TO THE MEMBERS OF N2N TECHNOLOGIES LIMITED
Your Directors have pleasure to present 34th Annual Report and Audited Annual Accountsof your company for the year ended on 31st March 2019.
|FINANCIAL HIGHLIGHTS: || || |
|STANDALONE BASIS || || |
| || ||(Rs. IN LAKHS) |
|Particulars ||FY 2018-19 ||FY 2017-18 |
|Total Income ||0.02 ||20.96 |
|Total Expenditure ||10.16 ||12.77 |
|Extraordinary Items ||- ||- |
|Profit / (Loss) Before Tax ||(10.14) ||8.19 |
PERFORMANCE REVIEW & FUTURE OUTLOOK:
During the current year your Company has booked total income of Rs.0.02 Lakhs and Lossafter tax of Rs.12.12 Lakhs on standalone basis.
Your Directors are confident that the policies strategies adopted by your company willprotect interest of the stakeholders.
DIVIDEND & RESERVES:
In view of the insufficient cash earnings per share your Directors expresses itinability to declare dividend for the year.
As at March 31 2019 Your company's total paid up share capital stood atRs.40131980/- divided into 3228069 fully paid up equity shares of Rs.10/- each and785129 fully paid up preference shares of Rs.10/- each. During the year under reviewthe Company has not issued any shares with or without differential voting rights. Alsocompany has neither issued employee stock options nor sweats equity shares and does nothave any scheme to fund its employees to purchase the shares of the Company.
As on 31st March 2019 Mr. Rahul Shah Promoter Director of the Company holds 43.11 %shares of the Company.
MATERIAL CHANGES AND COMMITMENTS BETWEEN THE DATE OF THE BALANCE SHEET AND THE DATE OFREPORT
There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the Financial Year of the Company towhich the Financial Statements relate and the date of the report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
A. Conservation of Energy and Technology Absorption:
The Company has no particulars to report regarding conservation of energy technologyabsorption as required under Section 134(3)(m) of the Companies Act 2013 read with Rulesthere under.
B. Foreign exchange earnings and outgo:
|Sr. No. Particulars ||Amt in र |
|1 Foreign Exchange earned in terms of actual inflows during the year ||Nil |
|2 Foreign Exchange outgo in terms of actual outflows during the year ||Nil |
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your company is committed to improve quality of lives of people in the community itsserves through long term stakeholder value creation with special focus on skillsdevelopment. The Company does not have to mandatorily constitute a Corporate SocialResponsibility (CSR) Committee in accordance with Section 135 of the Companies Act 2013.The company fully understands its role in society and is committed for sustainable &inclusive growth of people & the environment around its business.
BOARD AND DIRECTORS EVALUATION AND CRITERIA FOR EVALUATION
During the year the Board has carried out an annual evaluation of its own performance& performance of the Directors.
Your Company has constituted Nomination and Remuneration Committee which as per theprovisions of Companies Act 2013 has defined the evaluation criteria procedure and timeschedule for the Performance Evaluation process for the Board its Committees andDirectors. The criteria for Board Evaluation inter alia include degree of fulfillment ofkey responsibilities Board structure and composition establishment and delineation ofresponsibilities to various Committees effectiveness of Board processes information andfunctioning.
Criteria for evaluation of individual Directors include aspects such as attendance andcontribution at Board/ Committee Meetings and guidance/ support to the management outsideBoard/ Committee Meetings. In addition the Chairman was also evaluated on key aspects ofhis role including setting the strategic agenda of the Board encouraging activeengagement by all Board members and motivating and providing guidance to the Management.Criteria for evaluation of the Committees of the Board include degree of fulfillment ofkey responsibilities adequacy of Committee composition and effectiveness of meetings. Theprocedure followed for the performance evaluation of the Board Committees and Directorsis detailed in the Directors' Report.
CRITERIA FOR DETERMINING QUALIFICATIONS POSITIVE ATTRIBUTES AND INDEPENDENCE OFDIRECTORS:
The Nomination and Remuneration Committee has formulated the criteria for determiningqualifications positive attributes and independence of Directors in terms of provisionsof Section 178(3) of the Companies Act 2013.
In accordance with the above criteria a Director will be considered as anIndependent Director' if he/ she meet with the criteria for IndependentDirector' as laid down in the Act.
A transparent Board nomination process is in place that encourages diversity ofthought experience knowledge perspective age and gender. It is also ensured that theBoard has an appropriate blend of functional and industry expertise. While recommendingthe appointment of a Director the Nomination and Remuneration Committee considers themanner in which the function and domain expertise of the individual will contribute to theoverall skill-domain mix of the Board.
In addition to the duties as prescribed under the Act the Directors on the Board ofthe Company are also expected to demonstrate high standards of ethical behavior stronginterpersonal and communication skills and soundness of judgment. Independent Directorsare also expected to abide by the Code for Independent Directors' as outlined inSchedule IV to the Act.
The Company has adopted a Policy for remuneration of Directors Key ManagerialPersonnel and other employees which is aligned to its overall Human resource philosophy.The key factors considered in formulating the Policy are as under:
(a) the level and composition of remuneration is reasonable and sufficient to attractretain and motivate Directors of the quality required to run the Company successfully;
(b) relationship of remuneration to performance is clear and meets appropriateperformance benchmarks; and
(c) remuneration to Directors key managerial personnel and senior management involvesa balance between fixed and incentive pay reflecting short and long-term performanceobjectives appropriate to the working of the Company and its goals.
The key principles governing the Company's Remuneration Policy are as follows:
Remuneration for independent Directors and non-independent non-executive Directors:
Independent Directors (ID') and non-independent non-executive Directors(NED') may be paid sitting fees for attending the Meetings of the Board and ofCommittees of which they may be members and commission within regulatory limits asrecommended by the Nomination and Remuneration Committee (NRC') and approved by theBoard.
Overall remuneration should be reasonable and sufficient to attract retain andmotivate Directors aligned to the requirements of the Company taking into considerationthe challenges faced by the Company and its future growth imperatives. Remuneration paidshould be reflective of the size of the Company complexity of the sector/ industry/Company's operations and the Company's capacity to pay the remuneration and be consistentwith recognized best practices.
The aggregate commission payable to all the NEDs and IDs will be recommended bythe NRC to the Board based on Company performance profits return to investorsshareholder value creation and any other significant qualitative parameters as may bedecided by the Board. The NRC will recommend to the Board the quantum of commission foreach Director based upon the outcome of the evaluation process which is driven by variousfactors including attendance and time spent in the Board and Committee Meetingsindividual contributions at the meetings and contributions made by Directors other than inmeetings.
The remuneration payable to Directors shall be inclusive of any remunerationpayable for services rendered in any other capacity unless the services rendered are of aprofessional nature and the NRC is of the opinion that the Director possesses requisitequalification for the practice of the profession.
Policy on Remuneration for Managing Director (MD') / Executive Directors(ED') / Key Managerial Personnel (KMP')/ rest of the Employees:
The extent of overall remuneration should be sufficient to attract and retaintalented and qualified individuals suitable for every role. Hence remuneration should bemarket competitive driven by the role played by the individual reflective of the size ofthe Company complexity of the sector/ industry/ Company's operations and the Company'scapacity to pay consistent with recognized best practices and aligned to any regulatoryrequirements. Basic/ fixed salary is provided to all employees to ensure that there is asteady income in line with their skills and experience.
In addition the Company provides employees with certain perquisites allowancesand benefits to enable a certain level of lifestyle and to offer scope for savings. TheCompany also provides all employees with a social security net subject to limits bycovering medical expenses and hospitalization through re-imbursements or insurance coverand accidental death and dismemberment through personal accident insurance. The Companyprovides retirement benefits as applicable.
In addition to the basic/ fixed salary benefits perquisites and allowances asprovided above the Company provides MD/ EDs such remuneration by way of commissioncalculated with reference to the net profits of the Company in a particular financialyear as may be determined by the Board subject to the overall ceilings stipulated inSection 197 of the Companies Act 2013. The specific amount payable to the MD/ EDs wouldbe based on performance as evaluated by the NRC and approved by the Board.
The Company provides the rest of the employees a performance linked bonus. Theperformance linked bonus would be driven by the outcome of the performance appraisalprocess and the performance of the Company.
Presently no Directors or KMP of the Company is drawing any remuneration from thecompany
DIRECTORS' RESPONSIBILITY STATEMENT
The directors report that:
i) In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures.
ii) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss statement of the company for that period.
iii) The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities.
iv) The Directors have prepared the annual accounts on a going concern basis.
v) The Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively and
vi) The directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
DECLARATION ON INDEPENDENT DIRECTORS
All the Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Act. In the opinion of the Boardthey fulfill the conditions of independence as specified in the Act and the Rules madethere under and are independent of the management.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
At present your company does not have any Subsidiary Joint Venture or Associatescompany.
POLICY ON PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has zero tolerance for sexual harassment and has adopted a Policy onPrevention Prohibition and Redressal of Sexual Harassment at the Workplace in line withthe provisions of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 and the Rules there under. The Company has not received any complaintof sexual harassment during the financial year 2018-19.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy to provide a formal mechanism to theDirectors and employees to report their concerns about unethical behavior actual orsuspected fraud or violation of the Company's Code of Conduct or ethics policy. The Policyprovides for adequate safeguards against victimization of employees who avail of themechanism. It is affirmed that no personnel of the Company has been denied access to theAudit Committee.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
No significant material orders have been passed by the Regulators or Courts orTribunals which would impact the going concern status of the Company and its futureoperations.
(1) Statutory Auditors:
M/s. Maheshwari & Co. Chartered Accountants Mumbai are the statutory auditors ofthe Company and hold office till the conclusion of the 37th Annual General Meeting (AGM)subject to ratification at each intervening AGM. They have furnished a certificateconfirming consent and eligibility in accordance with Section 139 read with Section 141 ofthe Act. Pursuant to the provisions of the Act and the Rules made there under it isproposed to ratify their appointment as the statutory auditors of the Company till theconclusion of the next AGM. Members are requested to consider the ratification of theirand authorize the Board of Directors to fix their remuneration.
(2) Secretarial Auditors:
Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors of the Companyhad appointed M/s. Hardik Savla & Co a Company Secretary in Practice to undertake theSecretarial Audit of the Company for the year ended 31st March 2019. The SecretarialAudit Report is annexed to this report.
The Auditors' Report for the financial year ended 31st March 2019 contains followingqualification reservation adverse remark or disclaimer :
|Sr. No. ||Auditors qualification reservation adverse remark or disclaimer ||Board's comments |
| ||(Auditors have given following remarks under Standalone Audit Report "Emphasis of Matter" para) || |
|1 ||Non-compliance of section 203 & 134(1) of companies act 2013 for not having any KMP in the company ||Your Company is in process to make appointment of KMP's as per the provisions of Companies Act 2013 |
|2. ||Intangible Aseet (IPR) amounting Rs.915.02 lacs are not subjected to impairment during the year ||Note of the Audit Committee is annexed with the Directors Report |
|3 ||Balances of Debtors Loans and Advances Secured & Unsecured Loans Sundry Creditors Others are subject to confirmation and reconciliation and consequential adjustments ||Audit Committee has formalized a plan for confirmation of Loans and Advances and in the absence of final confirmation such balances shall be written off from the Books of Accounts of the Company. |
|4 ||company is required to appoint Internal Auditors ||Your Company shall make an appointment of Internal Auditor in current year. |
|5 ||the company has granted loan to DSR Infotech Limited which is non-compliance of Section 185 of the Companies Act 2013. ||DSR Infotech Ltd was a subsidiary company when such transaction had happened. As on date the DSR is not the subsidiary company of N2N. |
The Secretarial Auditors' Report for the financial year ended 31st March 2019 containsfollowing qualification reservation adverse remark or disclaimer:
|Sr. No. ||Secretarial Auditors qualification reservation adverse remark or disclaimer ||Board's comments |
|1. ||Non-compliance of section 203 & 131 as no KMP ||Your Company is in process to make appointment of KMP' s as per the provisions of Companies Act 2013 |
|2 ||The company has not published intimation & results of quarterly results in newspaper as required by SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 ||Your Company shall comply with the same during the current year and henceforth. |
|3 ||We would like to draw your attention the company has applied for re-adjudication of Stamp Duty on account of merger of Leadsoft softech Pvt Ltd with the Company as levied by the Controller of Stamps Mumbai ||Re-adjudication of Stamp Duty with Controller of Stamps Mumbai is under process. |
|4 ||Women Director needs to be appointed in place of Ms. Mahalakshmi Dandapani who is disqualified to act as such u/s 164 ||Your Company shall make appointment of suitable candidate for Women Director |
LISTING ON STOCK EXCHANGES
The Equity Shares of your Company are listed only with BSE Limited. The listing feesfor the financial year 2019-20 is not paid as on the date of this report however yourCompany shall pay the same by the ensuing Annual General Meeting.
The Company is committed to maintain the highest standards of corporate governance andadhere to the corporate governance requirements set out by SEBI. The certain regulationsas to corporate governance do not apply to the Company in Accordance with SEBI (LODR)Regulations 2015. Accordingly no separate section on Corporate governance is annexed.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The Management Discussion & Analysis Report as required under regulation 34 of theSEBI (LODR) Regulations 2015 is annexed to this report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENT UNDER SECTION 186
During the year the Company has not given any loan or guarantee or provided securityor has made any investment which would be required to be reported under section 186 of thecompanies Act 2013. The closing balances of investments which would be covered underSection 186 of the Companies Act 2013 are disclosed in the Schedule of Non-CurrentInvestments/Loans given in the Financial Statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO INSUB-SECTION (1) OF SECTION 188 OF THE COMPANIES ACT 2013
The contracts or arrangements as covered u/s188 of the Companies Act 2013 is notentered into by the Company. Hence no particulars are being provided in Form AOC-2 asmandated pursuant to the provisions of Section 134 of the Companies Act 2013 read withRule 8 (2) of the Companies (Accounts) Rules 2014.
THE EXTRACT OF ANNUAL RETURN
Extracts of Annual return in form MGT-9 as per the provisions of the Companies Act2013 is annexed hereto and forms part of this report.
MANAGERIAL REMUNERATION / PARTICULARS OF EMPLOYEES
Your company has not paid any managerial remuneration during the period under reviewtherefore no Disclosures in the Board Report as required under Rule 5 of Companies(Appointment & Remuneration) Rules 2014 is provided and further your Company also hasnot employed any person at a remuneration in excess of the limit set out in the saidRules.
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP) :
At the Annual General Meeting of the Company held on September 30 2018 the Membershad approved the re-appointment of Mr. Rahul Shah as a Director. In accordance with theprovisions of Section 152 of the Act and in terms of Articles of Association of theCompany being the sole person who is liable to retire by rotation Mr. Rahul Shah retiresand is eligible for re-appointment.
Mr. Akhand Singh has resigned from the Board. Mr. Tushar Shah was appointed asIndependent director in the Board. Also during the year Mrs. Mahalakshmi Dandapanivacated the post of Director of the Company. Your Board is looking for Independentdirector (women) to take her place in the board and its committees.
Presently no one is appointed or designated as key managerial personnel as per therequirements of section 203 of the Companies Act 2013. During the year Mrs Sonal Mantriwas appointed as Company Secretary and Compliance Officer as on March 15 2019 howevershe resigned on April 11 2019.
BOARD AND COMMITTEE MEETINGS
Five Board Meetings were convened and held during the year i.e. on May 29 2018August 14 2018 September 03 2018 November 14 2018 and February 14 2019. At PresentThe Audit Committee consist of Mr. Nishant Upadhyay as Chairman and Mr Tushar Shah Mr.Rahul Shah as Members.
The Stakeholders relationship committee as well as Remuneration Committee comprises MrTushar Shah as Chairman and Mr. Nishant Upadhyay Mr. Rahul Shah as Members. There havenot been any instances when recommendations of the Audit Committee were not accepted bythe Board. The intervening gap between the Meetings was within the period prescribed underthe Act.
DETAILS OF DEPOSITS WHICH ARE NOT IN COMPLIANCE WITH THE REQUIREMENTS OF CHAPTER V OFTHE COMPANIES ACT 2013:
Your Company has not accepted any fixed deposits covered under chapter V of theCompanies Act 2013 and as such no amount of principal or interest was outstanding onthe date of Balance Sheet.
INTERNAL CONTROLS SYSTEMS AND ADEQUACY
The Company's internal audit systems are geared towards ensuring adequate internalcontrols commensurate with the size and needs of the business with the objective ofefficient conduct of operations through adherence to the Company's policies identifyingareas of improvement evaluating the reliability of Financial Statements ensuringcompliances with applicable laws and regulations and safeguarding of assets fromunauthorized use.
The Audit Committee along with Management oversees results of the internal audit andreviews implementation on a regular basis.
Your Directors wish to place on record their appreciation for the wholehearted andsincere cooperation the Company has received from its bankers and various Governmentagencies. Your Directors also wish to thank all the employees for their co-operation.
| ||By Order of the Board of Directors || |
|Place : Mumbai ||Tushar Shah ||Nishant Upadhyay |
|Date: June 13 2019 ||Director ||Director |
| ||DIN-01932019 ||DIN-02128886 |