Notes to Accounts of E2E Networks Ltd.

Mar 31, 2025

xii. Provisions and contingencies

A provision is recognised when the Company has a present obligation as a result of a past event and it is probable
that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be
made. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence
of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not
wholly within the control of the Company or a present obligation that arises from past events where it is either not
probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount
cannot be made. Contingent assets are neither recognized nor disclosed in the financial statements.

xiii. Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity. Financial assets and financial liabilities are recognized when the Company
becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly
attributable to the acquisition or issue of financial instruments (other than financial assets and financial liabilities
at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial
liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial
assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.
Subsequently, financial instruments are measured according to the category in which they are classified.

Financial assets

All recognised financial assets are subsequently measured in their entirety at either amortised cost using the
effective interest method or fair value, depending on the classification of the financial assets.

a. Classification of financial assets

Classification of financial assets depends on the nature and purpose of the financial assets and is determined
at the time of initial recognition.

The Company classifies its financial assets in the following measurement categories:

• those to be measured subsequently at fair value (either through other comprehensive income, or
through profit or loss), and

• those measured at amortised cost

The classification depends on the entity’s business model for managing the financial assets and the
contractual terms of the cashflows.

A financial asset that meets the following two conditions is measured at amortised cost unless the asset is
designated at fair value through profit or loss under the fair value option:

• Business model test: The objective of the Company’s business model is to hold the financial asset to
collect the contractual cash flows.

• Cash flow characteristic test: The contractual term of the financial asset give rise on specified dates
to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A financial asset that meets the following two conditions is measured at fair value through other comprehensive
income unless the asset is designated at fair value through profit or loss under the fair value option.

• Business model test: The financial asset is held within a business model whose objective is achieved
by both collecting cash flows and selling financial assets.

• Cash flow characteristic test: The contractual term of the financial asset gives rise on specified dates
to cash flows that are solely payments of principal and interest on the principal amount outstanding.

All other financial assets are measured at fair value through profit or loss.

b. Financial assets at fair value through profit or loss (FVTPL)

Investment in equity instruments is classified at fair value through profit or loss, unless the Company
irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive
income for investments in equity instruments which are not held for trading.

Financial assets that do not meet the amortised cost criteria or fair value through other comprehensive income
criteria are measured at fair value through profit or loss. A financial asset that meets the amortised cost
criteria or fair value through other comprehensive income criteria may be designated as at fair value through
profit or loss upon initial recognition if such designation eliminates or significantly reduces a measurement
or recognition inconsistency that would arise from measuring assets and liabilities or recognizing the gains
or losses on them on different bases.

Financial assets which are fair valued through profit or loss are measured at fair value at the end of each
reporting period, with any gains or losses arising on remeasurement recognised in profit or loss.

c. Trade receivables

Trade receivables are recognized initially at fair value and subsequently measured at amortised cost less
provision for impairment.

d. Cash and cash equivalents

In the Statement of Cash Flows, cash and cash equivalents includes cash in hand, cheques and balances
with bank and short term highly liquid investments with original maturities of three months or less that
are readily convertible to known amount of cash. Bank overdrafts are shown within borrowings in current
liabilities in the balance sheet and forms part of financing activities in the Statement of Cash Flows. Book
overdraft is shown within other financial liabilities in the Balance Sheet and forms part of operating activities
in the Statement of Cash Flows.

e. Impairment of financial assets:

The Company assesses impairment based on expected credit losses (ECL) model to the following:

• financial assets measured at amortised cost

• financial assets measured at fair value through other comprehensive income
Expected credit loss are measured through a loss allowance at an amount equal to:

• the twelve month expected credit losses (expected credit losses that result from those default events
on the financial instruments that are possible within twelve months after the reporting date); or

• full life time expected credit losses (expected credit losses that result from all possible default events
over the life of the financial instrument).

For trade receivables or any contractual right to receive cash or another financial asset that result from
transactions that are within the scope of Ind AS 115, the Company always measures the loss allowance at
an amount equal to lifetime expected credit losses.

f. Derecognition of financial assets

A financial asset is derecognised only when

• The Company has transferred the rights to receive cash flows from the financial asset or

• Retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual
obligation to pay the cash flows to one or more recipients

• The right to receive cash flows from the asset has expired.

g. Foreign Exchange gains and losses

The fair value of financial assets denominated in a foreign currency is determined in that foreign currency
and translated at the exchange rate at the end of each reporting period. For foreign currency denominated
financial assets measured at amortised cost or fair value through profit or loss the exchange differences
are recognised in profit or loss except for those which are designated as hedge instrument in a hedging
relationship. Further change in the carrying amount of investments in equity instruments at fair value
through other comprehensive income relating to changes in foreign currency rates are recognised in other
comprehensive income.

h. Classification of debt or equity

Debt or equity instruments issued by the Company are classified as either financial liabilities or as equity in
accordance with the substance of the contractual arrangements and the definitions of a financial liability and
an equity instrument.

i. Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting
all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net
of direct issue costs.

j. Financial liabilities

All financial liabilities are subsequently measured at amortised cost using the effective interest rate method
or at fair value through Statement of Profit and Loss.

k. Trade and other payables

Trade and other payables represent liabilities for goods or services provided to the Company prior to the end
of financial year which are unpaid.

l. Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are
subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs)
and the redemption amount is recognised in Statement of Profit and Loss over the period of the borrowings
using the effective interest rate method.

Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged,
cancelled or expired.

The difference between the carrying amount of a financial liability that has been extinguished or transferred
to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed,
is recognised in Statement of Profit and Loss.

m. Foreign exchange gains or losses

For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the
end of each reporting period, the foreign exchange gains and losses are determined based on the amortised
cost of the instruments and are recognised in profit or loss.

The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency
and translated at the exchange rate at the end of the reporting period. For financial liabilities that are
measured as at fair value through profit or loss, the foreign exchange component forms part of the fair value
gains or losses and is recognised in Statement of Profit and Loss.

n. Derecognition of financial liabilities

The Company derecognises financial liabilities when, and only when, the Company’s obligations are
discharged, cancelled or have expired.

q. Offsetting Financial Instruments

Financial assets and liabilities are offset and the net amount is reported in the Balance Sheet where there
is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net
basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be
contingent on future events and must be enforceable in the normal course of business and in the event of
default, insolvency or bankruptcy of the Company or the counterparty.

xiv. Impairment of non-financial assets

Property, plant and equipment and other intangible assets represent a significant proportion of the asset base
of the Company. The charge in respect of periodic depreciation / amortisation is derived after determining an
estimate of an asset’s expected useful life and the expected residual value at the end of its life. The useful
lives and residual values of Company’s assets are determined at the time the asset is acquired and reviewed
periodically. The lives are based on historical experience with similar assets as well as anticipation of future
events, which may impact their life, such as changes in technology. The estimated useful life is reviewed at least
annually.

xv. Cash Flow Statement

Cash flows are reported using the indirect method, whereby loss for the period is adjusted for the effects of
transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments
and item of income or expenses associated with investing or financing cash flows. The cash flows from operating,
investing and financing activities of the Company are segregated.

xvi. Events occurring after the balance sheet date

Based on the nature of the event, the company identifies the events occurring between the balance sheet date
and the date on which the financial statements are approved as ‘Adjusting Event’ and ‘Non-adjusting event’.
Adjustments to assets and liabilities are made for events occurring after the balance sheet date that provide
additional information materially affecting the determination of the amounts relating to conditions existing at the
balance sheet date or because of statutory requirements or because of their special nature. For non-adjusting
events, the company may provide a disclosure in the financial statements considering the nature of the transaction.

(i) Trade receivables are non-interest bearing and are generally on terms of 0 to 30 days. Refer note 31 for details of
Company’s credit risk policy and exposure.

(ii) No trade or other receivable are due from directors or other officers of the company either severally or jointly with any

other person. Except as disclosed in Note 36 no trade or other receivable are due from firms or private companies
respectively in which any director is a partner, a director or a member.

*Note

During the year the Company has raised INR 40565.63 Lakhs in equity share capital through a preferential issue
of 23,93,959 equity shares, face value of INR 10 each and at a premium of INR 1,684.50 per share on September
21,2024 and INR 1,07,927.80 Lakhs in equity share capital through a preferential issue of 29,79,579 equity shares,
having face value of INR 10 each and at a premium of INR 3,612.25 per share on December 04, 2024.

(iv) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of INR 10 per share (March 31,2024: INR 10
each). Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders
are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion
to their shareholding.

13.1 Nature and purpose of other equity

(a) Shares based payment reserve: The share option outstanding account is used to record the value of equity-
settled share based payment transactions with employees. The amounts recorded in this account are transferred
to General reserve upon exercise of stock options by employees from 1 April 2024 onwards.

(b) Securities premium reserve: This represents premium received on issue of shares.

(c) Retained earnings: Retained earnings are the profits that the Company has earned till date, less any transfers to
general reserve, dividends or other distributions paid to shareholders. Retained earnings includes re-measurement
gain/(loss) on defined benefit plans, net of taxes that will not be reclassified to Statement of Profit and Loss.
Retained earnings is a free reserve available to the Company and eligible for distribution to shareholders, in case
where it is having positive balance representing net earnings till date.

(d) Revaluation Surplus: This reserve represents reserve created out of revaluation of other intangible assets. These
does not represent free reserve and accordingly, not available to the Company for distribution to shareholders.

(e) Money received against share warrants: Represents amount received by the Company towards issue of shares
warrants convertible into shares of the Company.

13.2 Shares held under ESOP Trust

The Company has created an Employee Stock Option Plan (ESOP) for providing share-based payment to its employees.

ESOP is the primary arrangement under which incentives are provided to certain specified employees of the Company.

The Company treats ESOP Trust as its extension and shares held by ESOP trust are treated as treasury shares.

For the details of shares reserved for issue under the Employee Stock Option Plan (ESOP) of the Company refer Note 35.

Terms of borrowings

(i) Term loan with outstanding balance as at 31 March, 2025 INR 1,140.70 Lakhs (31 March, 2024: INR 10,307.81 Lakhs)
is payable in structured periodic installments. The loan carries an interest rate between 8.20 % - 8.80% . The amount
payable in next 12 months of INR 531.01 Lakhs (31 March, 2024 : INR 1,458.19 Lakhs) has been shown under the head
Borrowings - Current as Current maturity of long term borrowings.

Notes:

1. The contract assets primarily relate to the Company’s rights to consideration for work completed but not billed at the
reporting date i.e. unbilled revenue. The contract assets are transferred to the receivables when the rights become
unconditional.

2. Contract liability relates to payments received in advance of performance i.e. advance from customers and deferred
sales revenue against which amount has been received from customer but services are yet to be rendered on the
reporting date either in full or in parts. Contract liabilities are recognized evenly over the period of service, being
performance obligation of the Company.

Changes in contract liabilities (excluding advance from customers) during the years ended March 31, 2025 and
March 31,2024 were as follows:-

In accordance with the practical expedient provided under Ind AS 115, the Company has not disclosed the amount
of unsatisfied performance obligation since most of the performance obligation in case of the Company are part
of a contract that has an original expected duration of one year or less and the entity recognises revenue from the
satisfaction of the performance obligation in accordance with paragraph B16 of Ind AS 115.

The Company has recognized revenue of INR 16,396.08 Lakhs (March 31,2024: INR 9,446.36 Lakhs) which is
equal to the contracted price and there are no adjustments made to the contract price.

(b) Fair value hierarchy

Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into
three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the
measurement, as follows:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market (for example: foreign exchange
forward contracts) is determined using valuation techniques which maximize the use of observable market data and
rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are
observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in
level 3.

There are no transfer of levels during the year.

The fair values lease liabilities were calculated based on cash flows discounted using a incremental borrowing rate.

As of March 31,2025 and March 31,2024, the fair value of trade receivables, cash and cash equivalent and other bank
balances, other current financial assets and liabilities, trade payables approximate their carrying amount largely due to
the short term nature of these instruments. For other financial assets and liabilities that are measured at amortised cost,
the carrying amounts approximate the fair value.

31. Financial risk management

The Company’s principal financial liabilities comprise of trade and other payables. The main purpose of these financial
liabilities is to provide finance to the Company to support its operations. The Company’s principal financial assets include
deposits, trade and other receivables, and cash and other bank balances that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the
management of these risks. The Company’s senior management ensures that the Company’s financial risk activities
are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in
accordance with the Company’s policies and risk objectives.

(A) Credit risk

Credit risk refers to the risk of default on its obligation by the counter party resulting in a financial loss.

Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of its cash
and cash equivalents and receivables. To reduce credit risk, the Company performs ongoing credit evaluations of its
customers and limits the amount of credit extended when deemed necessary. Generally, the Company requires no
collateral from its customers. The Company maintains an allowance for potential credit losses, but historically has not
experienced any significant losses related to individual customers or groups of customers.

The Company’s cash and cash equivalents are deposited with financial institutions and invested in bank deposits that
the Company believes are of high credit quality.

On account of adoption of Ind AS 109, the Company uses expected credit loss (ECL) model to assess the impairment
loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables.
The provision matrix takes into account available external and internal credit risk factors such as Company’s historical
experience for customers.

(B) Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at
reasonable price. The Company’s objective is to at all times maintain optimum levels of liquidity to meet its cash and
liquidity requirements. The Company closely monitors its liquidity position and maintains adequate source of financing,
if required, through the use of short term bank deposits, demand loans, commercial credit cards and cash credit facility.
Processes and policies related to such risks are overseen by senior management.

(C) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes
in market prices. Market prices comprises three types of risk: currency rate risk, interest rate risk and other price risks,
such as equity price risk and commodity price risk. Financial instruments affected by market risks majorly includes
foreign currency receivables and payables. The Company has in place appropriate risk management policies to limit the
impact of these risks on its financial performance. The Company ensures optimization of its cash through fund planning
and robust cash management practices.

(a) Interest risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. A majority of the financial assets and liabilities are non interest bearing or fixed
interest bearing instruments.

32. Capital management

For the purposes of the Company’s capital management, Capital includes equity attributable to the equity holders of the
Company and all other equity reserves. The primary objective of the Company’s capital management is to ensure that it
maintains an efficient capital structure and maximize shareholder value. The Company manages its capital structure and
makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain
or adjust the capital structure, the Company may adjust the dividend payment to shareholders or issue new shares. The
Company is not subject to any externally imposed capital requirements.

The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall
debt portfolio of the Company. Total borrowings includes all long and short-term borrowings as disclosed in Note 14 to the
financial statements. Equity comprises all components of equity.

40. Other Statutory Information:-

1. The Company does not have any Benami property, where any proceeding has been initiated or pending against the
Company for holding any Benami property.

2. The Company does not have any charges pending satisfaction with ROC beyond the statutory period.

3. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign
entities (Intermediaries) with the understanding that the Intermediary shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf
of the company (Ultimate Beneficiaries) or,

b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

4. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with
the understanding (whether recorded in writing or otherwise) that the Company shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf
of the Funding Party (Ultimate Beneficiaries) or,

b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

5. The Company do not have any transactions with companies struck off.

6. The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

7. The Company have no such transaction which is not recorded in the books of accounts that has been surrendered or
disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey
or any other relevant provisions of the Income Tax Act, 1961).

42. The figures of the previous year have been re-classified according to current year classification wherever required.

43. New Standards, Interpretations and Amendments adopted by the Company-

Ministry of Corporate Affairs(“”MCA””) notifies new standards or amendments to the existing standards under Companies
(Indian Accounting Standards) Rules as issued from time to time. For the year ended 31st Mach 2025, MCA has notifies
amendments to IND AS 116- Lease, relating to sale and leaseback transactions, which is applicable to a company w.e.f. 1st
April 2024. The Company has reviewed the new pronouncements and based on its evolution has determined that it is not
likely to have any significant impact in its financial statements._

As per our report of even date For and on behalf of the board of directors

For GSA & Associates LLP E2E Networks Limited

ICAI Firm Registration No.: 000257N/N500339

Sd/- Sd/- Sd/-

Tanuj Chugh Tarun Dua Srishti Baweja

Partner Managing Director Whole Time Director

Membership No.: 529619 DIN: 02696789 DIN: 08057000

Place: New Delhi Place: New Delhi Place: New Delhi

Date: April 17, 2025 Date: April 17, 2025 Date: April 17, 2025

Sd/- Sd/-

Megha Raheja Ronit

Whole-time Director & CFO Company Secretary

Membership No.: A59215

Place: New Delhi Place: New Delhi

Date: April 17, 2025 Date: April 17, 2025

---

Mar 31, 2024

(ii) Revaluation of IP addresses

The management determined that IP addresses constitute one class of asset, based on the nature and characteristics. The effective date of revaluation is 31 March 2024. The revaluation of IP addresses is based on the valuation by a registered valuer as defined under rule 2 of Companies (Registered Valuers and valuation) Rules, 2017.

For details of amount of the revaluation surplus that relates to intangible assets at the beginning and end of the period, the changes during the period and any restrictions on the distribution of the balance in revaluation surplus to shareholders, refer note 13.

(iii) Assets with indefinite useful life

Indefinite-lived intangible assets consist of Internet Protocol (“IP”) addresses. IP are the numerical addresses used to identify a particular piece of hardware connected to the Internet. Since the IP Address’s usefulness to the business is not limited by time, or any other factors, the life of these assets have been estimated as indefinite.

(i) Trade receivables are non-interest bearing and are generally on terms of 0 to 30 days. Refer note 31A for details of Company’s credit risk policy and exposure.

(ii) No trade or other receivable are due from directors or other officers of the company either severally or jointly with any other person. Except as disclosed in Note 36 no trade or other receivable are due from firms or private companies respectively in which any director is a partner, a director or a member.

Trade receivables ageing schedule for the year ended March 31, 2024

(iv) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of INR 10 per share (March 31,2023: INR 10 each). Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

13.1 Nature and purpose of other equity

(a) Shares based payment reserve: The share option outstanding account is used to record the value of equity-settled share based payment transactions with employees. The amounts recorded in this account are transferred to General reserve upon exercise of stock options by employees from 1 April 2023 onwards.

(b) Securities premium reserve: This represents premium received on issue of shares.

(c) Retained earnings: Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained earnings includes re-measurement gain/(loss) on defined benefit plans, net of taxes that will not be reclassified to Statement of Profit and Loss. Retained earnings is a free reserve available to the Company and eligible for distribution to shareholders, in case where it is having positive balance representing net earnings till date.

(d) Revaluation Surplus: This reserve represents reserve created out of revaluation of other intangible assets. These does not represent free reserve and accordingly, not available to the Company for distribution to shareholders.

(e) Money received against share warrants: Represents amount received by the Company towards issue of shares warrants convertible into shares of the Company.

13.2 Shares held under ESOP Trust

The Company has created an Employee Stock Option Plan (ESOP) for providing share-based payment to its employees.

ESOP is the primary arrangement under which incentives are provided to certain specified employees of the Company.

The Company treats ESOP Trust as its extension and shares held by ESOP trust are treated as treasury shares.

For the details of shares reserved for issue under the Employee Stock Option Plan (ESOP) of the Company refer Note

35.

Terms of borrowings

(i) Term loan with outstanding balance as at 31 March, 2024 INR 10,307.81 Lakhs (31 March, 2023: INR 59.76 Lakhs) is payable in structured periodic installments. The loan carries an interest rate between 8.56% - 9.38%. The amount payable in next 12 months of INR 1,458.19 Lakhs (31 March, 2023 : INR 38.65 Lakhs) has been shown under the head Borrowings - Current as Current maturity of long term borrowings.

(i) Disaggregate revenue information

The table below presents disaggregated revenues from contracts with customers for the year ended March 31, 2024 and March 31, 2023 by location of customer and timing of rendering of services. The Company believe that this disaggregation best depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by industry, market and other economic factors.

* Trade receivables are non-interest bearing and are generally on terms of 0 to 30 days (March 31,2023: 0 to 30 days).

As on March 31, 2024, an amount of INR 39.60 Lakhs is recognised as provision for expected credit losses on trade

receivables. Also refer note 31(A) for movement of provision for expected credit losses on trade receivables.

Notes:

1. The contract assets primarily relate to the Company’s rights to consideration for work completed but not billed at the reporting date i.e. unbilled revenue. The contract assets are transferred to the receivables when the rights become unconditional.

2. Contract liability relates to payments received in advance of performance i.e. advance from customers and deferred sales revenue against which amount has been received from customer but services are yet to be rendered on the reporting date either in full or in parts. Contract liabilities are recognized evenly over the period of service, being performance obligation of the Company.

In accordance with the practical expedient provided under Ind AS 115, the Company has not disclosed the amount of unsatisfied performance obligation since most of the performance obligation in case of the Company are part of a contract that has an original expected duration of one year or less and the entity recognises revenue from the satisfaction of the performance obligation in accordance with paragraph B16 of Ind AS 115.

The Company has recognized revenue of INR 9,446.36 Lakhs (March 31,2023: INR 6,620.18 Lakhs) which is equal to the contracted price and there are no adjustments made to the contract price.

29. Disclosure in respect of employee benefit plan a) Defined contribution plan

The company makes contribution, determination as a special percen age of employee salaries towards provident fund, ESI and labour welfare fund which are collectively defined as contribution plan. The company has no obligation other than to make the specified contribution. The contribution to be charged to statement of profit and loss as they accrued.

b) Post-employment obligations - Gratuity Plan

The Company provides gratuity for employees as per the Payment of Gratuity Act, 1972. Employees who are in continuous services for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/ termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is an unfunded plan.

The sensitivity analyses above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

The weighted average duration of defined benefit plan obligation at the end of the reporting period is 21.43 years (March 31,2023: 20.60 years)

(b) Fair value hierarchy

Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market (for example: foreign exchange forward contracts) is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

There are no transfer of levels during the year.

The fair values lease liabilities were calculated based on cash flows discounted using a incremental borrowing rate.

As of March 31,2024 and March 31,2023, the fair value of trade receivables, cash and cash equivalent and other bank balances, other current financial assets and liabilities, trade payables approximate their carrying amount largely due to the short term nature of these instruments. For other financial assets and liabilities that are measured at amortised cost, the carrying amounts approximate the fair value.

The Company’s principal financial liabilities comprise of trade and other payables. The main purpose of these financial liabilities is to provide finance to the Company to support its operations. The Company’s principal financial assets include deposits, trade and other receivables, and cash and other bank balances that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The Company’s senior management ensures that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives.

(A) Credit risk

Credit risk refers to the risk of default on its obligation by the counter party resulting in a financial loss.

Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of its cash and cash equivalents and receivables. To reduce credit risk, the Company performs ongoing credit evaluations of its customers and limits the amount of credit extended when deemed necessary. Generally, the Company requires no collateral from its customers. The Company maintains an allowance for potential credit losses, but historically has not experienced any significant losses related to individual customers or groups of customers.

The Company’s cash and cash equivalents are deposited with financial institutions and invested in bank deposits that the Company believes are of high credit quality.

On account of adoption of Ind AS 109, the Company uses expected credit loss (ECL) model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account available external and internal credit risk factors such as Company’s historical experience for customers.

(B) Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. The Company’s objective is to at all times maintain optimum levels of liquidity to meet its cash and liquidity requirements. The Company closely monitors its liquidity position and maintains adequate source of financing, if required, through the use of short term bank deposits, demand loans, commercial credit cards and cash credit facility. Processes and policies related to such risks are overseen by senior management.

(C) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprises three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity price risk. Financial instruments affected by market risks majorly includes foreign currency receivables and payables. The Company has in place appropriate risk management policies to limit the impact of these risks on its financial performance. The Company ensures optimization of its cash through fund planning and robust cash management practices.

(a) Interest risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. A majority of the financial assets and liabilities are non interest bearing or fixed interest bearing instruments.

For the purposes of the Company’s capital management, Capital includes equity attributable to the equity holders of the Company and all other equity reserves. The primary objective of the Company’s capital management is to ensure that it maintains an efficient capital structure and maximize shareholder value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders or issue new shares. The Company is not subject to any externally imposed capital requirements.

The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of the Company. Total borrowings includes all long and short-term borrowings as disclosed in Note 14 to the financial statements. Equity comprises all components of equity.

34. Segment information

As per Ind AS 108, Operating segments have been defined based on the regular review by the Company’s Chief Operating Decision Maker to assess the performance of each segment and to make decision about allocation of resources. The Company’s business activities fall within single primary business segment, viz, provision of cloud computing services. Accordingly, disclosures under Ind AS 108, Operating Segments are not required to be made.

35. Share-based payments

The Company instituted the Employee Stock Option Plan(s) to grant equity based incentives to eligible employees of Company. The ESOP plan “E2E ESOP Scheme 2018”. (“The 2018 Scheme”) has been approved by the shareholders of the Company at their meeting held on March 1,2018 for grant aggregating 400,000 options of the Company. The Scheme covers grant of options to the specified permanent employees of the Company including any Director whether whole-time or otherwise but excluding the Independent Director and Promoter of the Company.

The “E2E Networks Limited Employees Stock Option Scheme - 2021” (“The 2021 Scheme”) has been approved by shareholders of the Company on April 5, 2021 through postal ballot for granting aggregate 15,00,000 options. The Scheme covers grant of options to the specified permanent employees of the Company including any Director whether whole-time or otherwise but excluding the promoters, Independent Director and directors who either himself or through his relative or through any body corporate, directly or indirectly holds more than 10% of the outstanding equity shares of the Company.

The 2021 Scheme is implemented through Trust Route wherein the Trust shall acquire the shares by:

(a) Direct allotment from the Company and/or

(b) From secondary acquisition from the market

Provided further that upto 11,00,000 shares may be acquired by trust through direct allotment and upto 4,00,000 shares may be acquired through secondary acquisition from the market.

The key features of the schemes are outlined below:

The 2018 Scheme

Exercise price - The exercise price in respect of the options shall be decided by the Nomination and Remuneration Committee (“”NRC”” or “”the Committee””) of the Board of Directors.

Vesting conditions -

20% at the end of 1 year from the effective grant date 20% at the end of 2 year from the effective grant date 20% at the end of 3 year from the effective grant date 20% at the end of 4 year from the effective grant date 20% at the end of 5 year from the effective grant date

Exercise Period -

(a) At any time, as long as the option holder continues to be employed with the Company, or

(b) Within a period of 90 (Ninety) days from the date of cessation of the option holder’s employment with the Company, or

(c) Such other period as may be determined by the NRC on case to case basis.

The 2021 Scheme

Exercise price - The exercise price in respect of the options shall be decided by the Nomination and Remuneration Committee (”NRC” or “”the Committee””) of the Board of Directors.

Vesting conditions - The minimum vesting period is one year from the date of the grant and Maximum vesting period is four years from the date of the grant.

Exercise Period - The exercise period shall be 2 (Two) years from the date of respective vesting.

Further, on Sept 23 2023, the Company had granted 2,10,000 equity settled options at an exercise price as defined in the scheme. This scheme gave employees the right to subscribe to stock options representing an equal number of equity shares of face value Rs.10 each. These options vest uniformly over a period of 4 years commencing one year after the date of grant as per terms and conditions specified in option grant letters.

The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, share options during the year:

Total expense arising from share based payment transaction for the year is Rs. 189.47 Lakhs (March 31, 2023: Rs. 58.72 Lakhs) has been charged to statement of profit and loss.

The weighted average fair value of options granted during the year was Rs. 255.06 (March 31,2023 : Rs. 60.29).

The range of exercise prices for options outstanding at the end of the year was Rs. 50 to 116 (March 31, 2023: Rs. 12 to 116).

The following tables list the inputs to the models used for the these plans for the year ended March 31, 2024 and March 31,2023:

The expected life of the share options is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may also not necessarily be the actual outcome.

There are no non market performance conditions existing as at March 31,2024 and March 31,2023.

37. Recent Accounting Pronouncements issued but not yet effective

There are no standards that are notified and not yet effective as on the date.

38. Corporate Social responsibility

a) Gross amount required to be spent by the Company during the year ended March 31,2024: INR 11.52 Lakhs.

b) Amount spent during the year ended March 31,2024: INR 17.93 Lakhs.

40. Other Statutory Information:-

1. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

2. The Company does not have any charges pending satisfaction with ROC beyond the statutory period.

3. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or,

b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

4. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or,

b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

5. The Company do not have any transactions with companies struck off.

6. The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

7. The Company have no such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

42. The figures of the previous year have been re-classified according to current year classification wherever required.

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Mar 31, 2023

(i) Revaluation of IP addresses

The management determined that IP addresses constitute one class of asset, based on the nature and characteristics. The effective date of revaluation is April 1, 2020. The revaluation of IP addresses is based on the valuation by a registered valuer as defined under rule 2 of Companies (Registered Valuers and valuation) Rules, 2017.

For details of amount of the revaluation surplus that relates to intangible assets at the beginning and end of the period, the changes during the period and any restrictions on the distribution of the balance in revaluation surplus to shareholders, refer note 13.

(ii) Assets with indefinite useful life

Indefinite-lived intangible assets consist of Internet Protocol (“IP”) addresses. IP are the numerical addresses used to identify a particular piece of hardware connected to the Internet. Since the IP Address''s usefulness to the business is not limited by time, or any other factors, the life of these assets have been estimated as indefinite.

(i) Trade receivables are non-interest bearing and are generally on terms of 0 to 30 days. Refer note 32 for details of Company''s credit risk policy and exposure

(ii) Trade receivables are non-interest bearing.

(iii) No trade or other receivable are due from directors or other officers of the company either severally or jointly with any other person. Except as disclosed in Note 37 no trade or other receivable are due from firms or private companies respectively in which any director is a partner, a director or a member.

(iv) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of INR 10 per share (March 31, 2022: INR 10 each). Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

13.1 Nature and purpose of other equity

(a) Shares based payment reserve: The share option outstanding account is used to record the value of equity-settled share based payment transactions with employees. The amounts recorded in this account are transferred to General reserve upon exercise of stock options by employees from 1 April 2022 onwards.

(b) Securities premium reserve: This represents premium received on issue of shares.

(c) Retained earnings: Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained earnings includes re-measurement gain/(loss) on defined benefit plans, net of taxes that will not be reclassified to Statement of Profit and Loss. Retained earnings is a free reserve available to the Company and eligible for distribution to shareholders, in case where it is having positive balance representing net earnings till date.

(d) Revaluation Surplus: This reserve represents reserve created out of revaluation of other intangible assets. These does not represent free reserve and accordingly, not available to the Company for distribution to shareholders.

(e) Money received against share warrants: Represents amount received by the Company towards issue of shares warrants convertible into shares of the Company.

13.2 Shares held under ESOP Trust (Treasury Shares)

The Company has created an Employee Stock Option Plan (ESOP) for providing share-based payment to its employees. ESOP is the primary arrangement under which incentives are provided to certain specified employees of the Company. The Company treats ESOP Trust as its extension and shares held by ESOP trust are treated as treasury shares.

For the details of shares reserved for issue under the Employee Stock Option Plan (ESOP) of the Company refer Note 36.

* Trade receivables are non-interest bearing and are generally on terms of 0 to 30 days (March 31, 2022: 0 to 30 days). As on March 31,2022 Nil is recognised as provision for expected credit losses on trade receivables. Also refer note 32(A) for movement of provision for expected credit losses on trade receivables.

Notes:

1. The contract assets primarily relate to the Company’s rights to consideration for work completed but not billed at the reporting date i.e. unbilled revenue. The contract assets are transferred to the receivables when the rights become unconditional.

2. Contract liability relates to payments received in advance of performance i.e. advance from customers and deferred sales revenue against which amount has been received from customer but services are yet to be rendered on the reporting date either in full or in parts. Contract liabilities are recognized evenly over the period of service, being performance obligation of the Company.

In accordance with the practical expedient provided under Ind AS 115, the Company has not disclosed the amount of unsatisfied performance obligation since most of the performance obligation in case of the Company are part of a contract that has an original expected duration of one year or less and the entity recognises revenue from the satisfaction of the performance obligation in accordance with paragraph B16 of Ind AS 115.

The Company has recognized revenue of INR 6,620.18 lakhs (March 31, 2022: INR 5,187.34 lakhs) which is equal to the contracted price and there are no adjustments made to the contract price.

b) Post-employment obligations - Gratuity Plan

The Company provides gratuity for employees as per the Payment of Gratuity Act, 1972. Employees who are in continuous services for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/ termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is an unfunded plan.

The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.

Rental expense recorded for short-term leases was INR 61.33 lakhs for the year ended March 31, 2023 (March 31, 2022: INR 33.68 lakhs)

Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market (for example: foreign exchange forward contracts) is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

There are no transfer of levels during the year.

The fair values lease liabilities were calculated based on cash flows discounted using a incremental borrowing rate.

As of March 31,2023 and March 31,2022, the fair value of trade receivables, cash and cash equivalent and other bank balances, other current financial assets and liabilities, trade payables approximate their carrying amount largely due to the short term nature of these instruments. For other financial assets and liabilities that are measured at amortised cost, the carrying amounts approximate the fair value.

32 Financial risk management

The Company’s principal financial liabilities comprise of trade and other payables. The main purpose of these financial liabilities is to provide finance to the Company to support its operations. The Company''s principal financial assets include deposits, trade and other receivables, and cash and other bank balances that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The Company’s senior management ensures that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives.

(A) Credit risk

Credit risk refers to the risk of default on its obligation by the counter party resulting in a financial loss.

Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of its cash and cash equivalents and receivables. To reduce credit risk, the Company performs ongoing credit evaluations of its customers and limits the amount of credit extended when deemed necessary. Generally, the Company requires no collateral from its customers. The Company maintains an allowance for potential credit losses, but historically has not experienced any significant losses related to individual customers or groups of customers.

The Company’s cash and cash equivalents are deposited with financial institutions and invested in bank deposits that the Company believes are of high credit quality.

On account of adoption of Ind AS 109, the Company uses expected credit loss (ECL) model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account available external and internal credit risk factors such as Company’s historical experience for customers.

(B) Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. The Company’s objective is to at all times maintain optimum levels of liquidity to meet its cash and liquidity requirements. The Company closely monitors its liquidity position and maintains adequate source of financing, if required, through the use of short term bank deposits, demand loans, commercial credit cards and cash credit facility. Processes and policies related to such risks are overseen by senior management.

(C) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprises three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity price risk. Financial instruments affected by market risks majorly includes foreign currency receivables and payables. The Company has in place appropriate risk management policies to limit the impact of these risks on its financial performance. The Company ensures optimization of its cash through fund planning and robust cash management practices

(a) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. A majority of the financial assets and liabilities of the company are non interest bearing or fixed interest bearing instruments.

Foreign currency risk is the risk that the fair value of future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The company does not have significant exposure in currency other than INR hence the foreign currency risk is negligible.

33 Capital management

For the purposes of the Company’s capital management, Capital includes equity attributable to the equity holders of the Company and all other equity reserves. The primary objective of the Company’s capital management is to ensure that it maintains an efficient capital structure and maximize shareholder value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders or issue new shares. The Company is not subject to any externally imposed capital requirements.

The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of the Company. Total borrowings includes all long and short-term borrowings as disclosed in Note 14 to the financial statements. Equity comprises all components of equity.

35 Segment information

As per Ind AS 108, Operating segments have been defined based on the regular review by the Company’s Chief Operating Decision Maker to assess the performance of each segment and to make decision about allocation of resources. The Company’s business activities fall within single primary business segment, viz, provision of cloud computing services. Accordingly, disclosures under Ind AS 108, Operating Segments are not required to be made.

36 Share-based payments

The Company instituted the Employee Stock Option Plan(s) to grant equity based incentives to eligible employees of Company. The ESOP plan "E2E ESOS Scheme 2018" (“The 2018 Scheme”) has been approved by the shareholders of the Company at their meeting held on March 1,2018 for grant aggregating 400,000 options of the Company.

The Scheme covers grant of options to the specified permanent employees of the Company including any Director whether whole-time or otherwise but excluding the Independent Director and Promoter of the Company.

The "E2E Networks Limited Employees Stock Option Scheme - 2021" (“The 2021 Scheme”) has been approved by shareholders of the Company on April 5, 2021 through postal ballot for granting aggregate 15,00,000 options. The Scheme covers grant of options to the specified permanent employees of the Company including any Director whether whole-time or otherwise but excluding the promoters, Independent Director and directors who either himself or through his relative or through any body corporate, directly or indirectly holds more than 10% of the outstanding equity shares of the Company.

The 2021 Scheme is implemented through Trust Route wherein the Trust shall acquire the shares by:

(a) Direct allotment from the Company and/or

(b) From secondary acquisition from the market

Provided further that upto 11,00,000 shares may be acquired by trust through direct allotment and upto 4,00,000 shares may be acquired through secondary acquisition from the market.

Further, on June 17 2022, the Company had granted 1,44,000 equity settled options at an exercise price as defined in the scheme. This scheme gave employees the right to subscribe to stock options representing an equal number of equity shares of face value Rs.10 each. These options vest uniformly over a period of 4 years commencing one year after the date of grant as per terms and conditions specified in option grant letters.

38 Standards issued but not yet effective

Ministry of Corporate Affairs (“MCA”) notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 23, 2022, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2022, applicable from April 1,2022, as below:

Ind AS 1, Presentation of Financial Statements - This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies. The effective date for adoption of this amendment is annual periods beginning on or after April 1,2023. The Company has evaluated the amendment and the impact of the amendment is insignificant in the financial statements.

Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors - This amendment has introduced a definition of ‘accounting estimates’ and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies from changes in accounting estimates. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and there is no impact on its financial statements.

Ind AS 12, Income Taxes - This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and there is no impact on its financial statements.

39 Corporate Social responsibility

a) Gross amount required to be spent by the Company Rs. Nil during the year (March 31,2022: Nil)

b) Amount spent during the year Rs. Nil (March 31,2022: Nil)

41 Other Statutory Information:-

1. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

2. The Company does not have any charges pending satisfaction with ROC beyond the statutory period.

3. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or,

b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

4. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or,

b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

5. The Company do not have any transactions with companies struck off.

43 The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified and the final rules/interpretation have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective. Based on a preliminary assessment, the entity believes the impact of the change will not be significant

44 The figures of the previous year have been re-classified according to current year classification wherever required

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Mar 31, 2018

1. COMPANY OVERVIEW

E2E Networks Limited (Erstwhile E2E Networks Private Limited)("the Company") was incorporated on 20th August, 2009 with an objective of providing services of cloud computing services. The company had filed application for conversion to Public Limited Company and converted to Public Limited company on 14.03.2018.

NOTE - 2 FOREIGN EXCHANGE EARNINGS AND OUTGO

The Foreign Exchange earned in terms of actual inflows during the year and the Foreign Exchange outgo during the year in terms of actual Outflows:

NOTE - 3 SEGMENT REPORTING

In the opinion of the company management, the operations of the company are considered as single segment hence AS-17 on Segment reporting issued by the Institute of Chartered Accountants of India is not applicable.

NOTE - 4

EARNING PER SHARE

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

Diluted earnings per share is calculated by dividing income by the weighted-average number of shares outstanding during the year, assuming that all potentially dilutive securities were exercised, if dilutive. While Calculating the dilutive EPS for 30.09.2017, our management has considered the grant of options in entire year of 2017-2018.

NOTE- 5

EMPLOYEE STOCK OPTION PLAN

As At 31st March,2018 , the company has the following Share Based Payments for Employees.

"Employee Stock Option Scheme 2018 (ESOS 2018)"

The terms and conditions are us under:-

-Options shall vest equally over a period of 5 (five) years of continuous completed service or such other period as may be determined by the Compensation Committee on case to case basis from the date of Grant of Options subject to continuous and uninterrupted employment of the option holder.

-Total number of options granted shall not exceed 4,00,000.

-The options carry neither rights to dividend nor voting rights till shares are issued upon exercise of options.

-There is minimum period of one year between the grant date and vesting of options (Cliff Period).

The fair value of the share options were estimated in March 2018 using a black scholes option pricing model, taking into account the terms and conditions upon which the share options are granted.

As per the management estimates, we have considered 3% per year to be the employee''s attrition rate, and other than for Mr. Kotapalli Ravoof Mohamed Imran in whose case, 100% vesting is considered.

NOTE - 6 Operating Lease

The Company has taken equipment under operating lease from IBM India Private Limited. The period of the lease is from 31 dec 2017 to 31 dec 2020( for a period of 3 years). The total Lease rental expense under operating leases during the lease period is Rs. 3,41,85,718.08 excluding GST. The lease rental charged during the year is Rs. 28,48,809.84 and maximum obligations on long-term operating lease payable as per the Lease rentals stated in respective agreement are as follows:

NOTE - 7

Provision for Gratuity:

Provision for Gratuity has been made during the year based on Actuarial Valuation Report of Gratuity liability as on 31st March 2018. The gratuity plan of the company is not funded. Out of Provision for Gratuity of Rs. 41,49,051/-, Rs. 14,23,070/- has been recognised in profit and loss account and balance related to previous years i.e. from 1st April 2012 to 31st March 2017 has been adjusted with balance of reserve and surplus.

All employees are entitled to Gratuity Benefits on exit from service due to retirement, resignation or death. There is a vesting period of 5 years on exits due to retirement or resignation.

NOTE - 8

Issue of Fully Paid up Bonus Shares:

Considering the contribution of each member to the success of the organization over the last decade, the management had decided to issue bonus shares to the existing members in the current year. Pursuant to the resolution passed in the Extra-Ordinary General Meeting held on 3rd February 2018 and in accordance with the provisions of Companies Act, 2013, the company has issued fully paid up bonus shares to the existing members in the ratio 30:1.

NOTE - 9 IPO EXPENSES AND EXPENSES FOR INCREASE IN AUTHORISED SHARE CAPITAL:

Expenditure of Rs. 16,52,814/- pertaining to listing of company''s shares has been carried in the balance sheet under prepaid expenses under short term loans and advances. The same will be reduced from securities premium in 2018-19 in the year of listing of company.

The management of the company decided that it will amortise Rs. 12,12,500/- of the expenses pertaining to increase in Authorised Share Capital from Reserves and surplus in the year 2017-18.

NOTE - 10

Previous year''s figures, wherever necessary, have been regrouped, reclassified and recast to make them comparable with those of current year.