone of reaching 3 million subscribers and a penetration of 11.5% for the Ring back Tone services with one of the large mobile operators in Bangladesh.

5. On Mobile has renewed its existing partnership with Telefónica''s Movistar operators in Latin American Spanish speaking countries. As per the agreement, On Mobile will continue to power its flagship Ring back Tone (RBT) service to Movistar''s 132 million plus subscribers across 13 countries in Latin America for the next four years.

6. On Mobile secured a deal for Ring Back Tones services with a leading operator in Lesotho, making it the first music service in the market.

7. On Mobile deployed Ring Back Tones service in Malaysia. This marks the entry of On Mobile Ring back Tone services in the country.

8. On Mobile crossed a remarkable milestone of 10Mn Ring back tone service with a leading mobile operator in Bangladesh.

NEW PRODUCTS

1. High Definition Audio Ring back Tone

On Mobile launched High-Definition (HD) Ring back Tones for 4G Voice (Voice over LTE) customers and a new application called Identity for Vodafone Spain.

On Mobile has helped Vodafone Spain leverage Ring back Tones to increase the awareness and adoption rate of Voice over LTE (VoLTE). Committed towards providing improved quality in both voice and calling experience, On Mobile has encoded High-Definition Ring back Tones in AMR - WB (Adaptive Multi Rate - Wide Band) format. The On Mobile solution enables Vodafone''s Voice over LTE (VoLTE) service users to experience high audio quality, thereby improving consumer experience and stickiness.

On Mobile''s Identity application provides the user with an attractive design and excellent user experience. With its unique features, Identity offers Vodafone Spain customers the possibility to personalize their Ring back Tones through a Smart phone interface that allows easy identification of each audio track, plus an option to preview it before selection. Offered under a fat rate model, this application provides users the freedom to change songs assigned to their contacts as frequently as they wish, and the ability to choose their favorite music from an extensive catalog. In addition, users can customize their expression of identity by creating playlists with multiple songs.

2. Wif User Identification and Billing

Today on most digital stores marketed by the telecom operators there is no way to effectively identify or charge Wif users in digital stores without complicated user interactions.

On Mobile created a cloud based solution for seamless identification and secure billing of WiFi users on digital stores. This is a unique proposition in the market as currently there is no way to effectively identify or charge Wif users in digital stores without complicated user interactions. The registered stores become part of an On Mobile managed network, which help identify WiFi users. On Mobile''s proprietary algorithm manages the network, interworking between stores and user identification. This product has been launched successfully in a large Telecom operator in Europe.

INFORMATION ABOUT SUBSIDIARY/ JOINT VENTURE/ ASSOCIATE COMPANIES

As on March 31, 2016, the Company has 44 subsidiaries.

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

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

NEW LOCATIONS

During the year under review, the branches of the Company located in Romania, Nicaragua and Panama shifted to new addresses within the same city. Similarly, there has been a change in the registered office address of the subsidiaries of the Company based out of Madagascar, Canada and Argentina.

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

There have been no material changes for the period between end of the financial year 2015-16 and the date of this report affecting the financial position of the Company.

OPERATIONAL EFFICIENCY

On Mobile operations team continues its efforts to improve the efficiencies. The team strives to improve the systems and processes to enable faster Turn Around Times (TATs) to customer issues. The teams are also working to bring in uniformity between Operating System Versions and On Mobile platform versions as a part of standardization. The benefit being faster learning curve for new hires, faster resolution of issues and hence better monetization of services. The Delivery, Operations and Engineering teams jointly drove the following efforts:

ISO Certification

On Mobile has received ISO 27001:2013 Certification from UKAS. This is recertification and is valid for 3 years. The Client Delivery units, platforms, products and support functions were audited extensively under the ISO 27001:2013 standards framework by DNV This is an endorsement of the efforts that have gone into continued improvement of processes.

Automation & Optimization

We continue our efforts towards automation of repetitive tasks. Processes have been mapped to systems to make them measurable in terms of quantity and time. Data points were used to create dashboards and track team / system performances and drive improvements.

Operations team

The Operations team under the Global Network Operations Centre (GNOC) setup continues to be the backbone of the optimized operations team. We have been able to reduce on repetitive work across multiple regions. This consolidation has helped in improving issue resolution time due to cross learning.

INFRASTRUCTURE

On Mobile is going strong with more than 40 offices across the globe and 2.25 lakh square feet of office space. The offices are categorized as virtual office, business centers and owned/ leased offices. The largest facility is the Electronic City office in Bangalore with 1.30 lakh square feet of office space. All the On Mobile facilities are well equipped with good Infrastructure & working atmosphere and high level of security and safety. Regular and planned preventive measures are in place to avoid downtime and to ensure business continuity. We operate the facilities in a manner that complies with local laws and regulations.

On Mobile services to customers across 150 cities and towns in India. It has 9 regional warehouses catering to internal hardware movement and supporting operations of more than 2,500 internal IT servers across India. On Mobile is a truly global company which is spread across 53 countries and enjoys long-term partnerships with global telecom operators.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility (CSR) refers to business practices involving initiatives that benefit society. CSR strategies encourage the company to make a positive impact on the society, environment and stakeholders including consumers, employees, investors, communities, and others.

In line with the CSR activities listed in Schedule VII of the Companies Act, 2013, the Company has identified promoting health care including preventive health care as its primary focus area for the upcoming period. As per WHO estimates in India, there are approximately 63 million people, who are suffering from Significant Auditory Impairment. This places the estimated prevalence of hearing impairment at 6.3% in India. Given that the Company''s core offering is to enable people to express themselves through sound, this CSR initiative aligns the Company''s future identity with a relevant cause.

Accordingly, the Company is planning to fund for free hearing aids for the needy by equipping approximately 1,000 people with such devices, ending their social and vocational isolation.

During the year 2015-16, the Company made a contribution of Rs, 1,000,000 to Prime Minister''s National Relief Fund (PMNRF).

Apart from the said contribution to PMNRF, in the year 2015- 16, On Mobile continued its support towards "Education" as a social cause through Give India''s "Payroll Giving Program". The Company had tie–ups with few NGOs during Indian festivals.

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

http://www.On Mobile.com/sites/default/files/cg_policy/ Corporate_Social_Responsibility_Policy.pdf

Particulars required to be disclosed pursuant to the Companies (Corporate Social Responsibility Policy) Rules, 2014 are given in Annexure VII to the Director''s report.

RESEARCH AND DEVELOPMENT

During the fiscal year ending March 31, 2016, On Mobile has strengthened its mobile development team and continued to focus its R&D workforce on the development of a new RBT platform called SPARK.

Strengthening our mobile development team

As On Mobile is developing new mobile applications, the mobile development team has been strengthened with the arrival of key hires on Android and iOS. The mobile development team is now based in 2 locations: Paris and Bangalore, with each location focusing on developing a particular set of apps. This ensures faster delivery and better quality. Each location functions as a start-up leveraging the capabilities of the SPARK platform.

A focused back-end development team

The development team in Bangalore has been structured to work on the new SPARK platform, which is not only highly scalable enabling support of billions of calls per day but also more flexible allowing new features heretofore unseen on the service. Those new and innovative features will be delivered this year.

Excellence in user experience

This year, the work on the user experience has continued with extensive customer research and market insights forming the foundation. The user experience team has been continually strengthened to deliver user-friendly and innovative apps.

Audio expertise – transform, enhance and edit

As On Mobile is looking for new ways to use sound as a means of communication, we have invested in strengthening our audio expertise and made research on audio transformation, editing and enhancement to provide the end-user with new capabilities and possibilities.

CORPORATE GOVERNANCE

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

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

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

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Sanjay Baweja was appointed as an Additional Director of the Company by the Board with effect from May 28, 2015. Further, Nehchal Sandhu and Pascal Tremblay were appointed as Additional Directors of the Company with effect from August 1, 2015. The appointment of the said directors was regularized at the 15th AGM of the Company held on September 8, 2015.

Harit Nagpal, Naresh Malhotra and Bruno Ducharme have resigned from the Directorship of the Company w.e.f July 30, 2015.

AUDITORS'' APPOINTMENT

Deloitte Haskins & Sells, Chartered Accountants, were appointed as Auditors of the Company by the shareholders at the 14th AGM held on September 10, 2014 to hold office until the conclusion of the 17th AGM of the Company to be held during the year 2017. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of Auditors shall be placed for ratification at every AGM. Accordingly, the appointment of Deloitte Haskins & Sells, Chartered Accountants as Auditors of the Company is placed for ratification of the shareholders at the ensuing Annual General Meeting. The Company has received a Certificate from the Auditors to the effect that their appointment will be in accordance with the provisions of Section 141 of the Companies Act, 2013.

SECRETARIAL AUDIT

The Board of Directors of the Company had appointed Parameshwar G Hegde, Hegde & Hegde, Practicing Company Secretaries to conduct the Secretarial Audit pursuant to the provisions of Section 204 of the Companies Act, 2013 for the financial year ended March 31, 2016 and the Secretarial Audit Report is appended as Annexure IX.

COMMENTS ON AUDITORS'' REPORT

There are no Qualifications, reservations or adverse remarks or disclaimers made by Statutory Auditors of the Company in the Audit Report and by the Secretarial Auditor in the Secretarial Audit Report for the financial year ended March 31, 2016.

Details on the MR-2 applications made to Central Government seeking approval for managerial remuneration are given in the Corporate Governance Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

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

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

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

iii. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

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

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

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

NUMBER OF MEETINGS OF THE BOARD

The Board met four times during the financial year 2015- 16 viz., May 28, 2015, July 30, 2015, October 28, 2015 and February 4, 2016. The maximum interval between any two meetings did not exceed 120 days.

COMMITTEES OF THE BOARD

During the year, in accordance with the Companies Act, 2013, five Committees of the Board were functional as follows:

1. Audit Committee

2. Nomination and Compensation Committee

3. Stakeholders Relationship Committee

4. Corporate Social Responsibility Committee

5. Risk Management Committee

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

BOARD INDEPENDENCE

The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 that the Independent Directors of the Company meet the criteria of independence laid down in Section 149(6). Our definition of ''Independence'' of Directors is derived from Regulation 16(b) of Listing Regulations and Section 149(6) of the Companies Act, 2013. Based on the confirmation / disclosures received from the Directors and on evaluation of the relationships disclosed, the following Non- Executive Directors are Independent in terms of the aforesaid Listing Regulations and Section 149(6) of the Companies Act, 2013:

a) Rajiv Khaitan

b) Nancy Cruickshank

c) Sanjay Baweja

d) Nehchal Sandhu

e) Pascal Tremblay

COMPANY''S POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION

The Nomination and Remuneration Policy of the Company on Directors'' appointment and remuneration including criteria for determining Qualifications, positive attributes, independence of a Director and other matters provided under Sub-section (3) of Section 178, is appended as Annexure II to this Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

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

Amount Particulars of loans, Sl. Name of the entity Relation Rs, guarantees and No (in Million) investments

1. On Mobile Global South Africa (PTY) LTD Subsidiary 0.0004 Investment in share capital

2. On Mobile USA LLC. Subsidiary 57.2 Loans provided

3. On Mobile USA LLC. Subsidiary 74.9 Loans provided 4. On Mobile USA LLC. Subsidiary 26.5 Loans provided

5. On Mobile USA LLC. Subsidiary 73.4 Loans provided



Name of the entity Purpose for which the loan, guarantee and investment are proposed to be utilized

On Mobile Global South For working capital Africa (PTY) LTD

On Mobile USA llc For working capital of its subsidiary

On Mobile USA LLC. For working capital of its subsidiary

On Mobile USA LLC. For working capital of its subsidiary

On Mobile USA LLC. For working capital of its subsidiary

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

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

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

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

FOREIGN EXCHANGE EARNINGS AND OUTGO

(In Rs, Million)

Year ended Description

March 31, 2016 March 31, 2015

Foreign exchange earnings 2,138.68 1,972.46

Foreign exchange outgo 980.47 886.19

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS

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

RISK MANAGEMENT POLICY

The Board of Directors at their meeting held on October 30, 2014 constituted a Risk Management Committee in accordance with the provisions of the erstwhile Clause 49 of the Listing Agreement. The Company has formulated a risk management policy to facilitate setting up a framework for risk assessment and minimization procedures. A copy of the risk management policy is appended in this report as Annexure IV and is placed on the website of the Company at the below link: http://www.onmoblie.com/sites/default/ fles/cg_policy/Risk_Management_Policy.pdf

VIGIL MECHANISM

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

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

The Company is in compliance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules made there under. No complaints requiring any enquiry or action under the said Act and Rules have been received during the year under review.

EVALUATION OF PERFORMANCE OF BOARD/ DIRECTORS

Pursuant to the provisions of the Act and Listing Regulations, the Board has carried out an annual evaluation of its performance and the Directors individually. In addition to the above, the Board has carried the evaluation of the working of its Audit Committee, Nomination and Compensation Committee and Stakeholders Relationship Committee.

EXTRACT OF ANNUAL RETURN

As required pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 forms part of this Annual Report in Annexure V.

PARTICULARS OF EMPLOYEES

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

A statement showing details of every employee employed throughout the financial year and in receipt of remuneration of Rs, 60 lakh or more per annum or employed for part of the year and in receipt of Rs, 5 lakh or more per month under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is enclosed as Annexure VI (B) to Directors report.

FIXED DEPOSITS

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

EMPLOYEE STOCK OPTION SCHEMES

Pursuant to the provisions of Section 62(1)(b) read with Rule 12(9) of the Companies (Share Capital and Debentures)

Rules, 2014, the Company approved following Employee Stock Option Schemes i.e. Employee Stock Option Plan-I, 2003, Employee Stock Option Plan-II, 2003, Employee Stock Option Plan-III, 2006, Employee Stock Option Plan-I, 2007, Employee Stock Option Plan-II, 2008, Employee Stock Option Plan-III, 2008, Employee Stock Option Plan-IV, 2008, Employee Stock Option Plan-I, 2010, Employee Stock Option Plan-II, 2010 ; Employee Stock Option Plan I, 2011, Employee Stock Option Plan I, 2012 and Employee Stock Option Plan I, 2013 for granting stock options to its employees.

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

ACKNOWLEDGEMENTS

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

For and on behalf of the Board of Directors

François-Charles Sirois

Executive Chairman

Place: Montreal

Date: May 30, 2016


Mar 31, 2015

Dear Members,

The Directors take pleasure in presenting the 15th Annual Report on the business and operations of the Company together with the audited financial statements for the year ended March 31, 2015.

RESULTS OF OPERATIONS FOR THE YEAR 2014-15

Summary of the operations of the Company on standalone basis for the financial year 2014-15 is as follows:

(In Rs. Million)

PARTICULARS 2014-15 2013-14

Revenue from operations 3,460.40 4,062.32

Earnings before other income, 282.27 439.73 depreciation and amortization, finance charges, Exceptional item and tax

Exceptional item - 559.48

Profit before other income, depreciation 282.27 (119.75) and amortization, finance charges and tax

Profit/(Loss) before tax 198.90 (303.58)

Profit/(Loss) for the year 92.09 (372.99)

Equity Share Capital 1,092.20 1,142.36

Reserves and Surplus 6,177.08 6,647.39

Networth 7,269.28 7,789.75

Net Block 1,152.12 2,013.95

Net Current Assets 3,268.77 1,819.71

Cash and Cash Equivalents 890.27 313.75

Earnings/ (Loss) per share (Diluted) (In Rs.) 0.80 (3.30)

BUSINESS PERFORMANCE / FINANCIAL OVERVIEW

Standalone Financials

During 2014-15, the Company recorded net revenue of Rs. 3,460.40 million, a decrease of 15% over the previous year of Rs. 4,062.32 million. The Profit after tax of the Company was Rs. 92.09 million in 2014-15 as compared to a Loss of Rs. 372.99 million in 2013-14. The diluted earnings/(Loss) per share (EPS) for the year 2014-15 was Rs. 0.8 per share as compared to Rs. (3.3) per share in 2013-14.

Consolidated Financials

During 2014-15, the Company recorded consolidated net revenue of Rs. 8,470.50 million, a decrease of 2% over the previous year of Rs. 8,653.13 million. The consolidated Profit/ (Loss) after tax of the Company for the year 2014-15 is Rs. (323.18) million as compared to Rs. (1,319.52) million in 2013-14. The consolidated diluted earnings/ (Loss) per share (EPS) for the year 2014-15 is Rs. (2.9) as compared to Rs. (11.6) per share in 2013-14.

Appropriations

Dividend

Your directors are pleased to recommend the following dividend for the financial year ended March 31, 2015 which is payable on

obtaining the shareholders' approval in the 15th Annual General Meeting scheduled for September 8, 2015:

Particulars Par value Percentage Dividend amount of dividend (Rs.) per equity share (In Rs.)

Final 10.00 15% 1.50 Dividend

Particulars Date of recommendation Book Closure Date of dividend

Final Dividend May 28,2015 September 02, 2015 to September 08,2015 (both days inclusive).

The total dividend payout amount for the year inclusive of dividend distribution tax will be Rs. 197.18 million.

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

After providing for the dividend, the Company proposes to retain Rs. 3,095.20 million in the Statement of Profit and Loss. The Company is not proposing to transfer any amount to reserves from the profits of financial year 2014-15.

Liquidity

As on March 31, 2015, the Company had liquid assets including investments in fixed deposits and Mutual funds of Rs. 1,589.22 million.

CHANGES TO THE SHARE CAPITAL

During the year under review, the Company allotted 7,84,834 equity shares (including bonus) on the exercise of stock options under its various Employee Stock Option Plans and accordingly the paid up equity share capital of the Company as on March 31, 2015 stands at 109,220,336 equity shares of face value Rs. 10/- each. (i.e. Rs. 1,092,203,360).

OPEN OFFER BY PROMOTER

On-Mobile Systems Inc, the promoters of the Company vide their Detailed Public Statement dated February 11, 2014 announced a voluntary open offer to the Shareholders of the Company for acquisition of 11,900,000 paid up equity shares of Rs. 10/- each representing about 10.16% of the fully diluted voting share capital at Rs. 40/- per share. Subsequently, On-Mobile Systems Inc. had issued a letter of offer dated April 3, 2014 to the shareholders. The offer opened on April 25, 2014 and closed on May 9, 2014. After completion of the said open offer process, shareholding of On-Mobile Systems Inc has increased from 39,023,703 shares (34.16%) to 50,923,703 shares (44.58%).

BUY BACK

During the year under review, the Company bought back 5,800,000 Equity Shares of Rs. 10/- each fully paid being 100% of the maximum offer shares pursuant to the Buyback offer from the Open Market through the Stock Exchange Mechanism. The total amount invested in the Buyback was Rs. 442.79 million including brokerage and other charges. The price at which the shares were bought back was dependent on the price quoted on Bombay Stock Exchange (BSE) and National Stock Exchange of India Ltd (NSE). The highest price at which the shares were bought back was Rs. 85.80 per share on BSE and Rs. 85.80 per share on NSE while the lowest price was Rs. 68 per share on BSE and 67.95 per share on NSE (all prices excluding brokerage and other charges). Over all the shares were bought back at an average price of Rs. 76.34 per share (price including brokerage and other charges). The offer was opened on December 22, 2014 and closed on January 15, 2015. The last lot of extinguishment of equity shares in connection with Buyback had completed on January 21, 2015. As a result of this Buy back, the issued and paid-up share capital of the Company has been reduced from 114,253,104 shares to 108,453,104 shares.

SIGNIFICANT EVENTS: 2014- 15

A. Milestone

OnMobile's Ringback Tone (RBT) product now reaches 61 million mobile customers worldwide and delivers approximately 500 million music plays daily. This impressive milestone underscores the growth momentum of one of the principal offerings of the company and confirms On-Mobile's leadership position in the mobile music space. The company's RBT is currently deployed across 41 countries through more than 60 top-tier global telecommunications operators.

B. Market Expansion

1) On-Mobile signed a deal of five years with Robi to deploy various Ring back Tone and Interactive Voice Response solutions. Part of the Axiata Group, Robi is the 3rd largest mobile operator in Bangladesh with 24 million subscribers and has 21% market share with a savvy subscriber base having high ARPU. With this deployment, On-Mobile will power more than 68% of the RBT base in Bangladesh and have relationships with all operators in the country, becoming the provider of choice for these services.

2) On-Mobile became the exclusive Caller Ring back Tone partner (RBT) for Tata Teleservices (Tata) in India. On-Mobile will centrally manage Tata's Content Management Systems across the Code Division Multiple Access (CDMA) and Global System for Mobile Communications (GSM). This partnership will enable Tata to improve operational efficiency, reduce turnaround time and provide a superior user experience to all its subscribers. Signed for an initial term of 3 years, this deal will allow Tata's CDMA subscribers to access a slew of RBT features which were earlier available only for GSM subscribers.

3) On-Mobile deployed its signature Ring back Tone product in Brazil. The company was selected by Oi, a prominent telecommunications player that serves 75 million Brazilians, as its official RBT partner in that country. This partnership has increased On-Mobile's market share in Brazil significantly and strengthened its already strong presence in Latin America, a key market for On-Mobile. It also bears testimony to the company's proven track record in executing and managing comprehensive, fully- managed RBT offerings globally.

C. Divestiture

On-Mobile divested its French subsidiary Voxmobili S.A to Synchronoss Technologies Inc. as per the Share Purchase Agreement with Synchronoss Technologies signed in May 2014. With the closure of this deal, the company realized approximately USD 26 million subject to escrows and other conditions customarily contracted as part of such deals. The sale of Voxmobili is in line with On-Mobile's strategy of focusing on its core products.

D. Management update

Jacks Sterenfeld was appointed as Vice President for Latin America. He brings with him over 20 years of international sales and general management experience, with a focus on Latin America. Previously, he had been working for Telefonica for the past 11 years in various executive roles.

INFORMATION ABOUT SUBSIDIARY/ JOINT VENTURE/ ASSOCIATE COMPANY

As on March 31, 2015, the Company has 44 Subsidiaries. During the year under review, On-Mobile Latam Holding S.L. was incorporated in Spain as a wholly owned subsidiary.

Sale of Voxmobili S.A.: Equity shares held by the Company in Voxmobili S.A, one of the subsidiaries of the Company have been sold through On-Mobile Europe B.V. and On-mobile S.A with effect from July 11, 2014. Hence, Voxmobili S A has ceased to be a subsidiary of the Company. The said sale was approved by the shareholders through postal ballot resolution dated June 20, 2014.

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

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

NEW LOCATIONS

The Company continued its expansion internationally during this year as well. The Company has signed various important global contracts during the year under review. As part of the Company's global expansion strategy, the Company has setup a new branch office in Guinea Conkary. The Company has incorporated a new subsidiary- On-Mobile Latam Holding S.L. in Spain.

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

There have been no Material Changes for the period between end of the financial year 2014-15 and the date of this report affecting the financial position of the Company.

OPERATIONAL EFFICIENCY

Operational efficiency at On-Mobile is a continual endeavor. Over the past year, apart from the constant platform innovation and upgrades, we focused on the following initiatives to improve efficiency and reduce operational costs. The Delivery, Operations and Engineering teams jointly drove the following efforts: Automation & Optimization: All repetitive tasks were reviewed from a monitoring and automation perspective. Manual tasks were automated wherever possible and other tasks were re- engineered to reduce the time spent to complete the tasks. A site wise usage monitoring GUI was also provided which allowed the operations teams, irrespective of their location, to view the status and usage of the hardware and software components in production.

Operations team optimization: The Operations team was consolidated under the Global Network Operations Centre (GNOC). This removed geographical overlaps and brought in efficiency. Automation also helped reduce the operations team size over the last year. The GNOC teams are continually working on streamlining the operations process and better manage the customer Service Level Agreements (SLAs) with their 24/7 service desks.

Configuration management: As part of the operational efficiency drive we have created a configuration management tool for our key platforms, so that the centralized operations teams can remotely configure the services at site. This will help reduce the errors in configuration at the multiple sites, and ensure that the configuration backups are always available at a central site for restoration or trouble shooting in case of an error.

INFRASTRUCTURE

On-Mobile is going strong with more than 40 offices across the globe and 2.25 lakh square feet of office space. The offices are categorized as virtual office, business centers and leased offices. The largest facility is the Electronic city office in Bangalore with 1.30 lakh square feet of office space. All the On-Mobile facilities are well equipped with good working atmosphere and high level of security and safety competency. Regular planned preventive measures are in place to avoid downtime and ensure business continuity.

On-Mobile services to customers across 150 cities and towns in India. It has 9 regional warehouses catering to internal hardware movement and supporting operations of more than 2,500 IT internal servers across India. On-Mobile is a truly global company which is spread across 53 countries and enjoys long-term partnerships with global telecom operators.

HUMAN RESOURCES MANAGEMENT

People world of On-Mobile

On-Mobile has always believed in building a culture of innovation and creativity where our employees are inspired to achieve excellence in their area of functioning. As we transform ourselves to be a part of a new age technology world, we will continue to nurture a common culture among our globally diversified workforce.

Our focus for the year 2014-2015 was to create a highly engaged workplace. We emphasized on learning and skill development, identifying and rewarding our talent and corporate social responsibilities events

Learning and Skill Development

Skill development is a priority at On-Mobile. We believe that if employees are given the opportunity to continually advance professionally, then it increases our ability to achieve our short and long term business objectives.

In the year 2014 - 2015, we implemented an online learning tool. Employees have access to a robust portfolio of technical courses and courses on soft-skills and business skills, with about 250 courses offered online to our global workforce. The response has been overwhelming as it allows learning anywhere and anytime. We continue to offer a comprehensive suite of programs to all levels of management, from coaching for performance evaluation to specialized classroom learning. We are especially focused on strengthening our general management abilities.

Identifying and Rewarding Critical Talent

In early 2014, we implemented a framework to retain our critical talent. One of key features of the framework was to introduce and implement differential reward system for critical workforce. We also introduced ESOP based compensation program to participate in the long term success of On-Mobile.

On-Mobile believes in hiring best talent and thus has a very strenuous hiring process based on the role. The process includes hiring from best colleges and from reputed organizations.

Throughout 2014, we continued to recruit employees throughout the world, with particular emphasis on emerging markets. We added 214 people across the globe - our people count in March 2015 was 1,145.

In our 2015 talent engagement survey, a general survey of all employees conducted every year, we achieved an overall employee engagement score of 70% as compared to the engagement score of 60% in the year 2014. We attribute this to the implementation of initiatives such as effective goal setting process, organization restructuring (which resulted in enriched roles within the organization leading to higher productivity) and a huge focus on skill development.

CORPORATE SOCIAL RESPONSIBILITY

In the year 2014-15, On-Mobile continued support towards "Education" as a social cause through Give India Payroll giving program. The Company had tie-ups with few NGOs during Indian festivals.

We are currently working on our social investment strategy wherein we could leverage our technology to support a social cause.

The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013. The CSR Committee was constituted by the Board of Directors of the Company at its meeting held on July 31, 2014. The CSR committee charter and the CSR Policy of the Company are available in the below website link:

http://www.onmobile.com/sites/default/files/cg-policy/Corporate-Social- Responsibility-Policy.pdf

The Annual report on our CSR activities is appended as Annexure VII to the Director's report.

RESEARCH AND DEVELOPMENT

During the fiscal year ending March 31, 2015, On-Mobile executed a transformation of its R&D operations. The transformation followed three main pillars: focus, agility and user experience.

A more focused R&D force

On-Mobile executed the consolidation of its research and development centers around three main locations: Bangalore, Paris (France) and St-Ives (United Kingdom), each of those centers have clear responsibilities and areas of expertise. In Bangalore, the engineering workforce has deep expertise on large-scale platforms supporting billions of calls per days and complex telecommunication systems. In Paris, the product development team is specialized in mobile applications and user experience, in St-Ives, the R&D is focused on developing content storefronts, the backbone of our CVAS offering.

The number of products has also been reduced significantly in order to focus on the ones with the most potential and increase efficiency.

A more agile product development process

Through extensive agile development training and the use of the latest cloud-based collaboration tools such as Slack and In-vision, the product development process has been completely reshaped. In the past, On-Mobile used to follow waterfall development process, a process popular among Telco companies. While still using some of it for the largest back-end development work, the R&D force is now organized in small multi-disciplinary teams working in an agile way to iterate quickly on prototypes and deliver new products faster.

A greater emphasis on user experience

In 2013, the Consumer Connect initiative was started. This initiative was about gathering consumer insights through the analysis of the very large amount of data that the On-Mobile platforms manage. The initiative is still continuing and it is showing great value to our services by helping us reduce churn and grow usage. This also helped On-Mobile identify opportunities and pain points. In order to fix those pain points, the user experience team has been ramped up with the addition of new user interface designers and interaction designers.

This fiscal year has been about transforming the way the research and development workforce operate. It is now faster, more efficient and much more focused. The next fiscal year is going to be about the massive upgrade of our ring back tone platform to enable new products and new operational models.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of corporate governance. The Company meets the standards and guidelines set by the Securities and Exchange Board of India on Corporate Governance and have implemented all the stipulations prescribed. A detailed report on corporate governance pursuant to the requirements of Clause 49 of the Listing Agreement forms part of the Annual Report. The certificate(s) from the auditors of the Company, M/s Deloitte Haskins & Sells, Chartered Accountants, and independent Practicing Company Secretary, Parameshwar G Hegde confirming compliance of conditions of corporate governance as stipulated under the aforesaid Clause 49 are annexed to the Corporate Governance Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In accordance with Clause 49 of the Listing Agreement, the Management Discussion and Analysis Report is presented in the separate section forming part of the Annual Report.

DIRECTORS AND KEY MANANGERIAL PERSONNEL

At the last Annual General Meeting of the Company held on September 10, 2014, Naresh Malhotra, Rajiv Khaitan, Harit Nagpal, Bruno Ducharme and Nancy Cruickshank were appointed as Independent Directors, pursuant to Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Rajiv Pancholy was appointed as an Additional Director and Managing Director w.e.f June 26, 2014 and shareholders at their meeting held on September 10, 2014 approved the appointment of Rajiv Pancholy as 'Managing Director and CEO' for a period of five years with effect from June 26, 2014.

François-Charles Sirois was appointed as an Additional Director on the Board of the Company on June 26, 2014. François- Charles Sirois is currently President and Chief Executive Officer of Telesystem, a media and technology holding. He is also the President and Chief Executive Officer of On-Mobile Systems Inc., the largest shareholder of the company. Further, the Board of Directors at their meeting held on October 30, 2014 appointed François-Charles Sirois as 'Executive Chairman' of the Company for a period of five years w.e.f November 1, 2014. Pursuant to the provisions of Sections 196, 197 and 203 read with Schedule V and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, approval of the shareholders by special resolution to the appointment of François-Charles Sirois as the Executive Chairman of the Company is being sought at the forthcoming AGM. An application has been made to Central Government on January 24, 2015 seeking approval for the appointment of François as Executive Chairman and for payment of remuneration.

Praveen Kumar was appointed as Chief Financial Officer (CFO) of the Company w.e.f September 4, 2014 to lead the company's global financial operations. Being with the company since 2006, he is an On-Mobile veteran and has been an integral part of On-Mobile's various growth phases and transitions, including the IPO in 2007. His areas of expertise and responsibilities include financial accounting and reporting, revenue assurance, systems implementation, partnering with business on strategic initiatives, treasury management, taxation and investor relations.

Rentala Chandrashekhar was appointed as an additional director w.e.f October 8, 2013, but due to policy decisions in his current organization, he resigned on April 29, 2014.

Chandramouli Janakiraman has resigned as Managing Director and Chief Executive Officer with effect from June 2, 2014. Further, he resigned from the directorship of the Company with effect from June 26, 2014.

Barry White has resigned from the directorship of the Company with effect from August 14, 2014.

H.H. Haight has resigned from the directorship of the Company with effect from August 20, 2014.

Harit Nagpal, Naresh Malhotra and Bruno Ducharme have resigned from the directorship of the Company w.e.f July 30, 2015.

Sanjay Baweja was appointed as an Additional Director of the Company by the Board with effect from May 28, 2015. Further, Nehchal Sandhu and Pascal Tremblay were appointed as Additional Directors of the Company with effect from August 1, 2015 pursuant to the provisions of Section 161 of the Companies Act, 2013 and they hold office until the date of the ensuing Annual General Meeting. It is proposed to appoint them as Independent Directors of the Company pursuant to Section 149, 152 read with Schedule IV and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014 at the forthcoming Annual General Meeting.

AUDITORS' APPOINTMENT

Deloitte Haskins & Sells, Chartered Accountants, were appointed as Auditors of the Company by the shareholders at the last AGM held on September 10, 2014 to hold office until the conclusion of the 17th (Seventeenth) AGM of the Company to be held during the calendar year 2016-17. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of auditors shall be placed for ratification at every AGM. Accordingly, the appointment of Deloitte Haskins & Sells, Chartered Accountants as Auditors of the Company is placed for ratification of the shareholders at the ensuing AGM. The Company has received a certificate from the auditors to the effect that their appointment will be in accordance with the provisions of Section 141 of the Companies Act 2013.

SECRETARIAL AUDIT

The Board of Directors of the Company had appointed Parameshwar G Hegde, Practicing Company Secretary to conduct the Secretarial Audit pursuant to the provisions of Section 204 for the financial year ended March 31, 2015 and the Secretarial Audit Report is appended as Annexure IX.

COMMENTS ON AUDITORS' REPORT

There are no qualifications, reservations or adverse remarks or disclaimers made by Statutory Auditors of the Company in the audit report and by the Secretarial Auditor for the financial year ended March 31, 2015 in the secretarial audit report.

DIRECTORS' RESPONSIBILITY STATEMENT

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

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

ii. They have selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for that period.

iii. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 and for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

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

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

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

NUMBER OF MEETINGS OF THE BOARD

The Board met eight times during the financial year 2014- 15 viz., May 3, 2014; May 29, 2014; June 26, 2014; July 31, 2014; September 4, 2014; October 30, 2014; December 11, 2014 and February 5, 2015. The maximum interval between any two meetings did not exceed 120 days.

COMMITTEES OF THE BOARD

During the year, in accordance with the Companies Act, 2013, there are currently Five Committees of the Board, as follows:

1. Audit Committee

2. Nomination and Compensation Committee

3. Stakeholders Relationship Committee

4. Corporate Social Responsibility Committee

5. Risk Management Committee

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

BOARD INDEPENDENCE

The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 that the Independent Directors of the Company meet with the criteria of their Independence laid down in Section 149(6). Our definition of 'Independence' of Directors is derived from Clause 49 of the Listing Agreement with Stock Exchanges and Section 149(6) of the Companies Act, 2013. Based on the confirmation / disclosures received from the Directors and on evaluation of the relationships disclosed, the following Non- Executive Directors are Independent in terms of Clause 49 of the Listing Agreement and Section 149(6) of the Companies Act, 2013:

a) Rajiv Khaitan

b) Naresh Malhotra#

c) Harit Nagpal#

d) Nancy Cruickshank

e) Bruno Ducharme#

f) Sanjay Baweja*

g) Nehchal Sandhu*

h) Pascal Tremblay*

* Appointed during the year by the Board and approval of the shareholders for their appointment as Independent Directors is being sought at the forthcoming Annual General Meeting.

# Resigned from the directorship of the Company w.e.f. July 30, 2015.

COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

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

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

The Company has provided following loans and guarantees and made following investments pursuant to Section 186 of the Companies Act, 2013:

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

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

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

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

FOREIGN EXCHANGE EARNINGS AND OUTGO

(In Rs. Million) Year ended Description March 31, 2015 March 31, 2014

Foreign exchange earnings 1972.46 2400.86

Foreign exchange out go 886.19 1066.92

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS:

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

RISK MANAGEMENT POLICY

The Board of Directors at their meeting held on October 30, 2014 constituted a Risk Management Committee in accordance with Clause 49 of the Listing Agreement. The Company has formulated a risk management policy to facilitate setting up a framework for risk assessment and minimization procedures. A copy of the risk management policy is appended in this report as Annexure IV and is placed on the website of the Company at www.onmobile.com.

VIGIL MECHANISM

The Company has established a Whistle Blower Policy for



Sl. Name of the entity Relation Amount Rs. No. (in Million)

1. On-Mobile Global Limited Colombia S.A.S Subsidiary 15.90

2. On-mobile Turkey Telekomunikasyon Subsidiary 0.19 Sistemleri Limited Jirketi

3. On-Mobile Global Solutions Canada Limited Subsidiary 0.54

4. On-mobile Turkey Telekomunikasyon Subsidiary 6.01 Sistemleri Limited Jirketi

5. On-Mobile USA LLC. Subsidiary 165.10

Sl. Name of the entity Particulars of loans Purpose for which No. guarantees and the loan,guaran investments tee and invest ment are proposed to be utilised

1. On-Mobile Global Limited Investment in Share Working Capital Colombia S.A.S Capital

2. On-mobile Turkey Investment in Share Working Capital Telekomunikasyon Capital Sistemleri Limited Jirketi

3. On-Mobile Global Solutions Investment in Share Working Capital Canada Limited Capital

4. On-mobile Turkey Loans provided Working Capital Telekomunikasyon Sistemleri Limited Jirketi

5. On-Mobile USA LLC. Loans provided Working Capital and repayment of loan

Directors and employees to report their genuine concern. The details of the same are explained in the Corporate Governance Report.

EVALUATION OF PERFORMANCE OF BOARD/DIRECTORS

Pursuant to the provisions of the Act and Clause 49 of the Listing Agreement, the Board has carried out an annual evaluation of its performance and the Directors individually. For this purpose the Board had engaged a third party with experience in carrying out such evaluation of Board and the findings were shared individually with the Board Members as well as the Chairman.

In addition to the above, the Board has carried the evaluation of the working of its Audit Committee, Nomination and Compensation Committee and Stakeholders Relationship Committee.

EXTRACT OF ANNUAL RETURN

As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 forms part of this Annual Report in Annexure V.

PARTICULARS OF EMPLOYEES

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

A statement showing details of every employee employed throughout the financial year and in receipt of remuneration of Rs. 60 lakh or more per annum or employed for part of the year and in receipt of Rs. 5 lakh or more per month under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is enclosed as Annexure VI(B) to Directors report.

FIXED DEPOSITS

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

EMPLOYEE STOCK OPTION SCHEMES

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

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

ACKNOWLEDGMENTS

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

For and on behalf of the Board of Directors

François-Charles Sirois Executive Chairman

Place : London Date : July 30, 2015


Mar 31, 2014

Dear Members,

The Directors take pleasure in presenting the 14th Annual Report on the business and operations of the Company together with the Audited Financial Statements and Accounts for the year ended March 31, 2014.

RESULTS OF OPERATIONS FOR THE YEAR 2013-14

(In Rs. Million)

PARTICULARS 2013-14 2012-13

Revenue from operations 4,062.32 4,664.28

Earnings before other income, depreciation and amortisation, finance 439.73 701.40 charges, Exceptional item and tax

Exceptional item 559.48 -

Profit before other income, depreciation and amortisation, finance (119.75) 701.40 charges and tax

Profit/(Loss) before tax (303.58) 351.43

Profit/(Loss) for the year (372.99) 263.83

Equity Share Capital 1,142.36 1,141.53

Reserves and Surplus 6,647.39 7,221.78

Networth 7,789.75 8,363.31

Net Block 2,013.95 3,144.13

Net Current Assets 1,819.71 1,568.35

Cash and Cash Equivalents 313.75 1,077.87

Earnings/(Loss) per share (Diluted) (In Rs.) (3.30) 2.30

BUSINESS PERFORMANCE / FINANCIAL OVERVIEW

Standalone Financials:

During 2013-14, the Company recorded net revenue of Rs.4,062.32 million, a decrease of 13% over the previous year of Rs.4,664.28 million. The Profit/(Loss) after tax of the Company is Rs.(372.99) million in 2013-14 as compared to Rs.263.83 million in 2012-13. The diluted earnings/(Loss) per share (EPS) is Rs.(3.3) per share as compared to Rs.2.3 per share in 2012-13.

Consolidated Financials:

During 2013-14, the Company recorded consolidated net revenue of Rs.8,653.13 million, an increase of 19% over the previous year of Rs.7,252.69 million. The consolidated Profit/(Loss) after tax of the Company for the year 2013-14 is Rs.(l,319.52) million as compared to Rs.471.77 million in 2012- 13. The consolidated diluted earnings/(Loss) per share (EPS) for the year 2013-14 is Rs.(11.5) as compared to Rs.4.1 per share in 2012-13.

Appropriations

Dividend

Your directors are pleased to recommend a dividend of Rs. 1.50/- per equity share of Rs. 10/- each which is payable on obtaining shareholders'' approval in the 14th Annual General Meeting.

The dividend payout amount for the current year inclusive of dividend distribution tax will be Rs. 200.47 million.

The register of members and the share transfer books will remain closed from Saturday, August 30, 2014 to Wednesday, September 10, 2014(both days inclusive). The Annual General Meeting of the Company has been scheduled for September 10, 2014.

The Company proposes to retain Rs.3,200.32 million in the Statement of Profit and Loss.

CHANGES TO THE SHARE CAPITAL

During the year under review the Company allotted 82,680 equity shares (including bonus) on the exercise of stock options under its various Employee Stock Option Plans and accordingly the paid up equity share capital of the Company as on March 31, 2014 stands at 11,42,35,502 equity shares of face value Rs. 10/- each, (i.e. Rs. 1,14,23,55,020).

OPEN OFFER BY PROMOTER

OnMobile Systems Inc., one of the promoters of the Company vide their Detailed Public Statement dated February 11, 2014 announced a voluntary open offer to the Shareholders of the Company for acquisition of 11,900,000 paid up equity shares of Rs. 10/- each representing about 10% of the fully diluted voting share capital at Rs. 40/- per share. Subsequently OnMobile Systems Inc. had issued a letter of offer dated April 3, 2014 to the shareholders and completed the open offer process.

SIGNIFICANT EVENTS & AWARDS: 2014

International Market Expansion

OnMobile had a major customerwin for RingbackTones in the Middle East & Africa region. OnMobile''s innovative suite of Ringback Tone features which include search and discovery options, storefronts, and live stream content contributed immensely towards this win. As a part of this project, the Company will establish operations in 14 new countries where there is no presence today.

OnMobile deployed RBT services for the largest operator in Bangladesh. This deployment will help OnMobile establish a more dominant play in Bangladesh.

In the Middle East, OnMobile tied up with an operator in Qatar, a market with one of the highest ARPU in the world. With this win, OnMobile will be powering a significant portion of operator branded Value Added Services.

OnMobile secured deals with two large operators in Spain. OnMobile now has access to 90% of mobile subscribers in Spain. A partnership was also secured with a leading telecommunications operator in the Czech Republic. OnMobile gets an opportunity to service over 6.5 million subscribers in Czech Republic and Slovakia.

OnMobile''s new and improved Football product was launched in Africa based on a consumer insight that people follow clubs more than the game itself. The product was very successful and gathered a base of 3.2 million users.

Acquisition: Assets of Livewire Mobile

OnMobile acquired the business assets and liabilities of Livewire Mobile, a leading provider of end-to-end managed mobile entertainment solutions for network operators and consumer device manufacturers. Livewire Mobile''s comprehensive portfolio of mobile music, RBT and gaming solutions and its marquee client base, combined with OnMobile''s prestigious American customers gained the company a firm foothold in North America.

The new combined entity presents a single source solution for integrated Value Added Services that will cater to high value subscriber segments, including youth and upwardly mobile professionals.

AWARDS

OnMobile Global was honoured with the ''Top VAS Company of the Year 2013'' award at the Cyber Media ICT Awards 2013, graced by Shri Narendra Modi, Hon''ble Prime Minister of India.

OnMobile Global was awarded the ''Top Value Added Services Company of the Year 2013'' at the Amity Telecom Awards for Excellence in January 2014.

SUBSIDIARIES

As on March 31, 2014, the Company has 44 Subsidiaries.

The Ministry of Corporate Affairs, Government of India vide its circular no.2/2011 dated February 8, 2011 has provided an exemption to companies from complying with Section 212, provided such companies publish the audited consolidated financial statements in the Annual Report. Accordingly, audited consolidated financial statements have been furnished in the Annual Report and it does not contain the financial statements of the subsidiaries. The audited financial statements and related information of subsidiaries, where applicable, will be made available upon request. These documents will also be available for inspection during business hours at the registered office of the Company at Bangalore, India. The statement pursuant to Section 212 of the Companies Act, 1956 is provided elsewhere in the Annual Report.

NEW LOCATIONS

The Company continued its expansion internationally during this year as well. The Company has signed various important global contracts during the year under review. As part of the Company''s global expansion, the Company has setup new branch offices in Democratic Republic of Congo and Doha (Qatar). The Company has setup new subsidiaries in Turkey, Portugal, Burkina Faso, Czech Republic, Colombia and South Africa.

Six subsidiary from UK and one subsidiary from Australia have been added to the Company as a result of acquisition of certain assets of LiveWire Inc. during the year.

Material Changes for the period between end of the Financial Year and the Date of the Report

There have been no Material Changes for the period between end of the financial year 2013-14 and the date of this report.

NEW PRODUCTS AND SERVICES DEPLOYED IN THE YEAR 2013-14

Help Me on Mobile

OnMobile launched Help Me on Mobile - a free 24x7 mobile application that assists women, children, young adults and senior citizens in fighting crime and calling for help during emergencies. The free application houses a bank of two services ''I am here'' and

''I need help'', which are designed to ensure personal safety of an individual and is easily accessible from a single place. Help Me on Mobile equips mobile consumers with a safety application on their phones without having to look for an external source. Users can get assistance in tracking location, sending panic alerts to chosen family and friends, trigger off panic alarms and more.

Light a Candle

OnMobile launched Light a Candle, a service which enables anyone to request for a candle to be lit at the Holy Shrine on his/her behalf from anywhere, at any time. The service is as easy as using a recharge card, wherein the user simply purchases the card, enters the unique security number on the automated IVR and proceeds to place the request for the candle to be lit. The candle is in turn lit by representatives of OnMobile at these places of worship.

Khidki

Khidki is a pre-embedded content store for feature phones and delivers content via notifications in multiple languages. Easy access to a host of services, easy navigation, simplified user experience and free sampling of content are its key USPs.

OPERATIONAL EFFICIENCY

OnMobile''s platform for Value Added Services has been time- tested and validated globally for scalability, stability and security. The platforms have been consistently upgraded to support the latest developments in hardware and software technology.

It is an endeavor at the company to continually reduce the deployment costs and optimize the deployment models. The current scalability and optimization programs have led to a significant reduction in the cost per deployment.

OnMobile has developed systems and tools to power the Global Network Operations Center (GNOC) for state of the art infrastructure monitoring. This central 24X7 service desk monitors every hardware node that OnMobile has deployed as part of its managed services globally. This helps catch anomalies and respond within agreed Service Level Agreements (SLAs). GNOC also helps streamline Information Technology operations in terms of round- the-clock system and application monitoring, fault management and visibility to system performance. In turn, this helps achieve resource optimization at an organizational level.

INFRASTRUCTURE

OnMobile is going strong with more than 40 offices across the globe, 2.25 lakh square feet of office space and 1690 employee base. The offices are categorized as virtual office, business centers and leased offices. The largest facility is the Electronic city office in Bangalore with 1.30 lakh square feet of office space. All the OnMobile facilities are well equipped with good working atmosphere and high level of security and safety competency. Regular planned preventive measures are in place to avoid downtime and ensure business continuity.

HUMAN RESOURCES MANAGEMENT

People world of OnMobile

OnMobile has always believed in building a culture of innovation and creativity where our employees are inspired to achieve excellence in their area of functioning. As OnMobile grows globally, expanding its footprint through its own and acquired offices, we continue to endeavor to foster a common culture among our globally diversified workforce.

Employee Strength

Our head count, was 1690 as on March 31, 2014.

Today, we are a multicultural company with employees from all across the globe creating a vibrant & dynamic work environment.

Talent Acquisition

Our vision of "Making a large scale positive impact on people through mobile" has been the fabric of our vision and we try to recruit people who believe in this philosophy through our stringent selection process. Our goal is to attract the best talent around the globe. We continue to hire a diverse workforce and we believe in hiring individuals with vision, creativity and the energy to lead the changes that take place in the telecommunications industry each day.

We continue to tap into the campus talent pool, attracting the best and brightest from the country''s top Engineering and Management colleges. This year we added 22 campus hires into our workforce from top engineering campuses across India.

Employee engagement and development

OnMobile offers its employees a unique blend of an informal work environment and a corporate culture that encourages personal empowerment. We have always believed in creating an environment where our employees feel safe and secure. The year that went by saw a plethora of engagement activities conducted across locations to inculcate & build the "one company" culture.

Training at OnMobile is one of the means of continuously enhancing the skills, knowledge and attitudes of our employees to make them more effective in their current and future roles. With this mandate, in the year 2013-2014, we conducted training programs across organization covering approximately 1100 employees in these trainings.

CORPORATE SOCIAL RESPONSIBILITY

As a responsible Corporate Citizen, OnMobile is committed to contributing to the society, environment and community. The focus area on which OnMobile strived to ''Make a Difference'' was Education. We have participated in few events such as Give India Payroll program ( ongoing) and tie up with NGO''s during festivals. But we feel as an organization we should focus on specific causes instead trying to do a one off event.

We have identified two causes:

1. Education: Teach for India: We participated in the "Joy of Giving Week" program - India Giving challenge by Give India. Through this initiative we worked with Teach For India (for Bangalore & offices outside Bangalore).

Teach for India is a nationwide movement of outstanding college graduates and young professionals who teach full time in low income schools for two years. The fellowship enables them to become lifelong leaders advocating for educational equity.

2. Wild Life Rescue and Rehabilitation Center (WRCC) - www. wrrcbangalore.org : WRCC is a registered public charitable

trust for the conversation and welfare of wildlife rescued from Urban and rural areas around Bangalore.

We have worked with above mentioned organization throughout the year on various initiatives.

RESEARCH AND DEVELOPMENT

OnMobile''s products serve millions of consumers globally, bearing testimony to the company''s focus on innovation and technological excellence. The company''s Research & Development centers are spread across multiple locations.

Data Analytics and Business Intelligence

A critical success factor in the Value Added Service business is the ability to understand consumer needs and behavior across different markets. OnMobile has made significant investments in Technology to handle large amount of data and distill insights. OnMobile has state of art predictive models which help drive usage and prevent churn among consumers.

Consumer Connect is a company initiative that focuses on gathering consumer insights from the market which gives an understanding of likes & dislikes of consumers as well as new product ideas. These insights feed into the Product Development process to improve the relevance of products for the consumers.

Product Innovation

Emergence of the Smartphone in the last few years has significantly changed consumer behavior in terms of discovery, adoption and usage of mobile services. The falling prices of Smartphones and Data Plans have dramatically increased the share of Smartphone users in many markets.

A key focus of Product Innovation at OnMobile is to create new products and enhance the appeal of existing products for consumers of the Smartphone world. OnMobile has launched applications for products like Ringback Tones and Football to provide a superior experience to smart phone users.

While the world of smartphone users expands rapidly, a large set of consumers who use a simple feature phone or an ultra-low cost phone continues to exist. To address the needs of these consumers OnMobile launched Khidki, a content store for feature phone users.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of corporate governance. The Company meets the standards and guidelines set by the Securities and Exchange Board of India on Corporate Governance and has implemented all the stipulations prescribed. A detailed report on corporate governance pursuant to the requirements of Clause 49 of the Listing Agreement forms part of the Annual Report. The certificate(s) from the auditors of the Company, M/s Deloitte Haskins & Sells, Chartered Accountants, and independent Practicing Company Secretary, Parameshwar G Hegde confirming compliance of conditions of corporate governance as stipulated under the aforesaid Clause 49 are annexed to the Corporate Governance Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In accordance with the Listing Agreements, the Management Discussion and Analysis Report is presented in the separate section forming part of the Annual Report.

DIRECTORS

Appointments

Barry B. White was appointed as an additional Director of the Company by the Board w.e.f October 29, 2013. In terms of Section 161 of the Companies Act, 2013 he holds office until the date of Annual General Meeting. He is proposed to be appointed as an Independent Director of the Company pursuant to Section 149, 152 read with Schedule IV and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014, at the forthcoming Annual General Meeting.

Retirement and re-appointment

H H Haight, Director, retires by rotation and being eligible has offered himself for re-appointmentat the forthcoming Annual General Meeting of the Company.

Harit Nagpal, Rajiv Khaitan and Naresh Malhotra, the Directors designated as Independent Directors of the Company pursuant to Clause 49 of the Listing agreement entered into with Stock Exchanges, are proposed to be appointed as Independent Directors pursuant to the applicable provisions of the Companies Act, 2013.

Resignation

Rentala Chandrashekhar who was appointed as an additional director w.e.f October 8, 2013 has resigned w.e.f April 29, 2014 due to policy decisions in his current organization.

Chandramouli Janakiraman resigned as MD and CEO vide his resignation letter dated May 7, 2014, and he would continue as MD and CEO till new CEO joins.

AUDITORS

The statutory auditors of the Company, M/s. Deloitte Haskins & Sells, Chartered Accountants, who retire as statutory auditors of the Company at the conclusion of the forthcoming Annual General Meeting, having confirmed that their appointment, if made, will be within the limits under Section 139 of the Companies Act, 2013 are recommended for re-appointment.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the directors to the best of their knowledge and belief confirm that:

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

ii. they have selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for that period;

iii. theyhavetakenproperandsufficientcareforthe maintenance of adequate accounting records in accordance with the

provisions of the Companies Act, 1956 and for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

PARTICULARS OF EMPLOYEES

In terms of provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are set out in the Annexure to the Directors'' Report. However, having regard to the provisions of Section 219 (l)(b)(iv) of the Companies Act, 1956, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

The Company, being a service provider organization, most of the information as required under Section 217(l)(e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988, as amended is not applicable. However, the Company endeavors to effectively utilize and conserve energy by using improved technology in its infrastructure such as lightings and paper usage.

FIXED DEPOSITS

The Company has not accepted fixed deposits during the year under review falling within the purview of Section 58A of the Companies Act, 1956 and the Rules thereunder.

EMPLOYEE STOCK OPTION PLAN (ESOP)

The Company had approved following Employee Stock Option Schemes i.e. Employee Stock Option Plan-I, 2003, Employee Stock Option Plan-ll, 2003, Employee Stock Option Plan-Ill, 2006, Employee Stock Option Plan-I, 2007, Employee Stock Option Plan-ll, 2007 Employee Stock Option Plan-I, 2008, Employee Stock Option Plan-ll, 2008, Employee Stock Option Plan-Ill, 2008, EmployeeStock Option Plan-IV, 2008, Employee Stock Option Plan-I 2010, Employee Stock Option Plan-ll, 2010; Employee Stock Option Plan I, 2011,Employee Stock Option Plan I, 2012 and Employee Stock Option Plan I, 2013 for granting stock options to its employees.

All the schemes endeavor to provide incentives and retain employees who contribute to the growth of the Company. A summary disclosure in compliance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme Guidelines, 1999), as amended, is presented as below and the complete details have been disclosed under Note 31 of Notes to the financial statements which forms part of the Annual Report. During the year under review there has been no variation in the terms of ESOP schemes.

The guidance note issued bythe Institute of Chartered Accountants of India requires the disclosure of proforma net results and EPS both basic & diluted, had the Company adopted the fair value method. Had the Company accounted the option under fair value method, amortising the stock compensation expense thereon over the vesting period, the reported profit/(Loss) for the year ended March 31, 2014 would have been higher by Rs. 48.88 Million (Previous year: lower Profit of Rs.24.61 Million) and Basic and diluted EPS would have been revised to Loss of Rs.3.7/- (Previous year Earnings Rs 2.1/-) and Loss of Rs.3.7/- (Previous year Earnings- Rs 2.1/-) respectively as compared to Loss of Rs.3.3/- (Previous year Earnings Rs 2.3/-) and Loss of Rs.3.3/- (Previous year Earnings Rs 2.3/-) without such impact. Basic and Diluted Earnings/(Loss) Per Share (EPS) have been restated for all the corresponding period to give effect of the said issue of Bonus shares, in accordance with Accounting Standard (AS) 20 "Earnings Per Share" notified under Section 211(3C) of the Companies Act, 1956.

ACKNOWLEDGMENTS

The Board of Directors takes this opportunity to express their appreciation to the customers, shareholders, investors, vendors,and bankers who have supported the Company during the year. The Directors place on record their appreciation to the OnMobilians at all levels for their contribution to the Company. The Directors would like to make a special mention of the support extended bythe various departments of the Government of India, particularly the Software Technology Parks, the Service tax and Income Tax Departments, the Customs and Excise departments, the Ministry of Commerce, the Department of Telecommunications, the Reserve Bank of India, Ministry of Company Affairs, Securities and Exchange Board of India and look forward to their support in all future endeavors.

For and on behalf of the Board of Directors

H H HaightIV Chairman Place: Bangalore Date: May 29, 2014


Mar 31, 2013

Dear Members,

The Directors take pleasure in presenting the 13th Annual Report on the business and operations of the Company together with the Audited Financial Statements and Accounts for the year ended March 31, 2013.

RESULTS OF OPERATIONS FOR THE YEAR 2012-13

(In Rs. Million)

PARTICULARS 2012-13 2011-12

Revenue from operations 4,664.28 4,998.33

Earnings before other income, 701.40 1,030.05

depreciation and amortisation, finance charges and tax

Earnings before tax 351.43 800.53

Earnings after taxation 263.83 502.82

Equity Share Capital 1,141.53 1,150.03

Reserves and Surplus 7,221.78 7,191.83

Networth 8,363.31 8,341.86

Net Block 3,144.13 3,445.73

Net Current Assets 1,568.35 1,663.64

Cash and Cash Equivalents 1,077.87 1,520.79

Earnings per share (Diluted) (In 2.3 4.2 Rs.)

BUSINESS PERFORMANCE / FINANCIAL OVERVIEW

Standalone Financials:

During 2012-13, the Company recorded net revenue of Rs.4,664.28 million, a decrease of 7% over the previous year of Rs.4,998.33 million. The earnings after tax of the Company is Rs.263.83 million in 2012-13 as compared to Rs.502.82 million in 2011-12. The diluted earnings per share (EPS) is Rs.2.3 per share as compared to Rs.4.2 per share in 2011-12.

Consolidated Financials:

During 2012-13, the Company recorded consolidated net revenue of Rs. 7,252.69 million, an increase of 6% over the previous year of Rs. 6,380.14 million. The consolidated earnings after tax of the Company for the year 2012-13 is Rs.471.77 million as compared to Rs. 830.94 million in 2011 - 12. The consolidated diluted earnings per share (EPS) for the year 2012-13 is Rs.4.1 as compared to Rs. 7.0 per share in 2011-12.

Appropriations

Dividend

Your directors are pleased to recommend a dividend of Rs. 1.50/- per equity share of Rs. 10/- which Is payable on obtaining shareholders'' approval in the 13th annual general meeting.

The dividend payout amount for the current year inclusive of dividend distribution tax will be Rs. 200.33 million.

The register of members and the share transfer books will remain closed from Friday, July 19, 2013 to Tuesday, July 30, 2013 (both days inclusive). The Annual General Meeting of the Company has been scheduled for July 30, 2013.

The Company proposes to retain Rs. 3,773.92 million in the Statement of Profit and Loss, amount to be transferred to general reserve is Rs. 13.2 million.

Liquidity

As on March 31, 2013 the Company had liquid assets including investments in fixed deposits and Mutual funds of Rs. 1,251.56 million.

CHANGES TO THE SHARE CAPITAL

During the year under review the Company allotted 2.13,512 equity shares (including bonus) on the exercise of stock options under its various Employee Stock Option Plans (ESOPs).

Further, the Board of Directors at their meeting held on September 03, 2011 approved for a Buyback of equity shares of the Company, to the extent of Rs. 25 Crores subject to a minimum of 10,00,000 shares and a maximum of 40,00,000 shares, through the stock exchange mechanism.

In pursuance of the said Buyback, the Company started buying back shares on September 30, 2011, and the Company had bought back 29,36,000 shares till March 31, 2012. Further, in the financial year 2012-13, the Company had bought back 10,64,000 shares.

Due to the said Buyback process and the allotment of equity shares under ESOPs, the issued and paid up equity share capital of the Company as on March 31, 2013 stands at 11,41,52,822 equity shares of face value Rs. 10/- each. (i.e. Rs. 114,15,28,220).

SIGNIFICANT EVENTS THIS YEAR International Market Expansion

a) OnMobiie partnered with PT XL AxiataTbk (XL), a leading telecommunication company in Indonesia, to provide mobile cloud services to XL''s customers. OnMobile''s product will augment XL''s XCIoud portfolio with the addition of a mobile cloud solution that will enable XL''s subscribers to store, sync, share and stream their data from any of their smartphone, tablet for PC device.

b) OnMobiie collaborated with the Centre for e-Governance, Government of Karnataka, to launch Phase 1 (Pilot) of the mobile governance services for Karnataka citizens. OnMobiie provided the platform and services to help launch and manage the pilot phase of the project on m-Governance. OnMobiie has provided the underlying technology platform for helping design, develop and manage different governance services over mobile, across channels such as Interactive Voice Response (IVR), Unstructured Supplementary Service Data (USSD) and mobile browsers or WAP.

c) OnMobiie secured contracts from two operators during the third quarter for provision of RBT services in Europe.

d) There was also a sizable outsourcing contract signed in Europe and OnCloud was launched in North America and Europe, and M Radio in South Asia.

e) OnMobiie successfully launched the Football service in Africa in addition to winning a contract for managed services across all content types and channels.

f) OnMobiie has powered Everything Everywhere''s (EE) recently launched Clone Phone service and is responsible for delivering the cloud-based element of Clone Phone, including all data storage and support as well as integration with the carrier''s back-end systems. The OnMobiie solution was chosen on the basis of its user-friendly interface, its high performance that allows large files including videos to be quickly restored, and the company''s strong track record in the provision of value added services to leading global operators.

g) Telefonica selected OnMobiie to provide converged value added services for the operator''s Movistar Emocion content service for customers in Spain. OnMobiie is improving the ease of use of the Emocion portal and the integration of content capabilities to generate new revenue streams for Movistar by re-inventing the way customers are offered relevant content.

AWARDS

a) OnMobiie was awarded the VAS Company of the Year 2012 trophy by Voice & Data on the basis of its annual VAS industry survey. The award was received by Chandramouli Janakiraman, Managing Director from the renewable energy minister Dr Farooq Abdullah and Pradeep Gupta, CMD, Cybermedia in December 2012.

SUBSIDIARIES

As on March 31, 2013, the Company has the following Subsidiaries:

1. OnMobiie Singapore Pte. Ltd

2. PT. OnMobiie Indonesia

3. Voxmobili S A

4. OnMobiie Europe B V

5. OnMobiie S A

6. OnMobiie USA LLC

7. Servjcios De Telefonia OnMobiie SA De C V

8. OnMobiie Global S A

9. OnMobiie De Venezuela C A

10. OnMobiie Brasil Sistemas De Valor Agregado Para Comunicacoes Moveis Ltda, Brasil

11. OnMobiie Global for Telecommunications Services

12. OnMobiie Uruguay S A

13. OnMobiie Senegal SARL

14. OnMobiie Mali SARL

15. OnMobiie Bangladesh Private Limited

16. OnMobiie Servicios Corporativos De Telefonia

17. OnMobiie Kenya Telecom Limited

18. OnMobiie Telecom Limited

19. OnMobiie Costa Rica OBCR SA

20. OnMobiie Spain SL

21. OnMobiie Tanzania Telecom Limited

22. OnMobiie Zambia Telecom Limited

23. OnMobiie Uganda Limited

24. OnMobiie Madagascar Telecom Limited

25. OnMobiie Telecom Rwanda Limited

26. OnMobiie Telecom Nigeria Limited

27. OnMobiie Ghana Telecom Limited

28. OnMobiie Telecom (SL) Limited

29. OnMobiie Global Solutions Canada Limited

30. OnMobiie Global Italy S.R.L

As per Section 212 of the Companies Act, 1956, we are required to attach the directors'' report, balance sheet, and the statement of profit and loss of our subsidiaries. The '' Ministry of Corporate Affairs, Government of India vide its circular no.2/2011 dated February 8, 2011 had provided an exemption to companies from complying with Section 212, provided such companies publish the audited consolidated financial statements in the Annual Report. Accordingly, the Annual Report 2012-13 does not contain the financial statements of our subsidiaries. The audited annual accounts and related information of our subsidiaries, where applicable, will be made available upon request. These documents will also be available for inspection during business hours at our registered office in Bangalore, India.

NEW LOCATIONS

The Company continued its expansion internationally during this year as well. The Company had signed various important global contracts during the year under review. As part of the Company''s global expansion, the Company has set up new branch offices in Guatemala and Niamey (Niger). The Company has set up new subsidiaries in Spain, Tanzania, Zambia, Uganda, Madagascar, Rwanda, Nigeria, Ghana, Sierra Leone, Canada and Italy.

Material Changes for the period between end of the Financial Year and the Date of the Report

There have been no Material Changes for the period between end of the financial year 2012-13 and the date of this report.

NEW PRODUCTS AND SERVICES DEPLOYED IN THE YEAR 2012-13

(a) Full Track Music Store

On Mobile launched a new music product - The Full Track Music Store - for two Indian operators. This product is available as a mobile site and is also present on Interactive Voice Response (IVR). The users can access the Full Track (FT) store and browse/download full songs by subscribing to the store or on a pay per consume model. A new team is currently in place to build/manage the digital content stores for operators across the globe. The first role out is expected to happen in June for Telefonica, a major operator in Spain.

b) GreatBuyz

An exciting new product - GreatBuyz - was developed to bring paid and free deals to mobile phone as an aggregation service. GreatBuyz is the only deal product, live across all mobile channels including WAP, Android client, USSD, SMS and CBC. OnMobile launched this with two large Indian operators, Idea and BSNL, and has on- boarded several large deal players. The Company

is currently concentrating on extending the product to other Indian operators and partnering with several international telecom operators to explore launch opportunities in countries like Spain, Italy, Bangladesh, Sri Lanka, Egypt, etc.

c) m-Health - Project Ananya with BBC Media Action

OnMobile partnered with BBC Media Action to provide the technical platform to run Mobile Academy, an IVR training course that enables the health workers to expand their knowledge of life saving maternal and child health behaviours. The project which is sponsored and supported by the Bill & Melinda Gates Foundation, was developed in collaboration with Bihar government. On Mobile''s platform also powers Mobile Kunji, another BBC Media Action service that allows health workers to playback information about maternal and child health via their mobile phones. BBC Media Action are discussing the possibility of expanding similar services to other states in the country, starting with Odisha.

d) m-Governance

OnMobile collaborated with the Centre for e-Governance - Government of Karnataka, to launch pilot phase of the mobile governance services for Karnataka citizens. OnMobile provided the underlying technology platform for helping design, develop and manage these services over mobile, across channels such as Interactive Voice Response (IVR), Unstructured Supplementary Service Data (USSD) and mobile browsers or WAP including an offer of payment channels for utility services like credit card, IMPS and mobile wallet. The service, initiated in January 2013, spanned informational, interactive and transactional services - Sakala, helpline numbers and access, utility bill payments, etc.

e) OnMobile Cloud Platform

The OnMobile Cloud platform (version 8) was released with new modules and additional features. Synchronization is one of the key pillars of Personal Cloud and a new synchronization engine, that enables real-time notification on multiple end-points, was released. The award-winning Network Address Book was complemented with 2 new modules - the Central Message Store and the Call Log Cloud - which allows users to store, manage, access their SMS, MMS and call logs on any screen.

f) RBT

OnMobile''s flagship product, RBT, has made great strides over the last one year and we have several innovations in this space, enabling us into becoming globally dominant player. The new launches in this sector include RBT Handset App, RBT Lottery, RBT Touch/Non Touch Smartphone web page, Record my Own with Karaoke and Like RBT. Innovations and feature developments include Night Callertunes, Personalized Pre-RBT, Recommendation RBT, Built WAP over WIFI and RBT RRBT Integrated Model.

Other deployments (tailored to the following geographies):

India - RBT Handset App

- Night Callertunes

- New RBT website

- RBT WAP for Digital Marketing Campaign

- New RBT WAP

- Personalized Pre-RBT

- Like RBT

- Recommendation RBT

Europe - RBT Handset Android App

- RBT Handset Client

- New web & WAP Storefront

- WAP over WIFI

- Special Try & Buy Christmas

- Promotion

Africa - Record my Own with Karaoke

- SRBT App

- WAP

- Contest Integration GUI

LatAm - RBT Handset Client

- RBT Lottery Contest

- RBT Touch/Non Touch Smart- phone web page

SAARC & ME - New RBT website

RBT RRBT Integrated Model

QUALITY AND OPERATIONAL EFFICIENCY

The Company is committed to the eight guiding Quality Management principles of Customer Focus, Leadership, People Involvement, Process Approach, System Approach to Management, Continual Improvement, Fact-Based Decision- Making and Mutually Beneficial Supplier Relationships.

The Company''s Information Security Management System conforms to the ISO 27001:2005 standard since June 2009. The certificate is valid for Airtel, Aircel, Vodafone, Vodacom South Africa, Du, Idea and Telefonica Latin America Client Delivery Units, System Integration and support functions. The Company''s various products/services are subjected to periodic and rigorous assessments by reputed external assessors.

About ISO/IEC 27001:

The ISO/IEC 27001 is an information security management system(ISMS) standard published by the International Organization for Standardization and the International Electro Technical Commission. ISO/IEC 27001 provides an ISMS model for adequate and proportionate security controls to protect information assets and give confidence to interested parties. This sets the standard for handling the confidentiality, integrity and availability of an Information Asset.

All key business support processes in the organization are automated, integrated and deployed globally across geographies. This, along with dashboards for senior management, has provided increased visibility and availability of key metrics for compliance across processes. Additionally, specialized tools have been deployed for increased efficiency in the sales, software product development and delivery lifecycle. The Global NOC allows for efficient monitoring of applications and infrastructure across all deployments. The Company has renewed its focus on knowledge management and collaboration, which are resulting in greater innovation.

INFRASTRUCTURE

As of March 31, 2013, the Company has obtained on lease, office spaces at Bangalore, Bangalore SEZ, Mumbai and Noida SEZ. Further, the Company owns an office space in Mumbai. Apart from this the Company has set up offices at Gurgaon, Sydney, Singapore, Kuala Lumpur, Jakarta, Paris, Dhaka, Seattle, Bucharest, Centurion, Kathmandu, Dubai, London, Amsterdam, Miami, Bogota, Mexico City, California, Caracas, Sao Paulo, Buenos Aires, Panama City, Guayaquil, Managua, San Salvador, Lima, Monte Video, Madrid, Milan, Cairo, Nicosia, Dakar, and Dar es Salam.

Registered office of the company is shifted from No. 26, Bannerghatta Road, JP Nagar, 3rd Phase,Bangalore- 560076 to E City, Tower -1, No. 94/1C & 94/2, Veerasandra Village, Attibele Hobli, Anekal Taluk, Electronic City Phase -1, Bangalore-560100.

HUMAN RESOURCES MANAGEMENT

People world of OnMobile

OnMobile has always believed in building a culture of innovation and creativity where our employees are inspired to achieve excellence in their area of functioning. As OnMobile grows globally, expanding its footprint through its own and acquired offices, we continue to endeavor to foster a common culture among our globally diversified workforce.

Employee Strength

During the financial year, OnMobile has net addition of 29 employees. Our head count, as a result, stands at 1664 as on March 31, 2013.

Today, we are a multicultural company with employees from all across the globe creating a vibrant & dynamic work environment.

Talent Acquisition

Our vision of "Making a large scale positive impact on people through mobile" has been the fabric of our vision and we try to recruit people who believe in this philosophy through our stringent selection process. Our goal is to attract the best talent around the globe. We continue to hire a diverse workforce and we believe in hiring individuals with vision, creativity and the energy to lead the changes that take place in the telecommunications industry each day.

We continue to tap into the campus talent pool, attracting the best and brightest from the country''s top Engineering and Management colleges. This year we added 45 campus hires into our workforce from top MBA and engineering campuses across India.

Processes

With a pursuit towards streamlining and simplifying HR processes, we have automated & enhanced the recruitment, immigration & performance management systems, thereby reducing turnaround time & improving productivity. We continue to review HR processes on a periodic basis and create a benchmark in the VAS industry

Employee engagement and development

OnMobile offers its employees a unique blend of an informal work environment and a corporate culture that encourages personal empowerment. We have always believed in creating an environment where our employees feel safe and secure. The year that went by saw a plethora of engagement activities conducted across locations to inculcate & build the "one company" culture.

Training at OnMobile is one of the means of continuously enhancing the skills, knowledge and attitudes of our employees to make them more effective in their current and future roles. With this mandate, in the year 2012-2013, we conducted training programs across organization covering approximately 713 employees.

Corporate Social Responsibilities

As a responsible Corporate Citizen, OnMobile is committed to contributing to the society, environment and community. The focus area on which OnMobile strived to ''Make a

Difference'' was Education. We participated in the "Joy Of Giving Week" program - India Giving challenge by Give India. Through this initiative we worked with following NGO''s across 3 locations:

Bangalore: SGBS Trust (Unnati)

Unnati''s vision is to train and employ 1 million underprivileged youth through Unnati model by 2020

Mumbai :Muktangan

Muktangan''s aim is to evolve sustainable, replicable inclusive models of quality child-centered teacher education and school programs in partnership with marginalized communities and to advocate them to the larger system.

Delhi :Deepalaya

Deepalaya believesJn working towards the betterment of the urban and rural poor, with special focus on children because every child deserves a chance.

RESEARCH AND DEVELOPMENT

OnMobile has R&D centers based in India and in France. The fact that approximately a third of our employees are dedicatedly working on R&D initiatives at these locations re-emphasizes our focus on innovation and technological excellence. Our RBT, Data and other VAS offerings reach out to over 200 million unique consumers globally.

Data Analytics and Business Intelligence

Winning in the VAS space requires considerable investment in understanding consumer behaviour, needs, and spending capacity - and these profiles and trends vary significantly across geographies. We now live in the world of "Big Data" and your company is investing in building technologies to handle large amounts of data, distill insights that help drive growth. Our predictive models are helping drive retention or usage programs.

Our "Consumer Connect" initiative focuses on gathering insights into consumer behaviour and their mobile usage in the fast changing digital world. These insights help our product teams to build create new innovative services and services that drive higher adoption.

Product Innovation

The telecom world globally is focussed on driving mobile data usage. The emergence of the Smartphone in the last few years has significantly changed consumer behaviour of how they discover, adopt and use mobile services.

We are evolving several of our key products and creating new products for consumers in the new world driven by mobile data. We firmly believe that future of telecom communications will be carried out in Cloud-centric environment and we are working with telecom operators to evolve their systems into the communications cloud. The communications cloud will enable operators to take to market a new range of innovative services and links into their existing RCS or WebRTC initiatives.

As more consumers adopt smart phones, we are launching applications for Ringback Tones, Full Track Music, Football, etc that will enable new experiences for our consumers.

The Bottom Billion

While delivery of services with new experiences on Smartphones is very important, we cannot ignore the 3 billion consumers in emerging markets that still do not use data and carry a simple feature or ultra low cost phone. OnMobile continues to invest in creating technology and engaging services that can be delivered to this target group on even the most basic handsets. We are also investing in creating life impacting services in areas like agriculture, healthcare and education. We work closely with the social services sector and government to help take these services effectively to the market. Lowering Costs & Increasing efficiency

OnMobile''s Platforms for VAS services have been time- tested and validated globally for their scalability, security and stability. Our platforms have consistently been upgraded to support the latest developments in the hardware and software areas. We have evolved from basic Time Division Multiplexing (TDM) systems to support Optical Interconnects and IP based systems. These have both increased density per deployed rack and lowered overall deployment costs. We are also reducing the number of hardware servers by adopting technologies like virtualization. Our current scalability program aims to reduce the cost per deployment by more than half within the next 2 years.

OnMobile R&D teams have developed systems and tools that power our Global Network Operations Center (GNOC). This central 24x7 service desk monitors every hardware node that OnMobile has deployed as part of its managed services globally. This helps us catch faults / events and respond within agreed Service Level Agreements (SLA). CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of corporate governance. The Company meets the standards and guidelines set by the Securities and Exchange Board of India on Corporate Governance and has implemented all the stipulations prescribed. A detailed report on corporate governance pursuant to the requirements of Clause 49 of the Listing Agreement forms part of the Annual Report. The certificate(s) from the auditors of the Company, M/s. Deloitte Haskins & Sells, Chartered Accountants, and independent Practicing Company Secretary, Mr. Parameshwar G Hegde confirming compliance of conditions of corporate governance as stipulated under the aforesaid Clause 49 are annexed to the Corporate Governance Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In accordance with the Listing Agreements, the Management Discussion and Analysis Report is presented in the separate section forming part of the Annual Report.

DIRECTORS

Re-appointment

Naresh Malhotra, Director retires by rotation and being eligible, offers himself for reappointment at the forthcoming Annual General Meeting of the Company.

Brief resume of the director offering for re-appointment is included in the notice for the Annual General Meeting.

Resignation

Arvind Rao has resigned from the Board on July 9, 2012.

AUDITORS

The statutory auditors of the Company, M/s. Deloitte Haskins & Sells, Chartered Accountants, who retire as statutory auditors of the Company at the conclusion of the forthcoming Annual General Meeting, offer themselves for re-appointment and have also confirmed that their appointment, if made, will be within the limits under Section 224(1 B) of the Companies Act, 1956. The auditor''s report is self- explanatory.

OTHER MATTERS

In respect of the special review called for by the Audit Committee of the Board in May 2012 covering certain transactions initiated under the instructions of the erstwhile CEO, the Board wishes to inform that the final report submitted by our legal advisors confirmed that there was no evidence of commission of an offense that was required to be reported to any judicial or investigating body. The report also confirmed that there was no evidence of misappropriation or personal gain. The report did identify certain weaknesses in the contracting and payment processes which have been strengthened to prevent recurrence.

RESPONSIBILITY STATEMENT OF THE BOARD OF DIRECTORS

Pursuant to Section 217(2AA) of the Companies Act, 1956, the directors to the best of their knowledge and belief confirm that:

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

ii. they have selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for that period;

iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 and for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

PARTICULARS OF EMPLOYEES

In terms of provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are set out in the Annexure to the Directors'' Report. However, having regard to the provisions of Section 219 (1)(b)(iv) of the Companies Act, 1956, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

The Company, being a service provider organization, most of the information as required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988, as amended is not applicable. However, the Company endeavors to effectively utilize and conserve energy by using improved technology in its infrastructure such as lightings and paper usage

FIXED DEPOSITS

In terms of the provision of Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits Rules) 1975, the Company has not accepted any fixed deposits during the year under review.

EMPLOYEE STOCK OPTION PLAN (ESOP)

The Company had approved following Employee Stock Option Schemes i.e. Employee Stock Option Plan-I, 2003, Employee Stock Option Plan-ll, 2003, Employee Stock Option Plan-Ill, 2006, Employee Stock Option Plan-I, 2007, Employee Stock Option Plan-ll, 2007 and Employee Stock Option Plan-I, 2008, Employee Stock Option Plan-ll, 2008, Employee Stock Option Plan-Ill, 2008, Employee Stock Option Plan-IV, 2008, Employee Stock Option Plan-I 2010, Employee Stock Option Plan-ll, 2010 ; Employee Stock Option Plan I, 2011, and Employee Stock Option Plan I, 2012 for granting stock options to its employees.

All the schemes endeavor to provide incentives and retain employees who contribute to the growth of the Company. A summary disclosure in compliance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme Guidelines, 1999), as amended, is presented as below and the complete details have been disclosed under Note 32 of Notes to the financial statements which forms part of the Annual Report. During the year under review there has been no variation in the terms of ESOP schemes.

The guidance note issued by the Institute of Chartered Accountants of India requires the disclosure of pro forma net results and EPS both basic & diluted, had the Company adopted the fair value method. Had the Company accounted the option under fair value method, amortising the stock compensation expense thereon over the vesting period, the reported profit for the year ended March 31, 2013 would have been lower by Rs.24.61 Million (Previous year Rs.157.22 Million) and Basic and diluted EPS would have been revised to Rs.2.1/- (Previous year Rs 3.0/-) and Rs.2.1/- (Previous year- Rs 2.9/-) respectively as compared to Rs.2.3/- (Previous year Rs 4.3/-) and Rs.2.3/-(Previous year Rs 4.2/-) without such impact. Basic and Diluted Earnings Per Share (EPS) have been restated for all the corresponding period to give effect of the said issue of Bonus shares, in accordance with Accounting Standard (AS) 20 "Earnings Per Share" notified under Section 211 (3C) of the Companies Act, 1956.

FOREIGN EXCHANGE EARNINGS AND OUTGO

(In Rs. million)

Description Year ended March 31, 2013. March 31,2012

Foreign exchange earnings 2,251.20 1,506.70

Foreign exchange outgo 1,646.81 1,574.19

ACKNOWLEDGMENTS

The Board of Directors takes this opportunity to express their appreciation to the customers, shareholders, investors, vendors, and bankers who have supported the Company during the year. The Directors place on record their appreciation to the OnMobilians at all levels for their contribution to the Company. The Directors would like to make a special mention of the support extended by the various departments of the Government of India, particularly the Software Technology Parks, the Service tax and Income Tax Departments, the Customs and Excise departments, the Ministry of Commerce, the Department of Telecommunications, the Reserve Bank of India, Ministry of Company Affairs, Securities and Exchange Board of India and look forward to their support in all future endeavors.

For and on behalf of the Board of Directors

H. H. Haight IV Chairman

Place: Bangalore

Date: May 15, 2013

 
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