Onward Technologies Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Mar 2021

Notes:-

1. The statement has been reviewed by members of the Audit Committee and approved by the Board of Directors at their meeting held on May 14, 2021.

2. This statement has been prepared in accordance with the Companies (Indian Accounting Standard) Rules, 2015 (Ind AS) prescribed under section 133 of the Companies Act, 2013 and rules amended from time to time.

3. The Company has only one operating segment which is Engineering Design and IT services. Accordingly, separate segment information is not required to be disclosed.

4. During the quarter and twelve months ended March 31, 2021, the Company has issued 12,100 and 2,54,500 equity shares following the exercise of stock options by certain employees under the ESOP scheme, 2009 and has issued 41,700 and 41,700 equity shares following the exercise of stock options by certain employees under the ESOP scheme, 2019, respectively.

5. The Company has applied for strike off u/s 248 of the Companies Act, 2013 for it's wholly owned subsidiary, Onward Properties Private Limited and is awaiting approval from Registrar of Companies, Mumbai.

6. The Company has taken into consideration the impact of the known internal and external events arising from COVID-19 pandemic while preparing the financial information. As a part of such assessment, the Company has considered the recoverability of outstanding trade receivables, contract assets, impact of lease modifications, accounting for benefits received from governments and future cash flow position upto the date of approval of these financial results. The Company is confident of recoverability of assets as on March 31, 2021. However, the impact assessment of COVID-19 is an ongoing process and it's impact remains uncertain, given the uncertainties associated with its nature and duration. The impact of global health pandemic might be different from that estimated as at the date of approval of these financial results and the Company will continue to closely monitor any significant impact on the Company's financial position.

7. The Company continues to assess benefits announced by the Governments in the countries where it operates. During the quarter and twelve months ended as on March 31, 2021 the Company has recognised benefits amounting to INR 7.61 lakhs and INR 46.26 lakhs respectively against the employee benefits expense.

8. The Company has filed and received an approval for research and development expenditure credit available in the United Kingdom forthe FY 2018-19 and FY 2019-20. Total amount of such benefit recognised in the quarter ended December 31, 2020 is INR 183.73 lakhs. Based on its assessment and precedence, effective from quarter ended March 31, 2021, the Company has recognised for such incentive on accrual basis as it is confident that such grant will be received. Total amount of such benefit recognised in quarter ended March 31, 2021 for FY 2020-21 is INR 95.84 lakhs. The Company is in the process of filing claim with the Authorities.

9. During the year, the National Company Law Tribunal vide Order dated March 25, 2021, has approved a scheme of merger by absorption of Onward eServices Limited (referred as OeSL), a wholly owned subsidiary, with the Company, with an appointed date of January 1, 2020.

Pursuant to the scheme and requirement of Appendix C of Ind AS 103, the Company has recorded all assets, liabilities and reserves pertaining to OeSL at their respective book values and figures of assets and liabilities as at March 31, 2020 have been restated. All the intercompany transactions have been eliminated.

The standalone financial results for the current quarter include the operations of OeSL. The figures for the previous periods i.e. quarter ended December 31, 2020 and year ended March 31, 2020 have also been restated accordingly to incorporate the impact of the Scheme of Arrangement. As a result the net profit after tax for the quarter ended December 31, 2020 and year ended March 2020 is higher/(lower) by, Rs 119.81 lakhs and Rs. (277.29) lakhs as against the earlier reported net profit after tax of Rs. 253.26 lakhs and Rs. 819 lakhs, respectively.

10. Revenue from Operations for the year ended March 31, 2020 includes export incentives amounting to INR 203.82 lakhs under Service Exports from India Scheme, 2015 (SEIS Scheme) for services exported upto March 31, 2020. In absence of certain clarifications regarding applicability and extent of such benefit for the current year, management has not recognised any such benefit for services exported during the quarter and twelve months ended March 31, 2021. Management is confident of receiving benefits against the income recognised for the year ended March 31, 2020.

11. The Code on Social Security, 2020 ('Code'), pertaining to employee benefits during employment and post-employment, received Presidential assent in September 2020. The ministry of Labour and employment has released draft rules for the code on Social security, 2020 on November 13, 2020. The new code may impact the existing employee benefit obligations of the Company. The Company will assess the impact and recognise it in its financial statements in the period in which the Code becomes effective and the related rules are notified.

12. The figures for the quarter ended March 31, 2021 and March 31, 2020 are the derived figures between the audited figures for the year ended March 31, 2021 and March 31, 2020 and published reviewed figures of December 31, 2020 and December 31, 2019 respectively.

13. During the quarter ended September 30, 2020, the Company had acquired office premises from its holding company, Onward Network Technologies Private Limited, as per the agreement dated September 29, 2020 for an agreed consideration amounting to INR 1,083.65 lakhs payable as per agreed tenure. The transaction was approved by the shareholders through postal ballot on September 27, 2020. During the quarter ended December 31, 2020 the Company has settled the outstanding amount considering the present value of remaining payments. The Audit Committee and Board of Directors have approved the early payment.

14. The board of directors in its meeting held on May 14, 2021 has recommended final dividend of Rs. 3.00 per equity share of Rs. 10 each for the year 2020-21, subject to shareholders approval.

15. Previous year/period figures have been regrouped / rearranged wherever considered necessary.

Jigar Mehta
Managing Director