Dear Members,
The Board of Directors ("Board") have immense pleasure in presenting the 15th Annual Report on the business and operations of E2E Networks Limited ("the Company"), along with the Audited Financial Statements, for the financial year ended on March 31,2024.
FINANCIAL SUMMARY OF OPERATIONS
The financial performance for the Financial Year ended March 31,2024 is summarized below:
(Amount in INR Lakhs)
The Revenue from operations of the Company for the year ended March 31, 2024, was INR 9446.36 Lakhs as compared to INR 6620.18 Lakhs during the previous year ended March 31,2023, indicating an increase in revenue by 42.69%.
The profit for the year under review was INR 2186.69 Lakhs as compared to the profit of INR 990.99 Lakhs for the previous year.
During FY 2023-24, your Company continued to invest in enhancing capabilities of its public cloud platform focussing on the increased requirements for AI/ML and DL workloads. The continued focus on customer success has yielded an increase in revenue.
A detailed analysis of the financial results is given in the Management Discussion and Analysis Report, which forms a part of this report.
Future Prospect
As per Care Edge Ratings, the data center industry has entered the growth stage, and the capacity is expected to double in the next three years, from approx. 0.9 Gigawatts (GW) in 2023 to ~ 2 GW in 2026. This additional capacity built up has created substantial investment prospects due to the estimated capex requirement of INR 50,000 crore in the next three years. As per the report, India has a data center capacity share of only 3% globally despite generating 20% of the global data. A lot of this demand for data center capacity is now driven by Cloud GPU infrastructure required by economies betting on AI/ML and Deep Learning.
Demand environment driven by AI/ML/DL workloads:
1. Various Sectoral and National Data Protection Imperatives to take part in the global AI/ML/DL race there is a lot of funding focussed on AI/Deep Tech/Innovation missions and from investors expected. Data as the new oil could lead to a source of competitive advantage for India. India, as a country, is very rich in data due to the vast size of its population and its status as an early adopter of Digital Public Infrastructure (DPI), combined with a revolutionary increase in access to broadband for the majority of its population via 4G/5G infrastructure.
2. Large innovation investors are seeing some efficiency in the deployment of Cloud GPU capacity for workloads for use in pre-investment engagements.
3. Higher Education and Research continue to play a deep role in Large Language Model research into more Indian languages.
4. Enterprises, Mature Startups, and AI First Innovative companies.
A healthy growth is expected in demanding AI/ML/DL workloads running on Accelerated Computing Platforms is expected from all the above.
Our expertise in Cloud GPU technology and its commitment to driving AI innovation positions it favorably for sustained growth. We have showcased our ability to thrive in a competitive environment, through our focused strategic vision, and a customer-centric approach.
Our sales cycle is driven by customer trials of our Cloud Platform, more capacity deployment helps us in more sales and towards that end, we are organizing more debt funding in the near term. To that end, the plan is to ramp up investments into Server/Networking and Accelerated Computing hardware and its deployment into the Cloud Platform to increase its capacity. The increased capacity would allow us to pursue additional recurring revenue opportunities.
BRIEF DESCRIPTION OF THE STATE OF THE COMPANY'S AFFAIRS
Your Company provides accelerated Cloud which supports machine learning applications and other critical workloads. Our cloud infrastructure is used for workloads in various fields ranging from Data Science, NLP, Computer Vision / Image Processing, various digital native workloads, and traditional enterprise workloads. We provide Cloud infrastructure services through our cloud platform which can be accessed via our self-service portal available at link https://myaccount.e2enetworks.com. Our self-service public cloud platform enables rapid deployment of compute workloads. It enables Customers to provision/manage and monitor Linux/Windows/GPU Cloud Machines with high-performance CPU, large memory (RAM), or Smart Dedicated Compute featuring dedicated CPU cores. Our compute instances are available from Indian data centers located in Noida and Mumbai ensuring data locality for India-centric computing workloads.
Compared to INR 6.1 Crores in March 2023, the monthly recurring revenue increased to INR 10.90 Crores in March 2024. Your Company continues to build additional Cloud Capacity to be able to have more customers trying out its services via proof-of-concept trials and eventually converting into customers.
COMPANY'S WEBSITE
The website of your Company https://www.e2enetworks.com/ displays the Company's business operations up-front on the home page. The site carries a comprehensive database of information of all the products and services offered by the Company including other information for investors like the Financial Results of your Company, Shareholding Pattern, Directors & Senior Management personnel's profile, details of Board Committees, Corporate Policies and business activities of your Company.
All the mandatory information and disclosures as per the requirements of the Companies Act, 2013 (hereinafter referred as "the Act") and as per the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred as "SEBI LODR Regulations") have been uploaded on the website.
DEMAT SUSPENSE ACCOUNT/ UNCLAIMED SUSPENSE ACCOUNT
The Company does not have any Equity shares lying in the Demat Suspense/Unclaimed Suspense Account.
CORPORATE GOVERNANCE
Your Company always places major thrust on managing its affairs with diligence, transparency, responsibility and accountability thereby upholding the important dictum that an organization's corporate governance philosophy is directly linked to high performance.
The Company understands and respects its fiduciary role and responsibility towards its stakeholders and society at large and strives to serve their interests, resulting in creation of value and wealth for all stakeholders.
The compliance report on corporate governance and a certificate on corporate governance received from M/s. MAKS & Co., Company Secretaries (FRN: P2018UP067700) Secretarial Auditor of the Company, regarding compliance of the conditions of corporate governance, as stipulated under Chapter IV of SEBI Listing Regulations forms part of the Annual Report.
DIVIDEND
In order to conserve the resources of the Company for growth and further expansion, the Board of Directors of the Company thought it prudent not to recommend any Dividend on the Equity Shares of the Company for the financial year ended March 31,2024.
Pursuant to Regulation 43(A) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), the Company does not fall under top 1000 Listed Companies by market capitalisation as on March 31,2024 and hence the requirement for adopting the Dividend Distribution Policy is not applicable to the Company.
TRANSFER TO RESERVES
The Board of Directors have decided to retain the entire amount of profit for Financial Year 2023-24 in the Statement of Profit & Loss as on March 31,2024.
CHANGE IN THE NATURE OF BUSINESS
There is no change in the nature of the business of the Company during the year under review.
SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES
During the year under review, Company does not have any subsidiary, joint-venture or associate companies. PUBLIC DEPOSITS
During the year under review, your Company has neither invited nor accepted any fixed deposits from the public within the meaning of Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 and hence any provisions of the said Section are not applicable to the Company.
SHARE CAPITAL
a. Authorised Capital
During the year under review, pursuant to approval accorded by the members of the Company in the 14th Annual General Meeting on September 29, 2023 has increased its authorised share capital from INR 16,50,00,000 (Rupees Sixteen Crores Fifty Lakhs Only) divided into 1,65,00,000 (One Crore Sixty Five Lakhs Only) Equity Shares of INR.10/- (Rupees Ten Only) each to INR 25,00,00,000 (Rupees Twenty Five Crore Only) divided into 2,50,00,000 (Two Crore Fifty Lakh Only) Equity Shares of INR. 10/- (Rupees Ten Only) each ranking pari passu in all respect with the existing Equity Shares of the Company.
b. Issued, subscribed and Paid-up Capital
The issued and paid-up capital of the Company is at INR 14,47,51,260 (Indian Rupees Fourteen Crores Forty- Seven Lakhs Fifty-One Thousand Two Hundreds and Sixty Only) divided into 1,44,75,126 (One Crore Forty- Four Lakhs Seventy-Five Thousand One Hundred and Twenty-Six) Equity Shares of face value of INR 10/- (Rupee Ten Only) each as on March 31,2024.
Subsequent to the end of the Financial Year 2023-24 till the date of signing of this Report, the Company has allotted 11,694 equity shares on April 20, 2024 and 3,500 equity shares on July 17, 2024 under the E2E
Networks Limited Employees Stock Option Scheme 2018, pursuant to which the issued, subscribed and paid- up equity share capital of the Company has increased to INR 14,49,03,200/- (Rupees Fourteen Crore Fourty Nine Lakh Three Thousand Two Hundred Only) comprising 1,44,90,320 (One Crore Forty-Four Lakh Ninety Thousand Three Hundred and Twenty) Equity Shares of face value of INR 10/- (Rupees Ten Only) each.
c. Issue of equity shares with differential rights
Company has not issued any equity shares with differential rights during the year under review.
d. Issue of sweat equity shares
Company has not issued any sweat equity shares during the year under review.
e. Provision of money by Company for purchase of its own shares by employees or by trustees for the benefit of employees
Company has not made any provision of money for purchase of its own shares by employees or by trustees for the benefit of employees during the year under review.
f. Employee Stock Option Plans/Schemes
The Employee Stock Option Scheme of the Company aims to give benefit to eligible employees with a view to attract and retain the best talent, encourage employees to align individual performance with company objectives, and promote their increased participation and involvement in the growth of the Company.
The Board of Directors of the Company, inter alia administers and monitors the Employee Stock Option Schemes of the Company i.e. E2E Networks Limited Employees Stock Option Scheme - 2018 and E2E Networks Limited Employees Stock Option Scheme - 2021 in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SBEB Regulations").
The disclosures as required under Regulation 14 of SBEB Regulations, is available on website of the Company at: https://www.e2enetworks.com/investors/employee-stock-option-schemes
The certificate from the Secretarial Auditors of the Company, that the Scheme has been implemented in accordance with the SBEB Regulations and the resolutions passed by the members of the company, shall be uploaded on the website of the Company i.e. https://www.e2enetworks.com/ and shall be available for inspection by members in electronic mode during the Annual General Meeting of the Company.
CREDIT RATING
During the year under review, Company has no outstanding instruments for which the credit rating needs to be obtained.
BOARD OF DIRECTORS
The Composition of Board of Directors is in conformity with the applicable provisions of the Act and Listing Regulations.
During the year under review, there was no change in the composition of the Board.
a) Appointment/Re-appointment of Directors
Mr. Naman Kailashprasad Sarawagi (DIN: 05295642) was re-appointed as a Non-Executive Independent Director on the Board of the Company w.e.f. February 18, 2024, for a second term of five consecutive years, not liable to retire by Rotation, for which approval was obtained from the members of the Company in the 14th Annual General Meeting (AGM) held on September 29, 2023.
Pursuant to the provisions of Section 152(6) of the Companies Act, 2013 ("the Act"), the Members of the Company at their 14th Annual General Meeting ("AGM") held on September 29, 2023 had re-appointed Mrs. Srishti Baweja (DIN: 08057000) Director of the Company, who was liable to retire by rotation.
b) Retirement By Rotation and Subsequent Re-Appointment
In compliance with the provisions of Section 152 of the Act and in terms of the Articles of Association of the Company, Mr. Tarun Dua (DIN: 02696789), Chairman & Managing Director, is liable to retire by rotation at the ensuing AGM and being eligible, have offered himself for re-appointment.
The Board of Directors, on the recommendation of Nomination and Remuneration Committee, recommends his re-appointment. The resolution seeking members' approval for his re-appointment form part of the Notice of 15th Annual General Meeting.
Brief resume and other details of the Director seeking re-appointment at the ensuing AGM as stipulated under Secretarial Standard-2 issued by the Institute of Company Secretaries of India and Regulation 36 of the SEBI Listing Regulations, are separately disclosed in the Notice of the 15th Annual General Meeting.
c) Independent Directors
The Board has 4 (four) Independent Directors, representing diversified fields and expertise. Details are provided in the relevant section of the Corporate Governance Report. All Independent Directors have registered themselves with the Indian Institute of Corporate Affairs for the inclusion of their name in the data bank of independent directors, pursuant to the provision of Rule 6 (1) of Companies (Appointment and Qualification of Directors) Rules, 2014.
Further, as stipulated under the Regulation 17(10) and 19 read with Schedules thereto of Listing Regulations, an evaluation exercise of Independent Directors was conducted by the Nomination and Remuneration Committee and the Board of the Company. The Board members satisfied themselves with the performance and contribution of all the Independent Directors.
The Board is of the opinion that the Independent Director of the Company possess requisite qualifications, experience and expertise (including the proficiency) and holds highest standards of integrity.
None of the aforesaid Directors are disqualified under Section 164(2) of the Act. Further, they are not debarred from holding the office of Director pursuant to order of SEBI or any other authority.
d) Changes in Directors and Key Managerial Personnel
The Board of Directors, on the recommendations of Nomination and Remuneration Committee, at its meeting held on December 01,2023 appointed Mr. Ronit Gaba (A59215) as Company Secretary and Compliance Officer (Key Managerial Personnel) of the Company w.e.f. December 01, 2023 in accordance with the provisions of Section 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in place of Ms. Richa Gupta (A56523), who had resigned from the post of Company Secretary and Compliance Officer (Key Managerial Personnel) w.e.f. close of business hours of October 03, 2023.
Mr. Tarun Dua, Chairman & Managing Director (DIN: 02696789), Mrs. Srishti Baweja, Whole Time Director (DIN: 08057000) Mrs. Megha Raheja, Chief Financial Officer, continued to be the Key Managerial Personnel of your Company in accordance with the provisions of Section 203 of the Act.
Further, apart from the above stated facts, there was no change in composition of the Board of Directors and Key Managerial Personnel.
e) Declaration by Independent Directors
Independent Directors have submitted their declaration of independence, stating that:
(i) they continue to fulfil the criteria of independence as required pursuant to section 149(6) read with schedule IV of the Act and regulation 16(1)(b) of the SEBI Listing Regulations;
(ii) they have confirmed that they are not aware of any circumstances or situation which exist or may be anticipated, that could impair or impact their ability to discharge their duties in terms of regulation 25(8) of the SEBI Listing Regulations;
(iii) they are not debarred from holding the office of Director pursuant to any SEBI order or order of any such authority; and
(iv) there has been no change in the circumstances affecting their status as Independent Director of the Company.
All Independent Directors have affirmed compliance to the code of conduct for independent directors as prescribed in schedule IV to the Act. The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, skills, experience and expertise and they hold highest standards of integrity (including the proficiency) and fulfils the conditions specified in the Act and SEBI Listing Regulations and are independent of the management.
f) Performance Evaluation of Board, Committees and Directors
One of the key responsibilities and role endowed on the Board is to monitor and evaluate the performance of the Board, Committees and Directors.
Accordingly, in line with applicable provisions of the Act and Listing Regulations, the annual performance evaluation of the Board as a whole, Committees and all the Directors was conducted, as per the internally designed evaluation process approved by the Nomination and Remuneration Committee. The evaluation tested key areas of the Board's work including strategy, business performance, risk and governance processes. The evaluation considers the balance of skills, experience, independence and knowledge of the management and the Board, its overall diversity, and analysis of the Board and its Directors' functioning.
The evaluation methodology involves discussion on questionnaires consisting of certain parameters such as Evaluation factor, Ratings and Comments, if any.
The performance of entire Board is evaluated by all the Directors based on Board composition and quality, Board meetings and procedures, Board development, Board strategy and risk management, etc.
The performance of the Managing Director and Executive Directors is evaluated by all the Board Members based on factors such as leadership, strategy formulation, strategy execution, external relations, etc
The performance of Non-Executive Director and Independent Directors is evaluated by other Board Members based on criteria like managing relationship, Knowledge and skill, personal attributes, etc.
It also involves self-assessment by all the Directors and evaluation of Committees of Board based on Knowledge, diligence and participation, leadership team and management relations, committee meetings and procedures respectively.
Further, the assessment of Chairman & Managing Director's performance is done by each Board Member on similar qualitative parameters.
The feedback of the evaluation exercise and inputs of Directors are collated and presented to the Board and an action plan to further improve the effectiveness and efficiency of the Board and Committees is placed.
The Board as a whole together with each of its committees were working effectively in performance of its key functions - Providing strategic guidance to the Company, reviewing and guiding business plans, ensuring effective monitoring of the management and overseeing risk management function. The Board is kept well informed at all times through regular communication and meets once per quarter and more often as and when need arises. Comprehensive agendas are sent to all the Board Members and ensure the meetings are productive. The Company makes consistent efforts to familiarize the Board with the overall business performance covering Business, Product Category and Corporate Function from time to time and legal updates which will be applicable on Company.
The performance of the Chairman was evaluated satisfactory in the effective and efficient discharge of his role and responsibilities for the day-to-day management of the business, with reference to the strategy and longterm objectives. It was acknowledged that the management accorded sufficient insight to the Board in keeping it up to date with key business developments which was essential for each of the individual Directors to maintain and enhance their effectiveness.
g) Separate Meeting of Independent Directors
In accordance with Section 149 (7) of the Act read with Para VII (1) of Schedule IV of the Act and Regulation 25 of Listing Regulations, a separate Meeting of the Independent Directors of the Company was held on March 20, 2024, without the presence of Non- Independent Directors and Members of the management.
The Independent Directors at the meeting, inter alia, reviewed the following: -
• Performance of Non-Independent Directors and Board as a whole.
• Performance of the Chairman of the Company, taking into account the views of Executive Directors and Non-Executive Directors.
• Assessed the quality, quantity and timeliness of flow of information between the Company, Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
h) Nomination and Remuneration Policy
Pursuant to the provisions of Section 178(1) of the Act and Regulation 19(4) read with Part D of Schedule II of Listing Regulations, the Company has in place the Nomination and Remuneration Policy of Directors, Key Managerial Personnel (KMP) and Other Employees including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided u/s 178(3) of the Act.
The said policy of the Company has been uploaded on the website of the Company and can be assessed through the link: https://assets-global.website-tiles.com/6473d8d02a3cf26273f27856/6473d8d02a3cf26273f27893 Nomination-and-Remuneration-Policy.pdf
i) Code of Conduct for Directors and Senior Management
The Company has formulated a Code of Conduct for Directors and Senior Management Personnel and has complied with all the requirements mentioned in the aforesaid code. An affirmation on the same duly signed by the Chairman of the Company forms part of the Corporate Governance Report.
j) Familiarization Programme
Pursuant to regulation 25 of the SEBI Listing Regulations, the Company provides orientation and business overview to its independent Directors by way of detailed presentation. Such meetings/programs include briefings on the Company and its business, Executive Team, business model, applicable amendments in the Compliance, the roles and responsibilities of Independent Directors.
The details of such Familiarization Program for Independent Directors are posted on the website of the Company and the web link of the same is provided hereunder:
https://www.e2enetworks.com/investors/details-of-familiarization-program-held-for independent-directors
k) Succession Planning
The Company has in place the orderly succession plan for the appointments at the Board and Senior Management level.
l) Annual Secretarial Compliance Report
Pursuant to Regulation 24A (2) of Listing Regulations, all listed entities on annual basis are required to get a check done by Practising Company Secretary (PCS) on compliance of all applicable SEBI Regulations and circulars/ guidelines issued thereunder and get an Annual Secretarial Compliance Report issued in this regard which is further required to be submitted to Stock Exchanges within 60 days of the end of the Financial Year.
The Company has engaged the services of M/s. MAKS & Co. Company Secretaries (FRN P2018UP067700), Secretarial Auditor of the Company for providing this certification.
Accordingly, the Company has complied with the said provisions and an Annual Secretarial Compliance Report has been submitted to the Stock Exchanges within stipulated time.
The Annual Secretarial Compliance Report of the Company is available on the website of the Company and the web link of the same is provided hereunder: https://www.e2enetworks.com/investors/secretarial-compliance- report.
STATUTORY DISCLOSURES
None of the Directors of your Company are disqualified as per provision of Section 164(2) of the Act. The Directors of the Company have made necessary disclosures as required under various provisions of the Act and the SEBI Listing Regulations.
BOARD MEETINGS
During the year under review, the Board of the Company met 6 times viz. May 23, 2023, August 14, 2023, August 28, 2023, November 09, 2023, December 01,2023 and February 14, 2024. The intervening gap between two Board Meetings did not exceed one hundred and twenty days as provided in Section 173 of the Act and Regulation 17 of the SEBI Listing Regulations. The details of all Board meetings and the attendance of each Director in the Board Meetings and last AGM held on September 29, 2023 are provided in the Corporate Governance Report forming integral part of this Report.
AUDIT COMMITTEE
The details of the Audit Committee including its composition and terms of reference are mentioned in the Corporate Governance Report forming part of the Annual Report.
The Board, during the year under review, had accepted all recommendations made to it by the Audit Committee. BOARD COMMITTEES
The Board Committees play a vital role in strengthening the Corporate Governance practices of the Company and focus effectively on the issues and ensure expedient resolution of the diverse matters. The Committees also make specific recommendations to the Board on various matters as and when required. All observations, recommendations and decisions of the Committees are placed before the Board for information, noting or approval.
The Composition, of following Committees as on March 31, 2024, in terms of the Act and the SEBI Listing Regulations: -
a. Audit Committee
b. Nomination and Remuneration Committee
c. Stakeholders Relationship Committee
d. Corporate Social Responsibility Committee
e. Borrowing Committee
The Composition, terms of reference and number of meetings of the aforementioned Committees and the attendance of each Director in the Committee Meetings are provided in Corporate Governance Report which forms integral part of this Report.
FINANCIAL STATEMENTS
The Financial Statements for the year ended March 31, 2024, have been prepared in accordance with Indian Accounting Standards (Ind AS) as issued by the Institute of Chartered Accountants of India and as specified in Section 133 of the Act and the relevant rules thereof and in accordance with Regulation 33 of the SEBI Listing Regulations. The estimates and judgments relating to the Financial Statements are made on a prudent basis, so as to reflect in a true and fair manner, the form and substance of transactions and reasonably present the Company's state of affairs as of March 31, 2024 and its profits and its cash flows for the year ended on March 31,2024.
STATUTORY AUDITORS
Pursuant to provisions of Section 139 of the Act read with rules made there under, M/s. GSA & Associates LLP, Chartered Accountants, (Firm Registration No. 000257N), were appointed as Statutory Auditors of the Company at the AGM held on August 24, 2022 for a period of 5 years from Financial Year 2022-23 to Financial Year 2026-27 until the conclusion of AGM of the Company to be held in the year 2027.
The report given by M/s. GSA & Associates LLP, Chartered Accountants, Statutory Auditors on financial statements of the Company for Financial Year 2024 forms part of the Annual Report. The comments on statement of accounts referred to in the report of the Auditors are self-explanatory. The Auditors' Report does not contain any qualification, reservation or adverse remark.
SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/s. MAKS & Co., Company Secretaries [FRN P2018UP067700] for conducting the Secretarial Audit of the Company. The Secretarial Audit Report for the Financial
Year ended March 31,2024, is annexed herewith as Annexure - A to this report. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimers for the period under review.
MAINTENANCE OF COST RECORDS
The maintenance of Cost Records as specified by the Central Government under Section 148(1) of the Act is not applicable to the Company as the business activities of the company does not fall under any of the categories prescribed under Section 148(1) of the Act.
REPORT ON FRAUDS U/S 143 (12) OF THE COMPANIES ACT, 2013
During the year under review, the Statutory Auditors and the Secretarial Auditor have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under Section 143(12) of the Act, therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
During the financial year ended March 31,2024, no loan, guarantee and investment was made by the Company in terms of Section 186 of the Act and rules made there under.
MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF FINANCIAL YEAR
Except as disclosed elsewhere in the Annual Report, no material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year 2023-24 and till the date of signing of this Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
Even though operations of the Company are not energy intensive, the management has been highly conscious of the importance of conservation of energy and technology absorption at all operational levels and efforts are made in this direction on a continuous basis. In view of the nature of activities which are being carried on by the Company, the particulars as prescribed under Section 134(3)(m) of the Act, read with rule 8 of the Companies (Accounts) Rules, 2014 regarding Conservation of Energy and Technology Absorption are not applicable to the Company and hence have not been provided.
The Company has incurred expenditure of INR 230.62 Lakh (previous year INR 156.05 Lakhs) in foreign exchange and earned INR 1130.51 Lakh (previous year INR 211.88 Lakhs) in foreign exchange during the year under review.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
During the year under review, the provision of section 125(2) of the Act does not apply as the company was not required to transfer any amount to the Investor Education and Protection Fund (IEPF) established by the Central Government of India. The Company has designated the Company Secretary as ‘Nodal Officer' for the purposes of IEPF related matters.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS
During the year under review, there were no significant and material orders were passed by regulators or courts or tribunals impacting the going concern status and company's operation in future.
ANNUAL RETURN
The Annual Return of the Company in form MGT-7 as required under Section 92 and Section 134 of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is available on the website of the Company at https://www.e2enetworks.com/investors/annual-returns.
RISK MANAGEMENT
The Company has developed and implemented a Risk Management policy for identifying the risk associated with business of the Company and measures to be taken to control them. The company has established a well-defined process of risk management, wherein the identification analysis and assessment of the various risks, measuring of the probable impact of such risks, formulation of risk mitigation strategy and implementation of the same takes place in a structured manner. Though, the various risks associated with the business cannot be eliminated completely, all efforts are made to minimize the impact of such risks on the operations of the Company.
The Company is not required to form a Risk Management Committee. The Board of Directors of the Company and the Audit Committee shall periodically review and evaluate the risk management system of the Company.
INTERNAL CONTROL SYSTEMS INCLUDING INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
The Company has put in place an adequate Internal Control System, commensurate with size, scale and complexity of its operations. They have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use, executing transactions with proper authorization and ensuring compliance of corporate policies.
During the year under review, no material or serious observation has been highlighted for inefficiency or inadequacy of such controls.
CORPORATE SOCIAL RESPONSIBILITY
In compliance with Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 as amended, the Company has constituted Corporate Social Responsibility ("CSR") Committee. The CSR Committee has formulated and recommended to the Board, a CSR Policy which provides the overview of projects or programs and the guiding principles for selection, implementation and monitoring of the CSR activities, which has been approved by the Board. The CSR Policy adopted by Board is available on the website of the Company and is accessible through the link: https://global-uploads.webfiow.com/6473d8d02a3cf26273f27856/6473d8d02a3cf26273f27a66 Corporate-Social-Responsibilitv-Policv.pdf
As per the provisions of the Companies Act, 2013, a company meeting the specified criteria shall spend at least 2% of its average net profits for three immediately preceding financial years towards CSR activities. Accordingly, Company has to spent Rs. 11.52 Lakh towards CSR activities during the financial year 2023-24.
The Board of Directors noted that Company's CSR spend for the year ended March 31, 2024, was Rs. 17.93 Lakh as against its obligation of Rs. 11.52 Lakh. Pursuant to the recommendation by Corporate Social Responsibility Committee and approval by the Board of Directors an excess of Rs. 6.41 Lakh which was spent in financial year 2023-24 is available for set-off in a time frame of three immediately succeeding years.
The Annual Report on CSR activities of the Company has been attached as Annexure - B and forms part of this Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As stipulated under the provisions of Regulation 34 of the Listing Regulations, Management Discussion & Analysis Report is presented in a separate section forming part of Annual Report and provides details on overall Industry Structure and Developments, financial and operational performance and other material developments during financial year under review.
PARTICULARS OF REMUNERATION OF DIRECTORS AND OTHER EMPLOYEES
Disclosure pertaining to remuneration and other details as required under Section 197(12) read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annexure- C to this report.
In accordance with the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the name and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rule forms part of this report. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members of the Company excluding information on employees' particulars which is available for inspection by the Members at the Registered Office/Corporate Office of the Company during the business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining such information, he/she may write to the Company Secretary at the Registered Office of the Company.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has established a Vigil Mechanism named Whistle Blower Policy, for Directors, employees and business associates to report to the Management, concerns about unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct or ethics, in accordance with the provisions of Section 177 (10) of the Act and Regulation 22 of the Listing Regulations. This mechanism provides for adequate safeguards against unfair treatment of whistle blower who wishes to raise a concern and also provides for direct access to the Chairman of the Audit committee in appropriate/exceptional cases.
The Whistle Blower Policy is available on the website of the Company https://global-uploads.webflow. Com/6473d8d02a3cf26273f27856/6473d8d02a3cf26273f27a3c Whistle-Blower-Policy.pdf
During the year under review, no incidence under the above mechanism was reported.
CODE OF CONDUCT TO REGULATE, MONITOR AND REPORT TRADING BY DESIGNATED PERSONS (CODE OF CONDUCT)
The Company has adopted a Code of Conduct to regulate, monitor and report trading by Designated Persons [Pursuant to Regulation 9 of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015]. This Code of Conduct is intended to prevent misuse of Unpublished Price Sensitive Information ("UPSI") by Designated Persons and their immediate relatives.
The said Code lays down guidelines, which advise Designated Persons and Insiders on the procedures to be followed and disclosures to be made in dealing with the shares of the Company and cautions them on consequences of non-compliances. This Code includes a Policy and Procedure for Inquiry in case of leakage of UPSI or suspected leakage of UPSI and is available for reference on the website of the Company i.e. https://cdn.prod.website-files. com/6473d8d02a3cf26273f27856/6473d8d02a3cf26273f27890 Code-of-Conduct-for-Prevention-of-Insider- Trading.pdf
During Financial Year 2023-24, the Company had also conducted awareness session on insider trading for the Designated persons. For awareness and basic duties of designated persons under the applicable Provisions and code of conduct.
RELATED PARTY TRANSACTIONS
In line with the requirements of the Act and SEBI Listing Regulations, the Company has formulated a Policy on Related Party Transactions, which is available on the website of the Company at https://cdn.prod.website- files.com/6473d8d02a3cf26273f27856/65cf3d42c963b15d1a0c8781 Policv%20on%20Related%20Partv%20 Transactions.pdf
All contracts, arrangements and transactions entered by the Company with related parties during FY 2023-24 were in the ordinary course of business and on an arm's length basis. During the year, the Company did not enter into any transaction, contract or arrangement with related parties, which could be considered material, in accordance with the Company's Policy on dealing with Related Party Transactions ("RPT Policy"). Accordingly, the disclosure of related party transactions in Form AOC-2 is not applicable.
All applicable related party transactions were presented before the Audit Committee/Board. The disclosure on related party transactions as per Ind AS-24 has been provided under Note No. 36 of the standalone financial statements of the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Act, your directors state that:
a) In the preparation of the annual accounts, the applicable accounting standards had been followed and no material departures have been made from the same;
b) the Directors had selected Appropriate accounting policies have been selected and applied consistently and judgements and estimates that are reasonable and prudent have been made, so as to give a true and fair view of the state of affairs of the Company as at the end of financial year and of the profit & loss of the Company for that period;
c) the Directors had 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;
d) the Directors had prepared the annual accounts on a going concern basis;
e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
The Company is committed to providing a safe and conducive work environment to all its employees and associates. The Company has a policy on Prevention of Sexual Harassment at Workplace in place, which is available on the Company website at https://global-uploads.webflow.com/6473d8d02a3cf26273f27856/6473d8d02a3cf26273f27a38 Sexual- Harassment-of-Women-at-Workplace.pdf
The Company has constituted Internal Committee as per the sexual Harassment of Women & workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year under review, no complaint was received under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
COMPLIANCE WITH SECRETARIAL STANDARDS
During the financial year under review, the Company had complied with applicable Secretarial Standards on Board and General Meetings specified by the Institute of Company Secretaries of India pursuant to Section 118 of the Act.
ANY PROCEEDINGS UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016
There are no proceedings initiated/pending against your Company under the Insolvency and Bankruptcy Code, 2016 which materially impact the business of the Company.
VALUATION FOR ONE TIME SETTLEMENT OR WHILE TAKING THE LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS
There were no instances where your Company required the valuation for one time settlement or while taking the loan from the Banks or Financial institutions.
HUMAN RESOURCE MANAGEMENT
Management of E2E recognizes that its workforce is its most valuable asset and is crucial to driving success. With an employee-centric approach, the company strives to create a secure and stimulating workplace that boosts productivity. E2E invests in its employees by enhancing their skills, refining their expertise, and developing their leadership abilities through relevant learning and development programs. The company respects diversity among its employees and aims to strengthen its corporate capabilities accordingly. E2E Management promotes teamwork and a self-motivating work environment to support the comprehensive growth of its employees. To reinforce its human capital and attract, develop, and acknowledge exceptional talent, E2E has established human resource policies focused on fostering a positive work environment.
CAUTIONARY STATEMENT
Statements in the Report describing the Company's projections, estimates, and expectations may be interpreted as ‘forward-looking' statements within the meaning of applicable laws and regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to the Company's operations include economic conditions affecting demand/supply, price conditions in the domestic and international markets in which the Company operates, changes in Government regulations, tax laws, and other statutes. The Company assumes no responsibility to publicly amend, modify, or revise any ‘forward-looking' statements, based on any subsequent development, information, or events.
ACKNOWLEDGEMENT
Your Directors wish to convey their gratitude and place on record their appreciation for the valuable support and cooperation of the Company's employees, vendors, bankers, government and other statutory authorities, customers and shareholders, who have reposed their continued trust and confidence in the Company.