Mar 31, 2018
To
The Members,
The Directors take pleasure in presenting their Twenty Fifth Annual Report and the audited Statement of Accounts, highlighting the business operations and financial results for the financial year ended March 31, 2018. Consolidated performance of the Company and its subsidiaries has been referred to wherever required.
1. FINANCIAL SUMMARY OR HIGHLIGHTS/ PERFORMANCE OF THE COMPANY:
The summarized standalone and consolidated results of your Company and its subsidiaries are given in the table below:
On the basis of standalone financial statements, the performance of the Company appears as follows:
(Amount Rs. in Lakhs) |
||
Particulars |
2017-2018 |
2016-2017 |
Revenue from Operations |
1038.91 |
934.49 |
Other Income |
24.41 |
131.71 |
Total Income |
1283.11 |
1066.21 |
Total Expenditure |
896.82 |
694.99 |
Profit before Interest and |
||
Depreciation |
545.18 |
448.18 |
Finance Cost |
103.89 |
39.83 |
Depreciation |
55.04 |
37.14 |
Profit before exceptional items |
386.29 |
371.21 |
and Tax |
||
Exceptional Item |
0.00 |
0.00 |
Profit/(Loss) Before Tax |
386.29 |
371.21 |
Deferred Tax Asset |
7.03 |
(2.36) |
Current Tax |
113.68 |
88.09 |
Less: Provision of MAT |
0 |
0 |
Net Profit/ (loss) after Tax |
265.57 |
285.48 |
On the basis of consolidated financial statements, the performance of the Company appears as follows:
(Amount Rs. in Lakhs)
Particulars |
2017-2018 |
2016-2017 |
Revenue from Operations |
1571.70 |
1899.99 |
Other Income |
245.10 |
132.07 |
Total Income |
1816.81 |
2032.07 |
Total Expenditure |
1626.11 |
1696.37 |
Profit before Interest and |
477.31 |
498.84 |
Depreciation |
||
Depreciation |
63.46 |
40.06 |
Finance Cost |
223.16 |
123.09 |
Profit before exceptional items and Tax |
190.69 |
335.69 |
Exceptional Item |
0.00 |
0.00 |
Profit/(Loss) Before Tax |
190.69 |
335.69 |
Deferred Tax Asset |
8.89 |
(3.00) |
Current Tax |
113.68 |
88.09 |
Less: Provision of MAT |
0 |
0 |
Net Profit/ (loss) after Tax |
68.12 |
250.60 |
2. BRIEF DESCRIPTION OF THE COMPANYâS WORKING DURING THE YEAR/STATE OF COMPANYâS AFFAIR:
During the year under review, the gross revenue of the Company increased to Rs.1038.91 Lakhs as compared to Rs.934.49 Lakhs in the previous year. The Profit after tax for the year was Rs. 265.57 Lakhs as compared to Rs. 285.48 Lakhs in the previous year.
3. CHANGE IN THE NATURE OF BUSINESS, IF ANY:
Consolidation of Clients, rationalization of market segments & expansion of Sales force will be the Focused approach in Financial Year 2018 - 2019 to achieve the targeted numbers. During the Financial Year 2018-2019. The plan is to profitably balance out and integrate Top line growth with reasonable bottom lines.
4. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
There are no Material changes and commitments affecting the financial position of the company.
5. FUTURE OUTLOOK:
Renewed thrust with a larger Sales force to tap the growing market during Q 2 , Q 3 & Q 4 will take up the Top line under stand alone to a level of Rs.1300.00 lakhs, up from the previous yearâs Rs.1038.91 Lakhs, an estimated growth of around 20 % YoY .
Standalone:
In the ISP segment, there is immense competition in both the twin states of Telangana State & Andhra Pradesh State. On one hand, Home grown and dominant localized State level A & B category ISPs are fighting for larger market shares with bigger brand presence & reach. On the other side, National TELCOs are also directly marketing all their Voice, Data & Video service offerings in the same markets. Margins are shrinking with incremental fixed costs. Fall in Internet Bandwidth buying prices is getting negated with higher demand from end consumers from the point of view of both quality & quantity of bandwidth, which poses a challenge in optimizing usage of Internet bandwidth management. State Governments on both sides are exploring the possibility of providing Free Wi-Fi in select Cities & principal towns. This may add to the existing fierce competition. Additionally, Reliance Jio is expected to play havoc in the market with their aggressive combo offerings and marketing campaigns. Against the above backdrop, Nettlinx has strategically positioned itself in a niche market segment comprising of larger reliance on SMEs, Educational Institutions & Business Broadband than relying on third party Cable Operators network as opposed to only the home broadband segment & whole sale bandwidth by most others. Under these circumstances, Nettlinx will be able to overcome competition and scale over all the hurdles and achieve the desired and budgeted financial numbers.
Consolidated:
Nettlinx Realty Private Limited:
With an objective of profitable diversification under the Nettlinx Holding Company, Nettlinx Realty Private Limited has chalked out ambitious plans as the real estate sector is booming across the principal cities in India and is poised to grow rapidly in the next few years. As a first step towards achieving this objective, The Company, several years back, has acquired a land at Gachibowli at Hyderabad. Additionally it has bought another land at Nagpur identifying its potential and to take advantage of Nagpur becoming a major multi modal cargo hub and this land is very close to the SEZ. The Company has initiated the process of considering possible tie up with leading Companies to jointly leverage this land bank for possible conversion into residential / commercial property development projects.
The initial investments on these two lands got appreciated manifold owing to huge demand and land rates going up north. In Both these specific locations where the land is situated, exponential residential apartments are coming up from multiple developers. We should be able to monetize over a period of 2 - 3 years as we are going to enter development agreements with leading Companies.
Nettlinx Aqua Culture Private Limited:
In the current millennium, intensification of aquaculture is the need of the hour to meet the ever growing demand in the country & overseas markets. The Government is focusing in meeting the domestic requirement and helping marine exports through aquaculture in the coming 10 years and aquaculture has a major role as well as responsibility to achieve this objective. Intensification of aquaculture necessitates system and species diversification, proper feed and feeding strategies, diseases monitoring and surveillance, application of modern biotechnological tools , maintenance of optimum soil and water health, efficient use of water resources and efficiently and productively relying on successful technologies and taking advantage of robust Logistic management systems . Its expected and proposed that all these action points and measures will culminate into better yield and maximizing profits for the Organization in the medium term. In view of this and take part in the growth story for future, The Company has bought land at Gogullanka Village, H/o Guttinadevi, I Polavaram Mandal, East Godavari District, Andhra Pradesh State.
SALION SE:
Salion SE is a subsidiary of Nettlinx Aquaculture Private Limited. It has acquired 95% of Salion SE of Germany.
Salion SE is an Management consultant company based out of Berlin, Germany. The Corporation manages more than Euro 1.70 Million investments. It has a specialized team which advises on M&A and financing of M&A transactions.
This strategic investment will help Nettlinx build a war chest for future acquisitions of High tech companies in the industrial space in Germany.
The Company derives advantage through this route on account of extended leverage it gets in a low interest country where in the current interest rates are lesser than 2% PA against the interest rates prevailing in India which hover around 10% PA.
Salion SE has excellent credit rating and presently can leverage this investment to the tune of around Euro 20 Million. For overseeing this new project, Mr. Abraham Joy will be on the supervisory board of Salion SE to take care of the overall operations along with his team.
NETTLINX INC:
Nettlinx Inc. is a 17-year-old US (registered office in NJ) corporation. We are into software consulting, network services, application development, and outsourcing and managed cloud services. Clients include big companies like IBM, Microsoft, Vanguard, HCL to name a few.
Currently, we are developing a micro ERP application framework. It is aimed at small businesses which do not need the complex structure that a full-fledged ERP provides. The target market small businesses which do not have the need or utilize their own IT department. Currently, it is in production with two pharmaceutical distributors.
SRI VENKATESWARA GREEN POWER PROJECTS LIMITED:
Sri Venkateswara Green Power Projects Limited (SVGPPL) was incorporated in the year 1999 to establish power projects in the non renewable energy sector. â12 MW Waste to Energy Power Plant based on RDFâ facility at Yacharam Village & Mandal, Ranga Reddy District, Telangana State, utilizing the MSW from GHMC.
SVGreen has entered into a Concession Agreement with GHMC on 10th November 2010 for the supply of 700 TPD Hyderabad MSW to the project site - Re Ratified vide G.O. No. 448 dated 26.07.2017. (MA&UD - Govt. of Telangana).
With all the required permissions in place, the present project envisages developing and implementing a viable and environmentally sustainable 12 MW Energy from Waste, which would scientifically process and dispose the MSW. The project facility covers processing and treatment of MSW, which includes:
- 700 TPD MSW receipt and processing plant
- 12 MW Waste to Energy Plant for combustible component
- Leachate collection and treatment system
- Inert management facility
The company has already acquired land admeasuring about 25 Acres in Yacharam Village, near Hyderabad. The project site is about 2kms. From SH-19, Nagarjuna sagar Highway, 55 km from City Center, 22 km from ORR.
- The project has received Consent for Establishment from State Pollution Control Board.
6. SUBSIDIARIES:
Company has Four wholly owned subsidiaries namely Nettlinx Inc., Nettlinx Realty Private Limited, Nettlinx Aquaculture Private Limited (formerly known as Nettlinx Channel Private Limited) and Salion SE(Subsidiary of Nettlinx Aquaculture Private Limited) and One Subsidiary namely SrI Vekateswara Green Power Projects Limited. There are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013 (âActâ).
On 14th February, 2017 The Board of Directors of the company has passed the resolution for amalgamation of Nettlinx Aquaculture Private Limited into Nettlinx Limited.
The details of financial performance of Subsidiary/ Joint Venture/Associate Company is furnished in Annexure-A.
7. RESERVES:
The Directors do not propose to transfer any amount to the General Reserves. Rs. 2,65,57,292/- has been transferred to the Reserves during the financial year 2017-18, being the surplus for the year end 31st March, 2018.
8. SHARE CAPITAL:
The Authorized Share Capital of the company is Rs. 30,00,00,000 divided into 3,00,00,000 equity shares of Rs. 10 (Rupees Ten Only) each.
The Issued, Subscribed and Paid up Capital of the Company as on March 31 , 201 8 is Rs. 11,46,33,120 divided into 1,14,63,312 equity shares of Rs.10 (Rupees Ten Only) each.
The company has issued and allotted 1795127 convertible share warrants.
A. BUY BACK OF SECURITIES:
The Company has not bought back any of its securities during the year under review.
B. SWEAT EQUITY:
The Company has not issued any Sweat Equity Shares during the year under review.
C. BONUS SHARES:
No Bonus Shares were issued during the year under review.
D. EMPLOYEES STOCK OPTION PLAN:
The Company has not provided any Stock Option Scheme to the employees.
9. DIVIDEND:
Due to conservation of Profits, your Board could not recommend any dividend for the financial year 2017-18.
10. DEPOSITS:
The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.
11. DIRECTORS AND KEY MANAGERIAL PERSONNEL: DIRECTORS:
In terms of the recently notified Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, consent of the Members by way of Special Resolution is required for continuation of a Non-Executive Director beyond the age of seventy five years.
The appointment of Mr. Kothuri Kameswara Rao, aged 75 years is required to be approved by members by way of Special Resolution to continue his term till 28th September, 2019.
The appointment of Dr. Erwin Leopold Dieck, aged 78 years also requires to be approved by members by way of Special Resolution to continue his term till 28th September, 2021
The Board recommends the resolution as set forth in item No. 4 and 5 of the notice for approval of the members. For the perusal of the shareholders, a brief resume of the Director being re-appointed along with necessary particulars are given in the Explanatory statement of the notice.
RE-APPOINTMENTS:
In accordance with the provisions of Companies Act, 2013, Mr.Chandra Sekhar Pogula, Whole Time Director cum CEO of the company would liable to retire by rotation and, being eligible, offer himself for re-appointment. The Board recommends his reappointment at the ensuing Annual general Meeting of the company.
RESIGNATIONS:
1. Mr. Abraham Joy (Holding DIN:01993517), NonExecutive Director has resigned as Director of the company with effect from 13.12.2017.
2. Mr. Vijay Kumar Maistry (Holding DIN:02060345), Independent Non-Executive Director has resigned as Director of the company with effect from 13.12.2017.
3. Mr. Rohith Loka Reddy (Holding DIN:06464331), Managing Director has resigned as Managing Director and Director of the company with effect from 10.08.2018.
Statement on the declaration given by the Independent Directors as per Section 149(6) of Companies Act, 2013:
The company has received necessary declarations from the Independent Directors under section 149(7) of Companies Act, 2013 , that they meet the criteria of independence as laid down under section 149 (6) of the Companies Act, 2013 and Regulation 25 of Securities And Exchange Board Of India (Listing Obligations And Disclosure Requirements) Regulations, 2015.
DETAILS OF KEY MANAGERIAL PERSONNEL (KMP):
Pursuant to the provisions of section 203 of the Act, the key managerial personnel of the Company are -Mr.Rohith Loka Reddy, Managing Director,Mr. Chandra Sekhar Pogula, Chief Executive Officer and Whole Time Director, Mr. S. Mahaganesh, Chief Financial Officer and Mr. Sai Ram Gandikota, Company Secretary.
NUMBER OF MEETINGS OF THE BOARD:
Five meetings of the board were held during the year. For details of the meetings of the board, please refer to the corporate governance report, which forms part of this report.
One Extraordinary General Meetings of the company was held on 22.03.2018.
Meeting of Independent Directors of the company was held on 09.02.2018.
The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.
Board evaluation:
The board of directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 (âSEBI Listing Regulationsâ).
The performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of the criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc.
The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.
The board and the nomination and remuneration committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the chairman was also evaluated on the key aspects of his role.
In a separate meeting of independent directors, performance of non-independent directors, performance of the board as a whole and performance of the chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent directors, at which the performance of the board, its committees and individual directors was also discussed. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.
POLICY ON DIRECTORSâ APPOINTMENT AND REMUNERATION AND OTHER DETAILS:
The Companyâs policy on directorsâ appointment and remuneration and other matters provided in section 178(3) of the Act has been disclosed in the corporate governance report, which forms part of this report.
12. DIRECTORSâ RESPONSIBILITY STATEMENT:
In pursuance of Section 134(5) of the Companies Act, 2013, your directors confirm:
(a) That the directors in the preparation of the annual accounts the applicable accounting standards have been followed along with proper explanations relating to material departures.
(b) That the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the Company for that period.
(c) That the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safe guarding the assets of the company and for preventing and deleting fraud and other irregularities.
(d) That the directors had prepared the annual accounts on the going concern basis.
(e) That the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
(f) That the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
13. AUDITORS AND AUDITORâS REPORT: STATUTORY AUDITORS:
M/s. C.Ramachandram & Co, Chartered Accountants (Firm Registration No. 002864S) allotted by The Institute of Chartered Accountants of India (ICAI) was appointed as Auditors of the company for a term of consecutive five years at the 24th Annual General Meeting held on 27th September, 2017.
They have confirmed that they are not disqualified from continuing as auditors of the company.
The notes on financial statements referred to in the Auditorâs report are self-explanatory and do not call for any further comments. The auditorâs report does not contain any qualification, reservation, adverse remark or disclaimer.
SECRETARIAL AUDITORS:
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s VCSR & Associates, Company Secretaries, to carry out Secretarial Audit for the financial year 2017-2018.
SECRETARIAL AUDITORSâ REPORT:
The auditorsâ report and secretarial auditorsâ report does not contain any qualifications, reservations or adverse remarks. The Secretarial Audit report is annexed herewith as â(Annexure B)â & â(Annexure B1)â. The report is self-explanatory and do not call for any further comments.
AUDITORS CERTIFICATE ON CORPORATE GOVERNANCE:
As required by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 (âSEBI Listing Regulationsâ) the Auditorâs Certificate on Corporate Governance is enclosed as Annexure-C to the Boardâs Report. The Auditors certificate for Financial Year 2017-2018 does not contain any qualifications, reservations or adverse remarks.
14. EXTRACT OF ANNUAL RETURN:
As provided under section 92(3) of the Act, the extract of annual return is given in Annexure- D in the prescribed Form MGT-9, which forms part of this report.
15. PARTICULARS OF EMPLOYEES:
a) The information required under section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure-E to this report.
b) Pursuant to Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, during the Year under review, None of the employees of the company employed throughout the financial year, was in receipt of remuneration for that year which, in the aggregate, was not less than sixty lakh rupees; None of the employees of the company employed for a part of the financial year, was in receipt of remuneration for any part of that year, at a rate which, in the aggregate, was not less than five lakh rupees per month; None of the employees of the company employed throughout the financial year or part thereof, was in receipt of remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the managing director or wholetime director or manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company.
16. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS:
The Corporate Governance and Management Discussion & Analysis Report, which form an integral part of this Report, are set out as Annexure-F and Annexure-G respectively together with the Certificate from the auditors of the Company regarding compliance with the requirements of Corporate Governance as per SEBI Listing Regulations.
17. TRANSACTIONS WITH RELATED PARTIES:
All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an armâs length basis.
There are no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc, which may have potential conflict with the interest of the Company at large. Hence no disclosure in Form AOC-2 is required. All related party transactions are presented to the Audit Committee and the Board for its approval.
The Related Party Transaction Policy has been devised by your company for determining the materiality of transactions with related parties and dealings with them.
18. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The details in respect of internal financial control and their adequacy are included in the management discussion & analysis, which forms part of this report.
19. AUDIT COMMITTEE:
The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report.
20. VIGIL MECHANISM:
In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company at www.nettlinx.com
21. RISK MANAGEMENT:
The board of directors of the Company has formed a risk management committee to frame, implement and monitor the risk management plan for the Company. The committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The audit committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.
The development and implementation of risk management policy has been covered in the management discussion and analysis, which forms part of this report.
22. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYâS OPERATIONS IN FUTURE:
No significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status and Companyâs operations in future.
23. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186:
The particulars of loans, guarantees or investments made under section 186 of the Companies Act 2013 are covered in the notes of the Financial Statement for the year ended 31st March, 2018.
24. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees are covered under this policy.
The following is the summary of sexual harassment complaints received and disposed during the calendar year.
- No. of complaints received: Nil
- No. of complaints disposed off: Nil
25. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
(A) Conservation of Energy:
The operations of the company involve low energy consumption. However adequate measures have been taken to conserve energy wherever practicable.
(B) Technology Absorption:
The company continues to use the latest technologies for improving the quality of its operations. Provision of state of the Art communication facilities to all software development centers and total technology solutions to its clients contribute to technology absorption and innovation.
(C) 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 is as follows:
Foreign Exchange Inflows : 3,65,34,328 /-
Foreign Exchange Outflows: Rs. 1,21,231 /-
26. CORPORATE SOCIAL RESPONSIBILITY (CSR):
Even though the provisions of Companies Act, 2013 regarding Corporate Social Responsibility are not attracted to the company, yet the Company has been, over the years, pursuing as part of its corporate philosophy, an unwritten CSR policy voluntarily which goes much beyond mere philanthropic gestures and integrates interest, welfare and aspirations of the community with those of the Company itself in an environment of partnership for inclusive development.
27. HEALTH AND SAFETY/ INDUSTRIAL RELATIONS:
The company continues to accord high priority to health and safety of employees at manufacturing locations. During the year under review, the company conducted safety training programmes for increasing disaster preparedness and awareness among all employees at the plants. Training programmes and mock drills for safety awareness were also conducted for all employees at the plants. Safety Day was observed with safety competition programmes with aim to imbibe safety awareness among the employees at the plant.
During the year under review, your Company enjoyed cordial relationship with workers and employees at all levels.
28. LISTING WITH STOCK EXCHANGES:
The Company confirms that it has paid the Annual Listing Fees for the year 2017-2018 to BSE and MSEI where the Companyâs Shares are listed.
29. PREVENTION OF INSIDER TRADING:
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company, during the period (the Trading Window is closed). The Board is responsible for implementation of the Code.
All Board Directors and the designated employees have confirmed compliance with the Code.
30. ACKNOWLEDGEMENTS:
Your Directors wish to place on record their appreciation of the contribution made by the employees at all levels, to the continued growth and prosperity of your Company.
Your Directors also wish to place on record their appreciation of business constituents, banks and other financial institutions and shareholders, of the Company for their continued support.
By order of the Board of Directors
For Nettlinx Limited
Sd/-
Date: 10.08.2018 Dr. Manohar Loka Reddy
Place: Hyderabad Chairman
DIN:00140229
Mar 31, 2016
The Members,
The directors submit 23rd annual report of Nettlinx Limited (the "Companyâ or "Nettlinxâ) along with the audited financial statements for the financial year (FY) ended March 31, 2016. Consolidated performance of the Company and its subsidiaries has been referred to wherever required.
1. FINANCIAL SUMMARY OR HIGHLIGHTS/PERFORMANCE OF THE COMPANY :
(Amount Rs. in Lakhs)
Particulars |
2015-2016 |
2014-2015 |
Revenue from Operations |
682.25 |
563.71 |
Other Income |
84.32 |
86.07 |
Total Income |
766.57 |
649.78 |
Expenditure |
608.63 |
582.90 |
Depreciation |
34.91 |
37.83 |
Profit before exceptional items and Tax |
123.03 |
29.04 |
Exceptional Item |
0.00 |
0.00 |
Profit/(Loss) Before Tax |
123.03 |
29.04 |
Deferred Tax Asset |
1.60 |
2.56 |
Current Tax |
25.08 |
5.53 |
Less: Provision of MAT |
(22.90) |
(5.53) |
Net Profit/ (loss) after Tax |
122.45 |
31.60 |
2. BRIEF DESCRIPTION OF THE COMPANY''S WORKING DURING THE YEAR/STATE OF COMPANY''S AFFAIR:
During the year under review, the gross revenue of the Company increased to Rs.766.57 Lakhs as compared to Rs.649.78 in the previous year. The Profit after tax for the year was Rs.122.45 Lakhs as compared to Rs.31.60 Lakhs in the previous year.
3. CHANGE IN THE NATURE OF BUSINESS, IF ANY:
Consolidation of Clients, rationalization of market segments & expansion of Sales force will be the Focused approach in Financial Year 2016 - 2017 to achieve the targeted numbers. During the Financial Year 2016 - 2017, the plan is to profitably balance out and integrate Top line growth with reasonable bottom lines.
4. Material Changes and Commitments, if any, affecting the Financial Position of the Company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report
There are no Material changes and commitments affecting the financial position of the company.
5. FUTURE OUTLOOK:
Renewed thrust with a larger Sales force to tap the growing market during Q 2 , Q 3 & Q 4 will take up the Top line under standalone to a level of Rs.900 lakhs, up from the previous year''s Rs.766.63 lakhs an estimated growth of around 24 % YoY .
Aggressive Sales efforts on the domestic hosting business to boost the bottom lines , as the objective is to put the existing blade servers to optimal utilization. With a productive and efficient management of both ISP business & Domestic hosting , the Company is targeting a bottom line of Rs.2.00 Crores by the end of March 2017.
Standalone
In the ISP segment , There is immense competition in both the twin states of Telangana State & AP State .
On one hand , Home grown and dominant localized State level A & B category ISPs are fighting for larger market shares with bigger brand presence & reach. On the other side, National TELCOs are also directly marketing all their Voice, Data & Video service offerings in the same markets. Margins are shrinking with incremental fixed costs. Fall in Internet Bandwith buying prices is getting negated with higher demand from end consumers from the point of view of both quality & quantity of bandwidth, which poses a challenge in optimizing usage of Internet bandwidth. State Govts on both sides are exploring the possibility of providing Free Wi-Fi in select Cities & principal towns. This may add to the existing fierce competition. Additionally , Reliance Jio Communications is expected to play havoc in the market with their aggressive combo offerings and marketing campaigns. Against the above backdrop, Nettlinx has strategically positioned itself in a niche market segment comprising of larger reliance on SMEs, Educational Institutions & Business Broadband than relying on third party Cable Operators network as opposed to only the home broadband segment & whole sale bandwidth by most others. Under these circumstances, Nettlinx will be able to overcome competition and scale over all the hurdles and achieve the desired and budgeted financial numbers.
Consolidated:
Nettlinx Realty Private Limited:
With an objective of profitable diversification under the Nettlinx Holding Company, Nettlinx Realty Private Limited has chalked out ambitious plans as the real estate sector is booming across the principal cities in India and is poised to grow rapidly in the next few years. As a first step towards achieving this objective, The Company, several years back, has acquired a land at GachiBowli at Hyderabad. Additionally it has bought another land at Nagpur identifying its potential and to take advantage of Nagpur becoming a major multi modal cargo hub and this land is very close to the SEZ. The Company has initiated the process of considering possible tie up with leading Companies to jointly leverage this land bank for possible conversion into residential / commercial property development projects.
The initial investments on these two lands got appreciated manifold owing to huge demand and land rates going up north. In Both of these specific locations where the land is situated , exponential residential apartments are coming up from multiple developers.
Nettlinx Aqua Culture Private Limited:
In the current millennium, intensification of aquaculture is the need of the hour to meet the ever growing demand in the country & overseas markets. The Government is focusing in meeting the domestic requirement and helping marine exports through aquaculture in the coming 10 years and aquaculture has a major role as well as responsibility to achieve this objective. Intensification of aquaculture necessitates system and species diversification, proper feed and feeding strategies, diseases monitoring and surveillance, application of modern biotechnological tools , maintenance of optimum soil and water health, efficient use of water resources and efficiently and productively relying on successful technologies and taking advantage of robust Logistic management systems . Its expected and proposed that all these action points and measures will culminate into better yield and maximizing profits for the Organization in the medium term. In view of this and atke part in the growth story for future, The Company has bought land at Gogullanka Village, H/o Guttinadevi, I Polavaram Mandal, East Godavari District, AP State.
6. SUBSIDIARIES:
Company has three wholly owned subsidiaries namely Nettlinx Inc., Nettlinx Realty Private Limited and Nettlinx Aquaculture Private Limited (formerly known as Nettlinx Channel Private Limited). There are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013 (âActâ). Further there has been no material change in the nature of business of the subsidiaries.
7. RESERVES:
Rs..1,22,45,616 has been transferred to the Reserves during the financial year 2015-16, being the surplus for the year ended 31st March, 2016.
8. SHARE CAPITAL:
During the year under review, there is no change in the Share Capital of the Company. However, the board of Directors of the company has passed the resolution for increase of authorized capital from Rs.20,00,00,000 to Rs.30,00,00,000 in view of further requirement of funds for the company. The Authorized Share Capital of the company is Rs.20,00,00,000 divided into 2,00,00,000 equity shares of Rs.10 (Rupees Ten Only) each. The Issued, Subscribed and Paid up Capital of the Company as on March 31, 2016 is Rs.11,46,33,120 divided into 1,14,63,312 equity shares of Rs.10 (Rupees Ten Only) each.
9. DIVIDEND:
In view of inadequate profits, your Board could not recommend any dividend for the financial year 2015-16.
10. DEPOSITS:
The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet..
11. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
DIRECTORS:
INDUCTIONS:
The Board has made following appointments/ reappointments based on the recommendations of Nomination and remuneration Committee:
1. Apponitment of Mr.Rohith Loka Reddy as managing Director of the company with effective from 11.08.2016.
2. Appointment of Mr. Subramanyeswara rao Kakarala and Mr. Kakarla Kiran Venkatasiva as Additional and Independent Non-Executive Director of the company with effective from 11.08.2016.
The Board recommends the resolution as set forth in item No.4,5,6 of the notice for approval of the members. For the perusal of the shareholders, a brief resume of the Director being re-appointed along with necessary particulars are given in the Explanatory statement of the notice.
The Board based on the recommendations of Nomination and remuneration Committee, also appointed:
- Mr.S.Mahaganesh as Chief Financial Officer of the company with effective from 27th May, 2015.
- Mr.Emani Venkat Reddy as Company Secretary with effective from 01st August, 2015.
- Mr.Sai Ram Gandikota as Company Secretary with effective from 07th November, 2015 in place of Mr.Emani Venkat Reddy who has resigned from the office of Company secretary with effective from 06.11.2015.
Further, The Board had appointed Mr.Sai Ram Gandikota as compliance Officer for the SEBI Listing Regulations.
RE-APPOINTMENTS:
In accordance with the provisions of Companies Act, 2013, Dr. Manohar Loka Reddy, Chairman, Non-Executive Director of the Company would retire by rotation and, being eligible, offer himself for re-appointment. The Board recommends his reappointment.
RESIGNATIONS:
Mr.Emani Venkat Reddy has resigned from the office of Company secretary with effective from 06.11.2015. The Board places on record its appreciation for the services rendered by him during his tenure with the company.
Statement on the declaration given by the Independent Directors as per Section 149(6) of Companies Act, 2013:
The company has received necessary declarations from the Independent Directors under section 149(7) of Companies Act, 2013 , that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and Regulation 25 of Securities And Exchange Board Of India (Listing Obligations And Disclosure Requirements) Regulations, 2015.
DETAILS OF KEY MANAGERIAL PERSONAL (KMP):
Pursuant to the provisions of section 203 of the Act, the key managerial personnel of the Company are: Mr.Chandra Sekhar Pogula, Chief Executive Officer & Whole Time Director, Mr. S.Mahaganesh, Chief Financial Officer and Mr. Sai Ram Gandikota, Company Secretary.
NUMBER OF MEETINGS OF THE BOARD:
Six meetings of the board were held during the year. For details of the meetings of the board, please refer to the corporate governance report, which forms part of this report.
The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.
Board evaluation:
The board of directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 ("SEBI Listing Regulationsâ).
The performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of the criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc.
The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.
The board and the nomination and remuneration committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the chairman was also evaluated on the key aspects of his role.
In a separate meeting of independent directors, performance of non-independent directors, performance of the board as a whole and performance of the chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent directors, at which the performance of the board, its committees and individual directors was also discussed. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.
POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION AND OTHER DETAILS:
The Company''s policy on directors'' appointment and remuneration and other matters provided in section 178(3) of the Act has been disclosed in the corporate governance report, which forms part of this report.
12. DIRECTORS'' RESPONSIBILITY STATEMENT:
In pursuance of Section 134(5) of the Companies Act, 2013, your directors confirm:
(a) That the directors in the preparation of the annual accounts the applicable accounting standards have been followed along with proper explanations relating to material departures.
(b) That the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the Company for that period.
(c) That the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safe guarding the assets of the company and for preventing and deleting fraud and other irregularities.
(d) That the directors had prepared the annual accounts on the going concern basis.
(e) That the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
(f) That the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
13. AUDITORS:
Statutory Auditors:
At the Annual General Meeting held on 29th September, 2014 M/s Deva & Co, Chartered Accountants, Hyderabad, were appointed as Statutory Auditors of the Company for a period of three (3) years from the conclusion of the 21st AGM to the conclusion of 24th AGM, to be held in the calendar year 2017. In terms of First proviso to section 139(1) of the Companies Act, 2013, the appointment of Auditors shall be placed for ratification at every AGM . Accordingly, the appointment of M/s. Deva & Co as Statutory Auditors placed for ratification by the shareholders.
SECRETARIAL AUDITOR:
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed Mr. Ch. Veeranjaneyulu as Secreterial Auditor who is a partner of M/s VCSR & Associates, Company Secretaries in Whole-time Practice, to carry out Secretarial Audit for the financial year 2015-2016.
AUDITORS'' REPORT AND SECRETARIAL AUDITORS'' REPORT:
The auditors'' report and secretarial auditors'' report does not contain any qualifications, reservations or adverse remarks. The Secretarial Audit report is annexed herewith as "(Annexure A)â & "(Annexure A1)â. The report is self-explanatory and do not call for any further comments.
AUDITORS CERTIFICATE ON CORPORATE GOVERNANCE:
As required by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 ("SEBI Listing Regulationsâ) the Auditor''s Certificate on Corporate Governance is enclosed as Annexure-B to the Board''s Report. The Auditors certificate for Financial Year 2015-2016 does not contain any qualifications, reservatios or adverse remark.
14. EXTRACT OF ANNUAL RETURN:
As provided under section 92(3) of the Act, the extract of annual return is given in Annexure- C in the prescribed Form MGT-9, which forms part of this report.
15. PARTICULARS OF EMPLOYEES:
a) The information required under section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure-D to this report.
b) Pursuant to Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, during the Year under review, None of the employees of the company employed throughout the financial year, was in receipt of remuneration for that year which, in the aggregate, was not less than sixty lakh rupees; None of the employees of the company employed for a part of the financial year, was in receipt of remuneration for any part of that year, at a rate which, in the aggregate, was not less than five lakh rupees per month; None of the employees of the company employed throughout the financial year or part thereof, was in receipt of remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the managing director or whole-time director or manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company.
16. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS:
The Corporate Governance and Management Discussion & Analysis Report, which form an integral part of this Report, are set out as Annexure-E and Annexure-F respectively together with the Certificate from the auditors of the Company regarding compliance with the requirements of Corporate Governance as per SEBI Listing Regulations.
17. TRANSACTIONS WITH RELATED PARTIES:
All Related party transactions done by the company during the Financial Year were at Arm''s Length and in ordinary course of business. All related party transactions were placed in the meetings of Audit committee and or the Board of Directors for Approvals. During the Financial year, your company has not entered into any material transaction with any of its related parties except with its subsidiaries / associates which might be deemed to have had a potential material conflict with the interest of the company. Disclosures on related party transactions have been made in the notes to the Financial Statements. As all the transactions with related parties are on arm''s length basis and in the ordinary course of Business the particulars of contracts or arrangements with related parties under section 188 in form AOC_2 is not enclosed herewith.
18. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The details in respect of internal financial control and their adequacy are included in the management discussion & analysis, which forms part of this report.
19. AUDIT COMMITTEE:
The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report.
20. VIGIL MECHANISM:
In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company at www.nettlinx.com
21. RISK MANAGEMENT:
The board of directors of the Company has formed a risk management committee to frame, implement and monitor the risk management plan for the Company. The committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The audit committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.
The development and implementation of risk management policy has been covered in the management discussion and analysis, which forms part of this report.
22. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY''S OPERATIONS IN FUTURE:
No significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status and Company''s operations in future.
23. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186:
The particulars of loans, guarantees and investments have been disclosed in the financial statements.
24. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION. PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees are covered under this policy.
The following is the summary of sexual harassment complaints received and disposed during the calendar year.
- No. of complaints received: Nil
- No. of complaints disposed off: Nil
25. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
(A) Conservation Of Energy:
The operations of the company involve low energy consumption. However adequate measures have been taken to conserve energy wherever practicable.
(B) Technology absorption, adaptation and innovation:
The company continues to use the latest technologies for improving the quality of its operations. Provision of state of the Art communication facilities to al software development centers and total technology solutions to its clients contribute to technology absorption and innovation.
(C) 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 is as follows:
Foreign Exchange Inflows : Nil
Foreign Exchange Outflows : Nil
26. CORPORATE SOCIAL RESPONSIBILITY (CSR):
Even though the provisions of Companies Act,
2013 regarding Corporate Social Responsibility are not attracted to the company, yet the Company has been, over the years, pursuing as part of its corporate philosophy, an unwritten CSR policy voluntarily which goes much beyond mere philanthropic gestures and integrates interest, welfare and aspirations of the community with those of the Company itself in an environment of partnership for inclusive development.
27. HEALTH AND SAFETY/ INDUSTRIAL RELATIONS:
The company continues to accord high priority to health and safety of employees at manufacturing locations. During the year under review, the company conducted safety training programmes for increasing disaster preparedness and awareness among all employees at the plants. Training programmes and mock drills for safety awareness were also conducted for all employees at the plants. Safety Day was observed with safety competition programmes with aim to imbibe safety awareness among the employees at the plant.
During the year under review, your Company enjoyed cordial relationship with workers and employees at all levels.
28. ADDITIONAL INFORMATION:
Information pursuant to Section 134 (3) (l) & (m) of the Companies Act, 2013 which is included as a part of corporate Governance report.
29 LISTING WITH STOCK EXCHANGES:
The Company confirms that it has paid the Annual Listing Fees for the year 2015-2016 to BSE and MSEI where the Company''s Shares are listed.
30. ACKNOWLEDGEMENTS:
Your Directors wish to place on record their appreciation of the contribution made by the employees at all levels, to the continued growth and prosperity of your Company.
Your Directors also wish to place on record their appreciation of business constituents, banks and other financial institutions and shareholders, of the Company for their continued support.
By the order of the Board of Directors
For Nettlinx Limited
Sd/-
Date : 11.08.2016 Dr. Manohar Loka Reddy
Place : Hyderabad Chairman
DIN:00140229
Mar 31, 2014
Dear Members,
The Directors have pleasure in presenting their 21st Annual Report on
the business and operations of your Company for the financial year
ended March 31, 2014.
1. FINANCIAL RESULTS
The financial performance of the Company for the financial year ended
March 31, 2014 is summarized below:
Rs in lakhs
Particulars For the For the
Year ended year ended
31.03.2014 31.03.2013
Income from
operations 682.78 553.24
And other income
Total Expenditure 616.00 490.80
Interest 14.23 32.34
Depreciation 48.52 54.67
Profit / (Loss) 3.19 (24.57)
Before Taxation
Mat Tax Credit 0.6
Current Tax
Deferred Tax Asset 5.35 4.32
Profit / (Loss) after Tax 8.55 (19.73)
2. OPERATIONS OF THE COMPANY
The Turnover of the company for 2013-2014 was Rs 500.45 (operations)
compared to Rs 466 lakhs (Operations) of the previous year, a growth of
7.36%. The profit after tax of Rs 8.55 for the year under review is
against a net loss of Rs 24.57 lakhs in the previous year ended 31st
March 2013.
Overall performance, based on the consolidated accounts of your company
has registered a nett loss of Rs (19.28) lakhs against of net profit of
58.33 lakhs in the previous year ended 31st March 2013.
3. SHARE CAPITAL :
During the year under review the Authorised Share Capital of the
Company is Rs 20,00,00,000/ -.The Issued, Subscribed and Paid up Share
Capital of the Company as on March 31, 2014 is Rs114,633,120/- divided
into 11,463,312 equity shares of Rs 10/- (Rupees Ten) each.
4. DIVIDEND:
As there are no adequate profits in this financial year, hence no
dividend is recommended.
5. TRANSFER TO RESERVES:
The Company proposes not to transfer any amount to Reserves.
6. DIRECTORS :
Approval of the shareholders is being sought for re-appointment of Dr.
Manohar Loka Reddy, who retires by rotation at forthcoming Annual
General Meeting of the Company and being eligible, offer themselves for
reappointment in accordance with the Articles of Association and
Companies Act, 2013.
The Company has, pursuant to the provisions of Clause 49 of the Listing
Agreements entered into with Stock Exchange appointed Sri K. Kameswara
Rao, Sri J.V. Hanumanth Rao, Sri. M. Vijay Kumar and Sri. M. Appa Rao
as Independent Directors of the Company. The Company has received
declarations from all the Independent Directors of the Company
confirming that they meet with the criteria of independence as
prescribed both under sub- section (6) of Section 149 of the Companies
Act, 2013 and under Clause 49. In accordance with the provisions of
Section 149(4) and proviso to Section 152(5) of the Companies Act,
2013, these Directors are being appointed as Independent Directors to
hold office as per their tenure of appointment mentioned in the Notice
of the forthcoming AGM of the Company.
During the year under review, the Board proposed to re-designate Sri
Chandra Sekhar Pogula, as CEO wef November 1, 2013, till his remaining
tenure of appointment. Further the Board also proposes to approve
increase the total remuneration from Rs 15,75,000 (Rupees Fifteen Lakhs
Seventy Five Thousand only) per annum to Rs 24,00,000 (Rupees Twenty
Four Lacs) per annum. The Board recommends this resolution to be passed
as special resolution.
7. STATUTORY AUDITORS :
The Statutory Auditors of the Company M/s Deva & Co, Chartered
Accountants, Hyderabad, retire at this AGM, have signified their
willingness for their re-appointment and have confirmed their
eligibility under section 139(1) of the Companies Act, 2013. Members
are requested to re-appoint them for a period of thr ee years and to
authorize the Board to fix their remuneration.
8. COST AUDITORS
Mr. PLN Sarma, Cost Accountants, Hyderabad have been appointed as Cost
Auditors of the Company to conduct Audit of Cost Accounts records to be
maintained by the Company for the year ended 31.03.2015.
9. REPLIES TO AUDITORS'' REPORT:
The obser-vations of the auditors are explained, wherever necessary, in
appropriate notes to the accounts
10. LISTING :
Details of Listing are annexed to the Corporate Governance Report.
Listing at Stock Exchanges:
The Equity Shares of the company are listed on Bombay Stock Exchange
Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001.
Listing fees to the Bombay Stock Exchange Limited has been paid
up-to-date.
11. REQUIREMENTS UNDER CLAUSE 49 OF LISTING AGREEMENT
Corporate Governance :
The Company has been in full compliance with the norms of Corporate
Governance as outlined in Clause 49 of the Listing Agreement with the
Bombay Stock Exchange, Mumbai. A separate report on Corporate
Governance is produced as a part of the Annual Report along with the
Auditor''s Certificate on its compliance.
Management''s Discussion And Analysis : As required by Clause 49 of the
Listing Agreement with the Stock Exchanges, the Management''s discussion
and Analysis Report is enclosed as a part of this Report as
Annexure -I
12. DIRECTORS'' RESPONSIBILITY STATEMENT
In compliance of section 217 (2AA), as incorporated by the Companies
(Amendment) Act, 2000, in the Companies Act, 1956, your directors
confirm: -
a) That in the preparation of the accounts for the financial year ended
31st March, 2014 the applicable accounting standards have been followed
along with proper explanation relating to material departures;
b) That the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that were
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
profit or loss of the company for the year under review;
c) That the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the companies Act, 1956 for safeguarding the assets of
the company and for preventing and detecting fraud and other
irregularities and
d) That the Directors have prepared the accounts for the financial year
ended 31st March 2014 on a going concern basis.
13. FIXED DEPOSITS :
Your Company has not raised any Fixed Deposits as on 31st March, 2014
so as to attract the provisions of Section 58A of the Companies Act,
1956, read with the Companies (Acceptance of Deposits) Rules, 1975 as
amended from time to time.
There is no amount outstanding or due to any deposit holder
14. INTERNAL CONTROL SYSTEMS
Your Company has well established procedures for internal control
commensurate with its size and operations. The internal audit function
is adequately resourced commensurate with the operations of the Company
and reports to the Audit Committee of the Board.
15. SUBSIDIARIES :
Company has three wholly owned subsidiaries namely Nettlinx Inc.,
Nettlinx Realty Private Limited, Nettlinx Aquaculture Private Limited
(formely Nettlinx Chanel Private Limited) and as at 28th March, 2014
Nettlinx Limited has sold 100% stake in its subsidiary company Host
Department LLC.
Pursuant to the provision of Section 212(8) of the Act, the Ministry of
Corporate Affairs vide its circular dated February 8, 2011 has granted
general exemption from attaching the Balance Sheet, Profit and Loss
Account and other documents of the subsidiary companies with the Annual
Report of the parent Company. Accordingly the Company has availed the
exemption from attaching the Balance Sheet, Profit and Loss Account and
other documents of the subsidiary Companies.
A statement containing brief financial details of the subsidiaries for
the financial year ended March 31, 2014 is annexed. The annual accounts
of these subsidiaries and the related detailed information will be made
available to any member of the Company/its subsidiaries seeking such
information at any point of time and are also available for inspection
by any member of the Company/its subsidiaries at the registered office
of the Company. The annual accounts of the subsidiaries will also be
available for inspection, as above, at registered office of the
respective subsidiary companies.
16. STATUTORY INFORMATION
During the year under review, there were no employees drawing
remuneration in excess of the limits laid down in section 217(2A) of
the Companies Act, 1956 read with (Particulars of Employees)
Rules,1975.
The Directors are pleased to record their sincere appreciation of the
contribution by the staff.
17. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE EARNINGS AND OUTGO
Details of Energy Conservation, Research & Development, Technology
Absorption, Foreign Exchange Earnings and Outgo as required under
section 217(1)(e) of the Companies Act, 1956 read with the Companies
(Disclosure of Particulars in the Report of Board of Directors'')
Rules, 1988, are given in Annexure III, to the Directors Report.
18. EMPLOYEE STOCK OPTION PLANS
Company has earlier offered Stock Options under Nettlinx Stock Option
Plan 2007 aggregating to 800000 (Eight Lakhs only) Equity Shares of
face value Rs 10.00 each . Out of which , initially 5,75,000 options at
a price of Rs 11.20 were offered with 50 % vesting at end of year 1 and
year 2 respectively. Balance 2, 25,000 stock options were outstanding.
However , owing to market conditions and preference of the employees,
no one vested any shares even after 5 years cut off time from the year
of issuance 2007-08. Under the circumstances Stock Option Plan 2007
aggregating to a total of 800000 Shares stands void and cancelled as at
end 31.03.2104. Should there be a new Employee Stock Option Plan in
future, The company may spell out a new ESOP scheme accordingly after
obtaining necessary approvals.
19. AUDIT COMMITTEE:
The Company has constituted an Audit Committee, pursuant to the
provisions of Companies Act, 1956 and listing agreement requirements.
The roles, powers, independence and competency of the audit committee
and other details are given under the Corporate Governance Report.
ACKNOWLEDGEMENTS:
Your Directors place on record their sincere appreciation for the
services of the Department of Telecommunications (DOT), Bankers and the
Software Technology Park of India (STPI). Your Directors also place on
record their sincere appreciation and gratitude for the valuable
assistance, support and co-operation from the Company''s Customers,
Employees and shareholders during the period under review,
for and on behalf of the Board
Sd/-
(Dr. Manohar Loka Reddy)
Chairman
DIN: 00140229
Date : 06-08-2014
Place : Hyderabad
Mar 31, 2012
To The Members M/s. Nettlinx Limited
The Directors present the 19th Annual Report together with the Audited
Statements of Account for the year ended 31st March 2012.
FINANCIAL RESULTS
Rs.in lakhs
Particulars For the For the
Year ended year ended
31.03.2012 31.03.2011
Income from operations 503.13 584.32
and other income
Total Expenditure 474.25 677.94
Interest 47.93 59.77
Depreciation 55.58 67.19
Profit / (Loss) (74.64) (220.58)
Before Taxation
Current Tax 0.00 0.00
Deferred Tax Asset 4.32 6.62
Profit / (Loss) after Tax (70.32) (213.95)
MANAGEMENT'S DISCUSSION AND ANALYSIS
As required by Clause 49 of the Listing Agreement with the Stock
Exchanges, the Management's discussion and Analysis Report is enclosed
as a part of this Report as Annexure - I
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the
Company's Articles of Association, Dr. Loka Narayan Reddy, Mr. Manohar
Loka Reddy and Mr. K. Kameswara Rao retire by rotation at this Annual
General Meeting and being eligible offer themselves for reappointment.
During the year, Sri. M. Suresh Kumar Reddy has resigned and Board
wishes to place on record their appreciation for the services rendered
by him during his tenure as Director of the Company respectively.
During the year, Sri. V. Harish Kumar has resigned and Board wishes to
place on record their appreciation for the services rendered by him
during his tenure as Director of the Company respectively.
DIRECTORS RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 217(2AA)
OF THE COMPANIES ACT, 1956:
In compliance of section 217 (2AA), as incorporated by the Companies
(Amendment) Act, 2000, in the Companies Act, 1956, your directors
confirm: -
a) That in the preparation of the accounts for the financial year ended
31st March, 2012 the applicable accounting standards have been followed
along with proper explanation relating to material departures;
b) That the Directors have selected such accounting policies and
applied them consistently and made judgments and estimatr the financial
year ended 31st March 2012 on a going concern basis.
SUBSIDIARIES
Company has invested in 100% of the paid up capital of Nettlinx Inc.,
Nettlinx Realty Pvt. Ltd., Nettlinx Channel Pvt. Ltd., Host Department
LLC, Consolidated Financial performance has been given separately.
CORPORATE GOVERNANCE
Your Directors' affirm their commitment to the Corporate Governance
Standards prescribed by the Securities and Exchange Board of India
(SEBI). A report on Corporate Governance with Management Discussion and
Analysis as required under Clause 49 of the Listing Agreement is
Annexed to this report and marked as Annexure - II.
Audit Committee has been reconstituted with the following members.
1. Sri K. Kameswara Rao, Chairman
2. Sri J.V. Hanumanth Rao
3. Sri Vijay Kumar Maistry
FIXED DEPOSITS
Your Company has not accepted any deposits and, as such, no amount of
principal or interest was outstanding as at the close of the Financial
Year.
AUDITORS
M/s. DEVA & CO Chartered Accountants, Statutory Auditors of the
Company, hold office until the conclusion of the forthcoming Annual
General Meeting and are eligible for reappointment. The Statutory
Auditors have intimated to the Company that the appointment, if made,
would be within the prescribed limits under section 224 (1-B) of the
Companies Act, 1956 and that they are not otherwise disqualified within
the meaning of subsection (3) of section 226 to the Companies Act,
1956, for such appointment.
The notes to the accounts referred to in the Auditors' Report is self
explanatory and therefore do not call for any further Comments.
PARTICULARS OF EMPLOYEES
During the year under review, there were no employees drawing
remuneration in excess of the limits laid down in section 217(2A) of
the Companies Act, 1956 read with (Particulars of Employees)
Rules,1975.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO:
The information required under Section 217(1)(e) of the Companies Act,
1956 read with Rule 2 of the Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules 1988 are set out in Annexure
III, attached hereto and forms part of this report.
EMPLOYEE STOCK OPTION PLANS
Company has offered Stock Options to the employees under Nettlinx Stock
Option Plan 2007 aggregating to 2,45,000 options at a price of Rs.
11.20. For the year ending 31st March, 2012 there are 4,15,000 stock
options outstanding, and vesting options to the extent of 50% will fall
due on 16.08.2012
Disclosures Pursuant to Para 12 of the Securities Exchange Board of
India (Employees Stock Options Scheme and Employees Stock Purchase
Scheme) Guidelines, 1999 are set out as Annexure IV to the report.
ACKNOWLEDGEMENTS
Your Directors place on record their sincere appreciation for the
services of the Department of Telecommunications (DOT), Bankers and the
Software Technology Park of India (STPI). Your Directors also place on
record their sincere appreciation and gratitude for the valuable
assistance, support and co-operation from the Company's Customers,
Employees and shareholders during the period under review.
For and on behalf of the Board
Sd/-
(Dr. Manohar Loka Reddy)
Chairman
Date : 16-08-2012
Place : Hyderabad
Mar 31, 2010
The Directors have pleasure in presenting the Seventeenth Annual
Report together with the Audited Statements of Account for the year
ended 31st March 2010.
1. Financial Results
Rs. In Lakhs
Particulars For the For the
Year ended year ended
31st March, 10 31st March, 09
Income from operations 549.94 560.08
Total Expenditure 482.08 385.82
Interest 66.93 78.36
Depreciation 71.59 83.41
Profit / (Loss)
Before Taxation (70.67) 115.11
Provision for Taxation
-Current Tax 0 10.34
- Deferred Tax (Asset) (5.30) (9.76)
- Fringe Benefit Tax 0 1.33
Profit / (Loss) after Tax (65.37) 9.60
MANAGEMENTS DISCUSSION AND ANALYSIS
As required by Clause 49 of the Listing Agreement with the Stock
Exchanges, the Managements discussion and Analysis Report is enclosed
as a part of this Report as Annexure -1.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the
Companys Articles of Association, Dr. Loka Narayan Reddy, and Sri M.
Suresh Kumar Reddy retire by rotation at this Annual General Meeting
and being eligible offer themselves for reappointment.
During the year, Sri. M. Vijaya Bahsker Reddy, Executive Director and
Sri. Abraham Joy, Director
have resigned and Board wishes to place on record their appreciation
for the services rendered by them during their tenure as Executive
Director and Director of the Company respectively.
Dr. Loka Manohar Reddy and Mr. Chandra Sekhar Pogula were appointed as
Managing Director and Directors & COO respectively. Board recommends
their appointment and resolutions placed before you for approval.
Directors Responsibility Statement
Pursuant to the requirement under section 217(2AA) of the Companies
Act, 1956, with respect to Directors Responsibility Statement, it is
hereby confirmed that:
A In preparation of Annual accounts, the applicable accounting
standards have been followed and no material departures have been made
from the same.
B. The Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the company at the end of the financial year and of the profit of
the company for the said period.
C. The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act 1956, for safeguarding the assets of
your company and for preventing and detecting fraud and other
irregularities.
D. The Directors have prepared the annual accounts on a going concern
basis.
SUBSIDIARIES
Company has invested 100% of the paid up capital of Nettlinx Inc.,
Nettlinx Realty Pvt. Ltd., Nettlinx Channel Pvt. Ltd., Host Department
LLC, and 67% in IADFAC Laboratories Pvt. Ltd.
Consolidated Financial performance has been given separately.
CORPORATE GOVERNANCE
Your Directors affirm their commitment to the Corporate Governance
Standards prescribed by the Securities and Exchange Board of India
(SEBI). A report on Corporate Governance with Management Discussion and
Analysis as required under Clause 49 of the Listing Agreement is
Annexed to this report as Annexure-ll. Audit Committee has been
reconstituted of the following members.
1. Sri K. Kameswara Rao, Chairman
2. Sri V. Harish Kumar
3. Sri J.V. Hanumanth Rao
FIXED DEPOSITS
Your Company has not accepted any deposits and, as such, no amount of
principal or interest was outstanding as at the close of the Financial
Year.
AUDITORS
M/s. DEVA& CO Chartered Accountants, Statutory Auditors of the Company,
hold office until the conclusion of the forthcoming Annual General
Meeting and are eligible for reappointment. The Statutory Auditors have
intimated to the Company that the appointment, if made, would be within
the prescribed limits under section 224 (1-B) of the Companies Act,
1956 and that they are not otherwise disqualified within the meaning of
subsection (3) of section 226 to the Companies Act, 1956, for such
appointment.
The notes to the accounts referred to in the Auditors Report is self
explanatory and therefore do not call for any further Comments.
PARTICULARS OF EMPLOYEES
During the year under review, there were no employees drawing
remuneration in excess of the limits laid down in section 217(2A) of
the Companies Act, 1956 read with (Particulars of Employees) Rules,
1975.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO:
The information required under Section 217(1)(e) of the Companies Act,
1956 read with Rule 2 of the Companies (disclosures of particulars in
the Report of Board of Directors) Rules 1988 are set out in Annexure
III, attached hereto and forms part of this report.
EMPLOYEE STOCK OPTION PLANS
Company has offered Stock Options to the employees under Nettlinx Stock
Option Plan 2007 aggregating to 415000 options at a price of Rs. 11.20.
For the year ending 31st March, 2010 there are 3,85,000 stock options
outstanding, and vesting options to the extent of 50% will fall due on
30.8.2010.
Disclosures Pursuant to Para 12 of the Securities Exchange Board of
India (Employees Stock Options Scheme and Employees Stock Purchase
Scheme) Guidelines, 1999 are set out as Annexure IV to the report.
ACKNOWLEDGEMENTS:
Your Directors place on record their sincere appreciation for the
services of the Department of Telecommunications (DOT), Bankers and the
Software Technology Park of India (STPI). Your Directors also place on
record their sincere appreciation and gratitude for the valuable
assistance, support and co-operation from the Companys Customers,
Employees and Shareholders during the period under review,
For and on behalf of the Board
Sd/-
(Dr. Loka Manohar Reddy)
Managing Director
Sd/-
(K. KAMESWARA RAO)
Director
Date : 26th August, 2010
Place : Hyderabad
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