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Directors Report of Onward Technologies Ltd.

Mar 31, 2017

To

The Members,

The Directors of your Company are pleased to present before you the 26™ANNUAL REPORT on the business and operations of the Company, both, on standalone and consolidated basis, together with annual audited financial statements of the Company for the financial year ended March 31,2017.

CORPORATE OVERVIEW

Onward Technologies Limited is a niche player in Mechanical Engineering Design Services (EDS) and IT consulting services (ITS). The Company offers wide range of engineering design services including product design, engineering analysis, engineering documentation and maintenance and manufacturing solutions for automotive, off highway, aerospace, industrial equipment and consumer goods industries. The Company has number of clients from Fortune 1,000 list.

With a strong team of more than 2500 employees operating across Company''s various offices in India (Mumbai, Pune and Chennai), USA (Boston, Chicago, Detroit and Milwaukee) and Europe (Birmingham in UK and Frankfurt in Germany) we are catering to customers who are leading global players in their respective arenas.

FINANCIAL HIGHLIGHTS

The summarized financial performance of your Company are as follows: Rs. in Lacs

Consolidated Results

Standalone Results

Particulars

For the year

ended

31.3.2017

For the year ended 31.3.2016

For the year

ended

31.3.2017

For the year ended 31.3.2016

Sales and other income (Net)

22,622.03

19,963.27

9,885.21

9,074.64

Profit before finance cost, depreciation and exceptional items

1,484.97

1,528.97

1,076.20

1,132.23

Finance costs

280.79

332.89

204.48

207.40

Depreciation

432.95

382.27

378.35

336.90

Operating profit

771.23

813.81

493.37

587.93

Exceptional items

--

--

--

--

Profit before tax

771.23

813.81

493.37

587.93

Provision for taxation

- Current tax

- Previous year tax adjustment

- Deferred tax expenses/(benefits)

141.64

52.78

45.67

248.30

122.12

124.78

134.18

52.78

14.86

224.30

122.12

133.29

Profit after tax

531.14

318.61

291.55

108.22

Consolidated Performance:

Your Company''s revenues grew to Rs. 22,622.03 Lacs from Rs. 19,963.27 Lacs in the last financial year, a growth of 13.32% over the previous financial year.

The Earnings before Interest, Depreciation, Tax and Appropriations (EBIDTA) for the year 2016 -17 was at Rs. 1,484.97 Lacs as compared to Rs. 1,528.97 Lacs in the last financial year. Operationally, your Company continues to invest and grow both in EDS and ITS in India and overseas markets.

The net profit after taxes and minority interest was higher by 66.71% and stood at Rs. 531.14 Lacs as at March 31,2017 as compared to Rs. 318.61 Lacs in the previous fiscal.

Standalone Performance:

Your Company achieved total revenue of Rs. 9,885.21 Lacs as compared to Rs. 9,074.64 Lacs in the previous year, representing a year-on-year growth of 8.93% supported by increase in volumes and revenue across all business segment.

The Earnings before Interest, Depreciation, Tax and Appropriations (EBITDA) remains flat and stood at Rs. 1,076.20 Lacs in the current year as compared to Rs. 1,132.23 Lacs during the previous year.

During the year under review, the Company registered growth of 169.40 % in the net profit after tax which stood at Rs. 291.55 Lacs as compared to Rs. 108.22 Lacs in the previous fiscal.

DIVIDEND

Your Company had declared and paid final dividend in the 25th Annual General Meeting of the Company held on Monday, July 18,2016. The Company paid dividend of Rs. 14,986,720 (Rupees One Crore Forty Nine Lacs Eighty Six Thousand Seven Hundred Twenty only), excluding dividend distribution tax, at the rate of Re. 1 (Rupee One only) per equity share of face value Rs. 10 (Rupees Ten only).

Also, the Directors have recommended a dividend of Rs. 1 (10% per cent) per equity share of face value Rs. 10 each, for the financial year ended March 31,2017, which, if approved at the ensuing Annual General Meeting, will be paid to:

(i) all those equity shareholders whose names appear in the register of members as on July 14,2017, and

(ii) to those whose names appear as beneficial owners, as on July 14, 2017 as furnished by the National Securities Depository Limited and Central Depository Services (India) Limited for the purpose.

The dividend payout is in accordance with your Company''s policy of paying sustainable dividend linked to long term performance, keeping in view of the capital needs of your Company''s growth plans and desire to achieve optimal financing of such plans through internal accruals.

TRANSFERTO RESERVES

Your Directors does not propose to transfer any amount to its reserves out of the profits of the Company for the year ended March 31,2017.

SUBSIDIARIES

The subsidiaries of your Company are as follows:

Onward Technologies, Inc. (OTI) (North America)

During the year, your Company has opened its 11th global office in Brookfield, a suburb of Milwaukee, Wl. The same focuses on catering to the customers'' needs in the mid-west region and will be strategic for Onward Technologies'' expansion plan in the Industrial Machinery & Equipment vertical. This is the fourth office in the USA in addition to Chicago, Boston & Detroit.

All four offices are in strategic locations with concentration on engineering and IT customers and in close proximity to the clientele.

The North American operations have been growing at a steady pace. Revenues grew by 12.03% to Rs. 7,356.14 Lacs over the previous fiscal.

Onward eServices Limited (OeSL) (India)

OeSL operates primarily in India, with focus on Open Source Technology solutions, Infrastructure Management services, Professional services and Facilities management services.

During financial year 2016-17, revenues grew by over 23.25% to Rs. 5,036.14 Lacs. The EBITDA of the Company stood at Rs. 356.52 Lacs. The Indian market opening up in Company''s market segments helped the growth of top-line.

OeSL has successfully executed several governance projects and Mobility solutions through its Open Source Delivery Centre located at Chennai. OeSL is one of the preferred vendors for delivering Core Banking Implementation & Training to various banks through reputed System Integrators in India. In the recent past, OeSL has built a strong team to manage the Infrastructure Management Services to various Corporate and PSUs.

Onward Technologies GmbH (OTG) (Germany)

During FY16-17, revenues grew by over 62.71% to Rs. 703.80 Lacs.

OTG operates from Frankfurt, Germany and services European customers. OTG is focused on engineering business. It has increased the presence and clientele relationships moving towards growth trajectory. The investments made over a period including in the current year has started moving with positive results. We continue to bring in the enrichment in our offerings to this challenging market while solving the complex engineering problems.

Onward Properties Private Limited (OPPL)

During the year under review, OPPL did not undertake any substantial activities.

The brief particulars of the subsidiaries of your Company as required under AOC-1, is provided as an annexure to this report marked as Annexure-1. Further, your Company has not incorporated or acquired any subsidiaries or associate companies, nor Company has entered into any joint venture, during the year under review. Also, none of the abovementioned companies has ceased to be subsidiary of your Company.

BOARD OF DIRECTORS

Composition of the Board of Directors of the Company as at March 31,2017 was hereunder:

Name of the Director

Designation

Category

Mr. Harish Mehta

Executive Chairman

Executive

Mr. Jigar Mehta

Managing Director

Executive

Mrs. Prachi Mehta

Director

Non-Executive

Mr. Arun Meghani

Director

Non-Executive

Mr. Pradip Dubhashi

Independent Director

Non-Executive

Mr. Pranay Vakil

Independent Director

Non-Executive

Mr. Nandkumar Pradhan

Independent Director

Non-Executive

In the meeting of the Board of Directors held on May 16, 2016, the Board had re-appointed Mr. Harish Mehta as an Executive Chairman of the Company, subject to approval of members of the Company. The members at the 25th Annual General Meeting held on July 18,2016, ratified above appointment with effect from May 16,2016.

Further, Mr. Jigar Mehta was appointed on the Board of the Company as the Managing Director at the meeting of the Board dated May 16,2016, subject to approval of members of the Company. The members at the 25th Annual General Meeting held on July 18,2016, ratified said appointment with effect from May 16,2016.

Also, detailed composition of the Board of Directors, including Committees thereof; and number and dates of meetings held during the financial year is provided in the Report on Corporate Governance of your Company for the financial year 2016-17.

Mr. Arun Meghani, Non - executive Director of the Company, retired from the Board effective from Thursday, April 27, 2017, after a distinguished journey on Board of the Company. The Board expresses its gratitude to Mr. Meghani for his immense contribution to the Company with best wishes for the years to come.

The Board of Directors of your Company has appointed Mr. Rahul Rathi and Mr. Parish Meghani as an Additional Director (Non-executive/independent) on the Board of the Company on April 24, 2017 and May 10, 2017, respectively, to hold office up to date of ensuing Annual General Meeting, in terms of provisions contained in Section 161 of the Companies Act, 2013 (the Act) and rules made thereunder. Brief profile of Mr. Rahul Rathi and Mr. Parish Meghani along with other necessary information as required under Regulation 36 of Securities and Exchange Board of India (SEBI) (Listing

Obligations and Disclosure Requirements) Regulations, 2015 (Listing Obligations) is placed on the website of the Company and also available on the websites of the stock exchanges for the information of the members.

Independent Directors

Mr. Pradip Dubhashi, Mr. Pranay Vakil and Mr. Nandkumar Pradhan were the Independent Directors of the Company as on March 31, 2017. All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 of the Act which has been relied on by your Company and placed at the Board meeting held on May 22,2017.

Mr. Pradip Dubhashi, Independent Director of the Company had tendered his resignation from the Board of the Company with effect from April 05,2017. Your Company''s Board of Directors would like to express appreciation to Mr. Dubhashi and warmly acknowledge his contribution as member of the Board for long journey of over 15 years.

Your Company has also laid down policies to identify persons who are qualified to become Directors and who may be appointed in senior management. Pursuant to above policy and provisions of Section 149 of the Act and Listing Obligations, as amended from time to time, your Directors has proposed appointment of Mr. Rahul Rathi and Mr. Parish Meghani as Non-executive Independent Directors of the Company in their meeting held on May 22,2017, for the period of 3 (three) consecutive years upto July 20, 2020. The same shall be subject to approval of members at the ensuing Annual General Meeting. Accordingly, necessary resolutions along the explanatory statements are placed in the notice convening 26th Annual General Meeting of the Company.

Mr. Pranay Vakil and Mr. Nandkumar Pradhan were appointed as the Independent Directors on the Board with effect from August 1,2014 in accordance with the provisions of Section 149 of the Act. Pursuant to the provisions of Section 149 (10) of the Act, an Independent Director shall hold office for a term up to 5 (five) consecutive years, but shall be eligible for reappointment for another term up to 5 (five) consecutive years by approval of members by special resolution. In view of above provisions and terms of appointment, they hold office up to the date of this Annual General Meeting. Accordingly, keeping in view their experience, expertise and contribution to Board during their previous tenure for making the Board work more objectively and constructively, and uphold the ethical standards of integrity and probity, the Board of Directors recommends their re-appointment for the period of 3 (three) consecutive years up to July 20,2020.

Further, above re-appointments are recommended based on the report of performance evaluation of Independent Directors done by the Board of your Company. Mr. Pranay Vakil and Mr. Nandkumar Pradhan are not disqualified from being re-appointed in terms of Section 164 and Section 149 of the Act. Accordingly, necessary resolutions along with the explanatory statements are placed in the notice convening 26th Annual General Meeting of the Company.

Meetings of the Board of Directors:

Your Directors meet at regular intervals in every calendar quarter. Meetings are generally held at the registered office of the Company at Mumbai or at Company''s office at Pune. During the year, 4 (four) Board meetings were convened and held on the following days:

Sr. No.

Day

Date

Venue

1

Monday

May 16,2016

Mumbai, India

2

Monday

July 18,2016

Mumbai, India

3

Friday

October 21,2016

Mumbai, India

4

Monday

January 23,2017

Pune, India

The intervening gap between the meetings was within the period prescribed under the Act. Also, all the meetings were convened after sending due notices to the Directors along with agenda and explanatory notes at least seven days in advance pursuant to the provisions of the Act, Secretarial Statndard-1 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Obligations), as amended from time to time, to enable them to take informed decisions. Requisite quorum was met during each of the above meetings. There were no discussion at the meeting which took place through video conferencing, the Directors present were available at the venue of the meeting.

Separate meeting of Independent Directors:

Meeting of the Independent Directors of the Company was held on March 23, 2017, to review the performance of Non independent Directors (including the Chairman) and the Board as a whole, where all the Independent Directors were present. The Independent Directors also reviewed the quality, content and timeliness of the flow of information between the management and the Board and its Committees.

Key Managerial Personnel:

Your Company has appointed following key managerial personnel (KMP) during the year under review:

Sr. No.

Name of KMP

Designation

Date of appointment

1

Mr. Harish Mehta

Chairman & Whole-time Director (Executive Chairman)

May 16,2016

2

Mr. Jigar Mehta

Managing Director

May 16,2016

3

Mr. MonikDamania

Company Secretary

May 16,2016

Further, in accordance with the relevant provisions of the Act, necessary declarations and submissions has been made to Registrar of Companies in Form MR-1, Return on appointment of the KMPs.

Director Retiring by Rotation

In terms of Section 152 of the Act and Articles of Association of the Company, Mrs. Prachi Mehta would retire by rotation at the forthcoming meeting and is eligible for re-appointment. Mrs. Prachi Mehta has offered herself for re-appointment. The Board recommends her reappointment at the ensuing Annual General Meeting, as Director liable to retire by rotation.

Board Evaluation

Pursuant to the provisions of the Act and Listing Obligations, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its various committees. Independent Directors at their separate meeting held during the year, reviewed the performance of Non-independent Directors of your Company as well as Chairman of your Company and the Board as a whole.

Audit Committee

The Audit Committee of the Board comprised of Mr. Pradip Dubhashi, as the Chairman, Mr. Arun Meghani, Mr. Pranay Vakil, Mr. Nandkumar Pradhan and Mrs. Prachi Mehta as members as at March 31, 2017. During the year under review, there were no instances of non-acceptance of any recommendations of the Audit Committee by the Board of Directors of your Company.

SHARE CAPITAL

During the year the share capital of your Company increased from Rs. 149,337,700 to Rs. 151,962,700 by allotment of 262,500 new shares issued of face value Rs. 10 each under Company''s Employees Stock Option Plan 2009. Further, on April 6, 2016 your Company had allotted 137,600 shares under ESOP scheme and at present, the paid-up share capital is Rs. 153,338,700divided into 15,333,870equity shares office value Rs. 10each.

Listing information

The equity shares of your Company are listed on the following stock exchanges under the ISININE 229A01017.

BSE Limited: Scrip Code: 517536

The National Stock Exchange of India Limited: Scrip Code: ONWARDTEC

The Company has regularly paid the Annual Listing fees to the respective Stock Exchanges. Annual Custody/Issuer fee for the financial year 2016-17 has been paid by the Company to National Securities Depositories Limited and Central Depository Services (India) Limited.

Pledge of shares

None of the equity shares of the Directors of your Company are pledged with any banks or financial institutions.

EMPLOYEE STOCK OPTION SCHEME

Your Company had implemented Employee Stock Option Plan 2009 (ESOP 2009) for the benefit of employees of your Company and its subsidiaries. The aforesaid scheme was approved by the members of your Company at the 18th Annual General Meeting held on August 31,2009 and the scheme is monitored under the guidance of the members of Nomination and Remuneration Committee of the Board of Directors. The rationale of implementation of ESOP 2009 was to attract, motivate and retain talented personnel with the organization for long time. The total number of warrants approved under the scheme for employees of your Company and of its subsidiaries are 875,000 with option to convert into 3,500,000 equity shares (One warrant is equal to four equity shares). The employees working with the subsidiaries of your Company are also covered under the above scheme.

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

AUDITORS Statutory Auditors

The members at 23rd Annual General Meeting of the Company held on Friday, August 1,2014 had appointed M/s. Kirtane & Pandit LLP (or Existing Auditors), Chartered Accountants, (Firm Registration No. 105215W/W100057) as Statutory Auditors of the Company to hold office from the conclusion of that Annual General Meeting till the conclusion of 26th Annual General Meeting to be held in the year 2017. The term of office of existing auditors is getting expired in this Annual General Meeting. M/s. Kirtane & Pandit LLP has been auditors of the Company for more than past 10 years and cannot be re-appointed in accordance with the provisions of Sections 139,142 and other applicable provisions, if any, of the Act, read with the Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof, for the time being in force).

The Board of Directors has proposed appointment of M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration No. 012754N/ N500016) to hold office as the statutory auditors of the Company from the conclusion of this Annual General Meeting till the conclusion of the 31st Annual General Meeting of the Company, subject to approval of members.

Your Company has received a written consent from M/s. Price Waterhouse Chartered Accountants LLP to act as the statutory auditors of the Company for abovementioned period along with a certificate confirming the appointment, if made, shall be in accordance with the provisions mentioned above. Further, M/s. Price Waterhouse Chartered Accountants LLP are not disqualified to become the auditors of the Company under Section 141 of the Act.

Auditors'' report for Financial Year 2016-17:

M/s. Kirtane & Pandit LLP, Chartered Accountants, (Firm Registration No. 105215W/W100057) has conducted statutory audit of the financials of the Company for the financial year ended March 31,2017 and has submitted their report to the Board along with the financial statements approved at the Board meeting held on May 22, 2017. The said report is enclosed along with the financials of your Company and also forms part of this Annual Report, which includes their remarks and matters of emphasis which are self-explanatory.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board, had appointed M/s. Yogesh D Dabholkar & Co., Company Secretaries in Practice (FCS: 6336, CP No.: 6752) to undertake the secretarial audit of your Company for the financial year ended March 31,2017. Their audit report is annexed herewith this report as Annexure-3.

Their report envisages remarks in relation to non-appointment of key managerial personnel viz; Chief Financial Officer, during the year under review. The Board would like inform that your Company is in search for a competent Chief Financial Officer and intend to appoint one in the current fiscal.

INTERNAL CONTROLSYSTEMS ANDTHEIR ADEQUACY

Your Company has an internal control system, commensurate with the size, scale and complexity of its operations. Your Company has documented a robust and comprehensive internal control system for all the major processes to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedures, laws and regulations, safeguarding of assets and economical and efficient use of resources. The formalized system of control facilitates effective compliance as per Listing Obligations and relevant provisions of the Act.

To maintain its objectivity and independence, the internal audit function reports to the Chairman of the Audit Committee of the Board. The internal audit function monitors and evaluates the efficacy and adequacy of internal control system in your Company, its compliance with operating systems, accounting procedures and policies at all locations of your Company and its subsidiaries. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions there on are presented to the Audit Committee of the Board. The Audit Committee also met your Company''s Statutory Auditors to ascertain their views on the financial statements, including financial reporting system, compliance to accounting policies and procedures, the adequacy and effectiveness of internal controls and systems followed by your Company.

BUSINESS RISK MANAGEMENT

Your Company has formally framed a risk management plan/policy to identify and assess the risk areas, monitor and report compliance and effectiveness of the policy and procedure. A detailed exercise is being carried out to identify, evaluate, manage and monitoring of both business and non-business risk. This plan seeks to create transparency, minimize adverse impact on the business objectives and enhance your Company''s competitive advantage. The business risk plan defines the risk management approach across the enterprise at various levels including documentation and reporting. The Audit Committee and Board of Directors periodically review the risks and suggest steps to be taken to control and mitigate the same through a properly defined framework.

The purpose of risk management is to achieve sustainable business growth, protect Company''s assets, safeguard shareholder investments, ensure compliance with applicable laws and regulations and avoid major surprises of risks. The policy is intended to ensure that an effective risk management framework is established and implemented within the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Loans, guarantees and investments covered under Section 186 of the Act, form part of the notes to the financial statements provided in this Annual Report. Also, details of loans, guarantees and investments made by the Company during the Financial Year 2016-17 are provided as Annexure-4 of this Report.

PUBLIC DEPOSITS

Your Company has not accepted any public deposits and, as such, no amount of principal or interest was outstanding as of the date of the balance sheet.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

All contracts/arrangements/transactions entered by your Company during the financial year with related parties were on an arm''s length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Act and the Listing Obligations. There are no materially significant related party transactions undertaken by your Company with the Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of your Company at large.

All related party transactions are placed before the Audit Committee of your Company, for its approval. Also, the Company had taken an omnibus approval from the Audit Committee in its meeting held on May 16, 2016, for routine transactions with related party which are made on an arms'' length basis. A statement of all related party transactions is placed before the Audit Committee for its review on a quarterly basis, specifying the nature, value and terms and conditions of the transactions. Your Company has also adopted a related party transaction policy. This policy, as approved by the Board, is uploaded on your Company''s website; www.onwardgroup.com. All transactions are undertaken as per the provisions of the Company''s policy.

The related party transactions that were entered during the financial year 2016-17, are given in the notes to financial statements as per Accounting Standard 18 (AS 18), which form part of the Annual Report.

Further, all transactions with related parties have been conducted at an arm''s length basis and are in ordinary course of business. Accordingly, there are no transactions that are required to be reported in Form AOC-2 and as such do not form part of this Report.

EXTRACTOFANNUAL RETURN

The details forming part of the extract of the annual return in form MGT-9 is annexed herewith as Annexure - 5 to this Report.

DIRECTOR''S RESPONSIBILITY STATEMENT

The Directors confirm that:

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

2. 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 your Company at the end of the financial year and of the profit of your Company for that period;

3. 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 your Company and for preventing and detecting fraud and other irregularities;

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

5. They have laid down internal financial controls to be followed by your Company and that such internal financial controls are adequate and were operating effectively; and

6. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CORPORATE SOCIAL RESPONSIBILITY

The Board has constituted Corporate Social Responsibility (CSR) Committee which comprised of Mr. Pranay Vakil as Chairman; Mr. Harish Mehta and Mrs. Prachi Mehta as members. The Board has also approved a CSR policy on recommendations of CSR committee. However, provisions of Section 135 of the Act, which relates to CSR are not applicable to your Company so far as it does not meet the criteria mentioned therein.

However, as a matter of Company''s social responsibility, your Company has undertaken several initiatives through its social welfare organization named ''Onward Foundation''. Onward Foundation is a charitable organization and its charter is to extend support to society in the areas of education, health care and social welfare. Through its initiative called "Making a difference to our community" the foundation continues to extend its support to several orphanages and paraplegic institutes. Also, the foundation has contributed to education and social welfare of Adivasi girls from rural areas.

Your Company continues to pledge its support for several health care programs like "V-Care" which strives to provide medical support for treatment of cancer patients. Also, your Company has contributed for providing hearing aid treatments and instruments for underprivileged and poor people. To support education in the society the foundation has extended its arm to several educational institutes which provides basic education to the poor. Your Company strives to promote, support and strengthen the objectives of Onward Foundation with an ultimate aim of well being of society.

DISCLOSURES UNDERTHE ACT

1. Material changes and commitment affecting financial position:

No material changes and commitments which could affect your Company''s financial position have occurred between the end of the financial year and date of this report.

2. Shares with differential rights:

Your Company has not issued any shares with differential rights and hence no information as per provisions of Section 43 (a) (ii) of the Act read with Rule 4 (4) of the Companies (Share Capital and Debenture) Rules, 2014isfurnished.

3. Sweat Equity Shares:

Your Company has not issued any sweat equity shares during the year under review and hence no information as per provisions of Section 54 (1) (d) of the Act read with Rule 8 (13) of the Companies (Share Capital and Debenture) Rules, 2014isfurnished.

4. Reporting of frauds:

The Statutory Auditors of the Company has not reported any frauds by Company''s employees or officers in financial or business operations of the Company during the year under review, pursuant to provisions of Section 143 (12) of the Act.

5. Your Company did not carry any material transaction during the year under review, and hence there were no particular changes in the business of your Company.

6. Significant and material orders passed by the regulators or courts or tribunals:

Your Directors state that no disclosure or reporting is required as no significant or material orders were passed during the year under review by the regulators or courts or tribunals which impact the going concern status and Company''s operations in future during the year under review.

DISCLOSURES AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACSE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment of women in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under for prevention and redressal of complaints of sexual harassment at workplace. Your Company is committed to providing equal opportunities without regard to their race, caste, sex, religion, colour, nationality, disability, etc. All women associates (permanent, temporary, contractual and trainees) as well as any women visiting your Company''s office premises or women service providers are covered under this policy. All employees are treated with dignity with a view to maintain a work environment free of sexual harassment whether physical, verbal or psychological.

A committee has been set up to redress complaints in this regards. Details of the events which took place during the year are hereunder:

Sr. No.

Particulars

Events

1

Number of Complaints of Sexual Harassment pending at the beginning of the year

Nil

2

Number of Complaints of Sexual Harassment received during the year

Nil

3

Number of Complaints of Sexual Harassment disposed off during the year

NA

4

Number of Complaints of Sexual Harassment pending for more than 90 days

NA

5

Nature of Action taken by the Employer or District Officer

NA

6

No. of Awareness Program about Sexual Harassment Policy conducted and held at workplace

3 (Three)

No action was required to be taken by the Company as there were no complaints relating to sexual harassment received during the year under review. Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report on the business outlook and performance review for the year ended March 31,2017, as stipulated Regulation 34 of the Listing Obligations, is presented in a separate report which forms part of this Report.

CORPORATEGOVERNANCE

Your Company has taken appropriate steps and measures to comply with all the applicable provisions of the Listing Obligations on Corporate Governance. A detailed report on Corporate Governance along with a certificate of statutory auditors of your Company also forms part of this Report.

Green Initiatives in Corporate Governance:

In line with the ''Green Initiative'', your Company has effected electronic delivery of notice of Annual General Meeting and annual report to those shareholders whose email ids were registered with the respective depository participants and downloaded from the depositories viz. National Securities Depository Limited/Central Depository Services (India) Limited. The Act and the underlying rules as well as Listing Obligations permit the dissemination of financial statements in electronic mode to the shareholders. Your Directors are thankful to the shareholders for actively participating in the green initiative and seek your continued support for implementation of the same.

CONVERSION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

A

Conservation of Energy:

1

The steps taken or impact on conservation of energy

Your Company requires energy for its operations and the Company is making all efforts to conserve energy

2

The steps taken by your Company for utilizing alternate sources of energy

by monitoring energy costs and periodically reviews of the consumption of energy. It also takes appropriate steps to reduce the consumption through

3

The capital investment on energy conservation equipments

efficiency in usage and timely maintenance / installation/up gradation of energy saving devices.

B

Technology Absorption:

1

The efforts made towards technology absorption

Your Company uses latest technology and

2

The benefits derived like product improvement, manufacturing activities, cost reduction, product development or import substitution

equipments into the business. Further, your Company is not engaged in any manufacturing activities.

3

In case of imported technology (imported during the last three years reckoned from the beginning of the financial year)

a) The details of technology imported

b) The year of import

c) Whether technology been fully absorbed?

d) If not fully absorbed, areas where absorption has not taken place, and the reasons thereof

4

The expenditure incurred on Research and development

Your Company has not spent any amount towards research and developmental activities and has been active in harnessing and tapping the latest and the best technology in the industry.

(Amount in Rs. Lacs )

C. Foreign exchange earnings and outgo: (OTL -Standalone)

2016-17

2015-16

Foreign exchange earnings

4,737.23 Lacs

4,245.94 Lacs

Foreign exchange outgo

1,901.92 Lacs

1,888.10 Lacs

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 of the Act read with Rule 5 (1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is furnished herewith in Annexure - 6.

Further, the information required pursuant to Section 197 of the Act read with Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of your Company and Directors is furnished hereunder:

Sr.

Name

Designation

Remuneration

Nature

Qualification

Date

The

% of

Whether

no.

of

&

of

last

equity

the

employment

Experience

Commen

employment

shares

employee

whether

&

cement

held by

held

is a relative

contractual

Age

of

employee

by

of any

or

Employee

before

employee

Director,

otherwise

joining

Company

in

the

Company

Manager

of the

Company.

If yes

provide

the

details

1

Harish

Mehta

Executive

Chairman

Rs. 8,385,804

Permanent

Qualification:

M.S.EIectrical

Experience:

39 years Age: 69 years

l-Jan-2006

NA

216,528

(1.42%)

Relative of

Mr. Jigar

Mehta,

Managing

Director

and

Mrs. Prachi

Mehta,

Director

of the

Company

2

Jigar

Mehta

Managing

Director

Rs. 7,947,960

Permanent

Qualification:

Bachelor in Business Administration with concentration in Marketing and

Management

information

system,

Boston

University,

USA

Experience:

16 years Age: 37 years

19-Jun-2001

NA

215,944

(1.42%)

Relative of

Mr. Harish

Mehta,

Executive

Chairman

and Mrs.

Prachi

Mehta,

Director

of the

Company

Your Company recognizes the importance of aligning the business objectives with specific and measureable individual objectives and targets. Your Company has therefore formulated the criteria for rewarding its Directors, key managerial personnel and other employees keeping in view the following objectives:

- Ensuring that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate, to run the Company successfully.

- Ensuring that relationship of remuneration to performance is clear and meets the performance benchmarks.

- Ensuring that remuneration involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company and its goals.

Your Company''s remuneration policy is directed towards rewarding performance based on review of achievements periodically. The same is in consonance with the existing industry practice.

Extracts of the Remuneration Policy

The Remuneration Policy of Onward Technologies Limited (the "Company") is designed by the Nomination and Remuneration Committee (NRC) of the Company to attract, motivate and retain manpower in a competitive market. The Remuneration Policy applies to the Company''s Senior Management, including its Key Managerial Person and Board of Directors, and other employees.

Remuneration to Non-Executive Directors:

The Non-executive Directors of the Company are paid remuneration by way of sitting fees only for attending the meetings of the Board of Directors and its Committees. The sitting fees paid to the Non-executive Directors for attending meetings of Board of Directors and Audit Committee of Board of Directors shall be Rs. 75,000/- and Rs. 50,000/- per meeting, respectively. Also, sitting fees for attending Nomination and Remuneration Committee and Stakeholders'' Relationship committee meetings shall be Rs. 5,000/- per meeting. Beside the sitting fees they are also entitled to reimbursement of expenses. The Non-executive Directors of the Company are not paid any other remuneration or commission. The sitting fees of the Non-executive Directors for attending meetings of Board of Directors and the Committees of Board of Directors may be modified or implemented from time to time only with the approval of the Board in due compliance of the provisions of the Act.

Remuneration to Executive Directors. Kev Managerial Personnel(s) (KMPs) & Senior Management Personnel (s) (SMPs):

The Company has a credible and transparent framework in determining and accounting for the remuneration of the Managing Director / Whole Time Directors (MD/WTDs), Key Managerial Personnel(s) (KMPs) and Senior Management Personnel(s) (SMPs). Their remuneration shall be governed by the external competitive environment, track record, potential, individual performance and performance of the Company as well as industry standards. The remuneration determined for MD/WTDs, KMPs and SMPs are subjected to the approval of the Board of Directors in due compliance of the provisions of the Act. The remuneration for the KMP and the SMP at the time of the appointment has to be approved by the Board but any subsequent increments shall be approved by the Managing Director of the Company as per the HR policy of the Company and ratified by the Board.

As a policy, the Executive Directors are neither paid sitting fee nor any profit related commission.

Senior Management Personnel:

Persons/Officers of the Company having following designations shall be termed as Senior Management Personnel of the Company:

1. Chief Executive Officer (CEO),

2. Chief Financial Officer (CFO),

3. Chief Operating Officer (COO)

Further, Company''s policy on Directors'' appointment and remuneration including criteria for determining qualifications, positive attributes and independence of Directors is also available on Company''s website; www.onwardgroup.com.

ACKNOWLEDGMENTS

The Directors hereby put on record their sincere gratitude towards the continued assistance and co-operation extended to your Company by its customers, stakeholders, suppliers, banks, financial institutions and various government authorities towards the growth of your Company.

The Directors also place on record their deep sense of appreciation for the dedicated services rendered by the employees of your Company.

For and on behalf of the Board of Directors

Place: Mumbai

Date: May 22,2017 Harish Mehta

Executive Chairman


Mar 31, 2015

The members,

The directors are pleased to present before you the TWENTY FOURTH ANNUAL REPORT together with Audited Annual Accounts of the Company for the financial year ended 31st March, 2015.

Corporate Overview

Onward Technologies Limited (Consolidated) is a niche player in Mechanical Engineering Design Services (EDS) and IT consulting services (ITS). The Company offers a range of engineering design services including product design, engineering analysis, engineering documentation and maintenance, and manufacturing solutions for automotive, off highway, aerospace, industrial equipment and consumer goods industries. The Company has number of clients from Fortune 1,000 list.

With a strong team of 2,000 employees operating from the Company's various offices in India (Mumbai, Pune and Chennai), USA (Chicago, Boston and Detroit) and Europe (Reading in UK and Frankfurt in Germany), we are catering to customers who are leading global players in their respective fields.

Industry Overview

The global engineering spend is almost USD 1,300 billion. The global mechanical engineering spent is USD 260 billion, 20% of the global engineering spend. (NASSCOM-Booz report). The largest vertical in this segment is automotive growing globally at 5%. The growing shortages of skilled resources in the developed market, pressures to reduce time to market, increasing R&D spend and cost rationalization are driving and expanding the need for outsourcing of product engineering services and solutions and manufacturing engineering services. From India, the Company is emerging as a leader in this segment.

Financial Performance: (Consolidated)

The Company crossed Rs. 190 Crore in consolidated revenues for the FY 14-15, a growth of 13.50% over the previous financial year. The consolidated EBIDTA is at Rs. 1,306.51 Lac - a growth of healthy 34% over previous year. Operationally the Company continues to invest and grow both in EDS and ITS in India and overseas markets.

The summarized consolidated results of the Company are as follows:

(Rs. in Lac)

For the year ended For the year ended 31.3.2015 31.3.2014

Sales and other income (Net) 19,067.68 16,815.35

Profit before finance cost, depreciation and exceptional items 1,306.51 975.38

Finance costs 316.94 341.26

Depreciation 530.32 354.55

Operating profit before prior period expenses 459.25 279.57

Exceptional items - -

Profit before tax 459.25 279.57

Provision for taxation

- Current tax 97.45 20.62

- Current tax (Mat) - 135.19

- Previous year tax adjustment 135.81 65.98

- Deferred tax expenses/(benefits) (64.57) 50.25

Profit after tax 290.56 7.53

Transfer to Reserves

During the year, the Company has not transferred any amount to reserves.

Appropriations

Dividend

The overall performance of the Company has been satisfactory. Company sees excellent growth prospects and in order to capitalize on the opportunities the management has not recommended any dividend for the current financial year.

Business: The Company's engineering operations can be broadly divided under two groups:

- Product Engineering Group

- Manufacturing Engineering Group and Computer Aided Engineering Group

Engineering group: Design to cost, first time right quality and delivery on time are the unique differentiators of the Company. The Company's Analytically Driven Design and Development methodology helps deliver innovative solutions to the customer to reduce 'Time to market". Engineering excellence centers helps customers to strengthen their product engineering strategies assuming firm delivery commitments.

Product design, POC Build, Simulation engineering, Automation solutions, Prototyping, Engineering Change management, Should costing, Value engineering, Benchmarking, BIW Fixture design, Robotic engineering are the areas that the Company excels in. The Company has centers of excellences in Plastics, Composites, Sheet metal, Fabrication, Castings and Forgings.

Our product engineering engagement with world's leading manufacturer of engines got strengthened this year with the services expanding to Should Costing, Value Engineering and new product introduction support. We delivered brake piping design services to an automotive OEM covering about 3,000 pipes. We also formed a dedicated Offshore Development Centre for a client for their Technical Documentation and Distance Learning Module requirements.

Manufacturing Engineering team delivered large projects to automotive OEM's through Tier-1s in North American and European markets.

Achievements/Testimonials

QMS and ISMS: The Company was certified for ISO 9001-2008 and ISMS: ISO 27001-2013 standards by TUV Nord.

Onward was certified by a world leader in mining equipment for implementing stringent information security standards.

The Company successfully completed a major Computational Fluid Dynamics (CFD) project for a global energy management organization from US for their huge battery packs that helped to improve the efficiency.

One of the fortune 10 client recognized Onward Technologies Should Cost Engineering services as "Center of Excellence".

The strict adherence to quality processes driving to first time right delivery goals has made Onward, a 'Preferred partner' or 'Choice of Customer' for number of clients.

Operations

For the FY 14-15, the Company continued to strengthen its position in the Engineering and IT segments.

Operational Finances: Operationally, the Company's top line grew by 13.50% to Rs. 18,962 Lac from Rs. 16,815 Lac. On a consolidated basis, the Company's Debtors Turnover Ratio improved to 75 days as compared to that of last year at 85 days. The Company has further strengthened its state of the art facility by investing additional Rs. 635 Lac (consolidated) as compared to Rs. 380 Lac (last year) as capital investments. The Company further solidified its senior management by adding number of senior managers with deep domain expertise in engine, seating, interiors, BIW and Open Source technologies.

Human Resources

The Company is continuously investing in human resources to build Design driven manufacturing culture. The collaborative culture helps to establish and interface between Simulation and CAD during the design phase and predicts the product performance.

At Onward, we know the value of bringing together diverse ideas. We embrace a culture that is accepting and understanding. And we work to include individuals; we know the value of bringing together diverse ideas. It's a culture that reflects our global market, widens our business opportunities, attracts the best talent, and breathes life into the best teamwork.

The Company has a structured induction process at its locations and programs that lead to development of its human resources. Objective appraisal system in line with key result areas helps the Company to steer growth and commitment towards the core values of building a strong organization.

CSR activities - The Company has under taken a number of CSR initiatives through Onward Foundation. The Onward Foundation's Charter is to extend support in the fields of education and health. The Company through the foundation has setup a computer center for Adivasi girls in a rural area.

With a view of "Making a difference to our community', initiatives taken on many corporate social responsibility activities, supporting Paraplegic institute and Orphanage, blood donation camps and tree plantations.

The consolidated profit of the Company is below the limits mentioned under Section 135 of the Companies Act, 2013 as a result of which, CSR activities are not mandatory for the Company.

Subsidiaries

The subsidiaries of The Company are as follows:

Onward Technologies, Inc. (OTI) (North America)

Company has three offices in US at Chicago, Detroit and Boston. All three offices are in strategic locations with concentration on Engineering and IT customers and in close proximity to the clientele.

The North American operations have been growing at a steady pace. The revenues for the FY 14-15 were at Rs. 71 Crore. Onward eServices Limited (OeSL)

OeSL operates primarily in India, with focus on Open Source Technology solutions, Infrastructure Management services, Professional services and Facilities management services.

During FY 14-15, revenues grew by over 35% to Rs. 3,301 Lac. The EBIDTA of the Company stood at Rs. 259 Lac (as against negative EBIDTA of Rs. 372 Lac in previous year). The Indian market opening up in Company's market segments helped the growth of top-line by 35%, stringent cost controls improved utilization resulted in improving EBIDTA substantially.

OeSL has successfully executed CCTNS (Crime and Criminal Tracking Network and Systems) in the states of Maharashtra and Kerala through large System Integrators. The Company is one of the top vendors to deliver Open Source Technology solutions in state of Tamilnadu.

Onward Technologies GmbH (OTG) (Germany)

OTG operates from Frankfurt, Germany and services European customers. The Company is primarily focused on engineering business. The initial investment period being over, OTG is expected to show turnaround results in the coming year.

Onward Properties Private Ltd. (India)

During the year under review, the Company did not undertake any substantial activities.

The brief particulars of the subsidiaries of the Company as required under AOC-1, is provided as an annexure to this report marked Annexure-5.

Management Analysis

Indian Engineering R&D services industry continues to be at a pace of growth in line with the IT and BPO industry. The Company is unique in its segment, combining its rich experience with its track record; it offers an attractive value proposition to its clients. This position attracts a client base with a broad and deep sense of relationships that have opportunities of scale in the overall Product Life Cycle in their are respective present business. Currently, the Company supports some of the most prestigious manufacturing companies in the world offering a competitive advantage in solving their complex engineering problems. In order to multiply these, endorsements from clients have been invaluable in enhancing the client relationships enabling upselling and cross selling. Furthermore, client endorsements have helped in winning new relationships and reducing the evaluation periods. The Company's commitment to investments in training, capabilities and CAPEX over the years aligned to growth shall be fruitful and sustainable for the upcoming period. The Company will continue making investments towards enriching client engagement, reach and value added offerings.

The Company's IT services business has continued to invest further in all the 3 growth segments of Application Maintenance Services (AMS), Infrastructure Management Services (IMS) and Product Development and Implementation Services (PDIS). We expect a continued growth in each of the areas in both the Indian and North American markets.

Consolidated Financial Statements

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 of the erstwhile Companies Act, 1956, provided such companies publish the Audited consolidated financial statements in the Annual Report (AR). Accordingly, the AR 2014- 2015 contains the summary of financial statements of our Company's subsidiaries duly audited by its respective Statutory Auditors. Relevant information for each subsidiary has been disclosed in the consolidated balance sheet. Refer Notes on the consolidated balance sheet and statement of profit and loss.

We hereby undertake that annual accounts of subsidiary companies and the related detailed information shall be made available to shareholders of holding and subsidiary companies seeking such information at any point of time. The annual accounts of subsidiary companies shall be kept for inspection by any shareholders in the registered office of the Holding Company and of the subsidiary companies.

We shall furnish the hard copies of details of accounts of subsidiaries to any shareholder on demand within a reasonable period of time.

Directors

The board of the Company is composed of directors that meet the criteria laid down under the Companies Act, 2013 and listing agreements with the stock exchanges. The board consists of 1 Managing Director, 2 Non-Executive directors and 3 Independent directors. Mrs. Prachi Mehta was appointed on the board as an additional director in order to have a woman director and have varied diversity. Apart from this, there were no other changes in the composition of the board, during the year under review.

All Independent directors have given declarations that they meet the criteria of independence as laid down under Section 149 of the Companies Act, 2013 which has been relied on by the Company and placed at the board meeting held on May 13, 2015.

The Company has laid down policies to identify persons who are qualified to become directors and who may be appointed in senior management.

Retirement by rotation

In terms of Section 152 of the Companies Act, 2013, Mr. Arun Meghani, would retire by rotation at the forthcoming AGM and is eligible for re-appointment. Mr. Arun Meghani has offered himself for re-appointment.

Share Capital

During the year the share capital of the Company increased from Rs. 142,468,200 to Rs. 145,748,700 by allotment of 328,050 new shares issued under ESOP scheme of Rs. 10 each. At present the paid-up capital is Rs. 145,748,700 divided into 14,574,870 equity shares of Rs. 10 each.

Employee Stock Option Scheme

The Company had implemented Employee Stock Option Scheme 2009 for the benefit of employees of the Company and its subsidiaries. The aforesaid scheme was approved by the members of the Company at the 18th Annual General Meeting (AGM) held on 31st August, 2009 and the scheme is monitored under the guidance of the members of compensation committee of the board of directors. The rationale of implementation of new scheme was to attract, motivate and retain talented personnel with the organization for long time. The total number of warrants approved under the scheme for employees of the Company, Independent directors and employees of its subsidiaries are 875,000 with option to convert into 3,500,000 equity shares. The employees working with the subsidiaries of the Company are also covered under the above scheme.

The Disclosures required to be made under the SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines 1999, is given as Annexure-3 to this report including details on the grant, vesting, exercise, and lapsed options under the aforesaid ESOP schemes.

The aforesaid ESOP scheme of the Company expires at the ensuing AGM. Pursuant to the recommendation of the compensation committee, the board has approved the extension of the ESOP scheme for a period of up to 3 years i.e. till the AGM in the year 2018 or till the remaining options are exhausted by issue, whichever is earlier.

Auditors

Statutory Auditors

At the 23rd AGM held on August 1, 2014, the members approved the appointment of M/s. Kirtane & Pandit, Chartered Accountants (Firm Registration Number: 105215W) Pune, as Statutory auditors for a period of three years commencing from the twenty third AGM till the conclusion of the AGM to be held in the year 2017 subject to the ratification by the members every year. As recommended by the audit committee, the board has proposed the re-appointment of M/s. Kirtane & Pandit LLP, Chartered Accountants (Firm Registration Number: 105215W/W100057) as Statutory auditors for fiscal 2016. The appointment is accordingly proposed in the Notice of the current AGM vide item no. 3 for ratification by members.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the board, appointed M/s. Nilesh A. Pradhan & Co., a firm of Company Secretaries in practice to undertake the secretarial audit of the Company for the financial year ended March 31,2015. The secretarial audit report is annexed herewith as Annexure-2.

Internal Control Systems and their Adequacy

The Company has an internal control system, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit (IA) function is also defined. To maintain its objectivity and independence, the IA function reports to the chairman of the audit committee of the board.

During the year under review, no material or serious observation has been received from the internal auditors of the Company for inefficiency or inadequacy of such controls.

M/s. B. K. Khare & Co. are the internal auditors of the Company.

Particulars of Loans, Guarantees or Investments

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013, form part of the notes to the financial statements provided in this AR.

Fixed Deposits

We have not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the date of the balance sheet.

Particulars of contracts or arrangements made with related parties

All transactions with related parties for the year under review were on arm's length basis and were conducted in the ordinary course of business. Further, there were no transactions of material nature with the promoters, directors, key managerial personnel. Thus, the disclosure in form AOC-2 under Section 188 is not required.

All related party transactions are placed before the audit committee and also before the board for its approval.

Extract of Annual Return

The details forming part of the extract of the annual return in form MGT-9 is annexed herewith as Annexure-1.

Directors Responsibility Statement

The directors confirm that:

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

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

3. They have taken proper and sufficient care for the maintenance of adequate accounting records, in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

5. They have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

6. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the listing agreement, the board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its various committees.

Pledge of Shares

None of the equity shares of the directors of the Company are pledged with any banks or financial institutions. Disclosures under the Companies Act, 2013

1. Section 134 (3) (i):

No material changes and commitments which could affect the Company's financial position have occurred between the end of the financial year of the Company and date of this report.

2. Section 43 (a) (ii):

The Company has not issued any shares with differential rights and hence no information as per provisions of Section 43 (a) (ii) of the Act read with Rule 4 (4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

3. Section 54 (1) (d):

The Company has not issued any sweat equity shares during the year under review and hence no information as per provisions of Section 54 (1) (d) of the Act read with Rule 8 (13) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

4. Section 62 (1) (b):

The disclosure required under Section 62 (1) (b) is provided as separate annexure marked Annexure-3 to this report.

Listing Information

The equity shares of the Company are listed on the following stock exchanges under the ISIN INE 229A01017:

BSE Limited: Scrip Code: 517536

National Stock Exchange of India Limited: Scrip Code: ONWARDTEC Corporate Governance

Company has taken appropriate steps and measures to comply with all the applicable provisions of the revised Clause 49 on corporate governance. A detailed report on corporate governance along with a certificate of Statutory auditors of the Company is attached herewith as an annexure to this report.

Conversion of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

(i) Conservation of Energy

Company utilizes electricity for operation of computers and initiates all efforts to minimize the consumption. At all levels conservation of energy is stressed upon. Company also takes possible measures to reduce the consumption by deploying automation.

(ii) Technology Absorption Research and Development

The engineering design industry is research and development work. Every design project we deliver is an innovative design. The Company continuously enhances its capabilities to meet design requirements of new products using newer materials by our existing customers. The IT Industry is subject to high rate of technological obsolescence. The Company is investing in developing new capabilities in open source technologies area.

a) Specific areas for R & D

The Company believes that technological obsolescence is a practical reality. It invests and encourages continuous innovation. Its R&D is always focused to provide unique benefits to our customers and other stakeholders by working both proactively (self-driven research) and reactively (customer-driven research). Major specific areas of the Industry that require our Engineering marvel are Reduction of noise, air pollution and greenhouse gas emissions, Increasing safety and comfort on board.

b) Benefits derived as a result of R&D effort

R & D activities taken up by the Company helps it to remain competitive.

Green Initiatives in Corporate Governance

In line with the 'Green Initiative', the Company has effected electronic delivery of Notice of AGM and AR to those shareholders whose email ids were registered with the respective depository participants and downloaded from the depositories viz. National Securities Depository Limited/Central Depository Services (India) Limited. The Companies Act, 2013 and the underlying rules as well as Clause 32 of the listing agreement permit the dissemination of financial statements in electronic mode to the shareholders. Your directors are thankful to the shareholders for actively participating in the green initiative and seek your continued support for implementation of the green initiative.

Particulars of Employees

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Companies (Particulars of Employees) Rules, 1975, in respect of employees of the Company and directors is furnished herewith in Annexure-4. The Company has not employed any individual whose remuneration falls beyond the purview of the limits prescribed under the provisions Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Audit Committee

The present audit committee of the board comprises of Mr. Pradip Dubhashi, as the chairman of the committee, Mr. Arun Meghani, Mr. Pranay Vakil and Mr. NandKumar Pradhan as members.

Acknowledgements

The directors hereby put on record their sincere gratitude towards the continued assistance and co-operation extended to the Company by its Customers, Stakeholders, Suppliers, Banks, Financial Institutions and various Government authorities towards the growth of the Company.

The directors also place on record their deep sense of appreciation for the dedicated services rendered by the employees of the Company.

For and on behalf of the Board of Directors

Place: Mumbai Harish Mehta

Date : May 13, 2015 Chairman and Managing Director


Mar 31, 2014

The Directors are pleased to present before you the TWENTY THIRD ANNUAL REPORT together with Audited Annual Accounts of the Company for the financial year ended 31st March, 2014.

Financial Performance:

During the financial year FY 13-14, the Company recorded a healthy revenue growth of 14% to Rs. 16,815 Lac from Rs. 14,755 Lac in the previous financial year. The growth continued from the overseas markets in North America & Europe.

Over the last 12 months, the Company concentrated its focus in the overseas markets while maintaining current domestic business. Substantial investments were made to upgrade the infrastructure to serve our global clients.

The consolidated profitability was affected, with the PAT at Rs. 7.53 Lac mainly due to the changes in the business model of the domestic business of the ITS business in the subsidiary Onward eServices Ltd (OeSL).

The summarized consolidated results of the Company are as follows:

(Rs. in Lac)

For the year ended For the year ended 31.3.2014 31.3.2013

Sales and other income (Net) 16,815.35 14,754.58

Profit before finance cost, depreciation and exceptional items 975.38 1,498.35

Finance costs 341.26 338.53

Depreciation 354.55 405.60

Operating profit/(loss) before prior period expenses 279.57 754.22

Exceptional items - 26.36

Profit/(loss) before tax 279.57 780.58

Provision for taxation

- Current tax 20.62 61.14

- Current tax (Mat) 135.19 31.99

- Previous year tax adjustment 65.98 -

- Deferred tax expenses/(benefits) 50.25 154.21 Profit/(loss) after tax 7.53 533.24

Transfer to Reserves

During the year, the Company has not transferred any amount to reserves.

Dividend

The overall performance of the Company has been satisfactory. Company sees tremendous growth prospects and in order to capitalise on the opportunities the management has not recommended any dividend for the current financial year.

Operations

The Company has two major lines of focussed areas:

1) Engineering Design Services (EDS)

2) IT Consulting Services (ITS)

The Company''s engineering operations can be broadly divided under two groups:

- Product Engineering Group

- Manufacturing Engineering Group

The Engineering Services cover "Customer Voice" to "Customer Experience" (Product Life Cycle) and continues to add new services based on client requirements, changing technologies & environment.

PEG - Product Engineering Group offers Engineering Services/Solutions in the areas of Product Design, Development and Product sustenance. These activities are performed by a pool of Engineering Subject Matter Experts along with a team of skilled Engineers using proven Practices/ Processes and State of the Art Design, Development and Verification tools in the areas of Automotive, Off Road equipment, Powertrain and Industrial Equipment. A team of Experts certified by SAVE (Society of Value Engineers) carries out the Product Sustenance Engineering work which involves Value Engineering and continuous Improvement.

MEG - Manufacturing engineering group offers Engineering Services that facilitates the manufacturing of the designed products. The Group provides cost effective engineering solutions to the complexities of manufacturing. The highly qualified team has delivered several solutions to the Robotic Welding, Manual Welding, Machining and Assembly and Inspection needs of the Automotive, Off Road and Industrial products. A team of experts in Process planning, "Should - costing" and alternate sourcing act as consultants for Product Development.

Company has continued its investments in strengthening and nurturing the Customer relations by investing in Client Relations Teams, subject matter experts and through new services. These investments and initiatives in customer relations have cemented the Company''s positioning in the North American & European markets as a rightful contender and the status of preferred service providers. With these initiatives, the Company expects to grow further the existing clients and also through good addition of new clients Company is pleased to inform the opening of new Engineering Head Office at Pune, India. This state of the art facility spread over 26,000 sq. ft. will house Corporate, Product Design & Client Servicing teams. Here, Services are offered to leading mfg. firms in Europe and Americas with verticals across Industrial Equipment, Automotive etc. Strategically Located near Pune International Airport, it enables 24/7 operations and serve global customers in various time zones. The new office has the potential to accelerate growth with increased efficiencies by synergizing diverse Centers of excellence.

Customer First: The Company''s continued and persistent focus on keeping the Customer First in all our initiatives not only resulted in the retaining and expanding business with current prestigious clients but also facilitated the addition of new esteemed clients. . These initiatives were mainly focused towards broadening and deepening of quality offerings, within the timelines defined by the customers, ensuring large base of customer ready engineers. Company has become "Preferred Engineering Service Provider" to many existing customers.

COEEs - Centers of Engineering Excellences: The Company''s continued focus and commitment to investments in selected COEEs (Engine Design, Seating etc) is contributing to the growth by expanding the offerings. Most of these COEEs became quite attractive to many of our clients and demonstrated multiplying effects. During the year, Company has been able to acquire major and prestigious programmes from all the selected COEEs across all geographies. To name few; a good sizable team from this selective CoE is currently participating in integrating green-field projects overseas, giving Manufacturing Engineering technical assistance and support for the prestigious Auto OEM with a wide breadth of offerings. Similarly, Company''s team is also helping Domestic Auto OEM to put together the right engineering documentation to address the integration issues resulting in value addition to the services. We have also taken part in a global programme for North America based Tier-1 companies in product engineering support for Concept development to launch activities. All such efforts have resulted in penetration across sections of the client base enabling up selling and cross selling. The Company''s focus on such investments in CoE for the past few years has helped move up the value chain while adding impressive offerings to the existing portfolio and thus ensuring steady growth. Continued efforts have been made towards participating in prestigious global events such as SAE Congress, CoEP Centenary Celebrations, Product vendor user conference/technology events, forums, etc, where representatives of the Company have been invited as speakers/mentors.

Quality Processes & Customer Data Security: Company''s high level of commitment towards First Time Right Quality, Every Time Right Quality with right Quality processes and I PR protection measures and framework lead to increased customer satisfaction and an incident free year. This resulted in contributing to the increase in trust levels with respect to prospect conversion across clients and engagements, and also deepening relations with the existing client base and hence enabling up selling and cross selling. Company has continued to invest in maintaining up to date processes, frameworks and certifications, enriching the customer satisfaction levels. There have been rewards and recognitions in the Company for continual improvement in meeting the year-on-year objectives in addition to client feedback and reward systems.

Project Management-The Project Management Office (PMO) in the Company has played a vital role during the year, ensuring the client RFQs are responded to with the right validation of capabilities and service offerings in line with the clients'' expectations. Aligned to the vision of a virtual OEM; PMO has contributed by acquiring, imparting and deploying the resources, based on a skills matrix needed for each service offering to ensure the First Time Right Quality. Company has been making investments towards building a Knowledge Portal for betterment and reuse of lessons learnt from the previous projects and engagements in order to adopt the best practices and ensure Every Time Right Quality. These efforts towards Quality assurance are further supported by the internal Design Review Board that has been strongly institutionalized as a toll gate review mechanism; before client reviews. Continuous investments towards adding to and/or upgrading the CAPEX/infrastructure to deepen the service offerings to clients have been well aligned and accomplished.

Human Resources Initiatives

Company strongly believes in building effective human capital with strategic processes to drive established organizational goals forward in adherence with unmatched innovation and quality to uphold our core values and amplify our existing successful Business Model.

Strengthening the senior management team in order to penetrate new clients, enhance existing business relationships and increase customer interaction at a global level has been one of the key focus areas. In accordance with the above, significant efforts and investments were made to attract and engage High Potential talent in the organization. Conducive Orientation and Induction programmes were a primary focus of the Senior Management and have ensured leveraging our human capital to support our core values and encourage ppsitivity, fundamental to the Company''s success. In order to partner global businesses as per Industry standards and ensure commitment and alignment to our core values - we have fortified the required standard certifications in all aspects of the business.

Talent Management as a key function is spear headed by Human Resources to meticulously ensure career path, KRAs and job rotation across the organization. As a global organization, overseas opportunities were extended to many promising employees, providing them with advance career paths whilst maintaining intent to align with business / client requirements and focus on global growth. The Company is committed to promoting a global culture and has recruited local, talented and qualified personnel at multiple international locations

With an objective of promoting employee connect and cultivating a participatory environment, Company organized several events during the year, such as the Annual day celebrations, family get togethers, New Year and festive celebrations, we also participated in industry forums like CoEP, SAE Congress etc. as "Key Speaker" during the year. In order to motivate the employees and retain excellent talent, Company has policies in place to recognize individual performance, integrity, hard-work and loyalty. While considering recognition of the employees who strive to achieve success for the organization, Company rewards employees with Long Service Awards, ESOPs, POB (Pat on Back) awards, etc.

CSR Activities - The Company has under taken a number of CSR initiatives through Onward Foundation. The Onward Foundation''s Charter is to extend support in the fields of Education and Health.

Subsidiaries

The subsidiaries of The Company are as follows:

Onward Technologies, Inc. (North America)

Company expanded & relocated its North America headquarters in Rosemont, IL a suburb of Chicago. Company also expanded its setup and operations in Troy, Ml to match growing customer demands in the Automotive capital of the world. With this the Company completed its two year plan to expand into newer & bigger offices for all its key markets, to bring the office infrastructure to global standards & be able to attract the best available talent in the market.

Financial Highlights:

The North American operations have been growing at a steady pace in the last 3 years & last year achieved 19% revenue growth. The Company added a number of new clients in the said year and expanded its client base across various business segments. The Company is providing services to clients in the Education, Retail, Banking & Finance, Automotive & Aerospace, Waste Water Treatment industries.

In the current year, the Company expects to leverage the investments made in its local delivery capacity & operational expansion to result in sizeable growth & a sustainable business model.

Onward eServices Ltd. (India)

OeSL during the FY 13-14, has consolidated the strong alliances with the large Sis (System Integrators) and acquired new strategic accounts with high end customers.

The profitability remained affected mainly due to the delayed decisions in Government sponsored projects executed during the year

Financial Highlights:

- Overall Revenues grew by 21% to Rs. 2,438 Lac. While the revenue growth and customer base (including new additions) have been good, the Margins got significantly affected due to Non-recognition of large volume of WIP revenues from the much delayed Public Sector Projects during the year and certain onetime expenditures.

- However the decision to defer the WIP revenues coupled with a healthy Open Order Book of over Rs. 1,500 Lac set the beginning of the FY 14-15, will lead to a very healthy performance in the coming years.

Business Highlights:

Some of the Business Highlights:

a. End to End implementation of Core Banking Application in multiple RRBs (Regional Rural Banks) in the states of Karnataka, Kerala & Odisha.

b. Leveraging the relationship with large System Integrators, OeSL has successfully executed CCTNS (Crime and Criminal Tracking Network & Systems) in the states of Tamil Nadu, Maharashtra and Pondicherry. Recently commenced the CCTNS project in Kerala as well.

c. Continued with the Application, Development & Support activities for several eGovernanace projects in Tamil Nadu, where-in OeSL continues to be one of the top vendors.

d. FMS and Professional Services of West region have shown phenomenal growth in terms of revenues over the corresponding previous FY 12-13.

Onward Technologies GmbH (Germany)

OTG has made positive progress in the increase of its prospective client base and penetration into the market during FY 13-14. In this year, OTG has moved into a new, spacious and strategically located office in the heart of Frankfurt; enabling the sales team to reach out to new and existing clients as well in increasing accessibility for client visits to a local office. This has not only increased the client communication and relations, but has also met their quality and delivery expectations. Onward is committed to and will continue the trend of Quality and Delivery to achieve the necessary growth in the German market.

Onward Properties Private Ltd. (India)

The main objective of the Company is Investments in shares and property markets. During the year under review, the Company did not undertake any substantial activities.

As per Section 212 of the Companies Act, 1956, Company is required to attach the Directors'' Report, Balance Sheet, and Profit & Loss Account of its 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, the Annual Report 2013 - 2014 contain the summary of financial statements of our Company''s subsidiaries duly audited by its respective statutory auditors. Relevent information for each subsidiary has been disclosed in the consolidated balance sheet. Refer Notes on the Consolidated Balance Sheet and Profit and Loss AccountWe hereby undertake that annual accounts of Subsidiary companies and the related detailed information shall be made available to shareholders of holding and subsidiary companies seeking such information at any point of time. The Annual Accounts of subsidiary companies shall kept for inspection by any shareholders in the registered office of the Holding Company and of the subsidiary companies.

We shall furnish the hard copies of details of accounts of subsidiaries to any shareholder on demand within a reasonable period of time

Future Prospects

Indian Engineering R&D services industry continues to be at a pace of growth in line with the IT & BPO industry. The Company is unique in its segment, combining its rich experience with its track record; it offers an attractive value proposition to its clients. This positioning is attracting a client base with a broad and deep sense of relationships with opportunities of scale in the overall Product Life Cycle in the business that clients are in today. Currently, Company supports some of the most prestigious manufacturing companies in the world offering a competitive advantage in solving their complex engineering problems. In order to multiply these, endorsements from clients have been invaluable in enhancing the client relationships enabling upselling and cross selling. Furthermore, client endorsements have helped in winning new relationships and reducing the evaluation periods. The Company''s commitment to investments in training, capabilities & CAPEX over the years aligned to growth has been fruitful and sustainable for the upcoming period. The Company will continue making investments towards enriching client engagement, reach and value added offerings.

The market size of the industry in India is expected to rise to USD 225 billion by 2020 from the current approximately USD 100 billion, considering India''s competitive position, growing demand for exports, Government policy support, and increasing global footprint.

The Company''s IT services business has continued to invest further in all the 3 growth segments of Application Maintenance Services (AMS), Infrastructure Management Services (IMS) and Product Development &lmplementation Services (PDIS). We expect to see continued growth in each of the areas in both the Indian & North American markets.

Share capital

During the year the Share Capital of the Company was increased from Rs. 138,358,700 to Rs. 142,468,200 by allotment of 410,950 new shares issued under ESOP Scheme. At present the paid-up capital is Rs. 142,468,200 divided into 14,246,820 Equity Shares of Rs. 10 each.

Fixed Deposits

During the year under review, the Company had not invited or accepted any deposits from the Public.

Employee Stock Option Scheme

The Company had implemented Employee Stock Option Scheme 2009 for the benefit of Employees of the Company and its subsidiaries. The aforesaid scheme was approved by the Members of the Company at the Annual General Meeting held on 31st August, 2009 and the scheme is monitored under the guidance of the members of Compensation Committee of the Board of Directors. The rational of implementation of new scheme was to attract, motivate and retain talented personnel with the Organization for long time. The total number of warrants approved under the scheme for employees of the Company, independent directors and employees of its subsidiaries are 875,000 with option to convert into 3,500,000 equity shares. The employees working with the subsidiaries of the Company are covered under the above scheme.

The Disclosures required to be made under SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines 1999, is given as Annexure to this report including details on the grant, vesting, exercise, and lapsed options under the aforesaid ESOP schemes.

Auditors

M/s. Kirtane & Pandit, Chartered Accountants, (Registration No. 105215W) Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting. Company has received a letter from them to the effect that their re-appointment, if made, would be within the prescribed limits under Sections 139 and 141 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014.

Directors Responsibility Statement

Pursuant to the requirements under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

(a) in the preparation of the annual accounts for the financial year ended 31st March 2014, the applicable accounting standards have been followed and that no material departures have been made from the same, save to the extent, referred to in the Auditor''s Report;

(b) the Directors 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 as at 31st March 2014 and of the profit or loss of the Company for the year ended 31s'' March 2014;

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

(d) the Directors have prepared the annual accounts for the financial year ended 31st March 2014 on a going concern basis.

Listing Information

The equity shares of the Company are listed on the following stock exchanges under the ISIN - INE229A01017:

BSE Limited: Scrip Code: 517536

National Stock Exchange of India Limited: Scrip Code: ONWARDTEC

Corporate Governance

Company has taken appropriate steps and measures to comply with all the applicable provisions of the revised Clause 49 on Corporate Governance and Section 292A of the Companies Act, 1956. A detailed report on Corporate Governance along with a certificate of Statutory Auditors of the Company is attached herewith as an Annexure to this report

Conversion of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo: (i) Conservation of Energy:

Company utilizes electricity for operation of computers and initiates all efforts to minimize the consumption. At all levels conservation of energy is stressed upon. Company also takes possible measures to reduce the consumption by deploying automation.

(ii) Technology Absorption:

Research and Development

The IT and ITES Industry are subject to high rate of technological obsolescence. The Company is continuing its efforts to develop new software products with an eye to expand the levels of automation in the industries its customers operate. The constant R&D efforts have delivered new versions and features for the existing products in all the segments it works.

a) Specific Areas for R & D

The Company believes that technological obsolescence is a practical reality. It invests and encourages continuous innovation. Its R&D is always focused to provide unique benefits to our customers and other stakeholders by working both proactively (self-driven research) and reactively (customer-driven research).

b) Benefits derived as a result of R&D effort

R&D activities taken up by the Company helps it to remain competitive.

c) Future Plans

Expansion of current activities by adding more R&D related activities in Manufacturing and other Information Technology applications, which have potential for commercial applications.

Employee particulars

The particulars of employees as required to be disclosed in accordance with the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, form part of this Directors'' Report. However, as per the Provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Report and the Accounts are being sent to all Members of the Company excluding the aforesaid information. Any Members interested in obtaining such particulars may write to the Company at its registered address.

Directors

The Company''s Board of Directors is constituted in compliance with the Companies Act, 1956 and Listing Agreement with the stock exchanges.

The Directors are saddened to inform the shareholders of the sad demise of Mrs. Shaila Mehta, Director of the Company on 20.2.2014. Mrs. Shaila Mehta had a distinguished career in the Company and was actively associated with the growth of the Company right from its inception. As a member of the promoter group, she anchored the Company over the years. The Board of Directors and employees acknowledge her invaluable contribution to the Company.

Mr. Arun Meghani shall retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment.

The Company proposes to increase the present term of its Independent Directors viz., Mr. Pradip Dubhashi, Mr. Pranay Vakil and Mr. Nandkumar Pradhan for a further period of 3 years i.e. upto the conclusion of the 26th Annual General Meeting of the Company in the year 2017. Their brief profile forms a part of the explanatory statement as per section 102 of the Companies Act, 2013.

Audit Committee

The present Audit Committee of the Board comprises of Mr. Pradip Dubhashi, as the Chairman of the Committee, Mr. Arun Meghani, Mr. Pranay Vakil and Mr. NandKumar Pradhan.

Acknowledgements

The Directors hereby put on record their sincere gratitude towards the continued assistance and co-operation extended to the Company by its Customers, Stakeholders, Suppliers, Banks, Financial Institutions and various Government authorities towards the growth of the Company.

The Directors also place on record their deep sense of appreciation for the dedicated services rendered by the employees of the Company.

For and on behalf of the Board of Directors

Place: Mumbai Harish Mehta

Date: May 21, 2014 Chairman & Managing Director


Mar 31, 2013

To The Members,

The Directors are pleased to present before you the TWENTY SECOND ANNUAL REPORT together with Audited Annual Accounts of the Company for the financial year ended 31st March, 2013.

Financial Performance

As a globally integrated unit, your Company operates through its subsidiaries in North America (Onward Technologies, Inc. (OTI)) & Germany (Onward Technologies GmbH (OTG)) and with branch office in UK (Onward Technologies Ltd., UK) and Indian Subsidiary (Onward eServices Limited (OeSL)).

During the year your Company showed all around growth and the investments made over the last two years in North America and Germany have started showing positive traction & revenues from Overseas markets has started growing faster than the domestic market. There has been combination of volume growth and value addition. Total Revenue grew 12% from Rs. 132.00 Crs to Rs. 147.50 Crs. Earnings Before Interest, Tax and Depreciation charge (EBITDA) jumped 16% from Rs. 12.95 Crs to Rs. 15.00 Crs. Correspondingly the profit before tax increased from Rs. 5.30 Crs to Rs. 7.80 Crs.

The summarized consolidated results of the Company are as under:

(Rs. in Lac)

For the year ended For the year ended 31.3.2013 31.3.2012

Sales and other income (Net) 14,754.58 13,196.97

Profit before finance cost and depreciation 1,499.80 1,295.41 Finance costs 338.53 313.35

Depreciation 405.60 453.27

Operating profit/ (loss) before prior period expenses 755.67 528.79

Prior period expenses 1.45 1.16

Exceptional items 26.36 -

Profit/(loss) before tax 780.58 527.63

Provision for taxation

- Current tax 61.14 12.49

- Current tax (Mat) 97.65 114.99

- Mat credit (65.66) (114.99)

- Deferred tax expenses/ (benefits) 154.21 (135 80)

Profit/(loss) after tax 533.24 650.94

Transfer to reserves

During the year, the Company has not transferred any amount to reserves.

Dividend

The overall performance of your Company has been satisfactory. The Company sees tremendous growth prospects and to capitalize on the opportunities the management has not recommended any dividend for the current financial year.

Operations

Your Company has two major lines of focused areas:

1) Engineering Design Services (EDS)

2) IT Consulting Services (ITS) (Refer note on the subsidiaries, Onward Technologies, Inc. and Onward eServices Ltd. for operational details).

Director''s report (Contd.)

EDS Operations are part of Onward Technologies in India & ITS operations are run through its wholly owned subsidiary, Onward eServices Ltd. (OeSL). Both these business lines are supported through subsidiaries in North America & Germany with branch office in UK.

Your Company''s engineering operations can be broadly divided under two groups:

- Product Engineering Group (PEG)

- Manufacturing Engineering Group (MEG)

PEG - Product Engineering Group operates in the area of Product Design & development and Product sustenance using a proven Design process and state of the art Design tools and Verification tools. These activities are performed by a pool of highly experienced professionals with support from team of Engineers mainly in the area of Automotive, Off Road equipment and Industrial Equipment. A team of Experts certified by SAVE (Society of Value Engineers) carries out the Product Sustenance Engineering work which involves Value Engineering and continuous Improvement.

MEG - Manufacturing Engineering Group supports customers in bringing the designed product into reality. The Group provides the cost effective engineering solution to the complexities of manufacturing. Highly experienced team has delivered several solutions to the Robotic welding, Manual welding, Machining, Assembly and Inspection needs of the Automotive, Off Road and Industrial products. A team of experts in Process planning, Should costing and Alternate sourcing act as consultants to the product Development.

Customer First: Onward''s Customer First philosophy has continued to help your Company sign major contracts with Original Equipment Manufacturers (OEM), their Captives and Tier-I suppliers. Customers have applauded deliveries which were highly complex in nature, further establishing your Company as a Global Leader in Mechanical Engineering Services and Solutions. 4 of top 10 revenue contributing clients are Fortune 500 companies. 7 of Onward''s top 10 customers are billion dollar organizations with global operations. For 8 of the top 10 revenue contributing clients, your Company is providing multiple level of deliveries with both onsite and offshore & across multiple engineering service lines. By providing first time right delivery, we are able to further increase our share of the customer''s engineering budget.

COE - Centers of Excellence: Your Company has established COE''s to improve the knowledge of the organization with which there is a continuous improvement and value in the service to the customer. This investment helps acquiring, imparting and implementing the knowhow of new materials, new technologies and new processes across the organization. COEs will bring competitive strength to face any challenges. Your Company has 6 Centers of Excellence dedicated to different product lines.

Quality Processes & Customer Data Security: Engineering is a highly IPR driven business. With the high level of engineering services provided by your Company, customer data security and secure exchange of information is of paramount importance. Rigorous trainings on the importance of data security have been conducted for the staff. With confidential data being received from diverse customers in Company''s state-of-art servers, it is incumbent upon the Company to secure the same. Your Company has had another incident free year because of the steps taken to secure the customer data.

As an organizational directive we formed a "Complaint Committee" to address grievances and ensure compliances. Successful TUV recertification for ISO9001:2008 QMS and ISO 27001:2005 ISMS was accomplished giving us continued privilege of confirming to Quality Standards ensuring Customer Satisfaction.

Project Management - The Project Management Office (PMO) initiative is an important part of a projects based business. This office provides support to the Projects function. PMO evaluates the enquiries from sales, assess the resource needs and allots projects to right resources in the initial stage. In the following stage PMO continuously monitors the performance of the project team and takes course corrective action whenever needed. In the finishing stage PMO ensures the process of project closure, documentation of lessons learnt and achievements from the project in the organizational knowledge base. All of the above initiatives are linked together internally to ensure that the net result is a First Time Right Delivery to the customer.

Facility Up gradation : The year of FY 2012-13 saw efforts towards facility up gradation at our offices across the globe. A new customer centric delivery center was opened in Bangalore, India and a new marketing office was opened in Troy, Michigan - The global automotive hub of the world. We also expanded & moved into a new state of the art office in Boston, USA. All offices were designed in purview of Onward SHINE and our Core Offerings in the areas of Automotive, Off-highway, Aerospace, Locomotives, Lab Equipment, Industrial equipment, etc.

Human Resource Initiatives

Your Company has strategically partnered with every professional, leveraging human capital to support its business model successfully. With primary focus on the need to get the right people into the right jobs, HR''s role evolved to that of a true partner in the business. The importance of encouraging behaviors'' that drive our organizational goals forward comes to the fore when considering innovation and quality, core values that are fundamental to our Company''s current and future success. Innovative ways instituted to ensure we are the very best employer we can be.

Major progress in the skills required by HR professionals'' team and Employee Relationship Executives for highly advanced strategic, financial, analytical, and technical skills were developed to support organizational growth. Apart from the traditional issues such as employee relations, payroll and benefits, the focus on organizational development, skill set development, employee well being, corporate social responsibility, job rotation and succession plan was integrated effectively to support business continuity. HR''s function was well played to ensure that we have an open, free, and empowered culture and that we recruit, retain and nurture talent within the Organization. Your Company''s index has up - scaled as Employer of choice during the year based on the world class opportunities, international careers, clientele engagements, work-life balance initiatives, best practices that attract, optimize, and hold top talent and being in the growth trajectory towards achieving corporate objectives.

With an objective of connecting with employees, we have put a culture in place that is based on a participatory environment by organizing many events during the year, bringing in healthy participation from employees. An overwhelming response was received from employees during our Traditional Annual Day Function, creating an atmosphere of esprit de corps among them.

Internal Centre of Excellence (COE) driven best innovation ideas with employee involvement have been great mesmerizes during the year. Initiatives such as "HR Workshops", for onsite employees at client location and the overall performance periodical review process have been appreciated by clients as well as employees.

Centre of Excellence (COE) and the training team conducted several Internal and External Training programs aimed at knowledge enhancement, technology awareness, design development, communication and behavioral skills. Onward thrives to rightly discern and develop Leaders making the passionate, accountable, collaborative and enterprising bringing forth business values and creating the conditions for team players to succeed. Certification programs on "Six Sigma" and "Project Management" were initiated towards strengthening Leadership Skills

Achievement of Teams seeking the goal ''First Time Right and "Every Time Right quality" were appreciated based on project delivery targets and performance by rewards in form of certificates "Pat On Back", increment, incentive etc. were extended escalating motivation among employees.

Unique feature of offering ESOPs has allowed our employees to be proactive in perpetuating the business and appraising an employee ownership culture. We now have almost 20% of active employees who are offered ESOP''s. This has increased the level of commitment and sense of ownership amongst these employees. This brings along with itself an higher level of commitment and sense of ownership for quality & delivery in our highly technical services field.

Subsidiaries

The subsidiaries of your Company are as follows:

Onward Technologies, Inc.

The Company''s focus on growing its North American business continues with the strengthening and expansion of its US operations through investment in new larger offices and expansion of its US team both in the Northeast and the Midwest.

This was achieved with the moving of its Boston office to a larger state of the art office space in Boston''s fast growing Seaport business district and opening of an Engineering sales office in Troy MI which is the Automotive hub of the world. Both these offices are fully functional and have started contributing towards the growing revenue run rate of the Company''s business in the current year.

The North American operations have been growing at a steady pace in the last 3 years. The Company''s revenues for the financial year ended 31st March 2013 were at $ 11.05 Mn. The Company was able to add a number of new clients in the sand year and expand its client base across various business segments. The company is providing services to clients in the Education vertical, Retail, Banking & Finance, Automotive & Aerospace, Waste Water Treatment industry. This includes two Multibillion dollar global Corporations and a few midsized Companies.

Onward Technologies Inc is the marketing arm of the Onward India''s services and solutions business. They employ a sales and marketing team which analyses the needs of the potential customers. Marketing is done through a variety of channels including attendance at trade fairs, and following leads generated by the marketing team. The management team of OTL is responsible for developing the overall business development and marketing plan.

In the current year, the Company would continue with its expansion plans by investing in the current business operations to help propel the next round of growth in the coming years.

Onward eServices Ltd. (OeSL)

OeSL during the FY 2012-13, has seen all-round growth and has consolidated the strategic alliances with large SIs (System Integrators).

1. Financial Highlights:

- Overall revenues have grown by 18% over previous year and are at Rs. 20.08 Crs

- EBITDA is at Rs. 198.41 Lac as against Rs. (63.43) Lac previous year

- Profit before tax is at Rs. 22.26 Lac as against Rs. (319.43) Lac previous year

2. Business Highlights:

Some of the large projects executed by OeSL during the year are:

a. Enterprise application to various departments including Civil Supplies, Energy Development, Employment & Training, tracking the distribution under various welfare schemes sponsored by Govt. of Tamil Nadu.

b. End to End implementation of Core Banking Application in 36 State & District Central Cooperative Banks spread over six States i.e. Bihar, Uttaranchal, Andaman & Nicobar, Himachal Pradesh, Jammu & Kashmir and Sikkim.

c. Provided gamut of services for the Crime Records Project in the states of Tamil Nadu, Jharkhand and West Bengal and UIDAI project in Jharkhand through System Integrators.

d. Various turnkey Projects including overseas onsite projects in USA, UK, Indonesia & Kenya which will be one of the key focus areas in the years ahead.

3. Quality Initiatives:

a. OeSL has embarked on various Quality related initiatives, during the year 2012-13. OeSL was certified for ISO 9001:2008 during May 2012.

b. OeSL Chennai Development Center achieved the coveted quality assurance and appraised for CMMI Level 3 during December 2012.

4. Other Initiatives:

a. OeSL recruited and retained quality Human resources in Technical, Sales and Delivery functions, who will be the strength for the growth envisaged.

b. Also need - based investments have been made in Infrastructure - both in hardware and software to ensure smooth functioning of operations and delivery both Chennai & Mumbai.

c. Dynamic MIS, Project costing and regular budgetary reviews with variance analysis are in place.

Onward Technologies GmbH

Onward Technologies GmbH has added number of customers in their portfolio in the FY 12-13. In this year, Onward has delivered several projects to various German customers, meeting their quality and delivery expectation. Onward has to continue the trend of Quality and Delivery to achieve the necessary growth in the German market. It''s also a marketing arm of OTL.

Onward have continued investments in sales team and Engineers. This investment helped to kick start various engagements and Engineers have started working at customer locations.

We are expecting good additions to our customer base in the current financial year. We will continue investments in Engineers and visits of subject matter experts and SMT members to give further boost to the Growth cycle.

Onward Properties Pvt. Ltd. (erstwhile Shantmurli Holdings Pvt. Ltd.)

The main objective of the Company is Investments in shares and property markets. During the year under review, the Company did not undertake any substantial activities.

As per Section 212 of the Companies Act, 1956, the Company is required to attach the Directors'' Report, Balance Sheet, and Profit & Loss Account of its 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, the Annual Report 2012 - 2013 contain the summary of financial statements of our Company''s subsidiaries duly audited by its respective statutory auditors. Relevent information for each subsidiary has been disclosed in the consolidated balance sheet. Refer Notes to Consolidated Financial Statements.

We hereby undertake that annual accounts of subsidiary companies and the related detailed information shall be made available to shareholders of holding and subsidiary companies seeking such information at any point of time. The Annual Accounts of subsidiary companies shall kept for inspection by any shareholders in the registered office of the Holding Company and of the subsidiary companies.

We shall furnish the hard copies of details of accounts of subsidiaries to any shareholder on demand within a reasonable period of time.

Future Prospects

Indian Engineering R&D services industry is growing substantially in line with the IT & BPO industry. Your Company with more than 7mn hours of experience & demonstrated track record has a massive opportunity and the ability to support each of its clients in its Product Development/Process Innovations. This will ensure in a sustained & recurring business model and ample opportunities to scale up the business with existing customers. Today, your Company works with some of the leading manufacturing companies in the world solving their complex engineering problems. We continue to receive excellent feedback on both quality & delivery capabilities. Our commitment to all our customer is to proactively invest in training, capabilities enhancement & CAPEX based on the complex requirements of their end customers. Over the next few quarters, the Company has plans to further invest & expand in both North America & Europe which are the primary markets of the Company.

In India, IT and Its sectors lead the economic growth in terms of employment, export promotion, revenue generation and standards of living. As per NASSCOM estimates, IT/ITeS sector (excluding hardware) revenues are estimated at USD 87.6 billion in FY 2011-12; and the industry''s estimated growth was around 19 per cent during FY 2012-13.

The market size of the industry in India is expected to rise to USD 225 billion by 2020 from the current around USD 100 billion, considering India''s competitive position, growing demand for exports, Government policy support, and increasing global footprint.

With rich experience in execution of several large eGovernance, BFSI projects, OeSL is poised for higher growth trajectory and also take its footprints into other verticals viz. Manufacturing, Healthcare, Telecom, etc. besides continuing its strong presence in BFSI & Govt. verticals.

Onward''s IT services business has continued to invest further in all the 3 growth segments of Application Maintenance Services (AMS), Infrastructure Management Services (IMS) and Product Development & Implementation Services (PDIS). We expect to see continued growth in each of the areas in both the Indian & North American market.

Share Capital

During the year the Share Capital of the Company was increased from Rs. 135,155,200 to Rs. 138,358,700 by allotment of 320,350 new shares issued under ESOP Scheme. At present the paid-up capital is Rs. 138,358,700 divided into 13,835,870 equity shares of Rs. 10 each.

Fixed Deposits

During the year under review, the Company had not invited or accepted any deposits from the Public.

Employee Stock Option Scheme

Your Company had implemented Employee Stock Option Scheme 2009 for the benefit of Employees of the Company and its subsidiaries. The aforesaid scheme was approved by the Members of the Company at the Annual General Meeting held on 31st August, 2009 and the scheme is monitored under the guidance of the members of Compensation Committee of the Board of Directors. The rational of implementation of new scheme was to attract, motivate and retain talented personnel with the Organization for long time. The total number of warrants approved under the scheme for employees of the Company, independent directors and employees of its subsidiaries are 875,000 with option to convert into 3,500,000 equity shares. The subsidiaries whose employees were issued these warrants include Onward eServices Ltd., India, Onward Technologies, Inc. USA and Onward Technologies GmbH in Germany.

The Disclosures required to be made under SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines 1999, is given as Annexure to this report including details on the grant, vesting, exercise, and lapsed options under the aforesaid ESOP schemes.

An independent Director has been granted 2,500 options under the ESOP Scheme, 2009.

Auditors

M/s. Kirtane & Pandit, Chartered Accountants, Pune, Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting. The Company has received a letter from them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224(1-B) of the Companies Act, 1956.

Director''s Responsibility Statement

Pursuant to the requirements under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

(a) in the preparation of the annual accounts for the financial year ended 31st March 2013, the applicable accounting standards have been followed and that no material departures have been made from the same, save to the extent, referred to in the Auditor''s Report;

(b) the Directors 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 as at 31st March 2013 and of the profit or loss of the Company for the year ended 31st March 2013;

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

(d) the Directors have prepared the annual accounts for the financial year ended 31st March 2013 on a going concern basis.

Listing Information

The equity shares of the Company are listed on The Stock Exchange, Mumbai, and National Stock Exchange of India Limited. The Company has received approval for voluntary delisting of its equity shares from Ahmedabad Stock Exchange w.e.f. 31st July, 2012.

Corporate Governance

The Company has taken appropriate steps and measures to comply with all the applicable provisions of the revised Clause 49 on Corporate Governance and Section 292A of the Companies Act, 1956. A detailed report on Corporate Governance along with a certificate of Statutory Auditors of the Company is attached herewith as an Annexure to this report.

During the year your Company has strengthened its board by appointing two additional directors, Mr. Pranay Vakil and Mr. Nandu Pradhan to its Board.

Mr. Pranay Vakil, former Chairman and founder of Knight Frank India (JV of Knight Frank, UK, a leading international property consulting firm) has over 25 years'' experience in real estate business. He is a Chartered Accountant and a Lawyer by qualification. He actively works with industry associations like FICCI, IMC and CII and is on the boards of Indian multinationals. Mr. Nandu Pradhan, former Managing Director of Red Hat India (Red Hat, USA is global leader in Open source) has over 27 years'' experience in the Indian IT industry. Mr. Pradhan was one of the key persons in the formation of Onward group and was the Executive Director of Onward-Novell India from 1992 to 2003. He was instrumental in setting up the global development centre for Novell and managed the global development and services centre for Red Hat in India. He actively worked with industry associations such as Nasscom, CII on policy issues. He is the charter member of TiE. He has done his engineering from College of Engineering, Pune and MBA from Jamnalal Bajaj, Mumbai.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo :

(i) Conservation of Energy:

The Company utilizes electricity for operation of computers and initiates all efforts to minimize the consumption. At all levels conservation of energy is stressed upon. Company also takes possible measures to reduce the consumption by deploying automation.

(ii) Technology Absorption:

Research and Development

The IT and ITES Industry are subject to high rate of technological obsolescence. The Company is continuing its efforts to develop new software products with an eye to expand the levels of automation in the industries its customers operate. The constant R&D efforts have delivered new versions and features for the existing products in all the segments it works.

a) Specific Areas for R & D

The Company believes that technological obsolescence is a practical reality. It invests and encourages continuous innovation. Its R&D is always focused to provide unique benefits to our customers and other stakeholders by working both proactively (self-driven research) and reactively (customer-driven research).

b) Benefits derived as a result of R&D effort

R & D activities taken up by the Company helps it to remain competitive.

c) Future Plans

Expansion of current activities by adding more R&D related activities in Manufacturing and other Information Technology applications, which have potential for commercial applications.

Employee Particulars

The particulars of employees as required to be disclosed in accordance with the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, form part of this Directors'' Report. However, as per the Provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Report and the Accounts are being sent to all Members of the Company excluding the aforesaid information. Any Members interested in obtaining such particulars may write to the Company at its registered address.

Directors

Mr. Pradip Dubhashi and Mrs. Shaila Mehta shall retire by rotation and being eligible offer themselves for re-appointment.

Mr. Pranay Vakil and Mr. Nandu Pradhan were appointed as Additional Directors on 16th January, 2013 and hold the position upto the forthcoming Annual General Meeting. The Company has received a notice from members under Section 257 of the Companies Act, 1956 signifying their intention to propose Mr. Pranay Vakil and Mr. Nandu Pradhan, respectively, for the office of Director.

Audit Committee

The present Audit Committee of the Board comprises of Mr. Pradip Dubhashi, Mr. Arun Meghani, Mr. Pranay Vakil and Mr. Nandu Pradhan. Mr. Pradip Dubhashi is the Chairman of the Committee.

Acknowledgements

Your Directors hereby put on record their sincere gratitude towards the continued assistance and co-operation extended to the Company by its Customers, Stakeholders, Suppliers, Banks, Financial Institutions and various Government authorities towards the growth of the Company.

Your Directors also place on record their deep sense of appreciation for the dedicated services rendered by the employees of the Company.

By the order of the Board of Directors

Place: Mumbai Harish Mehta

Date: May 17, 2013 Chairman & Managing Director



Registered Office:

Sterling Centre, 2nd Floor

Dr. A. B. Road

Worli

Mumbai 400 018


Mar 31, 2012

The directors are pleased to present before you the twenty-first annual report together with audited annual accounts of the Company for the financial year ended 31st March, 2012.

Financial performance

As a globally integrated unit, Onward operates through its Indian subsidiary, (Onward eServices Limited (OeSL)) and global subsidiaries in North America (Onward Technologies, Inc. (OTI) & Germany (Onward Technologies GmbH) and with global branch office in UK (Onward Technologies Ltd., UK).

The summarized consolidated results of the Company are as under:

(Rs.in Lac)

Particulars For the year ended For the year ended 31.3.2012 31.3.2011

Sales and other income (net) 13,196.97 10,433.42

Profit before finance costs and depreciation 1,392.25 1,169.83

Finance costs 410.19 243.17

Depreciation 453.27 461.00

Operating profit before prior period expenses 528.79 465.66

Prior period expenses 1.16 23.15

Profit before tax 527.63 442.51

Provision for taxation

- Current tax 12.49 19.05

- Current tax (Mat) 114.99 - - Mat credit entitlement (114.99) - - Deferred tax expenses/ (benefits) (135.80) (76.41)

- Wealth tax - 0.25

Profit after tax 650.94 499.62 Transfer to reserves

During the year, the Company has not transferred any amount to reserves.

Dividend

The overall performance of the Company has been satisfactory. The Company sees tremendous growth prospects and to capitalize on the opportunities the management has not recommended any dividend for the current financial year.

Operations

The Company has two major lines of focused areas:

1) Mechanical Engineering Design Services (EDS)

2) IT Consulting Services (ITS)

EDS operations are part of Onward Technologies in India & ITS operations are run through its wholly owned subsidiary, Onward eServices Limited (OESL). Both these business lines are supported through global subsidiaries in North America (Onward Technologies, Inc. (OTI) & Germany (Onward Technologies GmbH) and with global branch office in UK (Onward Technologies Ltd., UK).

Global customers believed in our strength: The financial year 2011-2012 saw robust addition of International customers from India, Europe and US markets. In all, 23 new customers in engineering business were added majorly pushing-up demand for areas in product engineering group, virtual simulation engineering group and manufacturing engineering group. Onward added 200 mechanical engineers with domain expertise in Power train, BIW, Thermal, Seating, Interiors, Virtual Simulation and Analysis.

Customer support, delight and appreciation: The sales and business development teams were strengthened to support global customer enquiries from all over the world. Major contracts were signed and orders received from Original Equipment Manufacturers (OEM), their captives and tier-1 suppliers. Customers have applauded deliveries which were highly complex in nature, further establishing Onward as a global leader in mechanical engineering services and solutions.

Record established: Master CAM product team added over 50 customers from a single state in a single quarter thus breaking the record of highest order from a single state. Continued to secure one amongst the top 10 worldwide reseller for SAARC countries consecutive third year.

Domain specialists: To further enhance customers' experience and confidence, Onward has added experienced specialists in niche areas of agri-equipment, construction equipment, engines and transmissions, chassis, body engineering, seating and interior systems and BIW-fixtures and tooling.

Corporate values and growth strategy alignment through Onward-SHINE, an internal motivational theme was conceptualized by the management and adopted by all stake-holders to achieve aggressive growth plans with sustenance, honest, innovation, noble and excellence. A significant and distinctive Onward marquee.

Facility up gradation: Onward has further invested in opening new offices at Frankfurt, Germany and Bangalore, India. We expect both these to be important regions for Onward presence and providing dedicated support for client engagements.

Customer data security: Onward has diligently invested in its up-gradation of infrastructure and IT high-end servers (NAS, Intranet, etc.) for efficient handling of IT-related data management in secured manner. The addition of intranet servers has significantly enhanced the capabilities of internally developed sales enquiry tools, project management tools, and knowledge management tools.

Human resource initiatives

Onward has found success in its manpower planning process that steps-up and supports its unique business model. The sourcing and staffing models strategically complement each other. With business performance indicators in place, review models and strategic committees were conceptualized and introduced to foster healthy project deliveries and in turn customer satisfaction.

To raise quality standards to world class level, a formal Design Review Board was formed to monitor critical projects and steer them to success resulting in repeat orders from both Indian and International customers.

The Resource Management Team adopted quick turnaround models so as to acquire, enhance and match critical skill-sets to meet global customer demands. Over 26,000 hours of technical training and 16,000 hours of soft-skills, etiquette, behavioral and language trainings were imparted round the year. The training team works in conjunction of the need of the centers of excellence, knowledge management, resource management group and overall organizational growth demands.

Our internal Centers of Excellence (COE) had technology up-gradation of all its core competency areas of technology platforms and process platforms. Granting access to significant trainings and tools to our engineers is the fundamental aspect of this COE's. It is mandatory for every Onward an to join a COE, to learn and contribute world-leading technical innovations. Each COE helps decision-makers to rapidly orient to global customer specific demands supporting the COEs, in general is the Knowledge Management Committee. Onward has indigenously developed an internal KM tool that harnesses global technology trends.

Program Management and Quality Enhancement were further strengthened by adopting significant metrics and project-health indicators. Onward has always regarded these areas as the highest delivery priority aspects. Hence, technical and managerial specialists were added in areas of Agri-equipment, construction equipment, engines, transmission, chassis, body engineering, seating, interior systems, BIW-fixtures and tooling.

Employee recognitions: Onward celebrated its 20th anniversary amidst grand fun-fare, employee appreciations and cultural activities with a theme of sophistication-sustainability-scale. During the year, recommendations and recognitions were received by Ontarians directly from customers stating the technologically different approaches we use. Additionally, Onward offered ESOPs, spot rewards to key performers during the year.

Onward has put in place an exclusive team of Employee Relationship Executives, working towards harmonization of employees' goals by proactively reaching out to them, understanding aspirations and challenges and bring quick solutions to their grievances with personalized focus. At each stage, the HR personnel along with business managers, program managers and stake-holders are constantly thriving to put in place a perfect work-life balance, at all levels.

As stress busting mechanism, Behavioral and Personal Counseling plays a crucial role in Onward's employee management strategy. Onward acknowledges the need for the same and has put in place mechanism to counter and thwart such stresses on its engineers. Internal personal counseling sessions are conducted and employees are made to feel safe and secure. Assurance of information confidentiality is a guaranteed aspect in the process.

Subsidiaries

The subsidiaries of your Company are as follows:

Onward eServices Limited

Company during the FY 2011-12 has seen all-round growth and has consolidated the strategic alliances with large SIs (System Integrators) and has successfully delivered turnkey projects including data migration, training and handholding support to various institutions of both public and private sectors.

In state of Tamil Nadu, Onward has been replicating success stories across various e-Governance initiatives that includes developing online portals, web based centralized application as well as developing and implementing a comprehensive banking application for Co-operative institutions. This banking application is being piloted in different states across the Country.

With renewed zest, we are well positioned to further strengthen our strategic partnerships with our clients and SIs. The trust and support of our clients, employees, and shareholders inspire us to consistently raise the bar of our performance.

Onward Technologies GmbH

Onward Technologies GMBH operations moved its main sales office from Wiesbaden to Frankfurt in FY 2011-12. The Company has appointment focused management and sales team operating at the newly opened Frankfurt office which will cater to customers across Europe, including UK. Germany being the engineering leader of the world was chosen as Onward's European headquarters. The Company has plans to continue investment in Germany and the European continent over the next 3 years in the phase wise approach.

In our first year of operations, the focus was to create Onward brand awareness and meeting maximum prospects and engineering ecosystem of the country. We have been very pleased with the progress and have been able to establish Onward as a vendor in few of the most prominent European companies. Today, we have successfully working with global leaders in Germany, UK, Italy, Austria and Sweden.

Over the next 12 months, we will expand the sales and delivery teams in Frankfurt with a combination of both local hires and experienced Onward personnel. The focus will continue to establish Onward as an engineering partner of choice and become a preferred outsourcing vendor. We expect the growth momentum of our operations in Europe to accelerate and becoming an integral part of our business model.

Onward Technologies, Inc.

The Company has continued investing in expanding its presence in North America. The investment has been both in ramping up existing teams and create additional space for both its existing operations in the Midwest and the Northeast.

To help facilitate this expansion, the Boston office is moving into a bigger state of the art facility in the Seaport area, one of the most prestigious and fast growing business district of Boston. The Midwest expansion will be facilitated by an additional office in Michigan. Both these offices will be fully functional by July 2012.

The North American operations have been growing at a steady pace in the last 3 years. The Company's revenue for the financial year ended March 31, 2012 grew by 12%. The Company was able to add a number of new clients in the sand year and expand its client base across various business segments.

The current year's investments and expansion plans would be totally focused towards strengthening the current business operations to help propel the next round of growth in the coming three years.

Shantmurli Holdings Private Limited

During the year under review, the Company did not undertake any substantial activities.

As per Section 212 of the Companies Act, 1956, the Company is required to attach the Directors' Report, Balance Sheet, and Statement of Profit and Loss of its 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, the annual report for the year 2011-12 contain the summary of financial statements of our Company's subsidiaries duly audited by its respective statutory auditors. Relevant information for each subsidiary has been disclosed in the consolidated balance sheet. Refer Notes to Consolidated Financial Statements.

We hereby undertake that annual accounts of subsidiary companies and the related detailed information shall be made available to shareholders of holding and subsidiary companies seeking such information at any point of time. The annual accounts of subsidiary companies shall kept for inspection by any shareholders in the registered office of the holding Company and of the subsidiary companies.

We shall furnish the hard copies of details of accounts of subsidiaries to any shareholder on demand within a reasonable period of time.

Share capital

During the year the share capital of the Company was increased from Rs 133,200,700 to Rs 135,155,200 by allotment of 1,954,500 new shares issued under ESOP scheme. At present the paid-up capital is Rs 135,155,200 divided into 13,515,520 equity shares of Rs 10 each.

Fixed deposits

During the year under review, the Company had not invited or accepted any deposits from the public.

Employee stock option scheme

Your Company had implemented employee stock option scheme 2009 for the benefit of employees of the Company and its subsidiaries. The aforesaid scheme was approved by the members of the Company at the annual general meeting held on August 31, 2009 and the scheme is monitored under the guidance of the members of compensation committee of the board of directors. The rational of implementation of new scheme was to attract, motivate and retain talented personnel with the organization for long time. The total number of warrants approved under the scheme for employees of the Company, independent directors and employees of its subsidiaries are 875,000 with option to convert into 3,500,000 equity shares. The subsidiaries include Onward eServices Limited, India, Onward Technologies, Inc. USA and Onward Technologies GmbH in Germany.

The disclosures required to be made under SEBI (employees stock option scheme and employees stock purchase scheme) Guidelines 1999, is given as Annexure to this report including details on the grant, vesting, exercise, and lapsed options under the aforesaid ESOP schemes.

An independent director has been granted 2,500 options under the ESOP Scheme, 2009.

Auditors

M/s. Kirtane & Pandit, Chartered Accountants, Pune, auditors of the Company, hold office until the conclusion of the ensuing annual general meeting. The Company has received a letter from them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224 (1-B) of the Companies Act, 1956. Auditor's report

The Auditors have drawn their attention towards trade receivables and trade payables being subject to confirmation and also not having full time Company Secretary.

The management clarifies that in spite of sending confirmation letters to customers and vendors, most of the parties have not responded to our confirmation letters. However, the Company has initiated a procedure to get maximum confirmations in future. Also, the management clarifies that though the Company has not yet appointed a Company Secretary, however, the Company has appointed a full time advisory firm to take care of all statutory compliances.

With respect to the auditor's observation no. ix (c) in annexure to auditor's report about the disputed statutory amounts, we are pleased to inform you that income tax demands for the assessment year 2006-07 for Rs 38,393,111 and for the assessment year 2007-08 for Rs 26,076,636 have been reversed by the respective appellate authority but are pending for rectification orders by the income tax departments and the same are not required to be paid to the respective statutory authority. For rest of the matters, our appeals with the respective appellate authority is pending.

With respect to auditor's observation no. ix (a) in annexure to auditor's report about not being regular in depositing government dues, we would like to state that due to increase in volume of transactions and higher frequency of deposit of various dues on various dates, our team sometimes misses out the due dates. However, the Company is not defaulting in making such payments and has been depositing the dues with the respective authority with some period of delay. Your management will put in place a system for timely payment of statutory dues.

Director's responsibility statement

Pursuant to the requirements under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed that:

(a) in the preparation of the annual accounts for the financial year ended March 31, 2012, the applicable accounting standards have been followed and that no material departures have been made from the same, save to the extent, referred to in the auditor's report;

(b) the directors 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 as at March 31, 2012 and of the profit or loss of the Company for the year ended March 31, 2012;

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

(d) the directors have prepared the annual accounts for the financial year ended March 31, 2012 on a going concern basis.

Listing information

The equity shares of the Company are listed on The Stock Exchange, Mumbai, and National Stock Exchange of India Limited. The Company has initiated process of voluntary delisting of its equity shares from Ahmadabad Stock Exchange; however, the delisting approval from the exchange is awaited.

Corporate governance

The Company has taken appropriate steps and measures to comply with all the applicable provisions of the revised Clause 49 on corporate governance and Section 292A of the Companies Act, 1956. A detailed report on corporate governance along with a certificate of statutory auditors of the Company is attached herewith as an Annexure to this report.

Conservation of energy, technology absorption, foreign exchange earnings and outgo:

(i) Conservation of energy:

The Company utilizes electricity for operation of computers and initiates all efforts to minimize the consumption. At all levels conservation of energy is stressed upon. Company also takes possible measures to reduce the consumption by deploying automation.

(ii) Technology absorption:

Research and development

The IT and ITES Industry are subject to high rate of technological obsolesce. The Company is continuing its efforts to develop new software products with an eye to expand the levels of automation in the industries its customers operate. The constant R&D efforts have delivered new versions and features for the existing products in all the segments it works.

a) Specific areas for R & D

The Company believes that technological obsolescence is a practical reality. It invests and encourages continuous innovation. Its R&D is always focused to provide unique benefits to our customers and other stakeholders by working both proactively (self-driven research) and reactively (customer-driven research).

b) Benefits derived as a result of R&D effort

R & D activities taken up by the Company helps it to remain competitive.

b) Future plans

Expansion of current activities by adding more R&D related activities in manufacturing and other information technology applications, which have potential for commercial applications.

(iii) Foreign exchange earnings and outgo: (Standalone, India operations)

2011 - 12 2010 - 11

Foreign exchange earnings Rs.2,622.94 Lac Rs.2,284.19 Lac

Foreign exchange outgo Rs.335.22 Lac Rs.308.70 Lac

Employee particulars

The particulars of employees as required to be disclosed in accordance with the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, form part of this directors' report. However, as per the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the report and the accounts are being sent to all members of the Company excluding the aforesaid information. Any members interested in obtaining such particulars may write to the Company at its registered office address.

Directors

Mr. Arun Meghani and Mr. Samir Desai shall retire by rotation and being eligible offer themselves for re-appointment. Audit committee

The present audit committee of the board comprises of Mr. Pradip Dubhashi, Mr. Arun Meghani and Dr. Atul Wad. Mr. Pradip Dubhashi is the chairman of the committee.

Acknowledgements

Your directors hereby put on record their sincere gratitude towards the continued assistance and co-operation extended to the Company by its customers, stakeholders, suppliers, banks, financial institutions and various government authorities towards the growth of the Company.

Your directors also place on record their deep sense of appreciation for the dedicated services rendered by the employees of the Company.

For and on behalf of the Board of Directors

Place : Mumbai Harish Mehta

Date : May 25, 2012 Chairman & Managing Director


Mar 31, 2011

The Members,

The Directors are pleased to present before you the TWENTIETH ANNUAL REPORT together with Audited Annual Accounts of the Company for the financial year ended 31st March, 2011.

Financial Performance

As a globally integrated unit, Onward operates through its Indian subsidiary, (Onward eServices Limited (OeSL)) and global subsidiaries in North America (Onward Technologies, Inc. (OTI) & Germany (Onward Technologies GmbH) and with global branch offces in UK (Onward Technologies Ltd., UK) & UAE (Onward Technologies Ltd., UAE).

The summarized consolidated results of the Company are as under:

(Rs. in Lacs)

For the year ended For the year ended 31.3.2011 31.3.2010

Sales and Other Income (Net) 10,433.42 8,551.00

Profit before Finance Cost and Depreciation 1,169.83 404.10

Finance Cost 243.17 271.31

Depreciation 461.00 541.57

Operating Profit / (Loss) before Prior Period expenses 465.66 (408.78)

Prior Period Expenses 23.15 10.63

Profit / (Loss) Before Tax 442.51 (419.41)

Provision for Taxation

- Current 19.05 12.71

- Deferred tax Expenses / (Benefits) (76.41) (156.91)

- Wealth Tax 0.25 – Profit / (Loss)

afiter Tax 499.62 (275.20)

Transfer to Reserves

During the year, the Company has not transferred any amount to reserves.

Dividend

The overall performance of the Company has been satisfactory. The Company sees tremendous growth prospects and to capitalise on the opportunities the management has not recommended any dividend for the current financial year.

Operations

The Company has two major lines of focussed areas: 1) Mechanical Engineering Design Services (EDS) 2) IT Consulting Services (ITS)

EDS Operations are part of Onward Technologies in India & ITS operations are run through its wholly owned subsidiary, Onward eServices Ltd. (OeSL). Both these business lines are supported through global subsidiaries in North America (Onward Technologies, Inc. (OTI) & Germany (Onward Technologies GmbH) and with global branch offces in UK (Onward Technologies Ltd., UK) & UAE (Onward Technologies Ltd., UAE).

The financial year 2010-2011 started in the midst of market revival, with a healthy note for engineering services business. Global automotive industry, Indian auto industry, Off-highway equipment industry and General engineering industry all showed healthy growth. The Company's product engineering and Manufacturing engineering services capabilities saw good demand everywhere.

The Company believes its value proposition of offering low-cost innovation driven engineering services has started yielding good results. It is further confdent the investments made in medium term will Benefit the Company in long term.

The Company continued it's investment in high-end technology tools such as RobCAD the robotic plant automation and simulation tool, CATIAv5, Unigraphics, Pro/ENGINEER, AutoCAD along with High End computing machines.

Your Company has grown at a rapid pace during the last year and afiter consolidating its position, is now ready to take the next quantum jump. Its global delivery business model of offering blended onsite, near shore, offshore and domestic services has helped to increase its manpower base substantially. The Engineering Services Business has grown 20% in this year as compared to last year.

During the year, your Company has invested substantially in creating world class infrastructure.

Onward's belief on Business Model and the unique value proposition of low cost innovation driven mechanical engineering services are proven to be healthier and stronger.

Human Resource Initiatives:

Given the nature of the Company's business, it was indeed a need to align the talented work force with the predefined cultural frame work and enrichment of various initiatives per the following:

The Centre of Excellences (CoE) at Onward has been an exciting forum not only from the business development perspective, but also to employees as well to our customers. It is mandatory from the stage of joining the organization to take part actively in one or more CoEs. Through CoEs, Onward has been enriched with pool of engineers with various world recognized global certifications in addition to Onward certifications in the areas of Value Engineering, Quality, Castings, Sheet metal, Plastics, Engine, BIW, Security, Project Management. We inaugurated and made operational the Thermal Chamber a testing facility as a part of Cold Storage Equipment performance testing related activities, thus helping in enriching our offerings to customers just not the design and verifcation, but also prototype and validated for SoP (Start of Production) enabled. The value creation has resulted in large employee satisfaction in realizing their dreams as engineers. Further this is helping in enhancing the competencies, capabilities, business development, and time to market, scalability, and certifications.

Innovation: During this year, Onward has been recognized and received appreciations on various innovations and corresponding contributions given to customers. Many of these innovations have been led towards Patent Disclosure effort. The ideas and the projects resulted into POC building from the team, with an impressive display of products, and have proven to be top amongst innovations. Entire team is promoting Innovation as community of practice at Onward in whatever we do.

Training: Training at Onward has been the key enabler during the year's growth especially in preparing the engineers to understand Onward ways of doing right first time, customer oriented to match with change in expectations and get ready to be deployed with respective customer projects and programmes. There have been continuous efforts and various initiatives in talent development with an investment on highly specialized Robotic Plant automation simulation sofitware – RobCAD, CAD sofitware: Catia, Unigraphics, KBTD; CAE sofitware: StarCCM, Abaqus, Hypermesh, Ansys, Ansa, Matlab with high end computing machines. Formation of technology training centre as Onward finishing school is the key enabler.

Project Management & Quality Processes Initiatives : As a part of strengthening and enhance programme management and to be business oriented; the Business Managers and Project Managers were given training on Finance for Non-finance Managers, Customer relationship Management, a framework aligning with Disciplined approach with Quality and Customer expectations management. There have been continuous and periodical review processes with metrics in enriching the overall customer management. Prestigious clientele visited during the year, assessed and appreciated the overall policies, process frame work and adherence throughout the organization on ISO: 9001-2008 and ISO: 27001. The senior management commitment towards confguring and enriching the processes towards the changing business models has been well appreciated.

Employee Appreciation & Cultural Activities: Employee appreciations and cultural activities at Onward have taken a great positioning during the year. In addition to time to time pat-on-back, various recognitions at All Hands meet, Onward Foundation Day, quarterly project reviews/closures, customer visits/reviews, get-together and picnics for successful project delivery celebrations.

Most of the recommendations and recognitions have been from customers, as a delight feature during the year. Additionally, ESOPs have been offered to key performers during the year. Moreover, spot rewards are presented around the year for significant achievement or accomplishments – talent references, customer references, and solutions on wicked problems. Further there were quite happy moments and cultural activities celebrating festivals, playing outdoor games like Cricket, Badminton, Swimming and indoor games caroms, chess, etc.

Compensation and Benefits: The compensation structure post-recession driving the overall mindset towards performance oriented in ensuring business growth, operational excellence and employee growth. The key feature during the year is that Company offered ESOPs to key performers. Additionally, maintaining the retrial, medical and other Benefits, company car schemes which are at par with the industry. The key feature and the Benefit each employee enjoys at Onward is the wide variety of opportunities vertical, horizontal and lateral while aligning in individual change in aspirations. The management has invested in strengthening and providing global careers, Innovation based solution programmes, entrepreneurial business management.

Employee Connect & Relations: Staying connected with employees is a passion at Onward. There are various efforts in order to encourage their involvement in various initiatives and decisions. Employees at Onward enjoy this status and voluntarily come forward in enriching the employee satisfaction. We have a process where every employee gets opportunity to participate in any given area could be cultural, business, social events, Knowledge Portals, operational, employee referrals, customer referrals, etc. This has been possible due to quarterly mentor-mentee review process with cross functional assessment, feedback exchange and realigns the aspirations and development road map. From this, Onward capitalizes in building leaders in Business, Technology, Application, Function and Process for scale and sustain business growth.

Subsidiaries

The subsidiaries of your Company are as follows:

Onward eServices Ltd.

During the financial year the business operations of the Company has been satisfactory and encouraging, maintained the steady revenue growth. During the year the Company has invested heavily on Manpower recruitments and trainings to align it with the business requirement which has helped the Company to increase its capabilties.

The Company has successfully scaled up its operations and made a positive progress in terms of revenue growth by grabbing large size orders to be executed in the Financial Year 2011-12.

Onward Technologies GmbH

The German & European region has been a very important & critical market for Onward business model. The Company today works with several large prominent companies across Europe which is all scaling up their global operations & investments in R&D.

The Management of the Company has taken the necessary decisions & investment budgets to scale up the operations and provide a dedicated focus to this region. The Company has recently appointed a dedicated Management/ Sales & Execution Teams, starting from April 2011 for the Europe region.

The Company expects the overall percentage of revenues from Germany & Europe region growing substantially year on year for the next few years.

Onward Technologies, Inc.

North America continues to be the most important region for the Company globally. The Company continues to invest in this region & is focused on building a strong team and infrastructure to continue the momentum & leverage the past investments.

During the year, the Company's revenue grew by 29% and has recorded a quantum growth of 56% in profitability afiter tax for the Financial Year ended 31st March 2011.

Over the next 12 months, the Management Team plans to scale up its operations in North America by strengthening the Management/ Sales/ Execution teams for both its line of business.

Shantmurli Holdings Pvt. Ltd.

During the year under review, the Company did not undertake any substantial activities.

As per Section 212 of the Companies Act, 1956, the Company is required to attach the Directors' Report, Balance Sheet, and Profit & Loss Account of its 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, the Annual Report 2010 – 2011 contain the summary of financial statements of our Company's subsidiaries duly audited by its respective statutory auditors. Relevent information for each subsidiary has been disclosed in the consolidated balance sheet. Refer Notes on the Consolidated Balance Sheet and Profit and Loss Account (Note no.19).

We hereby undertake that annual accounts of subsidiary companies and the related detailed information shall be made available to shareholders of holding and subsidiary companies seeking such information at any point of time. The Annual Accounts of subsidiary companies shall kept for inspection by any shareholders in the registered offce of the Holding Company and of the subsidiary companies. We shall furnish the hard copies of details of accounts of subsidiaries to any shareholder on demand within a reasonable period of time.

Share Capital

During the year the Share Capital of the Company was increased from Rs. 132,728,700 to Rs. 133,200,700 by allotment of 47,200 new shares issued under ESOP Scheme. At present the paid-up capital is Rs.133,200,700 divided into 13,320,070 Equity Shares of Rs.10 each.

Fixed Deposits

During the year under review, the Company had not invited or accepted any deposits from the Public.

Employee Stock Option Scheme

Your Company had implemented Employee Stock Option Scheme 2009 for the Benefit of Employees of the Company and its subsidiaries. The aforesaid scheme was approved by the Members of the Company at the Annual General Meeting held on 31st August, 2009 and the scheme is monitored under the guidance of the members of Compensation Committee of the Board of Directors. The rational of implementation of new scheme was to attract, motivate and retain talented personnel with the Organisation for long time. The total number of warrants approved under the scheme for employees of the Company, independent directors and employees of its subsidiaries are 875,000 with option to convert into 3,500,000 equity shares. The subsidiaries include Onward eServices Ltd., India, Onward Technologies, Inc. USA and Onward Technologies GmbH in Germany.

The Disclosures required to be made under SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines 1999, is given as Annexure to this report including details on the grant, vesting, exercise, and lapsed options under the aforesaid ESOP schemes.

An independent Director has been granted 2,500 options under the ESOP Scheme, 2009.

Auditors

M/s. Kirtane & Pandit, Chartered Accountants, Pune, Auditors of the Company, hold offce until the conclusion of the ensuing Annual General Meeting. The Company has received a letter from them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224(1-B) of the Companies Act, 1956.

The Auditor's observations are self explanatory and need not be further commented in this report.

Director's Responsibility Statement

Pursuant to the requirements under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed that:

(a) in the preparation of the annual accounts for the financial year ended 31st March 2011, the applicable accounting standards have been followed and that no material departures have been made from the same, save to the extent, referred to in the Auditor's Report;

(b) the Directors 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 as at 31st March 2011 and of the profit or loss of the Company for the year ended 31st March 2011;

(c) the Directors have taken proper and suffcient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(d) the Directors have prepared the annual accounts for the financial year ended 31st March 2011 on a going concern basis.

Listing Information

The equity shares of the Company are listed on The Stock Exchange, Mumbai, and National Stock Exchange of India Limited. The Company has initiated process of voluntary delisting of its equity shares from Ahmedabad Stock Exchange; however, the delisting approval from the exchange is awaited.

Corporate Governance

The Company has taken appropriate steps and measures to comply with all the applicable provisions of the revised Clause 49 on Corporate Governance and Section 292A of the Companies Act, 1956. A detailed report on Corporate Governance along with a certificate of Statutory Auditors of the Company is attached herewith as an Annexure to this report.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo :

(i) Conservation of Energy:

The Company utilizes electricity for operation of computers and initiates all efforts to minimize the consumption. At all levels conservation of energy is stressed upon. Company also takes possible measures to reduce the consumption by deploying automation.

(ii) Technology Absorption:

Research and Development

The IT and ITES Industry are subject to high rate of technological obsolesce. The Company is continuing its efforts to develop new sofitware products with an eye to expand the levels of automation in the industries its customers operate. The constant R&D efforts have delivered new versions and features for the existing products in all the segments it works.

a) Specifc Areas for R & D

The Company believes that technological obsolescence is a practical reality. It invests and encourages continuous innovation. Its R&D is always focused to provide unique Benefits to our customers and other stakeholders by working both proactively (self-driven research) and reactively (customer-driven research).

b) Benefits derived as a result of R&D effort

R & D activities taken up by the Company helps it to remain competitive.

c) Future Plans

Expansion of current activities by adding more R&D related activities in Manufacturing and other Iinformation Technology applications, which have potential for commercial applications.

(iii) Foreign Exchange Earnings and Outgo: (Standalone, India Operations)

2010 - 11 2009 - 10

Foreign Exchange earnings Rs. 2,284.19 Lac Rs.1,954.98 Lac

Foreign Exchange outgo Rs. 308.70 Lac Rs. 371.62 Lac

Employee Particulars

The particulars of employees as required to be disclosed in accordance with the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, form part of this Directors' Report. However, as per the Provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Report and the Accounts are being sent to all Members of the Company excluding the aforesaid information. Any Members interested in obtaining such particulars may write to the Company at its registered address.

Directors

Mr. Pradip Dubhashi and Mr. Harish Mehta shall retire by rotation and being eligible offer themselves for re-appointment.

It was proposed to change the tenure of re-appointment of Mr. Harish Mehta as the Chairman and Managing Director of the Company for a period of 5 years w.e.f. April 1, 2011 on revised terms and conditions as mentioned in the Notice of this Annual General Meeting.

Audit Committee

The present Audit Committee of the Board comprises of Mr. Pradip Dubhashi, Mr. Arun Meghani and Dr. Atul Wad. Mr. Pradip Dubhashi is the Chairman of the Committee.

Acknowledgements

Your Directors hereby put on record their sincere gratitude towards the continued assistance and co-operation extended to the Company by its Customers, Stakeholders, Suppliers, Banks, Financial Institutions and various Government authorities towards the growth of the Company.

Your Directors also place on record their deep sense of appreciation for the dedicated services rendered by the employees of the Company.

For and on behalf of the Board of Directors

Place : Mumbai Harish Mehta Date : May 16, 2011 Chairman & Managing Director


Mar 31, 2010

The Directors are pleased to present before you the NINETEENTH ANNUAL REPORT together with Audited Annual Accounts of the Company for the financial year ended 31st March, 2010.

Financial Performance

As a globally integrated unit, Onward operates through its Indian subsidiary, Onward eServices Limited (OeSL) and global subsidiaries in North America (Onward Technologies, Inc. (OTI) & Germany (Onward Technologies GmbH) and with global branch offices in UK (Onward Technologies Ltd., UK) & UAE (Onward Technologies Ltd., UAE).

The summarized consolidated results of the Company are as under : (Rs. in Lac)

For the year ended For the year ended 31.3.2010 31.3.2009

Sales and Other Income (Net) 8,551.00 9,444.56

Profit before Finance Cost and Depreciation 404.10 76.09

Finance Cost 271.31 378.93

Depreciation 541.57 631.48

Operating Profit / (Loss) bef ore Prior Period expenses (408.78) (934.32)

Prior Period Expenses 10.63 24.60

Profit / (Loss) Before Tax (419.41) (958.92)

Provision for Taxation

- Current 12.71 4.62

- Deferred tax expense (includi ng Fringe Benefit Tax) / (Benefit) (156.91) 333.12 Profit / (Loss) after Tax (275.20) (1,296.66)

Transfer to Reserves

During the year, the Company has not transferred any amount to reserves.

Dividend

No dividend is provided for the year 2009 - 10 since the Company has reported losses during the year.

Operations

The Company has two major lines of focussed areas.

1) Mechanical Engineering Design Services (EDS)

2) IT Consulting Services (ITS)

EDS Operations are part of Onward Technologies in India & ITS operations are run through its wholly owned subsidiary, Onward eServices Ltd. (OeSL). Both these business lines are supported through global subsidiaries in North America (Onward Technologies, Inc. (OTI) & Germany (Onward Technologies GmbH) and with global branch offices in UK (Onward Technologies Ltd., UK) & UAE (Onward Technologies Ltd., UAE).

The financial year 2009-2010 started in the midst of highly uncertain market scenario, no clear visibility overseas though the worst part got over.

That continued scenario heavily impacted with dip in engineering services sales in the first two quarters mainly due to customers continued holding of various projects, continued postponements on additional work, delayed payments, freeze on budgets/hiring, etc.

The swift actions as a part of strategic measures taken during the year and previous year to comb the implications of the economic melt-down, resulted positive during the year.

However, as per the guidance in the beginning; at the end of Election-2009 result; the stability and healthier growth of Indian Market started showing results from Q3. Further at the end of Q3 and beginning of Q4 the overseas and existing customer relationships renewed the discussion towards positive growth though it is further down the road.

Overall global crisis made newer and most of our relationships to greatly review the internal optimization, conservative spending and the business model with lower fixed expenses; higher variable in initiating newer programs and developments while focusing growth.

Erstwhile, the management has been vigilant and closely monitoring the scenario for positive growth at one end; on the other side taken various initiatives on improvements in operational efficiencies, re-sharpening effort, reinforce with great capabilities, teams and leadership in the chosen strategic areas.

The Company believes its value proposition of offering low-cost innovation driven engineering services got further strengthened during tough times for manufacturing industry. So the Company has continued making investments in areas it considers strategic to its business.

The Company has inducted some key leaders in the areas of Virtual Engineering, Thermal Management, Body In White/ sheet metal structures, Power Train, Value Engineering, Manufacturing Engineering, Quality/Processes and Operations, for Sustained growth rates.

The Company continued it’s investment in Upgrading Quality Certification to ISO:9001-2008, strengthening Sales and Business Development in domestic market, high-end technology tools for explicit/implicit and computational fluid dynamics such as Abaqus and Star-CD.

The Company also invested on Testing and Laboratory centre in Pune to enable the stronger relationships with our customers in offering and by taking art-part complete solution.

Based on the overall reinforcing efforts, initiatives and tremendous progress with capabilities, capacities built over period indicate that we are in right track in leveraging Onwards unique value proposition.

The Company believes that the worst is over and the situation is encouraging. However, we are not still out of it from growth perspective. The positive growth may be further down the road.

Onward’s Business Model and the unique value proposition of low cost innovation driven mechanical engineering services are found to be healthier and stronger; because of the fact that it has weathered through tough stances and has emerged out successfully. Company further strongly perceives and continues to focus on the business model with fullest advantage.

Human Resource Initiatives:

The Centre of Excellences (CoE) initiative taken over two years was further strengthened by various activities undertaken by the concerned groups. We recruited specialists and subject matter experts in the niche areas from the industry. Made teaming arrangements with various prototyping, manufacturing and testing facilities. Carried-out seminars, technical paper presentation, trainings, certifications, knowledge reposit/reuse practices, thus helped in enhancing the competencies, capabilities, business development, time to market, scalability, and certifications.

Innovation: During this year; Onward has been chosen amongst Top 100 innovation companies to be one of the participants of SAE Industry Innovator World Congress conference held in Detroit, USA. The forum is for an impressive display of products and services, limited to companies who accepted the “Innovators Only” challenge and have proven to be top industry innovators and solution providers.

Training: Training is continuous talent development process at Onward to meet the change in expectations of our customer and the market. In order to facilitate and ensuring gainfully deployable for productivities and quality; we have put up thorough process of identifying the needs, expectations and gap analysis, fulfilling the gaps with training calendar and competent training instructors classroom, site visits, customer visits, on job, fun & learn activities, etc. These trainings are not only in the areas of enhancing the capabilities-software/process/application, but also towards customer orientation, value and solution selling, value engineering, project management, contractual and scope verification, design review process, security & IPR protection, Legal & Risk management, ISO & ISMS awareness, Delivery and Services framework, Onward cultural framework Knowledge-Walk The Talk-Innovation-Relationships-Leadership -KWIRL, etc.

Project Management & Quality Processes Initiatives: As a part of strengthening and enhance quality levels; the Project Managers and their teams were given training on Project Management Methodologies, a framework aligning with Design for SixSigma and processes/tools such as FMEA, DOE, QFD, A3 sheets, etc. They have started implementing various techniques learnt during the courses in the process of total solution offerings.

Employee Appreciation & Cultural Activities: Employees are appreciated for their achievements under various Annual Awards during the Onward Foundation Day, Pat-on Back certifications for excellence in respective areas during All Hands Meet. These innovative awards have unique feature of self nominations/manager nominations/ management nominations. Moreover, spot rewards are presented around the year for significant performance. Further there were quite happy moments and cultural activities celebrating festivals, engineer’s day, green week, playing outdoor games like Cricket and indoor games caroms, chess, etc.

Compensation and Benefits: To ensure remain performance oriented, the compensation structure has been evolved based on post recession, during recession and after the fact. The structure ensures business growth, operational excellence, employee growth. The Company maintains the retrial, medical and other benefits which are at par with the industry. The key feature and the benefit each employee enjoys at Onward is the wide variety of opportunities vertical, horizontal and lateral while aligning in individual change in aspirations. Greater careers are designed at Onward with the engineering mindset.

Employee Connect & Relations: Staying connected with employees was utmost requirement during the year as the panic scenarios loomed around due to global crisis. Based on the employee satisfaction index levels, attrition level and business performance; we are quite proud to express our success in staying connected. This has been accomplished by means of thorough and seamless communication amongst senior business management team, ear marking primary spokes person, time-time communications and quarterly business reports on market scenario, business growth opportunities, initiatives to optimize utilization, enablers to convert opportunities, collaborative team work and involvement of employees in each aspect. Our initiatives of Quarterly report, All Hands Meet, i-suggest, help-desk, primary spokes person, town hall meetings, professional counselor have contributed to the great extent in staying connected with employees.

Professional Counseling: Professional counseling a must process in Onward and similar businesses where employees are the key assets. We have taken this with utmost importance and has been in place for quite number of years. A neutral professional counselor, on board helping and addressing the counseling effort. This counseling with a blend of Philosophy and Business is addressing Personal and Professional life balancing and contributing higher satisfaction in respective zones. Taking these accomplishments; Onward has framed a session group wise mentor-mentee programs named “Parivartan” to run round the year to ensure aligning with Onward cultural framework: Knowledge-Walk The Talk-Innovation-Relationships-Leadership (KWIRL).

Subsidiaries

The subsidiaries of your Company are as follows:

Onward eServices Ltd.

The Company continued on its focus of increasing the profitability of its domestic operations and several steps were taken to meet the important milestone. The Company posted an operational margin from its current business of Rs 1.27 Crore before interest and depreciation, an excellent achievement by the entire team.

The Company also took several steps in changing the focus of its business operations, which was predominately focused on the domestic banking sector to a larger focus on the IT Services sector, which is undergoing a massive automation and computerization across the country. We were successful in winning few large deals in South & East India where we are ramping up our operations. We also moved in to a new office building in Chennai (Onward House) which is used by both our Sales & Development Teams.

The companies also completed its restructuring of its team and focus in North India and moved into a new office in Delhi. The Company has already exited several client projects with no scope of expansion & limitation for growth, so the management team can be 100% focused on its key clients and continuously improving the quality of services across these projects. The feedback has been positive with the renewal of close to 80% of its business and several large client projects in the pipeline.

The target for the Company in F.Y. 2010-11 is to grow profitably with a strong focus on becoming an important services player in the open source initiatives across the country.

Onward Technologies GmbH

Germany is a mecca of Mechanical Engineering profession. The German market is attractive for Onward.

During the year, Onward strengthened the current relationships, added newer relationships and foresee great increase in response in the coming years.

The Company continues to make investments in the German Market. We have to remain invested for a long period as we are optimistic to see good results.

Onward Technologies, Inc.

The Company’s North American subsidiary had a very healthy year in line with projections and has recorded profit of Rs.136.83 Lac for F.Y. 2009-10 as compared to Rs.161.30 Lac in F.Y. 2008-09.

The North American subsidiary will continue to focus and expand both its line of business in Mechanical Engineering Design Services & IT Consulting Services. The Company has been successful in delivering several mission critical projects for its North American customers, many of which have been working with the Company for the past few years. The Company has also been successful in opening several new accounts across the Mid-West & North-East which will have a direct positive impact on the growth and profitability in F.Y. 2010-11 and next few financial years.

The Company has also received excellent services feedback from all its large customers which continue to grow and leverage Onward’s Global Delivery Model. We expect a substantial increase in demand for these services & plan to invest in additional infrastructure to support these requirements. The Company has also started expanding the Sales & Business Development Teams to increase the reach in the market & to leverage these relationships and grow the consulting business in North America.

The forecast for F.Y. 2010-11 is very promising & the management team is positive of growing the business both in terms of revenue & profitability.

Shantmurali Holdings Pvt. Ltd.

During the year under review, the Company did not undertake any substantial activities.

Share Capital

During the year there has been no change in the paid up Share Capital of the Company. At present the paid-up capital is Rs.132,728,700 divided into 13,272,870 Equity Shares of Rs.10 each.

Fixed Deposits

During the year under review, the Company had not invited or accepted any deposits from the Public.

Employee Stock Option Scheme

Your Company had implemented Employee Stock Option Scheme 2001 for the benefit of Employees of the Company and its Subsidiaries. The aforesaid scheme was approved by the Members of the Company at the Annual General Meeting held on 10th October 2001 and the scheme is monitored under the guidance of the members of Compensation Committee of the Board of Directors.

Your Company had implemented Employee Stock Option Scheme 2009 for the benefit of Employees of the Company and its Subsidiaries. The aforesaid scheme was approved by the Members of the Company at the Annual General Meeting held on 31st August, 2009 and the scheme is monitored under the guidance of the members of Compensation Committee of the Board of Directors. The rational of implementation of new Scheme was to attract, motivate and retain talented personnel with the Organisation for long time. The total number of warrants approved under the Scheme for employees of the Company, independent directors and employees of its subsidiaries are 875,000 with option to convert into 3,500,000 Equity shares. The subsidiaries includes Onward eServices Ltd., India, Onward Technologies, Inc. USA and Onward Technologies GmbH in Germany.

The Company framed Employees Stock Options Scheme called ESOP 2005, approved by the Members of the Company at the Annual General Meeting of the Company held on August 9, 2005. Considering the market conditions and the current market price of the shares of the Company vis-à-vis the exercise price of Rs.30 for an option under ESOP Scheme 2005, it was advisable to terminate the said scheme and accordingly the Board has terminated the scheme in its Meeting held on January 29, 2010 on the recommendation of Compensation Committee.

The Disclosures required to be made under SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines 1999, is given as Annexure to this report including details on the grant, vesting, exercise, and lapsed options under the aforesaid ESOP Schemes.

Auditors

M/s. Kirtane & Pandit, Chartered Accountants, Pune, Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting. The Company has received a letter from them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224(1-B) of the Companies Act, 1956.

Auditors Qualification

The Auditors have commented that adequate documents are not available pertaining to writing off of Account Receivable (Item No. 20 of Schedule R). The Management clarifies that , looking at the general economic scenario, the efforts, time and money which would be required to pursue these receivables and the very negligible chances of recovering of the same at the earliest, the Company decided against taking any further action in this matter.

Directors Responsibility Statement

Pursuant to the requirements under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors’ Responsibility Statement, it is hereby confirmed that :

(a) in the preparation of the annual accounts for the financial year ended 31st March 2010, the applicable accounting standards have been followed and that no material departures have been made from the same, save to the extent, referred to in the Auditor’s Report;

(b) the Directors 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 as at 31st March 2010 and of the profit or loss of the Company for the year ended 31st March 2010;

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

(d) the Directors have prepared the annual accounts for the financial year ended 31st March 2010 on a going concern basis.

Listing Information

The Equity Shares of the Company are listed on The Stock Exchange, Mumbai, and National Stock Exchange of India Limited. The Company has initiated process of voluntary delisting of its equity shares from Ahmedabad Stock Exchange, however, the delisting approval from the Exchange is awaited .

Corporate Governance

The Company has taken appropriate steps and measures to comply with all the applicable provisions of the revised Clause 49 on Corporate Governance and Section 292A of the Companies Act, 1956. A detailed report on Corporate Governance along with a certificate of Statutory Auditors of the Company is attached herewith as an Annexure to this report.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo:

(i) Conservation of Energy:

The Company utilizes Electricity for operation of Computers and initiates all efforts to minimize the consumption. At all levels conservation of energy is stressed upon. Company also takes possible measures to reduce the consumption by deploying Automation.

(ii) Technology Absorption:

Research and Development

The IT and ITES Industry are subject to high rate of technological obsolesce. The Company is continuing its efforts to develop new software products with an eye to expand the levels of automation in the industries its customers operate. The constant R&D efforts have delivered new versions and features for the existing products in all the segments it works.

a) Specific Areas for R & D

The Company believes that technological obsolescence is a practical reality. It invests and encourages continuous innovation. Its R&D is always focused to provide unique benefits to our customers and other stakeholders by working both proactively (self-driven research) and reactively (customer-driven research).

b) Benefits derived as a result of R&D effort

R & D activities taken up by the Company helps it to remain competitive.

c) Future Plans

Expansion of current activities by adding more R&D related activities in Manufacturing and Process Engineering applications, which have potential for commercial applications.

(iii) Foreign Exchange Earnings and Outgo:

Employee Particulars

The Particulars of Employees as required to be disclosed in accordance with the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, form part of this Directors’ Report. However, as per the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Report and the Accounts are being sent to all Members of the Company excluding the aforesaid information. Any Members interested in obtaining such particulars may write to the Company at its registered address.

Directors

Mrs. Shaila Mehta and Dr. Atul Wad shall retire by rotation and being eligible offer themselves for re-appointment.

Acknowledgements

Your Directors hereby put on record their sincere gratitude towards the continued assistance and co-operation extended to the Company by its Customers, Stakeholders, Suppliers, Banks, Financial Institutions and various Government authorities towards the growth of the Company.

Your Directors also place on record their deep sense of appreciation for the dedicated services rendered by the employees of the Company.



For and on behalf of the Board of Directors



Place : Mumbai Harish Mehta Date : May 21, 2010 Chairman & Managing Director

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