Your Directors have immense pleasure in presenting the 11 Annual Report on the businessand operations of your Company along with the Audited Financial Statements for thefinancial year ended on March 31 2020.
FINANCIAL SUMMARY OF OPERATIONS
The financial performance during the financial year 2019-20 is summarized below:
(Amount in INR Lakhs)
| ||Standalone |
|Particulars ||FY 19-20 ||FY 18-19 |
|Revenue from operations ||2509.61 ||3375.40 |
|Total Expenditure other than finance cost and depreciation ||2630.15 ||2282.63 |
|Earnings before Interest Tax and Depreciation (EBITDA) ||(120.54) ||1092.77 |
|Other Income ||221.47 ||45.07 |
|Depreciation ||1014.09 ||882.88 |
|Finance Costs ||18.24 ||12.78 |
|Profit/(Loss) before tax (PBT) ||(931.40) ||242.18 |
|Current Tax ||- ||113.06 |
|Deferred Tax ||- ||(44.20) |
|Adjustment related to previous year ||3.94 ||- |
|Net Profit for the Year (PAT) ||(935.34) ||173.32 |
|Basic EPS (in INR) ||(6.54) ||1.24 |
|Diluted EPS (in INR) ||(6.54) ||1.23 |
The Revenue from operations of the Company for the year ended March 31 2020 was INR2509.61 lakhs as compared to INR 3375.40 lakhs during the previous year ended March 312019.
The loss for the year under review was INR 935.34 lakhs as compared to profit of INR173.32 lakhs for the previous year.
The FY 19-20 has been a challenging year from growth perspective mostly due to declineof revenue from few key customers as compared to last year and as focus remained oninvestment in people and technology to be able to capture the opportunity lying ahead ofus. However Your Company's strategy of enhancing the capabilities of its public cloudbuilding new features and solutions and delivering them at a very competitive pricing isexpected to pay off well.
A Detailed analysis of the financial results is given in the Management Discussion andAnalysis Report which forms a part of this report.
The trends in digital transformation Artificial Intelligence Machine Learning andDeep Learning are very encouraging for the growth of cloud infrastructure in India. Forinstance the speed necessary for machine learning systems can be accomplished with modernGPUs built for AI/ML workloads that offer a compelling alternative to traditional generalpurpose processors. Cloud-based GPUs are a great option to run machine learning workloadswhere pay as you go pricing is very attractive. We are very excited about the newercompute workloads with an ever growing total addressable market. Further the Companyintends to add some features to its Cloud Offerings (expected date of Launch FY 20-21 orbeyond) like Block Storage RDS WordPress Cloud Service. The Company is well positionedto deliver in the major growth areas of the Public Cloud Infrastructure services in thecoming years in India.
BRIEF DESCRIPTION OF THE STATE OF THE COMPANY'S AFFAIRS
The Company offers a superior public cloud platform with great value to its customers.The company continues to innovate to enable usage for niche workloads of the emergingdigital and smaller enterprises in India. Our public cloud is a High-Performance Cloudwith amongst the best availability high reliability and advanced technical stacks. TheCompany has built its own cloud platform based on open source technologies to avoid anyvendor lock-in.
Our Company offers Cloud Infrastructure with different system Con_guration OperatingSystem and Services based on the different needs and objectives of the clients like CPUIntensive Cloud C2 Series with Red Hat High Memory Cloud Windows Cloud Smart DedicatedServers Smart Dedicated GPU amongst other Cloud Infrastructure services. Recently theCompany has added some enhanced features to its Services like Auto Scaling Reserved IPE2E Object Storage E2E CDN Service 1- Click Deployment amongst others.
IMPACT OF COVID-19 PANDEMIC ON OPERATIONS OF THE COMPANY
Amidst this COVID-19 pandemic we are in an era of world-wide economic slowdown andconsequent regulatory reforms as this pandemic has affected almost all individuals andbusinesses. Accordingly the Company has evaluated the impact of this pandemic on itsbusiness operations and financial position and based on its review of current indicatorsof future economic conditions. As of now the Board believes that there is no materialsignificant negative impact on its operations and financial position. However the impactassessment of COVID-19 is a continuing process given the uncertainties associated with itsnature and duration and accordingly the impact may be different from that estimated as atthe date of approval of this report. The Company will continue to monitor any materialchanges to future economic conditions and would keep the investors updated on materialimpacts due to this pandemic.
As per the current impact assessment done by the Company following can be consideredas the changes undergone due to this pandemic situation:-
i) Hardware Supply chain was impacted due to general shut down in logistics due tolockdowns. There were ongoing delays in Procurement Delivery of Servers & Equipment'sand there has been generally more price volatility. Recent easing of the situation hasallowed us to service most of the customer needs by offering suitable alternatives orincreased allowance in delivery timelines.
ii) Most Teams including sales are working from home currently and using onlinemeetings to interact with each other and customers.
iii) New products/features launches are impacted as priority is to service existingneeds fully.
iv) Existing Customers and Prospective Customers have a cost savings focus thisresults in revenue contraction of existing customers some logo churn and increasedtraction in new customer acquisition.
v) In order to control cash outflows the salary of Leadership team Sales/Marketingand few Manager level employees has been restructured with some portion of their fixedsalary converted into variable pay.
Your Company has a sound internal financial reporting and control mechanism andwherever applicable additional controls are being added to address the current situation.
The Equity Shares in the Company are continued to be listed with NSE EMERGE Platform.The Listing Fee for the financial year 2020-21 has been paid to the Stock Exchange. TheISIN No. of the Company is INE255Z01019.
Your Company's Corporate Governance philosophy is governed by its commitment to run itsbusinesses in a legal ethical and transparent manner a dedication that comes from the topmanagement and is imbibed throughout the organisation. The Company believes that soundcorporate governance is critical in enhancing and retaining investor trust. Transparencyaccountability fairness and intensive communication with stakeholders are integral to ourfunctioning.
The Board has framed Code of Conduct for all Board members and Senior Management of theCompany and they have affirmed the compliance for the financial year ended March 31 2020.
Since Your Company is listed on NSE EMERGE Platform by virtue of Regulation 15 of SEBI(Listing Obligation and Disclosure Requirements) Regulation 2015 the compliance with thecorporate governance provisions as specified in regulations 17 to 27 and clauses (b) to(i) of sub regulation (2) of Regulation 46 and Para C D and E of Schedule V are notapplicable to the Company. Hence Corporate Governance Report does not form part of thisAnnual Report.
CHANGE IN THE NATURE OF BUSINESS
There is no Change in the nature of the business of the Company during the year underreview.
SUBSIDIARY JOINT VENTURE AND ASSOCIATE COMPANIES
The Company does not have any subsidiary joint-venture or associate companies.
During the year under review there has been no change in the Share Capital of theCompany. The Authorized Share Capital of the Company stood at INR 165000000/- (RupeesSixteen Crores and Fifty Lakhs only) divided into 16500000 (One Crore and Sixty FiveLakhs) Equity Shares of INR 10/- each as on March 31 2020.
The issued and paid up capital of the Company was INR 142911140 (Rupees FourteenCrores Twenty Nine Lakhs Eleven Thousand One Hundred and Forty only) divided into14291114 (One Crore Forty Two Lakhs Ninety One Thousand One Hundred and Fourteen)equity shares of face value of INR 10/- each as on March 31 2020.
Subsequent to the end of the period under review the share capital of the Companyfurther increased due to allotment of 92008 equity shares on account of exercise of stockoptions issued to Employees under E2E ESOS Scheme 2018. The current issued and paid upcapital of the Company therefore stands increased to INR 143831220 (Rupees FourteenCrores Thirty Eight Lakhs Thirty One Thousand Two Hundred and Twenty only) divided into14383122 (One Crore Forty Three Lakhs Eighty Three Thousand One Hundred and Twenty Two)equity shares of face value of INR 10/- each.
DETAILS OF UTILISATION OF FUNDS RAISED THROUGH PREFERENTIAL ALLOTMENT
During the year under review the Company has allotted 46000 convertible warrants at aprice of INR 39.75/- each on a preferential basis entitling the warrant holder(s) tosubscribe to an equivalent number of equity shares of face value of INR 10/- each as perthe provisions of Chapter V of the Securities and Exchange Board of India (Issue ofCapital and Disclosure Requirements) Regulations 2018. The Company has received upfrontpayment of INR 457000/- equivalent to 25% of total consideration. During the year underreview the Company has completely utilised the funds raised through preferential issue inaccordance with objects stated in the Notice of the Annual General Meeting held on August21 2019. Details of utilization of funds are provided in the Financial Statements.
EMPLOYEE STOCK OPTION PLANS/SCHEMES
The Employee Stock Option Scheme of the Company aims to give benefit to eligibleemployees with a view to attract and retain the best talent encourage employees to alignindividual performance with company objectives and promote their increased participationin the growth of the Company.
The Nomination and Remuneration Committee of the Board of Directors of the Companyinter alia administers and monitors the Employee Stock Option Schemes of the Company i.eE2E ESOS Scheme 2018 in accordance with the Securities and Exchange Board of India (ShareBased Employee Benefits) Regulations 2014 (SBEB Regulations).
The members are apprised that the E2E ESOS Scheme 2018 (ESOP Scheme2018) of the Company was approved by its shareholders by way of specialresolution on March 1 2018 and was made effective from March 1 2018. The ESOP Scheme2018 was further rati_ed by the shareholders in the 9 AGM of the Company held on September28 2018. In terms of SBEB Regulations the Company has to specifically (a) mention aboutthe provisions relating to vesting of options in case of death of an employee (b) providecertain disclosures in the explanatory statement of the notice sent to shareholders whileobtaining the approval of any ESOP scheme. The Company inadvertently missed to complywith above provisions while obtaining approval of shareholders for ESOP Scheme 2018 onSeptember 28 2018 and therefore during the year under review shareholder approval wastaken for the amendment in ESOP Scheme 2018 in order to comply with aforesaid provisionsof SBEB Regulations. The Members approved the same by way of special resolution passed onAugust 21 2019.
The disclosures as required under Regulation 14 of SBEB Regulations read with SEBICircular No. CIR/CFD/POLICY CELL/2/2015 dated June 16 2015 is available on website ofthe Company at link https://e2enetworkschz3fw2mgr.cdn.e2enetworks.net/wp-content/uploads/2020/08/ESOP-DISCLOSURE-FY-19-20.pdf
Further the Company has received a certificate from the Statutory Auditors of theCompany that the Scheme has been implemented in accordance with the SEBI Guidelines andthe resolution passed by the members. The certificate shall be uploaded on the website ofthe Company https://www.e2enetworks.com/ and shall be available for inspection by membersin electronic mode during the Annual General Meeting of the Company.
During the year under review your Company has neither invited nor accepted any fixeddeposits from the public within the meaning of Section 73 of the Companies Act 2013 readwith the Companies (Acceptance of Deposits) Rules 2014.
DIVIDEND AND TRANSFER TO RESERVES
Keeping in view the losses for the year under review the Board of Directors of theCompany has not recommended any dividend for the financial year ended March 31 2020.Accordingly there has been no transfer to general reserves.
During the year under review the Board of the Company met 4 times viz May 6 2019July 22 2019 November 6 2019 and February 11 2020. The gap between two meetings didnot exceed one hundred and twenty days. The Composition of the Board and the attendance ofeach Director in the Board Meetings and Last AGM held on August 21 2019 are set out inthe following table:-
|S. Name of Director No ||DIN ||Designation ||No. of Board Meeting(s) which Director was entitled to attend ||No. of Board Meeting(s) Attended ||Whether attended Last AGM held on August 21 2019 |
|1 Mr. Tarun Dua ||02696789 ||Managing Director ||4 ||4 ||Yes |
|2 Mrs. Srishti Baweja ||08057000 ||Whole Time Director ||4 ||4 ||Yes |
|3 Mr. Manjit Rai Dua ||03247358 ||Non-Executive Director ||4 ||2 ||No |
|4 Mr. Varun Pratap Rajda ||07468016 ||Independent and Non- Executive Director ||4 ||1 ||No |
|5 Mr. Gaurav Munjal ||02363421 ||Independent and Non- Executiver Director ||4 ||3 ||Yes |
|6 Mr. Naman K. Sarawagi * ||05295642 ||Independent and Non- Executive Director ||4 ||1 ||No |
|7 Mr. Anurag Bhatia ||08451081 ||Independent and Non- Executive Director ||3 ||3 ||No |
* Mr. Anurag Bhatia was appointed as Director w.e.f May 16 2019.
The Board Committees play a vital role in strengthening the Corporate Governancepractices of the Company and focus effectively on the issues and ensure expedientresolution of the diverse matters. The Committees also make specific recommendations tothe Board on various matters as and when required. All observations recommendations anddecisions of the Committees are placed before the Board for information noting orapproval.
As on March 31 2020 the following Committees have been constituted in terms of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 and the Companies Act2013:-
A. AUDIT COMMITTEE
During the year under review the Audit Committee of the Company met 3 times viz May 62019 July 22 2019 and November 6 2019. The Board has accepted all recommendations ofthe Audit Committee made during the financial year 2019-20.
The Composition of the Audit Committee and the details of attendance of Members in theCommittee Meetings are set out in the following table:-
|S. Name of Member No. # ||Designation ||No. of Meeting(s) which Member was Entitled to attend ||No. of Meeting(s) attended |
|1 Mr. Gaurav Munjal ||Chairman ||3 ||2 |
|2 Mr. Varun Pratap Rajda ||Member ||3 ||1 |
|3 Mr. Manjit Rai Dua * ||Member ||3 ||2 |
|4 Mr. Naman K. Sarawagi ||Member ||3 ||1 |
Mr. Gaurav Munjal was appointed as Chairman of Committee in place of Mr. Varun PratapRajda w.e.f April 9 2019.
*Mr. Naman K. Sarawagi was appointed as Member of the Committee w.e.f April9 2019.
B. NOMINATION AND REMUNERATION COMMITTEE
During the year under review the Nomination and Remuneration Committee of the Companymet 2 times viz May 6 2019 and July 22 2019.
The Composition of the Nomination and Remuneration Committee and the details ofattendance of Members in the Committee Meetings are set out in the following table:-
|S. Name of Member No. ||Designation ||No. of Meeting(s) which Member was Entitled to attend ||No. of Meeting(s) attended |
|1 Mr. Varun Pratap Rajda ||Chairman ||2 ||1 |
|2 Mr. Gaurav Munjal ||Member ||2 ||2 |
|3 Mr. Manjit Rai Dua ||Member ||2 ||1 |
|4 Mr. Naman K. Sarawagi* ||Member ||2 ||0 |
Mr. Naman K. Sarawagi was appointed as Member of Committee w.e.f April 9 2019.
C. STAKEHOLDERS RELATIONSHIP COMMITTEE
During the year under review the Stakeholders Relationship Committee of the Companymet once viz November 6 2019.
The Composition of the Stakeholders Relationship Committee and the details ofattendance of Members in the Committee Meeting is set out in the following table:-
|S. Name of Member No. ||Designation ||No. of Meeting(s) which Member was Entitled to attend ||No. of Meeting(s) attended |
|1 Mr. Gaurav Munjal ||Chairman ||1 ||0 |
|2 Mr. Varun Pratap Rajda ||Member ||1 ||0 |
|3 Mr. Manjit Rai Dua * ||Member ||1 ||1 |
|4 Mr. Naman K. Sarawagi ||Member ||1 ||1 |
*Mr. Naman K. Sarawagi was appointed as Member of Committee w.e.f April 92019.
D. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
During the year under review the Corporate Social Responsibility Committee of theCompany met once viz July 22 2019.
The Composition of the Corporate Social Responsibility Committee and the details ofattendance of Members in the Committee Meeting is set out in the following table:-
|S. Name of Member No. ||Designation ||No. of Meeting(s) which Member was Entitled to attend ||No. of Meeting(s) attended |
|1 Mrs. Srishti Baweja ||Chairman ||1 ||1 |
|2 Mr. Gaurav Munjal ||Member ||1 ||0 |
|3 Mr. Varun Pratap Rajda * ||Member ||1 ||1 |
|4 Mr. Naman K. Sarawagi ||Member ||1 ||0 |
*Mr. Naman K. Sarawagi was appointed as Member of Committee w.e.f April 92019.
E. BORROWING COMMITTEE
During the year under review the Borrowing Committee was constituted by the Board onFebruary 11 2020. No meeting of the Committee was held during the year under review.
The Composition of the Borrowing Committee is as follows:-
|S. No. Name of Member ||Designation |
|1 Mr. Tarun Dua ||Chairman |
|2 Mrs. Srishti Baweja ||Member |
|3 Mr. Manjit Rai Dua ||Member |
The Financial Statements for the year ended March 31 2020 has been prepared inaccordance with accounting standards as issued by the Institute of Chartered Accountantsof India and as specified in Section 133 of the Companies Act 2013 and the relevant rulesthereof and in accordance with Regulation 33 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. IND AS is not applicable to the Company because Companieslisted on SME exchanges are not required to comply with IND AS. The estimates andjudgments relating to the Financial Statements are made on a prudent basis so as toreflect in a true and fair manner the form and substance of transactions and reasonablypresent the Company's state of affairs as at March 31 2020 and its loss and its cashflows for the year ended on March 31 2020.
M/s B. B. & Associates Chartered Accountants (FRN 023670N) were appointed asStatutory Auditors of the Company for a term of five consecutive years from the conclusionof the 9 Annual General Meeting of the Company until the conclusion of the 14 AnnualGeneral Meeting of the Company to be held in the year 2023.
There are no qualifications reservations adverse remarks or disclaimers made by theStatutory Auditors in their Audit Report for the financial year 2019-20. The observationsof the Statutory Auditors in the Auditors' Report together with the relevant notes toAccounts in Schedules are self - explanatory and therefore do not call for any furtherexplanation.
The Board had appointed M/s MAKS & Co. Company Secretaries [FRN P2018UP067700] forconducting the Secretarial Audit of the Company for the Financial Year 2019-20. TheSecretarial Audit Report for the Financial Year ended March 31 2020 is annexed herewithas Annexure A to this report. The Secretarial Audit Report does not contain anyqualification reservation adverse remark or disclaimers for the period under review.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
During the financial year ended March 31 2020 no loan guarantee and investment wasmade by the Company in terms of Section 186 of the Companies Act 2013 and rules madethere under.
REPORT ON FRAUDS U/S 143 (12) OF THE COMPANIES ACT 2013
During the year under review the Statutory Auditors have not reported any incident offraud to the Audit Committee of the Company under sub section (12) of section 143 of theCompanies Act 2013.
MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF FINANCIAL YEAR
There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year 2019-20 and date of thisReport.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
Even though operations of the Company are not energy intensive the management has beenhighly conscious of the importance of conservation of energy and technology absorption atall operational levels and efforts are made in this direction on a continuous basis. Inview of the nature of activities which are being carried on by the Company theparticulars as prescribed under Section 134(3)(m) of the Act read with rule 8 of theCompanies (Accounts) Rules 2014 regarding Conservation of Energy and TechnologyAbsorption are not applicable to the Company and hence have not been provided.
The Company has continued to maintain focus and avail of export opportunities based oneconomic considerations. The Company has incurred expenditure of INR 33.79 lakhs (previousyear INR 38.98 lakhs) in foreign exchange and earned INR 110.49 lakhs (previous year INR114.54 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 Companies Act 2013does not apply as the company was not required to transfer any amount to the InvestorEducation and Protection Fund (IEPF) established by the Central Government of India.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS
No significant and material orders were passed by regulators or courts or tribunalswhich could impact the going concern status and company's operation in future.
EXTRACT OF ANNUAL RETURN
Pursuant to sub-section 3(a) of Section 134 and Sub-section (3) of Section 92 of theAct read with Rule 12(1) of the Companies (Management and Administration) Rules 2014 anextract of Annual Return in Form MGT-9 is attached as Annexure B and forms part ofthis Annual Report. The same is also being uploaded on the website of the Company and canbe accessed through the linkhttps://e2enetworkschz3fw2mgr.cdn.e2enetworks.net/wp-content/uploads/2020/08/FY-19-20_MGT-9_Annual-Return.pdf
The Company has developed and implemented a Risk Management policy for identifying therisk associated with business of the Company and measures to be taken to control them. Thecompany has established a well-defined process of risk management wherein theidentification analysis and assessment of the various risks measuring of the probableimpact of such risks formulation of risk mitigation strategy and implementation of thesame takes place in a structured manner. Though the various risks associated with thebusiness cannot be eliminated completely all efforts are made to minimize the impact ofsuch risks on the operations of the Company.
The Company is not required to form a Risk Management Committee. The Board of Directorsof the Company and the Audit Committee shall periodically review and evaluate the riskmanagement system of the Company.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has an adequate Internal Control System commensurate with size scale andcomplexity of its operations. They have been designed to provide reasonable assurance withregard to recording and providing reliable financial and operational reliable financialand operational information complying with applicable statutes safeguarding assets fromunauthorized use executing transactions with proper authorization and ensuring complianceof corporate policies.
CORPORATE SOCIAL RESPONSIBILITY
The Corporate Social Responsibility Policy (CSR Policy) adopted by Board is availableon the website of the Company and is accessible through the linkhttps://www.e2enetworks.com/wp-content/uploads/2019/06/CSR-Policy.pdf
In order to carry out its CSR obligations under the Companies Act 2013 on regularbasis the Company has entered into an MOU on February 18 2019 with Ved Prakash MukundLal Educational Society (VES) a registered society formed essentiallyto promote education and skill development among students. During the year under reviewthe Company has contributed an amount of INR 3 Lakhs towards the CSR initiates inaccordance with this MOU.
Further during the year under review in order to expedite the spending of unspent CSRBudget in addition to the MOU with VES the Company was seeking to partner with anotherorganization of repute with experience and a track record of running CSR Programs in theEducation Sector through which the Company may undertake CSR activities. Accordingly theCompany has entered into an MOU with Bhagawan Sri Bala Sai Educational and CharitableSociety a registered society formed essentially to promote education. Accordinglythe Company has contributed an amount of INR 15 Lakhs towards its CSR initiates inaccordance with the MOU entered with Bhagawan Sri Bala Sai Educational and CharitableSociety.
The Annual Report on CSR activities of the Company has been attached as Annexure Cand forms part of this Board Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review as stipulated underRegulation 34 of SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015is presented in a separate section forming part of this Annual Report and shall beconsidered as an integral part of this report.
PERFORMANCE EVALUATION OF BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS
In terms of the provisions of the Companies Act 2013 and Securities and Exchange Boardof India (Listing Obligation and Disclosure Requirements) Regulations 2015 a formalannual performance evaluation has been done by the Board of its own performance theDirectors individually as well as the evaluation of its Committees.
The Chairperson of Nomination and Remuneration Committee has facilitated theperformance evaluation process and the performance evaluation forms were circulated to allDirectors of the Company.
Based on the criteria mentioned in the Evaluation Form the exercise of evaluation wascarried out through a structured process covering various aspects of the Board functioningsuch as composition of the Board and committees experience & expertise performanceof specific duties & obligations attendance contribution at meetings etc. Theperformance evaluation of the Chairman was also carried out. The performance Evaluation ofthe Directors was carried out by the entire Board (excluding the Director beingevaluated). The Directors expressed their satisfaction with the evaluation process.
The performance of the committees was evaluated by the Board after seeking feedbackfrom members on the basis of parameters/criteria such as degree of fulfilment of keyresponsibilities adequacy of committee composition effectiveness of meetings etc
Independent Directors of the Company in their separate meeting held on March 11 2020reviewed the performance of the non-independent directors and the Board as a whole. Theyalso reviewed the performance of the Chairperson of the Company.
PARTICULARS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL DIRECTORS
The Board of Directors of the Company has optimum combination of executive andnon-executive directors including independent directors and woman directors in compliancewith the applicable provisions of the Companies Act 2013 (the Act) andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
During the year under review Mr. Anurag Bhatia has been appointed as an AdditionalDirector (Independent and Non- Executive) of the Company with effect from May 16 2019.
Further the members of the Company in their Annual General Meeting held on August 212019 approved the appointment of Mr. Naman K. Sarawagi and Mr. Anurag Bhatia as aNon-Executive Independent Director to hold office for a period of five consecutive yearsfrom the date of their respective appointment as additional director of the Company.
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mrs. Srishti Baweja (DIN: 08057000) Whole-Time Director ofthe Company will be retiring by rotation at the ensuing Annual General Meeting and beingeligible has offered herself for re-appointment. A brief resume details of expertise andother directorships/committee memberships held by Mrs. Srishti Baweja forms part of Noticeconvening the 11 Annual General Meeting. The Board recommends her re-appointment to themembers of the Company at the ensuing Annual General Meeting.
All the Independent Directors have given declarations that they meet the Criteria ofindependence as laid down under section 149(6) of the Companies Act 2013 and Regulation16(1) (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Further in the opinion of the Board the independent directors fulfill the conditionsspecified in Listing Regulations and they are independent of the management.
KEY MANAGERIAL PERSONNEL
During the year under review there was no change amongst the Key Managerial Personnelof the Company. The following persons are the Key Managerial Personnel of the Companypursuant to Section 2(51) and Section 203 of the Companies Act 2013 read with the rulesframed thereunder: -
|S. No. Name of Member ||Designation |
|1 Mr. Tarun Dua ||Chairman and Managing Director |
|2 Mrs. Srishti Baweja ||Whole Time Director |
|3 Mr. Varun Taneja ||Chief Financial Officer |
|4 Mrs. Neha Baid ||Company Secretary |
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURE
The Company has no employee who is in receipt of remuneration of INR 850000 permonth/- or INR 10200000 per annum and hence the company is not required to give theirinformation under Sub Rule 2 and 3 of Rule 5 of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014.
Further the details pursuant to Rule 5 (1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are attached herewith as Annexure Dand the names and other particulars of top 10 (ten) employees in terms of remunerationdrawn by them pursuant to Rule 5 (2) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are attached herewith as Annexure E.
NOMINATION AND REMUNERATION POLICY
The Board has adopted Nomination and Remuneration Policy for selection and appointmentof Directors and Key managerial personnel and to decide their remuneration. The Nominationand Remuneration Policy of the Company acts as a guideline for determining inter aliaqualification positive attributes and independence of a Director matters relating to theremuneration appointment removal and evaluation of the performance of the Director andKey Managerial Personnel. The said policy of the Company has been uploaded on the websiteof the Company and can be assessed through the linkhttps://e2enetworkschz3fw2mgr.cdn.e2enetworks.net/wp-content/uploads/2019/05/Policy_Nomination-Remuneration-of-directors.pdf
VIGIL MECHANISM/WHISTLE BLOWER POLICY
Your Company believes in ethical and lawful business conduct and strives to carry onits business activities in a fair transparent and professional manner. Pursuant to theprovisions of section 177 of the Companies Act 2013 and other applicable provisions theCompany has adopted a Vigil Mechanism/Whistle Blower Policy for securing/ reporting/deterring/ punishing/ rectifying any unethical unlawful acts behaviour leak/suspectedleak of Unpublished Price Sensitive information etc. and to enable to voice/ address bona_de concern of malpractice deviation from the policies of the Company internally in aneffective and systematic manner after its discovery. The policy also provides for adequatesafeguards against victimization of persons who use such mechanisms and also makeprovisions for direct access to the chairperson of the Audit Committee in appropriate orexceptional cases. The said policy is available on the Company's website and can beassessed through the linkhttps://www.e2enetworks.com/wp-content/uploads/2019/05/Whistle-Blower-Policy-1.pdf
During the year under review no complaint pertaining to the company was received underthe Whistle Blower Policy/Vigil mechanism.
PREVENTION OF INSIDER TRADING
In accordance with the provisions of SEBI (Prohibition of Insider Trading) Regulation2015 the Company has adopted a Code of Conduct for Prevention of Insider Trading (InsiderCode) with a view to regulate trading in securities by the Directors andDesignated persons of the Company. The said policy is available on the Company's websiteand can be assessed through the linkhttps://e2enetworkschz3fw2mgr.cdn.e2enetworks.net/wp-content/uploads/2019/11/Code-of-Conduct-for-Prevention-of-Insider-Trading.pdf
The Insider Code of the Company stipulates the provisions regarding Trading Planpre-clearance for dealing in the Company's shares and prohibits the purchase or sale ofCompany shares by the Directors and the Designated persons while in possession ofunpublished price sensitive information in relation to the Company and during the periodwhen the Trading Window is closed.
During the year under review there was no case in relation to the violation of theprovisions of the Insider Code of the Company.
RELATED PARTY TRANSACTIONS
All transactions entered into with Related Parties during the financial year underreview were in the ordinary course of business and on an arm's length basis. The detailsof the transactions with related parties are provided in the notes to accompanyingstandalone financial statements. Details of transactions pursuant to compliance of section134(3)(h) of the Companies Act 2013 and Rule 8(2) of the Companies (Accounts) Rules 2014are annexed herewith as per Annexure-F in the FORM AOC-2.
All Related Party transactions are placed before the Audit Committee for approval.Prior omnibus approval of the Audit Committee is obtained for the transactions which areof a foreseen and repetitive nature. A statement giving details of all related partytransactions entered into pursuant to the omnibus approval so granted is placed before theAudit Committee for their review on a periodic basis. The policy on Related PartyTransactions as approved by the Board has been uploaded on the Company's website and canbe accessed through the linkhttps://www.e2enetworks.com/wp-content/uploads/2019/05/Policy-on-Related-Party-Transactions.pdf
During the financial year 2019-20 there were no transactions with related partieswhich qualify as material transactions under the applicable provisions of the CompaniesAct 2013 and SEBI (Listing Obligation and Disclosure Requirements) Regulation 2015.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Act the Directors state that:
a) In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures if any;
b) Appropriate accounting policies have been selected and applied consistently andjudgements and estimates that are reasonable and prudent have been made so as to give atrue and fair view of the state of affairs of the Company as at March 31 2020 and of theloss of the Company for the year ended March 31 2020;
c) Proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) The annual accounts have been prepared on a going concern basis;
e) Proper internal financial controls were followed by the Company and such internalfinancial controls are adequate and were operating effectively; f) Proper systems aredevised to ensure compliance with the provisions of all applicable laws and that suchsystems were adequate and operating effectively.
POLICY AGAISNT SEXUAL HARASSMENT
The Company has in place a Policy for prevention prohibition and redressal of SexualHarassment of Women at workplace in line with the requirements of The Sexual Harassment ofWomen at the Work Place (Prevention Prohibition and Redressal) Act 2013 and rules madethere under. An Internal Compliant Committee is in place as per the requirements of thesaid Act to redress complaints received regarding sexual harassment. However there was nocase reported with the Committee during the period under review.
Further your company ensures that there is a healthy and safe environment for everywomen employee at the workplace and makes the necessary policies for a safe and secureenvironment for women employees.
MAINTENANCE OF COST RECORDS
The maintenance of Cost Records as specified by the Central Government under Section148(1) of the Companies Act 2013 is not applicable to the Company as the company does notfall under any of the categories prescribed under Section 148(1) of Companies Act 2013.
DEMATERIALISATION OF EQUITY SHARES
The Company's Equity Shares are admitted in the system of Dematerialization by both theDepositories namely NSDL and CDSL. Equity Shares of the Company are compulsorily tradablein electronic form. As on March 31 2020 97.73% of the Equity Shares are held inelectronic form and only 2.27% Equity Shares were held in physical form. The Member(s)holding shares in physical form are advised to avail of the facility of dematerialization.
COMPLIANCE WITH SECRETARIAL STANDARDS
During the financial year under review the Company has complied with applicableSecretarial Standards on Board and General Meetings specified by the Institute of CompanySecretaries of India pursuant to Section 118 of the Companies Act 2013.
HUMAN RESOURCE MANAGEMENT
Your Company considers its human resources as an important asset and endeavours tonurture groom and retain talent to meet the current and future needs of its business.During the year under review the human resource department along with support ofmanagement continued to proactively work on several initiatives to overcome the challengesfaced by the organization to retain the existing employees as well as attract good talentfrom the market. These initiatives include regular management discussions acknowledgementof employees' accomplishments offering role enhancements with larger accountabilitiesand maintaining transparency with them. This has helped the Company in building theirconfidence and trust in the Company. We continue to provide a conducive work environmentand opportunities for development of employees.
Your Directors wish to convey their gratitude and place on record their appreciationfor the valuable support and cooperation of the Company's employees vendors bankersgovernment and other statutory authorities customers and shareholders who have reposedtheir continued trust and confidence in the Company.
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For and on Behalf of Board of Directors
| ||Sd/- ||Sd/- |
|Place: Noida ||Tarun Dua ||Srishti Baweja |
|Date: August 12 2020 ||Managing Director ||Whole Time Director |
| ||DIN:02696789 ||DIN:08057000 |