Directors Report of Net 4 India Ltd.

Mar 31, 2015

Dear Members,

We are pleased to present the 29thAnnual Report together with the audited financial statements of the company for the financial year ended March 31, 2015.

OPERATIONAL RESULTS

The summary of the financial performance of the Company for the financial year ended March 31, 2015 compared to the previous year ended March 31, 2014 is given below:

(Rs. In lakhs)

PARTICULARS Year Ended Year Ended 31.03.2015 31.03.2014

Net Sales/lncome(including other income of for FY 2015 4238.75 11006.97 and Rs. 1071.29 for FY2014)

Gross profit/Loss before interest and depreciation (3870.16) (17495.87)

Finance cost 422,84 1770,31

Profit/Loss before depreciation and amortization - (4293) (19266.18) (Cash Profit/Cash Loss)

Depreciation and Amortization 1767.82 2044.48

Profit/Loss before Tax and before exceptional (6060.82) (21310.64)

Exceptional items -- --

Profit/Loss before Tax (PBT) (6060.82) (21310,64)

Provision for Tax - Current -- --

Provision for Tax - Deferred (727,50) (1312)

Profit/Loss after Tax (5333.32) (19998 64)

Earning per share (26.59) (99.70)

PERFORMANCE HIGHLIGHTS &STATE OF COMPANY'SAFFAIRS

Your Company focuses on providing services to businesses (small, medium and large) and its offerings include Data Centre & Cloud Hosting Solutions, Enterprise Messaging &Hosting Solutions and Domain name registration. Since inception, within a short span of time, your Company has grown multi-folds and became the largest provider of web hosting services and domain name registration in India. Powered by a pool of talented professionals and equipped with latest Technologies, the Company caters to the Web and Application services, Data Centre and Cloud Computing services to its clients. However, the slow down of the world economy has considerably tapered off the growth momentum in almost all the sectors, including but limited to IT related sectors, on account of rising inflation, depreciating rupee and higher interest costs. General stress in the Indian economy had also made it difficult for companies like us to sustain and achieve the desired targets."

Your company suffered heavily for the last 2 odd years mainly due to its involvement in the Network Integration business. Not only did this lead to a high amount bad debts, but was also the main reason for the high gearing the company took on. Your company is no longer operating this business segment.

The company has made major inroads into solidifying and securing the existing profitable business, reducing costs heavily across the board and concentrating only its core strength areas. Our highly dedicated employees are working tirelessly to ensure that the company steadily but surely implements and achieves its revival plan. We can already see the daylight and are extremely confident of a bounce back to profitability and further stability form the next financial year.

Your Company, following all the necessary applicable ethical considerations and best sustainability business model under the current legal framework of the country, is leading strategically thus continuously growing its business operations as desired. All its functions are holistically benefiting all the involved stakeholders withouteopardizing the interests of one at the cost of other. The company's operations are running to achieve the desirable economic ends with all the socially acceptable means. This is very much in consonance with the current business needs of the company and operational efficiency along with future growth.

DIVIDEND

In order to conserve the resources of the company for the good future prospects and growth, and as the Company has suffer loss in the said reporting period, the Board of Directors taking this view have decided not to distributed any dividend out of the reserve of the Company and therefore the Board of Directors of the company has not recommended any dividend to the shareholders.

SHARE CAPITAL

The paid up Equity Share Capital of the Company as on March 31, 2015 was Rs.20,05,82,500/- comprising of 2,00,58,250 equity shares of Rs.10/- each. During the year under review, the Company has neither issued any kind of shares nor granted any stock options. Details of Director's shareholding have been stated in the annexure.

FINANCE

During the year 2014-15, your company has successfully raised resources in the form of Long Term and Short term to part finance of the company besides meeting overall working capital requirements of the company. The details are as follows:

S. NATURE OF BORROWING AMOUNT (IN LAKHS) NO

1. Long Term Borrowings form Bank(Secured) 14073.66

2. From Others &Fixed Deposits (unsecured) 1433.80

DEPOSITS

Due to certain circumstances beyond the control of the company and management, the Company had suffered massive losses and has been suffering from severe financial crunch since about 2 years now and is having a tough liquidity position at the moment as well. This all had led the Company into defaults in repayment of deposits since August 2013, and the Company had stopped accepting deposits thereafter.The company has filed a repayment and revival scheme with the honorable Company Law Board and is following their directions from time to time.

SUBSIDIARIES

S. NAME DETAIL NO

1 NET 4 COMMUNICATIONS LTD CIN:U72900WB2005PLC104025 Date of I ncorporation:05/07/2005 Registered office:3rd Floor Unit 3E 20B Abdul Hamid street, Kolkata, West Bengal

2 Net4 Network Services Limited CIN: U72200DL2011PLC219357 Date of Incorporation: 18/05/2011 Registered office:303A Third Floor, Plot N Pocket H Market SaritaVihar, Delhi-110076

3. Pipete Communications Private CIN: U64200DL2009PTC193950 Limited Date of I ncorporation:04/09/2009 Registered office: 139-A-1 S/F Mohammadpur, New Delhi-110061,

4. Net4 HK Limited Certificate of Incorporation: 1598959 Date of Incorporation: 11/05/2011 Registered office: Honkong

Pursuant to the circular dated February 8, 2011 issued by Ministry of Corporate Affairs, Government of India and Section 136 of the Companies Act, 2013, which has exempted companies from attaching the financial statements of the subsidiary companies along with the Annual Report of the Company. The Company will make available the annual financial statements of the subsidiary company and the related detailed information to any members of the company on receipt of a written request from them at the Registered Office of the Company. The annual financial statements of the subsidiary company will also be kept open for inspection at the Registered Office of the Company on any working day during business hours. The Consolidated Financial Statements presented by the Company include financial results of its subsidiary companies, associates etc. Details regarding subsidiaries have been provided in Form AOC-1 attached as per annexure 3.The statements are also available on the corporate website of the Company www.net4.in

CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Clause 32 read with Clause 41 of the Listing Agreement entered into with the Stock Exchanges and prepared in accordance with Accounting Standard 21 (Consolidated Financial Statements) of Institute of Chartered Accountants of India, for financial year ended March 31, 2015.

MANAGEMENT DISCUSSION AND ANALYSIS

In terms of Clause 49 of the Listing Agreement of the Stock Exchanges, the detailed review of the operations, performance and future outlook of the Company and its business is given in the Management's Discussion and Analysis Report which forms part of this Annual Report. The report on Management's Discussion and Analysis is annexed as per annexure 4 with the Report.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a compliance report on Corporate Governance has been annexed as part of the Annual Report along with Auditor's certificate for the compliance.

SECRETARIAL AUDIT REPORT

In line with the requirement of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 read with other applicable provisions, if any; the Board of Directors of the Company had appointed M/s Abnish Kumar & Associates, Practicing Company Secretary to conduct Secretarial Audit of the Company for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed with the Board's report and formed as part of the Annual Report.

The Secretarial Auditors' remarks are taken note of and the Company is trying its level best to come out of this hardship and will try to adopt reasonable steps for proper compliance of all the laws, committees applicable on our Company.

LISTING/DELISTING OF THE EQUITY SHARES

The equity shares of your Company are listed at the National Stock Exchange (NET4) the Bombay Stock Exchange (Scrip Code: 532912) and Delhi Stock Exchange (Scrip Code: 113089).The annual listing fees for the year 2014-15 have been paid to all these Stock Exchanges.

DIRECTORS

Mr.asjit Singh Sawhney, Mr. Amarjit Singh Sawhney and Mr. Surya S. Chadha continue to act as the directors of the Company.

Resignation of Company Secretary:-

Ms. Nandita goel,Company Secretary and the Compliance Officer of the company had resigned from the position as such with effect from 15th May, 2014.

Ms. Khushboo Mehndiratta, Company Secretary and the Compliance Officer of the company appointed with effect fromune 5, 2014 had resigned from the position as such with effect from 29th September, 2015.

Appointment of Company Secretary:-

Ms. Nidhi Singh has been appointed as a Company Secretary and the Compliance Officer of the company in place of Ms. Khushboo Mehndiratta with effect from 17th December, 2014.

MEETING OF THE BOARD

During the financial year 2014-15, 06 (Six) meetings i.e. 06.06.2014, 12.06.2014,14.08.2014, 06.12.2014,10.12.2014,14.02.2015of Board of Directors of the Company were held andthe intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 (i.e., the maximum interval between any two board meeting did not exceed 120 Days),Details of the Meetings (Number of the Director present etc) is mention in Corporate Governance Report a part of Annual Report.

BOARD EVALUATION

As per the provisions of Section 149 read with Schedule IV of the Companies Act, 2013 read with Clause 49- ll-B(5),the Independent Directors shall conduct a separate meeting to review the performance of Non-Independent Directors. But the Company has not complied with the above said provisions as the Company does not have independent Directors at their Board due to the immediate and consecutive resignation of all the independent directors, the Composition of Board has been traumatized. However, the management is concerning the issue and is taking appropriate steps to revive the Board's Composition.

NOMINATION AND REMUNERATION COMMITTEE AND REMUNERATION POLICY

The Board does not have a Nomination & Remuneration Committee for selection and appointment of Directors, Senior Management and their remuneration as per Section 178 of the Companies Act, 2013 and rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014 and read with clause 49(IV) of the Listing Agreement due to non availability of independent directors.

EXTRACTS OF ANNUAL RETURN

The Extract of Annual Return in Form MGT-9 pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014 for the financial year 2014-15 has been enclosed with this report in ANNEXURE-1

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Section 135 of the Companies Act, 2013 is not applicable on your Company as the company has suffered Losses

BUSINESS RESPONSIBILITY REPORTING

As per Clause 55 of the Listing Agreement with the Stock Exchanges, listed companies shall submit, as part of their Annual Reports, Business Responsibility Reports, describing the initiatives taken by them from an environmental, social and governance perspective, in the prescribed format. This clause 55 has been inserted pursuant to SEBI circular No. CIR/CFD/ DIL/8/2012 dated August 13, 2012 and clause is applicable to top 100 listed companies (based on market capitalization as on March 31, 2012). Hence, this clause is not applicable to your company.

AUDIT COMMITTEE

Audit Committee of the Board has not been constituted as per Section 177 of the Companies Act, 2013 and rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014 and read with clause 49(lll) of the Listing Agreement due to the immediate and consecutive resignation of all the independent directors, the Composition of Committee cannot be made However, the management is extremely concernedabout the issue and is taking appropriate steps to revive the Board's Composition so that the Company can make the appropriate Committees as per the provisions of the Companies Act 2013.

STAKEHOLDERS RELATIONSHIPCOMMITTEE AND VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Stakeholders Relationship Committee has not been constituted as per section 178 (5) of the Companies Act, 2013 read with Clause 49 (VIII)(E)(4) of the Listing Agreement, the reasons for non-composition of stakeholders relationship committee as same as mentioned under the above head of Audit Committee. Further the Vigil Mechanism / Whistle Blower Policy was also not formulated by the Company but the Company will soon appoint the Independent director and Constitute committees.

RELATED PARTY TRANSACTIONS

During the year, the Company has entered into transactions with related parties as defined under Section 2(76) of the Companies Act, 2013 which were in the ordinary course of business and on arm's length basis and in accordance with the provisions of the Companies Act, 2013, Rules issued thereunder and Clause 49 of the Listing Agreement. During the year, there were no transactions with related parties which qualify as material transactions under the Listing Agreement.

The details of the related party transactions as required under Accounting Standard -18 are set out in Notes to the financial statements forming part of this Annual Report.

The Disclosure required in Form AOC-2 pursuant to Section 134 (3)(h) read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is NIL.

PARTICULARS OF LOANS. GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are given in Annexure -1 forming part of this Report.

MANAGERIAL REMUNERATION & PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and financial statements are being sent to the members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company in this regard.

Considering the current financial position of the company and their limited involvement, the company has not paid remuneration to any of its directors.

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT 2013

Your Company is committed to creating and maintaining a secure work environment where its employees, agents, vendors and partners can work and pursue business together in an atmosphere free of harassment, exploitation and intimidation. To empower women and protect women against sexual harassment, a policy for prevention of sexual harassment has been rolled out and Internal Complaints Committee as per legal guidelines has been set up. This policy allows employees to report sexual harassment at the workplace. The Internal Committee is empowered to look into all complaints of sexual harassment and facilitate free and fair enquiry process with clear timelines.

AUDITORS AND AUDITORS REPORT

Your Company s auditors, M/s Sandy Associates, Statutory Auditors of the Company was appointed for the period of 5 years in the Annual general Meeting of the Company held on 30.09.2014 subject to the ratification at every Annual General Meeting. They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed thereunder for re-appointment as Auditors of the Company. As required under Clause 49 of the Listing Agreement, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. The Board recommends their re-appointment.

Directors Reply on Auditors Remarks

a. ) During the financial year 2013-14 the Company had defaulted in repayment of principle and interest thereon of Term Loan from State Bank of India. Working Capital Loans taken from State Bank of India. State Bank of Travancore and Loan against FDR from Canara Bank. All the loans had been classified as Non-Performing Assets (NPA) by these banks. The status of these loans & credit facilities has remained the same during the current financial year. The Management believes that it was a wrong Calculation from the Banks end and the date at which the account was NPA was incorrect. The SBI had not Extended facility as per accorded in the Sanctioned Letter potentially Leading to alleged Defaults. The same is the case with SBt and further SBT has not Quantified and cleared the Position as to Security Deposit amounting to Rs 3.75 Cr. held by them for the Company against its Loan. With ref to Canara Bank, the management believes that this loan has been settled with the 100% security Deposit held with Canara Bank.

b. ) Income Tax demand of Rs.132.78Lacs (Approx.) from AY 2004-05 to AY 2011-12 not deposited and appeals have been filed or in the process of filing.

The company believes the demand is unjust and inaccurate and has accordingly filed appeals in the matter

c. ) Service Tax Amounting to Rs.8.33Crores (net) (Approx.) upto 31st March 2015 not deposited. Company believes that there is pending an accurate Calculation of CENVAT Credit and this will reduce the pending amount significantly. Further to this the Company has been paying more than its accruing liability on a consistent basis over the last 2 years and working to extinguish the liability at the earliest. The company has paid service tax amounting to Rs. 6,48,52,070/- in the last 2 years.

d. ) Provident Fund and ESI amounting to Rs.59.13Lacs (Approx.) upto 31st March, 2015 not deposited. The Company has now paid of the complete liability of the Financial year 2014-15

e. ) TDS amounting to Rs.68.59 Lacs(Approx.) as on 31st March 2015 not deposited. The Company has deposited TDS amounting to Rs. 46 lakh approx

f. ) VAT liablity for certain branches still to be deposited. . The Company has deposited VAT amounting to Rs. 21,413/- and believes that any other demands are unjustified and incorrect.

g. ) Fixed Deposit amounting to Rs.13.77 crore (approx.) were due for repayment as on 31st March, 2015. The Company has filed a Fixed deposit Scheme in CLB for Repayment to FD holders, and the company is following the instructions of Company Law Board from time to time. Pursuant to the instruction of the CLB and even including payments made otherwise, the company has cleared approximately Rs 3.8 Cr. of its Fixed Deposit Liability, as above.

The company has written off bad debts amounting to Rs. 13.78Crores (Approx.) The company has no security for these debts. On the basis that no security has been obtained and no cash has been received on these debts, the company has written off bad debts thereby reducing the profit for the year (if any) and net assets at 31st March by that amount.

"As enumerated above, the losses the company suffered were mainly caused due caused due to acute recession/down turn in the market and liquidity enviiroment starting 2012-2013. The difficulties were further complicated by slow recovery of the dues from the customers. A large number of customers also refused to pay on account of some or the other product and service deficiency or non conformity with the order. Some of these were due to the service and implementation deficiencies caused by the acute shortage of manpower and the company has had to consequently book these and other non recoverable amounts as bad debts."

OTHER MATTERS

As per statutory records produced before us and explanations given to us, our comment as follows:

(i) There were no Independent Directors in the company leading to non-compliance of the provisions of the listing Agreement as well as the Companies Act 2013.

The Company had already published the advertisement twice in the newspapers in the recent past, concerning inviting candidature for the appointment of Independent director. However, we have not yet received the appropriate candidature for the same. Also, the Company is lacking in receipt of director's candidatures, in quantum, for being appointed on the Board of the Company.

The reason behind the lack in receipt of director's candidature would probably be the concerning financial position of the Company and other ongoing numerous issues/cases therein.The company is going through an extremely tough financial position since more than two years and has suffered heavy losses.

In the backdrop of the above, the director's, independent or otherwise, might not find their position comfortable; and thus, the company is not receiving the candidature for the position as such.

We however, submit that the Company is consistently trying to appoint suitable candidature on the Board of the Company at the earliest and have already taken step in compliance thereof by publishing the advertisements as specified above and are continually stepping ahead for recruiting the suitable candidature.

We are endeavoring hard for the appointment of the suitable candidature and as soon as we find the suitable candidature, we'll make the appointment with no delays.

(ii) There was no Woman Director in the Board of Directors of the company, leading to non-compliance of the applicable provision. The Company has appointed a woman Director on October 30 2015 (in) There was no Audit Committee for the year. Due to the Sudden Resignation of all the Independent Directors, the company could not Constitute an audit Committee

(iv) There was no Nomination and Remuneration Committee for the year. Due to the Sudden Resignation of all the Independent Directors, the company could not Constitute the said vommittee

(v) There was no Risk Management Committee for the year. Due to the Sudden Resignation of all the Independent Directors, the company could not Constitute the said Committee

(vi) There was no Shareholder's & Investor Grievance Committee for the year. Due to the Sudden Resignation of all the Independent Directors, the company could not Constitute the said Committee y

(vii) There was no Internal Auditor for the year. Due to the resignation of the Internal auditor the position was vacated however the company shall appoint the same with no delays

h. ) Non-Compliance of provisions relating to public deposit i.e.as per the requirements of Company (Acceptance of Deposit) Rules, 1975 a company has to deposit or invest at least 15% of its deposits maturing during the financial year latest by 30th April 2014. This requirement has not been complied by the company. Due to the tough financial position The company has filed the repayment scheme to CLBfor Repayment to FD holders, and the company is following the instructions of Company Law Board from time to time. Pursuant to the instruction of the CLB and even including payments made otherwise, the company has cleared approximately Rs 3.8 Cr. of its Fixed Deposit Liability.

(viii) The company has litigationsfiled against it under various counts like under section 138 of Negotiable Instrument Act, Arbitration, petition filed by ex-employee for recovery of dues, winding up petition, etc. The number of cases is large although the exact number of cases was not made available to us. /As per available information & explanation provided by the management, the quantum of amount on these cases cannot be ascertained. The Company is making all its efforts to make the Settlement with the genuine Debt holders

(ix) The company had received winding up order from the Court on the basis of a petition filed by 2 companies due to non-repayment of loans. However, the company has obtained stay order from the court on the basis of repayment schedule submitted before it. The Court has stayed this order subject to payment of Rs. 25 Lacs in 4 weeks out of which Rs. 10 Lacs was paid immediately and for the balance, the company has time till 17thune, 2015.This observation is incorrect, as, although the company had received the winding up order dated 23.04.2015 it was not a part of the period under review. Be that as it may, the Company had appealed the decision and received a stay order dated 18.05.2015 and has paid Rs. 45 lacs in compliance of the order of the Hon'ble high Court which is 9 lacs more than the actual liability. The matter is under consideration by the Court.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. The Company has not accepted any deposits from the public covered under section 73to 76 of the Companies Act, 2013 during the year. However, public deposits were accepted in earlier years. Earlier, deposits were governed by the provisions of Sections 58A of the Companies Act, 1956 and the rules framed thereunder relating to the deposits accepted, same were, wherever applicable, have not been complied with. The company has defaulted in repayment of principal and interest thereon w.e.f. August 2013. During the financial year 2014-15, the company has paid amount of principle & interest of Rs. 25.34 Lac (approx.). Total amount payable (due plus overdue amount) as on 31.03.2015 was Rs.13.77 Crore (approx.).

i. ) Fixed Deposit amounting to Rs.13.77 crore (approx.) were due for repayment as on 31st March, 2015. Due to the tough financial position The company has filed the repayment scheme to CLB for Repayment to FD holders, and the company is following the instructions of Company Law Board from time to time. Pursuant to the instruction of the CLB and even including payments made otherwise, the company has cleared approximately Rs 3.8 Cr. of its Fixed Deposit Liability.

2, The accumulated losses of the company at the end of the financial year are more than the net worth and also it has incurred cash loss during the financial year covered by our audit and in the immediately preceding financial year.

The Company has significantly reduced Cost of Operation through various means, including by Outsourcing Infrastructural and Technical activity in order to reduce cost of sales and concentrate on widening customer sales. The company's revival plan is on track and it is confident that it will bridge the gap to settle genuine outstanding liabilities in the not too distant future.

3 According to the information and explanations given to us, the Company has not given guarantee for loans taken by others from bank or financial institutions. Terms loans, other credit limits and loan from financial institutions were unpaid and the dues have been classified as Non-Performing Assets (NPA) by the banks.

The Management believes that it was a wrong Calculation from the Banks end and the date at which the account was NPA was incorrect. The SBI had not Extended facility as per accorded in the Sanctioned Letter potentially Leading to alleged Defaults. The same is the case with SBt and further SBT has not Quantified and cleared the Position as to Security Deposit amounting to Rs 3.75 Cr. held by them for the Company against its Loan. With ref to Canara Bank, the management believes that this loan has been settled with the 100% security Deposit held with Canara Bank.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed during the financial year 2014 - 2015 by the Regulators / Courts which would impact the going concern status of the Company and its future operations..

DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them and also based on the representations received from the Operating Management, your directors make the following statement in terms of Section 134 (3) (c) of the Companies Act, 2013 that:

a. in the preparation of the annual accounts for the financial year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. such accounting policies as mentioned in the Notes to the Financial Statements have been selected 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 as at March 31, 2015 and of the profit and loss of the Company for the financial year ended March 31, 2015;

c. the proper and sufficient care has been taken by them for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the annual accounts for the financial year ended March 31, 2015 have been prepared by them on a going concern basis;

e. proper Internal financial controls have been followed by the company and that such internal financial controls are adequate and were operating effectively; and

f. proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENT

The Directors express their gratitude to Financial Institutions, Banks, and various other agencies for the co-operation extended to the Company. The Directors also take this opportunity to thank the shareholders, customers, suppliers, lenders, distributors and other stakeholders for the confidence reposed by them in the Company. The employees of the Company contributed significantly in achieving the results. The Directors take this opportunity of thanking them and hope that they will maintain their commitment to excellence in the years to come.

By Order of the Board

Sd/-

Amarjit Singh Sawhney Director DIN 00110823

---

Mar 31, 2014

Dear Members,

M/s Net 4 India Limited

On behalf of the Board of Directors, I am presenting the Twenty Eighth Annual Report together with the Audited Annual Accounts for the Financial Year ended March 31, 2014 along with Auditor''s Report thereon.

* Financial Results

The Standalone and Consolidated Financial performance of Net 4 India Ltd. for the year ended March 31, 2014 is presented below:

(Rs. In lacs, except per share data)

Standalone

Particulars Year Ended Year Ended 31.03.2014 31.03.2013

Total Revenue 11,006.97 32,243.95

Net Profit before Tax (21,310.64) 2,318.80

Provision for Tax (1312.00) 752.51

Net profit after- Tax/ Amount available (19,998.64) 1,566.29 for Appropriation

Earning Per Share - Basic & Diluted (99.70) 7.81

(Rs. In lacs, except per share data)

Consolidated

Particulars Year Ended Year Ended 31.03.2014 31.03.2013

Total Revenue 17,055.35 49,184.87

Net Profit before Tax (30,196.20) 3712.47

Provision for Tax (1,995.39) 1204.03

Net profit after- Tax/ Amount available (28,200.81) 2,508.43 for Appropriation

Earning Per Share - Basic & Diluted (99.70) 12.51 12.50

* Performance

Within the domestic economy, growth slowed much more than anticipated, with the GDP growth for fiscal year 2013-14 being pegged the lowest in a decade. Inflation, which remained high through most part of the year, eroded domestic consumer savings and curtailed consumption reflecting in slowing market growth. The slowdown was particularly stark in discretionary categories which were further accentuated by slowdown in modern trade on the back of stores rationalization by certain retailers.

Your Company''s performance for the year 2013-14 has to be viewed in the context of the aforesaid economic and market environment

* Standalone & Consolidated financial results of 2013-14 in comparison to previous year 2012-2013

Consolidated Results Standalone Results

* Total Income recorded as * Total Income recorded as on March 31, 2014 was on March 31, 2014 was Rs. 17,055.35 lacs as compared Rs. 11006.97 lacs as compared to Rs. 49,184.87 lacs to Rs. 32,243.95 lacs recorded during the previous recorded during the previous fiscal year. fiscal year.

* Profit After Tax Due to * Profit After Tax Due to general slowdown of the general slowdown of the economy, profits of the economy, profits of the company has turned down to company has turned down to the loss of Rs. (28,200.81) the loss of Rs. (19,998.64) lacs as compared to the lacs as compared to the profit of Rs. 2,508.43 lacs. profit of Rs. 1566.29.

* Earnings per share (EPS) of * Earnings per share (EPS) of the company declined to the company declined Rs. (99.70) from Rs. 12.51 for to Rs. (99.70) from Rs 07.81 the financial year 2013-2014. for the financial year 2013-2014.

* Business Overview

Net4 is India''s leading Data Centre, Cloud Hosting and Network Services Provider,. Net4 focuses on providing services to businesses (small, medium and large) and its offerings include Data Centre & Cloud Hosting Solutions, Enterprise Internet Services, VoIP Solutions, Enterprise Messaging &Hosting Solutions and Domain name registration. Net4 has a PAN India presence with offices in 11 major business cities. Net4 is amongst the largest provider of hosted email, web hosting and domain name registration (www. net4.in) in the Asia-Pacific region.

However, the slope down of the world economy has considerably tapered off the growth momentum in almost all the sectors, including but limited to IT Sector, on account of rising inflation, depreciating rupee and higher interest costs. General stress in the Indian economy had also made it difficult for IT Companies like us to sustain and achieve the desired targets.

Net4 has the distinction of being the first Internet services company in the World to be IS0 27001 certified, for Information Security standards adopted at its Data Centers. It is also ISO 9001:2000 certified, a Microsoft Gold Partner and an ICANN & .IN accredited Domain Name Registrar.

* Subsidiary Companies

Sr. Name Detail No.

* Cin No. U72900WB2005PLC104025

* Incorporated in the year 2005

1 M/s Net 4 Communications Limited * having its Registered Office at Kolkata

* Company''s main business is Computer-Hardware & Software for Internet Access & Internet Telephony Services including VoIP Solutions

* Cin No. U72200DL2011PLC219357

* Incorporated on May 18, 2011

2 M/s Net4 Network Services Limited * having its registered office at delhi

* Company carry on the business of providing Internet Related Services and VoIP Solutions

* Cin No. U64200DL2009PTC193950

* Incorporated on September 4, 2009

3 M/s Pipetel Communications Private Limited * having its Registered office at Delhi

* It is mainly engaged into Enterprise Internet services, VoIP Solutions and Web Services billing and Provisioning Platform Solutions Foreign Subsidiary

* Certificate of Incorporation bearing number 1598959

* Incorporated on May 11, 2011

4 M/s Net4 HK Limited

* Having its office at Hong Kong

* Company carry on the business of Internet Related Services and VoIP Solutions.

* Exemption u/s 212 (8) of the Companies Act, 1956

In terms of the circular No. 2/2011 dated February 8, 2011 issued by the Ministry of Corporate Affairs, general exemption under section 212 of the Companies Act, 1956 has been granted to the Companies from attaching the Balance Sheet, Profit & Loss Account and other document of the subsidiary companies with the Balance Sheet of the Parent/Holding Company. A statement containing brief financial details of the Company''s subsidiaries for the financial year ended March 31, 2014 is included in the Annual Report. The Consolidated Financial Statement of the Company includes the financials of its Subsidiary Companies.

The annual accounts of the subsidiary Companies 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 and its subsidiaries at the Registered Office of the Company. The annual accounts of the said subsidiaries will also be available for inspection, as above, at the registered offices of the respective subsidiary companies. The Company shall furnish a copy of the details of annual account of subsidiaries to any member on demand.

* Consolidated Financial Statements

In compliance with the Accounting Standard-21 on Consolidated Financial Statements and as per the requirement of the provisions of the Listing Agreements with the Stock Exchanges, a Consolidated Financial Statement of the Company together with its subsidiaries is attached in the Annual Report. The Consolidated Financial Statements have been prepared in accordance with the relevant Accounting Standards as prescribed under section 211 (3C) of the Companies Act, 1956 ("Act").

The Consolidated Financial Statement of the Company and its Subsidiaries will be available on the website of the Company at www.net4.in

* Dividend

The Company has not recommended any dividend for the year 2013-14.

* Directors

* Resignation of Directors

* Mr. Desi S. Valli had resigned from the Board of the Company with effect from 01.07.2013

* Mr. Brijesh Chand Mathur had resigned from the Board of the Company with effect from 29.07.2013

* Mr. Kamlesh Gandhi had resigned from the Board of the Company with effect from 04.08.2013

* Mr. Manish Wadhawan had resigned from the Board of the Company with effect from 16.08.2013

* Mr. Sandeep K Ghosh had resigned from the Board of the Company with effect from 16.08.2013

* Resignation of Company Secretary

Ms. Nandita Goel, Company Secretary and the Compliance Officer of the company appointed with effect from November 13, 2013 had resigned from the position as such with effect from May 15, 2014.

* Appointment of Company Secretary

Ms. Khushboo Mehndiratta has been appointed as a Company Secretary and the Compliance Officer of the company in place of Ms. Nandita Goel with effect from June 5, 2014.

* Listing Information:-

Your Company is listed on the National Stock Exchange (NET4:) the Bombay Stock Exchange (Scrip Code: 532912) and Delhi Stock Exchange (Scrip Code: 113089). The Listing Fee for the year 2013-14 has been paid to all the concerned Stock Exchanges

* 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:

(i) in the preparation of the Annual Accounts, the applicable accounting standards were followed and wherever required, proper explanations relating to material departures have been given;

(ii) 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 as at March 31, 2014 and of the profit of the Company for the year ended on that date;

(iii) the Directors have taken proper and sufficient care for 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

(iv) the Directors have prepared the Annual Accounts of the Company on a going concern basis.

* Human Resource

A committed human capital of multi-cultural employees have been pushing boundaries of your aspirational organisation to maximize opportunities across our corporate office, registered office and 7 branch offices. The potential and ability to deliver consistently is established by our remarkable team, evident from our consistent growth. The company recognizes the importance and contribution of human capital and therefore appreciates and motivates them to pursue excellence. Focused efforts to develop and nurture human capital through in-house, external professional development programmes and on-job training are used for upgrading technical, marketing and management skills. Performance orientation and ethics are high priority areas.

The work environment and career opportunities help retain talent. Your Directors recognize the team''s valuable contribution and place on record their appreciation for Team Net4 India as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, is available at the registered office of your Company.

* Fixed Deposit

Due to certain unforeseen circumstances, the Company had suffered massive losses and been into financial crunches since more than a year and is having a tough liquidity position at the moment as well. This all had led the Company into defaults in repayment of deposits since August 2013, and the Company had stopped accepting deposits thereafter.

* Particulars under Section 212 of the Companies Act, 1956

As per Section 212 of the Companies Act, 1956, we are required to attach the Directors'' Report, Balance Sheet, and Profit and Loss Account of our subsidiaries to the Balance Sheet of the Company. As per the requirement of Section 212 (1) of the Companies Act, 1956, the documents of the Subsidiary Companies have been attached to the Balance Sheet of M/s Net 4 India Limited. These documents will also be available for inspection during business hours at our Registered Office and also at the Registered Office of the concerned Subsidiaries.

* Code of Conduct

In terms of Clause 49 of the Listing Agreement, the Company has formulated a Code of Conduct for the Directors and Senior Managerial Personnel. All the Board Members and Senior Managerial Personnel have given their consent to adhere to the Code of Conduct to the Compliance Officer of the Company. As per the requirement of Listing Agreement, the Code of Conduct is also available on Company''s website www.net4.in.

* CEO- CFO Certification

Mr. Jasjit Singh Sawhney, Chairman & Managing Director and Mr. Amarjit Singh Sawhney, Whole Time Director of the Company have, pursuant to Clause 49(V) of the Listing Agreement, provided the CEO/CFO Certification regarding the accuracy of the Financial Statements for the Financial Year ended March 31, 2014. The Certificate in respect thereof also forms part of the Annual Report.

* Insider Trading Regulations

The Company has also formulated a ''Code of Internal Procedures and Conduct for Prevention of Insider Trading in the Shares of the Company'' as per the provisions of SEBI (Prohibition of Insider Trading Regulations) 1992, as amended from time to time, providing guidelines to the designated employees while dealing in the shares of the Company.

* Auditor and Auditors'' Report

Your Company''s auditors, M/s Sandy Associates, Statutory Auditors of the Company retire at the conclusion of the forthcoming Annual General Meeting. Your Company has received a letter from them to the effect that their re-appointment, if made, will be in accordance with the provisions of Section 224(1-B) of the Companies Act, 1956.

* Energy Conservation, Technology Absorption and Foreign Exchange Earnings & Outgo

Information as required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 in respect of Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo is enclosed and marked as Annexure-I to this Report.

* Particulars of Employees

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are given in Annexure- II to the Director''s Report.

Mr. Jasjit Singh Sawhney, Chairman & Managing Director and Mr. Amarjit Singh Sawhney, Whole-time Director of the Company, are relatives and particulars in their respect are given in the Corporate Governance Report. None of the other employee is relative of any of the Directors of the Company.

* Corporate Social Responsibility

Your organization has identified health, education, disaster relief and civic utilities around the plants and research centers as areas where assistance is provided on a need-based and case to case basis.

* The Management Discussion and Analysis

The management discussion and analysis on the operations of the Company is provided in a separate section and forms part of this report.

* Corporate Governance

It has always been the Company''s endeavour to excel through better Corporate Governance and fair and transparent practices, many of which have already been in place even before they were mandated by the law of the land. The Company complies with the revised clause 49 of the Listing Agreement, although the same has been deferred for implementation by SEBI till 31st December, 2005.The Board of Directors of the Company had also evolved and adopted a Code of Conduct based on the principles of Good Corporate Governance and best management Practices being followed globally. The Code is available on the website of the Company www.net4.in The Compliance Report on Corporate Governance forms part of the Annual Report. The Auditors certificate on the compliance of Corporate Governance Code embodied in Clause 49 of the Listing Agreement is attached and forms part of this Report.

* Statement u/s 217 (3) of the Companies Act, 1956

Below given is the statement u/s 217 (3) of the Companies Act, 1956 containing the Auditor''s Observations/Qualification as specified in the Auditor''s Report for the year ended 31.03.2014 and the management''s explanation thereon:

a) The company has defaulted in repayment of Principle and Interest thereon of Term Loan from State Bank of India, Working Capital Loans taken from State Bank of India, State Bank of Travancore and Loan against FDR from Canara Bank on various dates. All these loans have been classified as Non Performing Assets (NPA) by these banks.

b) Income Tax demand of Rs. 13.50 Crores(Approx.) upto the Financial Year 2010-11 not deposited. Appeals have been filed/in the process of filing.

c) Service Tax amounting to Rs. 7.75 Crores (Net)(Approx.) upto 31st March, 2014 not deposited.

d) Provident Fund and ESI amounting to Rs. 0.56 Crores (Approx.) upto 31st March, 2014 not deposited.

e) TDS amounting to Rs. 1.08 Crores(Approx.) for the year 2013-14 not deposited. TDS for the year 2012-13 has been deposited but the TDS returns have not been filed.

f) VAT liability for certain branches still pending to be deposited.

g) Fixed deposit repayments during the year partially not done.

The company has written off bad debts amounting to Rs. 115.40 Crores (Approx.) and made a provision for bad debts amounting to Rs. 20.45 Crores (Approx.). The company has no security for these debts. On the basis that no security has been obtained and no cash has been received on these debts, the company has written off and provided for bad debts thereby reducing profit before taxation for the year (if any) and net assets at 31st March by that amount.

MATTER OF EMPHASIS

i. The company was unable to repay the Term Loan availed from State Bank of India and Working Capital Loans taken from State Bank of India, State Bank of Travancore, Loan against FDR from Canara Bank. Due to the non-compliances of terms & condition and non-payment of amount due, all these loans have been classified as Non Performing Assets (NPA) by these banks.

ii. Income Tax demand of Rs. 13.50 Crores (Approx.) is pending for various years upto the Financial Year 2010-11 and has not been deposited. The company has filed appeals/under process for filing the same.

iii. Service Tax amounting to Rs. 7.75 Crores (Net) (Approx.) upto 31st March, 2014 has not been deposited. Notices have been received from the Service Tax Department in this regard and the company has started depositing some amount every month as per their directions.

iv. TDS amounting to Rs. 1.08 Crores (Approx.) for the year 2013-14 has not been deposited.

v. The company has not filed statutory returns under various acts, namely, Service Tax Returns (from October 2011 onwards), Income Tax Return (FY 2011-12 & 2012-13), TDS Returns for the years 2012-13 and 2013-14, Sales Tax Return and ESI & PF Returns (for major part of the year).

vi. The company has partially repaid public deposits matured during the year. The unpaid amount for the year 2013-14 is amounting to Rs. 4.04 Crores.

vii. Regarding provision for bad debts amounting to Rs. 20.45 Cr and writing off bad debts amounting to Rs. 115.40 Cr.

viii. There has been no deposit on account of gratuity fund during the year.

ix. Balance confirmations from the vendors have not been obtained.

OTHER MATTERS

i) There were no Independent Directors in the company leading to non-compliance of the provisions of the Listing Agreement as well as The Companies Act, 2013.

ii) There was no Audit Committee for a major part of the year.

iii) There was no Shareholder''s & Investor Grievance Committee for a major part of the year.

1. The Company has accepted deposits from the public upto July 2013.The provisions of Sections 58A of the Companies Act, 1956 and the rules framed there under relating to the deposits accepted, wherever applicable, have not been complied with. The company has defaulted in repayment of principal and interest thereon w.e.f. August 2013.The outstanding amount as on 31st March, 2014 amounted to Rs. 1269.03 Lacs excluding interest due but not paid. This includes unpaid liability Rs. 404.44 Lacs for the current year i.e. 2013-14.

As per explanation and records produced, the reason for default has been due to heavy losses resulting to cash crunch in the company leading to bouncing of cheques issued towards repayment of deposits (principal and interest). This also lead to closure of the bank account from where cheques had been issued. The company is, however, making some payments towards the unpaid liability from the year 13-14, as per fund availability It has also come to our notice that due to default in repayment of deposits by the company some of the investors have issued notices to the company in order to instigate proceedings against the company before the Court or Company Law Board or National Company Law Tribunal under relevant sections of The Companies Act and Negotiable Instruments Act (against cheque bouncing) for repayment or winding up.

Further, as per the requirements of Company (Acceptance of Deposit) Rules, 1975 a company has to deposit or invest at least 15% of its deposits maturing during the financial year latest by 30th April 2013 i.e. in the beginning of the year in any of the specified assets which could be utilised for repayment of deposits maturing during the year but at no time the amount shall fall below 10% of the amount maturing before 31st of that year. Though the company had investments towards the liquid assets more than 10% of the amount maturing during the year 2013-14 but the same was not in consonance with the requirement of maintaining the level of 15%.

According to the information and explanations given to us, the company is not regular in depositing undisputed statutory dues including Provident Fund, ESI, Income Tax, Sales Tax, Service Tax and any other statutory dues.

In case of loans taken from other parties (other than listed in the register maintained under section 301 of the Companies Act, 1956) repayment of principle as well as interest has been irregular. The interest wherever provided are without deduction of tax at source.

INCOME TAX

Income Tax for the following years has not been deposited with the appropriate authorities on account of dispute. The company has filed the appeal before the Commissioner of Income Tax (Appeals)/in the process of filing the appeal. The details are as under:

Assessment Year Amount (Rs. In lakh) (including interest)

2008-09 40.28

2009-10 265.61

2010-11 773.67

2011-12 271.43

SERVICE TAX

Matter relating to Amount Involved (Rs. In Lakh)

Taxability on SSL Certificate - 91.84 (Approx.) (excluding Interest whether VAT applicable or & Penalty) Service tax applicable

Taxability of Domain prior to 1141.64 (Approx.) (excluding July 2012. (period from 2008-09 Interest & penalty) to 2011-12)

Matter relating to Forum

Taxability on SSL Certificate - whether VAT applicable or High Court Service tax applicable

Taxability of Domain prior to Service Tax Department, July 2012. (period from 2008-09 Indraprastha, New Delhi to 2011-12)

SALES TAX

Matter description Amount Involved (Rs. In Lakh)

Dispute regarding entitlement of 15.05 (Approx.) (excluding Interest Input Vat Credit (2010-11) & Penalty)

Liability created by Department 4.75 (Approx.) (excluding Interest & penalty

Matter description Forum

Dispute regarding entitlement of Input Vat Credit (2010-11) MVAT Department, Mumbai

Liability created by Department MVAT Department, Mumbai Management''s Response

For defaults in Statutory and other Dues:

Due to general slowdown of economy, the Company could not achieved the desired growth as anticipated and also because of the delayed payment from our debtors and sales, the company had continued to face off the mismatch of receivables and payables. This all had put the company into recurring losses resulting into the non-payment of statutory dues and defaults in other repayment. However, the Company is making hardcore efforts for revival and is gradually moving towards a revival, having implemented various restructuring plans.havingemented various restructuring plans.

For Defaults under the Listing Agreement

Due to the immediate and consecutive resignation of all the independent directors, the Composition of Board has been traumatized. However, the management is concerning the issue and is taking appropriate steps to revive the Board''s Composition.

* Appreciations and Acknowledgements

Your Directors place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain as industry leaders.

The Board places on record its appreciation for the support and co-operation your Company has been receiving from its suppliers, redistribution stockists, retailers, business partners and others associated with the Company as its trading partners. Your Company looks upon them as partners in its progress and has shared with them the rewards of growth. It will be the Company''s endeavour to build and nurture strong links with the trade based on mutuality of benefits, respect for and co-operation with each other, consistent with consumer interests.

The Directors also take this opportunity to thank all Investors, Clients, Vendors, Banks, Government and Regulatory Authorities and Stock Exchanges, for their continued support.

Your Directors wish to thank all stakeholders and business partners, your Company''s bankers, financial institutions, medical profession and business associates for their continued support and valuable co-operation. The Directors also wish to express their gratitude to investors for the faith that they continue to repose in the Company

For and on behalf of the Board of Directors Net 4 India Limited

Sd/-

Place: Noida Jasjit Singh Sawhney Dated: June 12, 2014 Chairman & Managing Director

---

Mar 31, 2013

Dear Members,

M/s Net 4 India Limited

The behalf of the Board of Directors, I am delighted to present Twenty Seventh Annual Report together with the Audited Annual Accounts for the Financial Year ended March 31, 2013 along with Auditor''s Report thereon.

- Financial Results

The Standalone and Consolidated Financial performance of Net 4 India Ltd. for the year ended March 31, 2013 is presented below:

(Rs. In lacs, except per share data)

particulars Standalone Consolidated

year ended year ended year ended year ended 31.03.2013 31.03.2012 31.03.2013 31.03.2012

Total Revenue 32243.95 30,970.00 49184.87 46,942.64

*Net Profit before Tax 2318.80 3,460.22 3712.47 5,050.16

Provision for Tax 752.51 1121.44 1204.03 1635.95

Net Profit after Tax/Amount available for

Appropriation

Earnings Per Share - Basic & Diluted 7.81 11.66 12.51 17.02

The financial performance of your Company was impacted by the adverse changes in the markets during the year. The year under review has been a challenging one for your Company because of the events around the world over which the Company has little control. Some of the other major events across the world which impacted the business are:

- Slowdown of the Indian Economy brought down the domestic markets

- Slowdown in other economies which also led to a drop in yields in international markets

- The weakening of the Indian Rupee vis-a-vis the United States Dollar

- General stress in the Indian economy which not only meant that interest rates have hardened but also made it difficult for the IT Companies like us to raise short term/ working capital debt.

The Company, on its part, has taken various initiatives to improve its operating efficiency and revenue earning potential to bring down the breakeven load factor. The underlying performance reflects the consolidated and standalone results of the company.

- Appropriations

Out of the profits available for appropriations, your Company has retained Rs. 1566.29 lacs in the Profit and Loss Account. No transfers have been made to General Reserve.

- Business Overview

Since inception, within a short span of time, your Company has grown multi-folds and became the largest provider of web hosting services and domain name registration in India. Powered by a pool of talented professionals and equipped with latest Technologies, the Company caters to the Web and Application services, Data Centre and Cloud Computing and Network and System Integration services to its clients. However, the slope down of the world economy has considerably tapered off the growth momentum in almost all the sectors, including but limited to IT Sector, on account of rising inflation, depreciating rupee and higher interest costs. General stress in the Indian economy had also made it difficult for IT Companies like us to sustain and achieve the desired targets. But, being the most valued Network and Application Service Provider- with innovative and differentiated offerings", Net 4 worked hard to achieve the objectives and to overcome the influential circumstances with its Q2 and Q3 Results.

- Corporate Social Responsibility

Your Company is committed in fulfilling the Corporate Social Responsibility by contributing towards social and environmental causes. As a responsible corporate entity, we work towards the preservation of environment through various conservation programs. Your company is actively sustaining the spirit of Green Initiative, a worldwide adopted phenomenon to check the constantly increasing Global Warming, by deploying environmental friendly processes at work. The initiatives taken up by the Company includes, but does not restricts to, Motivational Programmes, E-documentation, Energy Savers and Pollution Checks.

- Motivational Programmes

Your Company has implemented various motivational programmes among its employees and also invites them to participate in management decisions, leading to appreciation of their confidence and thereby increasing overall productivity.

- E-documentation

Various steps have been taken to minimize the use of paper. As the constant increase in the use of paper has lead to deforestation thereby increasing Global Warming. Your Company is also planning to adopt recycling of the waste paper. To reduce the usage of paper, the Company is practicing the concept of e-documentation and has also in furtherance to this concept and the Circular issued by Ministry of Corporate Affairs to allow paperless compliances, decided to send its Annual Report to the members through electronic mode.

- Energy Savers

The Company is also making efforts to keep a check on the usage of power by installing energy saver equipments at its work places. Awareness on energy conservation is extended among the employees to control the unnecessary use of power.

- Pollution Checks

Considering the fact that fuel prices are increasing on a continual basis and also to have a check on day-to-day increasing air and noise pollution, the Company is actively urging on the use of video-conferencing wherever possible rather than travelling down to the respective place. Employees of the Company have also been advised to use the concept of car pooling so as to ensure a pollution free environment.

All these initiatives create a socially and ethically responsible business entity and helps in long term sustainability, ensuring value growth for our various stakeholders. „

- Subsidiary Companies

As on date, the Company has four subsidiaries

M/s Net 4 Communications Limited was incorporated in the year 2005 vide Certificate of Incorporation bearing registration numberU72900WB2005PLC104025 having its Registered Office at Kolkata. The Company''s main business is Computer-Hardware & Software for Internet Access & Internet Telephony Services including VoIP Solutions.

M/s Net4 Network Services Limited was incorporated on May 18, 2011 vide Certificate of Incorporation bearing registration number U72200DL2011PLC219357 in and under the Laws of India. The Company carry on the business of providing Internet Related Services and VoIP Solutions.

M/s Net4 HK Limited was incorporated on May 11, 2011 vide Certificate of Incorporation bearing number 1598959 in and under Tthe Laws of Hong Kong. The Company carry on the business of Internet Related Services and VoIP Solutions.

M/s Pipetel Communications Private Limited* was incorporated on September 4, 2009 vide Certificate of Incorporation bearing registration number U64200DL2009PTC193950 in and under the laws of India. It is mainly engaged into Enterprise Internet services, VoIP Solutions and Web Services billing and Provisioning Platform Solutions.

*(M/s Pipetel Communications. Private Limited has made further allotment of its Equity Shares to M/s Prudent Enterprises Private Limited by virtue of with it has ceased to be the wholly owned subsidiary of Net 4 India Limited. However, it still continues to be the subsidiary of the Company)

- Exemption this 212 (8) of the Companies Act. 1956

- In terms of the circular No. 2/2011 dated February 8, 2011 issued by the Ministry of Corporate Affairs, general exemption under section 212 of the Companies Act, 1956 has been granted to the Companies from attaching the Balance Sheet, Profit & Loss Account and other document of the subsidiary companies with the Balance Sheet of the Parent/Holding Company. A statement containing brief financial details of the Company''s subsidiaries for the financial year ended March 31, 2013 is included in the Annual Report. The Consolidated Financial Statement of the Company includes the financials of its Subsidiary Companies.

The annual accounts of the subsidiary Companies 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 and its subsidiaries at the Registered Office of the Company. The annual accounts of the said subsidiaries

- Dividend

The Company has not recommended any dividend for the year 2012-13 as the Company is utilizing the funds for its expansion plans which would certainly lead to the growth of the Company thereby increasing the value of the shares of your Company.

- Directors

For the year ended on March 31, 2013, the Board of the Company has had an optimum combination of Executive & Non-Executive Directors with not less than fifty percent of the Board comprising of the Non-Executive Independent Directors.

- Appointment

Mr. Kamlesh Gandhi was appointed as an additional Director of the Company, under Section 260 of the Companies Act, 1956, by the Board of Directors at their meeting held on February 14, 2012.

However, the Company has received consent from Mr. Kamlesh Gandhi with the requisite deposit pursuant to Section 257 of the Companies Act, 1956 for being appointed as the Director of the Company and at the Annual General Meeting of the Member of the Company held on September 28, 2012; he has been regularized as Director on the Board of the Company.

- Resignation of Directors

Mr. Desi Subri Valli, Mr. Brijesh Chand Mathur, Mr. Kamlesh Gandhi, Mr. Sandeep Ghosh and Mr. Manish Wadhawan had resigned from the Board of the Company with effect from July 1, 2013; July 29, 2013, August 4, 2013, August 16 ,2013, and August 16, 2013, respectively.

- Re-appointment

In accordance with the provisions of the Section 255 and 256 of the Companies Act, 1956 read with Articles of Association of the Company, Mr. Surya Chadha, Director of the Company is retiring by rotation at the forthcoming Annual General Meeting and being eligible, offer himself for re-appointment. The Board recommends for his appointment as Director.

- Resignation of Company Secretary

Ms. Archna Walia, Company Secretary and the Compliance Officer of the company had resigned from the position as such with effect from July 31, 2013.

- 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:

(i) in the preparation of the Annual Accounts, the applicable accounting standards were followed and wherever required, proper explanations relating to material departures have been given;

(ii) 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 as at March 31, 2013 and of the profit of the Company for the year ended on that date;

(iii) the Directors have taken proper and sufficient care for 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

(iv) the Directors have prepared the Annual Accounts of the Company on a going concern basis.

-'' Human Resource

Employees today aspire towards growth opportunities, career options, empowerment and work life balance in an organization. To retain leadership position, the Company continuously innovates and customizes its human resource strategy to meet changing employee needs.

Net4 focuses meticulously on talent engagement, deployment on right projects, role / career progression and benchmark compensation and benefits, which has helped the Company to attract and retain best talent.

Your Company takes great pride in the allegiance, caliber & proficiency shown by its highly motivated human resource that contributed its best to take the Company to its new heights. The productivity of the employees is reflected in the consistent improvement over the years. We have also set up a scalable recruitment and human resources management process, which gives the employees the opportunities to come up with their grievances, suggestions and also give them chance to participate in the decisions. The Company continues to take new initiatives to further align its Human Resource policies to contribute to the growing needs of the business.

Your Company provides an environment which encourages initiative, innovative thinking and rewards performance without regard to various external factors such as race, sex, color, creed, religion, national origin, citizenship, age, marital status or orientation.

Your Company ensures and focuses on training and development of its personnel through various internal and advanced training programs, succession planning and participation at national and international conferences, job rotation, on-the-job training and various workshops.

- Quality

Quality has been the foundation of your organization''s sustenance and growth for all these years. Your Company has a well-defined Quality Management System, which established- various processes to implement quality and continuously improve organization''s overall process capability. Your Company is ISO 9001.2000 certified, the world''s most successful International Standard, addressing best practice in the application of Quality Management Systems.

Your Company is also the First Internet Service Provider in the world to get an ISO 27001:2005 certification for its Internet Data Centre(s) certified by BSI (British Standard Instruction), and the company is continually maintaining the standards.

- Fixed Deposit

For the year ended on 31 March, 2013, Your Company has accepted the deposits within the meaning of Section 58A of the Companies Act, 1956 read with Companies (Acceptance of Deposit) Rules, 1975 of Rs. 1478.26 (previous year Rs. 1574.13 Lacs). In terms of the provisions of Investor Education and Protection Fund (IEPF) Rules, 2001, an amount of Rs. 10,730/- was due on September 30, 2012, towards unclaimed interest and/or principal amount, for being transferred to Investors Education & Protection Fund, established by the Central Government under Section 205C(1) of the Companies Act, 1956, which was duly deposited in Investors Education & Protection Fund on October 29, 2012.

- Corporate Governance

Your Company is adhering with the Corporate Governance guidelines, as laid down in the Clause 49 of the Listing Agreement and mandatory stipulation as prescribed by the Securities Exchange Board of India. The Company has also voluntarily adopted a code of conduct for good governance applicable to all Board Members and the Senior Managerial personnel of the Company. A separate section on Corporate Governance is attached herewith and forms part of the Director''s Report.

M/s Sandy Associates, Statutory Auditors of the Company, examined the conformity of the stipulations of Corporate Governance as specified in Clause 49 of the Listing Agreement and haves certified the compliance in respect thereof. The Certificate from the Auditor is forming a part of the Annual Report.

Mr. Jasjit Singh Sawhney, Chairman & Managing Director and Mr. Amarjit Singh Sawhney, Whole Time Director of the Company have, pursuant to Clause 49(V) of the Listing Agreement, provided the CEO/CFO Certification regarding the accuracy of the Financial Statements for the Financial Year ended March 31, 2013. The Certificate in respect thereof also forms part of the Annual Report.

- Management Discussion and Analysis Statement

Management Discussion and Analysis Statement on the Company''s performance, industry trends and other material changes with respect to the Company and its Subsidiaries, wherever applicable, is attached herewith and forms part of this Report.

- Code of Conduct

Your Company had, in pursuance of Clause 49 of the listing Agreement, taken up "The code of Conduct" for all Board Members and Senior Managerial Personnel of the Company. This code is designed to ensure the follow up of conduct and ethical business practices all over the Company. The Code is articulated to all Board Members and senior managerial personal and all of them have confirmed in writing their compliance with and adherence to the code of conduct adopted by the Company. The Code of Conduct is also available on Company''s website at www.net4.in.

- Insider Trading Regulations

The Company has also formulated a ''Code of Internal Procedures and Conduct for Prevention of Insider Trading in the Shares of the Company'' as per the provisions of SEBI (Prohibition of Insider Trading Regulations) 1992, as amended from time to time, providing guidelines to the designated employees while dealing in the shares of the Company.

- Auditor and Auditors'' Report

M/s Sandy Associates, Statutory Auditors of the Company, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept the office, if re-appointed.

The Auditors'' Report and Notes to Accounts referred to in the Auditors'' Report are self-explanatory and therefore, does not call for any further comments.

- Energy Conservation. Technology Absorption and Foreign Exchange Earnings flow.

Information as required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 in respect of Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo is enclosed and marked as Annexure-I to this Report.

- Particulars of Employees

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are given in Annexure- II to the Director''s Report.

Mr. Jasjit Singh Sawhney, Chairman & Managing Director and Mr. Amarjit Singh Sawhney, Whole-time Director of the Company, are relatives and particulars in their respect are given in the Corporate Governance Report. None of the other employee is relative of any of the Directors of the. Company.

Acknowledgements

The Directors place on record the appreciation and gratitude for the co-operation and assistance extended by various departments of the Union Government, State Government, Bankers and Financial Institutions.

The Directors also place on record their appreciation of dedicated and sincere services of the employees of the Company at all levels.

The Company will make every effort to meet the aspirations of its Shareholders/Investors and wish to sincerely thank them for their whole hearted co-operation and support at all times.

For and on behalf of the Board of Directors

Net 4 India Limited

Place: Noida Jasjit Singh Sawhney

Dated: 14.08.2013 Chairman & Managing Director

---

Mar 31, 2012

Dear Members,

M/s Net 4 India Limited

The behalf of the Board of Directors, I am delighted to present Twenty Sixth Annual Report together with the Audited Annual Accounts for the Financial Year ended March 31, 2012 along with Auditor''s Report thereon.

- Financial Results

The Standalone and Consolidated Financial performance of Net 4 India Limited for the year ended March 31, 2012 is presented below:

(Rs. In lacs, except per share data)

Standalone Consolidated

Particulars Year Ended Year Ended Year Ended Year Ended 31.03.2012 31.03.2011 31.03.2012 31.03.2011

Total Revenue 30,970.00 20,351.84 46,942.64 30,769.02

Net Profit before Tax 3,460.22 2,222.29 5,050.16 3,197.17

Net Profit after Tax/Amount 2,338.78 1,488.28 3,414.21 2,113.06 available for Appropriation

Balance retained in Profit & Loss 2,354.74 1,484.75 3,443.99 2,109.66 Account

Earning Per Share - Basic & Diluted 11.66 7.63 17.02 10.84

Historical performance

- Performance

Your Company continuously focused on growth and has posted another year of impressive performance with highest ever top line and highest earnings since inception. This is due to focused plans to work out on the growth strategies of the Company. The underlying performance reflects the inherent strength and operational excellence of your Company.

- Consolidated Results

Consolidated financial results of 2011- 12 in comparison to previous year 2010-11

Total Income of the Company increased by 52.56%, to Rs. 46,942.64 Lacs from Rs. 30,769.02 Lacs.

Profit after Tax increased by 61.58%, to Rs. 3,414.21 Lacs from Rs. 2,113.06 Lacs .

Earning per share (EPS) increased by 57.01%, to Rs. 17.02/- per share from Rs. 10.84/- per share.

- Standalone Results

Standalone financial results of 2011-12 in comparison to previous year 2010-11

Total Income for the year increased by 52.17%, to Rs. 30,970.00 Lacs from Rs. 20,351.84 Lacs.

Profit After Tax increased by 57.15%, to Rs. 2,338.78 Lacs from Rs. 1,488.28 Lacs

Earning per share (EPS) increased by 52.82%, to Rs.11.66/- per share from Rs. 7.63/- per share.

- Appropriations

Out of the profits available for appropriations, your Company has retained Rs. 2,354.74 lacs in the Profit and Loss Account. No transfers have been made to General Reserve.

- Business Overview

The economy has considerably slowed down during the year and growth momentum was tapered off in almost all the sectors on account of rising inflation, depreciating rupee and higher interest costs, despite that your Company emerged to achieve new heights of growth. It continues to work towards realizing the vision "of being the most valued Network and Application Service Provider- with innovative

and differentiated offerings". Since inception, within a short span of time, it has grown multi-folds and became the largest provider of web hosting services and domain name registration in India. Powered by a pool of talented professionals and equipped with latest technologies, the Company caters to the Web and Application Services, Data Centre and Cloud Computing and Network and System Integration services to its clients.

- Corporate Social Responsibility

Your Company is committed in fulfilling the Corporate Social Responsibility by contributing towards social and environmental causes. As a responsible corporate entity, we work towards the preservation of environment through various conservation programs. Your Company, is actively sustaining the spirit of Green Initiative, a worldwide adopted phenomenon to check the constantly increasing Global Warming, by deploying environmental friendly processes at work. The initiatives taken up by the Company includes, but not limited to, Motivational Programmes, E-documentation, Energy Savers and Pollution Checks.

Motivational programmes

Your Company has implemented various motivational programmes among its employees and also invites them to participate in management decisions, leading to appreciation of their confidence and thereby increasing overall productivity.

E-documentation

Various steps have been taken to minimize the use of paper. As the constant increase in the use of paper has lead to deforestation thereby increasing Global Warming. Your Company is also planning to adopt recycling of the waste paper. To reduce the usage of paper, the Company is practicing the concept of e-documentation and has also in furtherance to this concept and the Circular issued by Ministry of Corporate Affairs to allow paperless compliances, decided to send its Annual Report to the members through electronic mode.

Energy Savers

The Company is also making efforts to keep a check on the usage of power by installing energy saver equipments at its work places. Awareness on energy conservation is extended among the employees to control the unnecessary use of power.

Pollution Checks

Considering the fact that fuel prices are increasing on a continual basis and also to have a check on day-to-day increasing air and noise pollution, the Company is actively urging on the use of video-conferencing wherever possible, rather than travelling down to the respective place. Employees of the Company have also been advised to use the concept of car pooling so as to ensure a pollution free environment.

All these initiatives create a socially and ethically responsible business entity and helps in long term sustainability thus ensuring value growth for our various stakeholders.

- Subsidiary Companies

As on the date, the Company has four subsidiaries:

M/s Net 4 Communications Limited was incorporated in the year 2005 vide Certificate of Incorporation bearing registration number U72900WB2005PLC104025 having its Registered Office at Kolkata. The Company''s main business, is Computer-Hardware & Software for Internet Access & Internet Telephony Services including VoIP Solutions.

M/s Net4 Network Services Limited was incorporated on May 18, 2011 vide Certificate of Incorporation bearing registration number U72200DL2011PLC219357 in and under the Laws of India. The Company carry on the business of providing Internet Related Services and VoIP Solutions.

M/s Net4 HK Limited was incorporated on May 11, 2011 vide Certificate of Incorporation bearing number 1598959 in and under the Laws of Hong Kong. The Company carry on the business of Internet Related Services and VoIP Solutions.

M/s Pipetel Communications Private Limited was incorporated on September 4, 2009 vide Certificate of Incorporation bearing registration number U64200DL2009PTC193950 in and under the laws of India. It is mainly engaged into Enterprise Internet Services, VoIP Solutions and Web Services billing and Provisioning Platform solutions.

- Exemption u/s 212 (8) of the Companies Act, 1956

In terms of the circular No. 2/2011 dated February 8, 2011 issued by the Ministry of Corporate Affairs, general exemption under section 212 of the Companies Act, 1956 has been granted to the Companies from attaching the Balance Sheet, Profit & Loss Account and other document of the subsidiary companies with the Balance Sheet of the Parent/Holding Company. A statement containing brief financial details of the Company''s subsidiaries for the financial year ended March 31, 2012 is included in the Annual Report. The Consolidated Financial Statement of the Company includes the financials of its Subsidiary Companies.

The annual accounts of the subsidiary Companies 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 and its subsidiaries at the Registered Office of the Company. The annual accounts of the said subsidiaries will also be available for inspection, as above, at the registered offices of the respective subsidiary companies. The Company shall furnish a copy of the details of annual accounts of subsidiaries to any member on demand.

- Consolidated Financial Statements

In compliance with the Accounting Standard-21 on Consolidated Financial Statements and as per the requirement of the provisions of the Listing Agreements with the Stock Exchanges, a Consolidated Financial Statement of the Company together with its subsidiaries is attached in the Annual Report. The Consolidated Financial Statements have been prepared in accordance with the relevant Accounting Standards as prescribed under section 211 (3C) of the Companies Act, 1956 ("Act").

The Consolidated Financial Statement of the Company and its Subsidiaries will be available on the website of the Company at www.net4.in

- Dividend

The Company has not recommended any dividend for the year 2011-12 as the Company is utilizing the funds for its expansion plans which would certainly lead to the growth of the Company thereby increasing the value of the shares of your Company.

- Directors

The Board of the Company is having an optimum combination of Executive & Non-Executive Directors with not less than fifty percent of the Board comprising of the Non-Executive Independent Directors.

A. Appointment:-

Mr. Kamlesh Gandhi was appointed as an additional Director of the Company, under Section 260 of the Companies Act, 1956, by the Board of Directors at their meeting held on February 14, 2012. Mr. Kamlesh Gandhi would be designated as Non-Executive Independent Director and shall hold the office until the date of ensuing Annual General Meeting.

However, the Company has received a notice along with the requisite deposit pursuant to Section 257 of the Companies Act, 1956 proposing the candidature of Mr. Kamlesh Gandhi, for being appointed as the Director of the Company. Accordingly, the necessary resolution shall be put in the Notice of the Annual General Meeting for his appointment as a Director.

B. Re-appointment:-

In accordance with the provisions of the Section 255 and 256 of the Companies Act, 1956 read with Articles of Association of the Company, Mr. Surya Chadha and Mr. Sandip Kumar Ghosh, Directors of the Company are retiring by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. The Board recommends their appointment as Directors.

The tenure of appointment of Mr. Jasjit Singh Sawhney, Chairman & Managing Director and Mr. Amarjit Singh Sawhney, Whole Time Director, of the Company was expired on February 29, 2012 and March 31, 2012, respectively. They were further appointed by the Board of Directors, subject to the approval of shareholders, for afresh period of three years w.e.f. March 01, 2012 and April 01, 2012, respectively.

C. Cessation:-

During the year 2011-2012, Mr. Bharat Chawla, Director of the company, resigned from the Board of the Company. The Board placed on record the valuable contribution made by Mr. Bharat Chawla during his tenure as Director of the Company.

None of the Director of your Company is disqualified as per the provisions of Section 274(1)(g) of the Companies Act, 1956. Your Directors have made necessary disclosures as required under various provisions of the Act and Clause 49 of the Listing Agreement.

D. Change in Company Secretary & Compliance officer:-

Mr. Krishan Kumar Nagpal, the Company Secretary & Compliance officer of the Company had resigned from the office and Ms. Archna Walia has been appointed in his place w.e.f March 01, 2012

- 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:

(i) in the preparation of the Annual Accounts, the applicable accounting standards were followed and wherever required, proper explanations relating to material departures have been given;

(ii) 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 as at March 31, 2012 and of the profit of the Company for the year ended on that date;

(iii) the Directors have taken proper and sufficient care for 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

(iv) the Directors have prepared the Annual Accounts of the Company on a going concern basis.

- Human Resource

Employees today aspire towards growth opportunities, career options, empowerment and work life balance in an organization. To retain leadership position, the Company continuously innovates and customizes its human resource strategy to meet changing employee needs.

Net4 focuses meticulously on talent engagement, deployment on right projects, role/career progression and benchmark compensation and benefits, which has helped the Company to attract and retain best talent.

Your Company takes great pride in the allegiance, caliber & proficiency shown by its highly motivated human resource that contributed its best to take the Company to its new heights. The productivity of the employees is reflected in the consistent improvement over the years. We have also set up a scalable recruitment and human resources management process, which gives the employees the opportunities to come up with their grievances, suggestions and also give them chance to participate in the decisions. The Company continues to take new initiatives to further align its Human Resource policies to contribute to the growing needs of the business.

Your Company provides an environment which encourages initiative, innovative thinking and rewards performance without regard to various external factors such as race, sex, color, creed, religion, national origin, citizenship, age, marital status or orientation.

Your Company ensures and focuses on training and development of its personnel through various internal and advanced training programs, succession planning and participation at national and international conferences, job rotation, on-the-job training and various workshops.

- Quality

Quality has been the foundation of your organization''s sustenance and growth for all these years. Your Company has a well-defined Quality Management System, which established various process to implement quality and continuously improve organizations overall process capability. Your Company is ISO 9001:2000 certified, the world''s most successful International Standard, addressing best practice in the application of Quality Management Systems.

Your Company is also the First Internet Service Provider in the world to get an ISO 27001:2005 certification for its Internet Data Centre(s) certified by BSI (British Standard Instruction), and the company is continually maintaining the standards.

- Fixed Deposit

During the year under review, your Company has accepted the deposits within the meaning of Section 58A of the Companies Act, 1956 read with Companies (Acceptance of Deposit) Rules, 1975 of Rs. 1,574.13 Lacs (previous year Rs. 1,270.20 Lacs). In terms of the provisions of Investor Education and Protection Fund (IEPF) Rules, 2001, there was no unclaimed interest and/or principal amount due for transfer to Investors Education & Protection Fund, established by the Central Government under Section 205C(1) of the Companies Act, 1956, for the year ended March 31, 2012.

- Corporate Governance

Your Company is adhering with the Corporate Governance guidelines, as laid down in the Clause 49 of the Listing Agreement and mandatory stipulation as prescribed by the Securities Exchange Board of India. The Company has also voluntarily adopted a code of conduct for good governance applicable to all Board Members and the Senior Managerial personnel of the Company. A separate section on Corporate Governance is attached herewith and forms part of the Director''s Report.

M/s Sandy Associates, Statutory Auditors of the Company, examined the conformity of the stipulations of Corporate Governance as specified in Clause 49 of the Listing Agreement and have certified the compliance in respect thereof. The Certificate from the Auditor is forming a part of the Annual Report.

Mr. Jasjit Singh Sawhney, Chairman & Managing Director and Mr. Amarjit Singh Sawhney, Whole Time Director of the Company have, pursuant to Clause 49(V) of the Listing Agreement, provided the CEO/ CFO Certification regarding the accuracy of the Financial Statements for the Financial Year ended March 31, 2012. The Certificate in respect thereof also forms part of the Annual Report.

- Management Discussion and Analysis Statement

Management Discussion and Analysis Statement on the Company''s performance, industry trends and other material changes with respect to the Company and its Subsidiaries, wherever applicable, is attached herewith and forms part of this Report.

- Code of Conduct

Your Company had, in pursuance of Clause 49 of the Listing Agreement, taken up "The Code of Conduct" for all Board Members and Senior Managerial Personnel of the Company. This Code is designed to ensure the follow up of conduct and ethical business practices all over the Company. The Code is articulated to all Board Members and senior managerial personal and all of them have confirmed in writing their compliance with and adherence to the Code of Conduct adopted by the Company. The Code of Conduct is also available on Company''s website at www.net4.in.

- Insider Trading Regulations

The Company has also formulated a ''Code of Internal Procedures and Conduct for Prevention of Insider Trading in the Shares of the Company'' as per the provisions of SEBI (Prohibition of Insider Trading Regulations) 1992, as amended from time to time, providing guidelines to the designated employees while dealing in the shares of the Company.

- Auditor and Auditors'' Report

M/s Sandy Associates, Statutory Auditors of the Company, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept the office, if re-appointed.

The Auditors'' Report and Notes to Accounts referred to in the Auditors'' Report are self-explanatory and therefore, does not call for any further comments.

- Energy Conservation, Technology Absorption and Foreign Exchange Earnings & Outgo

Information as required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 in respect of Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo is enclosed and marked as Annexure-I to this Report.

- Particulars of Employeess

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are given in Annexure- II to the Director''s Report.

Mr. Jasjit Singh Sawhney, Chairman & Managing Director and Mr. Amarjit Singh Sawhney, Whole-time Director of the Company, are relatives and particulars in their respect are given in the Corporate Governance Report. None of the other employee is relative of any of the Directors of the Company.

- Acknowledgements

The Directors place on record the appreciation and gratitude for the co-operation and assistance extended by various departments of the Union Government, State Government, Bankers and Financial Institutions.

The Directors also place on record their appreciation of dedicated and sincere services of the employees of the Company at all levels.

The Company will make every effort to meet the aspirations of its Shareholders/Investors and wish to sincerely thank them for their whole hearted co-operation and support at all times.

For and on behalf of the Board of Directors

Net 4 India Limited

Sd/-

Place: Noida Jasjit Singh Sawhney

Dated: August 10, 2012 Chairman & Managing Director

---

Mar 31, 2011

Dear Members,

M/s Net 4 India Limited

On behalf of the Board of Directors of your Company, it is our privilege to present the 25th Annual Report on the business and operations of the Company together with the Audited Statement of Accounts for the financial year ended March 31, 2011 and Auditor's Report thereon.

- Results of Operations

(Rs. In lacs, except per share data)

Year Ended March 31st 2011 2010

Particulars Consolidated Standalone Consolidated Standalone

Operating Income 30357.44 19697.50 19513.74 10837.70

Net Profit before Tax 3197.17 2222.28 1765.37 1061.85

Net Profit after Tax/Amount 2113.06 1488.28 1150.48 695.17 available for Appropriation

Amount transferred to General - - 51.90 17.40 Reserve

Balance retained in Profit & Loss 2109.66 1484.75 1198.80 750.62 Account

Dividend - - 65.18 65.18

Earning Per Share-Basic & Diluted 10.84 7.63 6.66 4.02

- Performance

The Company had shown a tremendous growth in the year 2010-11. The Turnover of the Company for the year under review has significantly improved from the previous year figures and consequently the Profit after Tax and the Earning per Share (EPS) of the Company have also shown a remarkable increase as compared to the previous year. A brief comparison of year on year (YoY) is as under:

Consolidated Results

Total Income for the year increased by 54.06%. The income recorded as on March 31, 2011 was Rs. 30,769.02 lacs as compared to Rs. 19705.32 lacs recorded during the previous fiscal year. Profit After Tax during the year increased by 83.67%. The profit recorded as on March 31, 2011 was Rs. 2113.06 lacs as compared to Rs. 1,150.48 lacs recorded during the year ended on March 31, 2010. Earning per share (EPS) during the year increased by 62.76%, the EPS recorded as on March 31, 2011 is Rs. 10.84/- per share as compared to Rs. 6.66/- per share for the year ended on March 31, 2010.

Standalone Results

Total Income for the year increased by 81.29%. The income recorded as on March 31, 2011 was Rs. 20,351.84 lacs as compared to Rs. 11,225.95 lacs recorded during the previous fiscal year. Profit After Tax during the year increased by 114.09%. The profit recorded as on March 31, 2011 was Rs. 1,488.28 lacs as compared to Rs. 695.17 lacs recorded during the year ended on March 31, 2010. Earning per share (EPS) during the year increased by 89.80%, the EPS recorded as on March 31, 2011 is Rs. 7.63/- per share as compared to Rs. 4.02/- per share for the year ended on March 31, 2010.

- Appropriations

Out of the amount available for appropriations, your Company had retained Rs. 1484.75 lacs in the Profit and Loss Account and no transfers have been made to General Reserve.

- Business Overview

Your Company is a leading Network and Application Service Provider. The Company has grown multi- folds within a shot span of time and is amongst the largest provider of web hosting services and domain name registration in Asia Pacific. Powered by a pool of talented professionals and equipped with latest Internet Technologies, the Company caters to the internet infrastructure needs of other companies thereby enabling them to concentrate on their core business to achieve their business goals and transformational IT objectives.

The Company in its Silver Jubilee year has come out with a sterling performance taking a big leap forward, as the profits of the Company have zoomed by 84%. During the year 2010-11, the Company has scaled new heights and set several benchmarks in terms of networth, turnover and profits.

- Increase in Share Capital

The Share Capital of the Company has been increased to Rs. 20,05,82,500 in the financial year 2010-11 as compared to Rs. 18,44,78,120 in the previous year. The Company vide its Board Meeting dated May 25, 2010 and August 11, 2010, respectively, had accepted the offer for investment in the Company from certain Investors and in lieu thereof has made a Preferential Allotment of 16,10,438 Equity Shares of Rs. 10/- each for cash out of which 9,16,818 Equity Shares were issued at a premium of Rs. 77.76/- per Share to M/s. Granite Hill India Opportunity Fund & 6,93,620 Equity Shares were issued at a premium of Rs. 106/- per share to M/s QS India Hosting, Mauritius, and the consent of the shareholders in respect thereof, in the form of Special Resolutions, in terms of Section 81(1A) of the Companies Act, 1956 had been obtained at the Extra-ordinary General Meetings of the Company held on June 21, 2010 and September 06, 2010, respectively.

- Corporate Social Responsibility

As a matter of Corporate Social Responsibility, your Company is actively sustaining the spirit of Green Initiative, a worldwide adopted phenomenon to check the constantly increasing Global Warming, by deploying environmental friendly processes at work. Several steps are being taken by the Company in different areas to extend the concept of Corporate Social Responsibility so as to assure economic and effective utilization of natural & other resources. The initiatives taken up by the Company includes, but does not restrict to, Motivational Programmes, E-documentation, Energy Savers and Pollution Checks.

Motivational Programmes

Your Company is introducing various motivational programmes among its employees and also welcomes them as a part of management, leading to appreciation of their confidence, and thereby increasing their productivity.

E-documentation

Your Company has taken up various steps to make the use of paper at its minimal as the constant increase in the use of paper has lead to deforestation thereby increasing Global Warming. To reduce the usage of paper, the Company is practicing the concept of e-documentation, and has also in furtherance to this concept and the Circular issued by Ministry of Corporate Affairs to allow paperless compliances, decided to send its Annual Report to the members through electronic mode.

Energy Savers

The Company is also making efforts to keep a check on the usage of power by deploying energy saver equipments at its work places. Awareness on energy conservation is extended among the employees to control the unnecessary use of power.

Pollution Checks

To keep a check on day-to-day increasing air and noise pollution, the Company is actively urging on the use of Video-Conferencing facility wherever possible, rather than travelling down to the respective place. Employees of the Company have also been advised to use the concept of car pooling so as to ensure a pollution free environment.

All these initiatives create a socially and ethically responsible business entity and helps in long term sustainability thus ensuring value growth for our various stakeholders.

- Subsidiaries

At the financial year ended on March 31, 2011, the Company has two Wholly-Owned Subsidiaries, M/s Net 4 Singapore Pte Limited and M/s Net 4 Communications Limited. Your Company has also established another two wholly-owned subsidiaries namely, M/s Net4 Network Services Limited incorporated in India vide Certificate of Incorporation dated May 18, 2011 and M/s Net4 HK Limited incorporated in Hong Kong vide Certificate of Incorporation dated May 11, 2011.

Your Company has also acquired 100% stake in the Equity Shares of M/s Pipetel Communications Private Limited thereby making this company as its Wholly-Owned Subsidiary company.

Consecutively, as on the date of report, your Company is having five Wholly-Owned Subsidiaries namely, M/s Net 4 Singapore Pte Limited, M/s Net 4 Communications Limited, M/s Net4 Network Services Limited, M/s Net4 HK Limited and M/s Pipetel Communications Private Limited.

Net 4 Communications Limited was incorporated in the year 2005 having its Registered Office at Kolkata. During the year under review, Total Income of the Company increased to Rs. 10,696.21 Lacs from 8,682 Lacs, at a growth rate of 23.20%. The Profit after Tax increased from Rs. 459.73 Lacs to Rs. 680.68 Lacs an increase of 48.06%.

The performance of Net 4 Singapore Pte Limited, incorporated primarily to manage the Companies' proposed International Wholesale VoIP Business, have not matched with the expectations of the Board and it is decided to wind-up the Company. An application for the de-registration of the Company have been filed with the concerned authorities in Singapore.

Net4 Network Services Limited was incorporated on May 18, 2011 vide a Certificate of Incorporation bearing number U72200DL2011PLC219357 has been issued in and under the Laws of India. The Company is having the main business of Internet Related Services and VoIP Solutions.

Net4 HK Limited was incorporated on May 11, 2011 vide a Certificate of Incorporation bearing number 1598959 has been issued in and under the Laws of Hong Kong.

Pipetel Communications Private Limited was incorporated on September 4, 2009 vide Certificate of Incorporation bearing number U64200DL2009PTC193950 in and under the laws of India. It is mainly engaged into Enterprise Internet services, VoIP Solutions and Web Services billing and Provisioning Platform solutions.

The Company has entered into a Composite Scheme of Arrangement with M/s Net4 Network Services Limited ("Net4 Network") and M/s Pipetel Communications Private Limited ("Pipetel"). By virtue of the Scheme, "Pipetel" will amalgamate into and with the Company and by way of demerger, the ISP undertaking of the Company (which will comprise of the business acquired through merger of Pipetel) shall stand transferred to "Net4 Network".

- Consolidated Financial Statements

As required under the Listing Agreements with the Stock Exchanges, a Consolidated Financial Statement of the Company together with its subsidiaries is attached in the Annual Report. The Consolidated Financial Statements have been prepared in accordance with the relevant Accounting Standards as prescribed under section 211 (3C) of the Companies Act, 1956 ("Act").

As per Section 212 of the Companies Act, 1956, the Directors' Report, Balance Sheet, and Profit and Loss Account of the subsidiaries are required to be attached with the Balance Sheet of the Company. However, Ministry of Corporate Affairs vide its Circular No.2/2011 dated February 8, 2011 has granted general exemption from attaching the Balance Sheet, Profit & Loss Account and other document of the subsidiary companies with the Balance Sheet of the Company. A statement containing brief financial details of the Company's subsidiaries for the financial year ended March 31, 2011 is included in the Annual Report. The Annual Accounts of these Subsidiaries & 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 and its Subsidiaries at the registered office of the Company. The Annual Accounts of the said Subsidiaries will also be available for inspection, as above, at the registered offices of the respective Subsidiary Companies. The Company shall furnish a copy of the details of Annual Accounts of Subsidiaries to any member on demand.

- Dividend

The Company has not recommended any dividend for the year 2010-11 (previous year 10%) as the Company is utilizing the funds in its expansion plans which would certainly lead to a quantum growth of the Company thereby increasing the value of the shares of your Company.

- Directors

The Board of Directors of the Company is having an optimum combination of Executive & Non-Executive Directors with not less than fifty percent of the Board comprising of the Non-Executive Independent Directors.

Mr. Bharat Chawla, Director of the Company, resigned from the Board of the Company w.e.f May 21, 2011.

Further, in accordance with the provisions of the Companies Act, 1956 read with Articles of Association of the Company, Mr. Desi Subri Valli and Mr. Manish Wadhawan, Directors of the Company are retiring by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re- appointment. The Board recommends the appointment of the said Directors.

- 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:

(i) in the preparation of the Annual Accounts, the applicable accounting standards had been followed and wherever required, proper explanations relating to material departures have been given;

(ii) 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 as at March 31, 2011 and of the profit of the Company for the year ended on that date;

(iii) the Directors have taken proper and sufficient care for 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

(iv) the Directors have prepared the Annual Accounts of the Company on a going concern basis.

- Human Resource

Net4 takes great pride in the commitment, competence & vigor shown by its highly motivated human resource that contributed its best to bring the Company to its present heights. The productivity of the employees is reflected in the consistent improvement over the years. We have also set up a scalable recruitment and human resources management process, which enables us to attract and retain high caliber employees. The Company continues to take new initiatives to further align its HR policies to contribute to the growing needs of the business.

Your Company provides an environment which encourages initiative, innovative thinking and rewards performance without regard to various external factors such as race, sex, color, creed, religion, national origin, citizenship, age, marital status or orientation.

Your Company ensures and focuses on training and development of its personnel through various internal and advanced training programs, succession planning and participation at national and international conferences, job rotation, on-the-job training, and various workshops.

- Quality

Quality has been the substratum of your organization's sustenance and growth for all these years. Your Company has a well-defined Quality Management System, which establishes wide process to implement quality and continuously improve organization's overall process capability. Your company is ISO 9001:2000 certified, the world's most successful International Standard, addressing best practice in the application of Quality Management Systems.

Your Company is also the First Internet Service Provider in the world to get an ISO 27001:2005 certification for its Internet Data Centre(s) certified by BSI (British Standard Instruction), and we are continually maintaining the standards.

- Fixed Deposit

During the year under review, your Company has accepted deposits within the meaning of Section 58A of the Companies Act, 1956 read with Companies (Acceptance of Deposit) Rules, 1975 for Rs. 1,270.20 lacs (previous year Rs. 388.14 Lacs). In terms of the provisions of Investor Education and Protection Fund (IEPF) Rules, 2001, there was no unclaimed interest and / or principal amount due for transfer to Investors Education & Protection Fund, established by the Central Government under Section 205C(1) of the Companies Act, 1956 for the year ended March 31, 2011.

- Corporate Governance

Your Company is committed to maintain the highest standards of Corporate Governance. In addition to adhering the Corporate Governance practices set out by the Securities and Exchange Board of India for and the Listing Agreement and the mandatory stipulations prescribed there under, the Company has also evolved & adopted a Code of Conduct based on the principles of Good Corporate Governance and best management practices being followed globally.

Report on Corporate Governance for the year ended on March 31, 2011 in terms of Clause 49 of the Listing Agreements entered into with the concerned Stock Exchanges in India forms part of the Annual Report. Requisite Certificate from the Statutory Auditors of the Company, M/s Sandy Associates, Chartered Accountants, New Delhi, confirming compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement, is attached to this Report.

- Management Discussion and Analysis Statement

Management Discussion and Analysis Statement on the Company's performance, industry trends and other material changes with respect to the Company and its Subsidiaries, wherever applicable, is attached to this Report.

- Code of Conduct

In terms of Clause 49 of the Listing Agreement, the Company has formulated a Code of Conduct for its Senior Management Employees including the Managing Director and the Whole-time Director. All the Senior Managerial Personnel, including the Managing Director and the Whole-time Director, have given their consent to adhere to the Code of Conduct to the Compliance Officer of the Company. As per the requirement of the Listing Agreement, the Code of Conduct is also available on Company's website www.net4.in.

The Company has also formulated a 'Code of Internal Procedures and Conduct for Prevention of Insider Trading in the Shares of the Company' as per the provisions of SEBI (Prohibition of Insider Trading Regulations) 1992, as amended from time to time, providing guidelines to the designated employees while dealing in the Shares of the Company.

- Listing Information

The Shares of the Company were admitted to trading under the Direct Listing Norms of the National Stock Exchange on December 10, 2010 (Scrip ID - NET4 & NSE Code-20784).

Apart from the above, the Shares of your Company are also listed at Bombay Stock Exchange (Scrip Code: 532912) and Delhi Stock Exchange (Scrip Code: 113089). In accordance with Clause-38 of the Listing Agreements entered into by the Company with the concerned Stock Exchanges in India, the Company has paid for the year 2010-11 the Annual Listing Fees to all the concerned Stock Exchanges & the Annual Custodian Fees to the concerned Depositories.

- Auditors and Auditors' Report

M/s Sandy Associates, Statutory Auditors of the Company, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept the office, if re-appointed.

The Auditors' Report and Notes to Accounts referred to in the Auditors' Report are self-explanatory and therefore, does not call for any further comments.

- Energy Conservation, Technology Absorption and Foreign Exchange Earnings & Outgo

Information as required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 in respect of Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo is enclosed and marked as Annexure I to this Report.

- Particulars of the Employees

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are given in Annexure II to the Directors' Report.

Mr. Jasjit Singh Sawhney, Chairman & Managing Director and Mr. Amarjit Singh Sawhney, Whole-time Director of the Company are relatives and particulars in respect thereof are given in Corporate Governance Report. None of the other employee is relative of any of the Directors of the Company.

Acknowledgements

The Directors place on record the appreciation and gratitude for the co-operation and assistance extended by various departments of the Union Government, State Government, Bankers and Financial Institutions.

The Directors also place on record their appreciation of dedicated and sincere services of the employees of the Company at all levels.

The Company will make every effort to meet the aspirations of its Shareholders and wish to sincerely thank them for their whole hearted co-operation and support at all times.

For and on behalf of the Board of Directors

Net 4 India Limited

Sd/-

Place: Noida Jasjit Singh Sawhney

Dated: August 30, 2011 Chairman & Managing Director

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Mar 31, 2010

On behalf of the Board of Directors of your Company, it is our privilege to present the 24th Annual Report on the business and operations of the Company together with the Audited Statement of Accounts for the fnancial year ended March 31, 2010 and Auditor’s Report thereon.

Results of Operations

(Rs. In lacs, except per share data)

Year Ended March 31st 2010 2009

Particulars Consol Stand Consol Stand -idated -alone -idated -alone

Operating Income 19513.74 10837.70 16067.23 9790.00

Net Proft before Tax 1765.37 1061.85 1307.35 906.15

Net Proft after Tax/ Amount available for 1150.48 695.17 840.42 595.32

Appropriation

Amount transferred to General Reserve 51.90 174.00 14.90 149.00

Balance retained in Proft & Loss Ac- 1198.80 750.62 629.55 384.45 count

Dividend 65.18 65.18 167.50 167.50

Earning Per Share-Basic & Diluted 6.66 4.02 5.02 3.55



Performance

The year under review witnessed an improved Turnover as compared to the previous year fgure and the Proft after Tax and consequently, Earning per Share (EPS) of the Company has also increased as compared to previous year. A brief comparison of year on year (YoY) is as under:

Consolidated Results

Total Income for the year ended March 31, 2010 was Rs. 19,705.32 Lacs as compared to Rs. 16,284.89 Lacs re- corded during the previous fscal, an increase of 21%. Proft after Tax increased from Rs. 840.42 Lacs for the year ended March 31, 2009 to Rs. 1,150.48 Lacs for the year ended March 31, 2010 an increase of 36.90%. Earnings per Share (EPS) increase from Rs.5.02/- per share in March 31, 2009 to Rs.6.66/- per share in March 31, 2010, an increase of 32.67%.

Standalone Results

Total Income for the year ended March 31, 2010 was Rs. 11,225.95 Lacs as compared to Rs. 10,179.43 Lacs recorded during the previous fscal, an increase of 10.28%. Proft after Tax increased from Rs. 595.32 Lacs for the year ended March 31, 2009 to Rs. 695.17 Lacs for the year ended March 31, 2010 an increase of 16.77%. Earnings per Share (EPS) increase from Rs.3.55/- per share in March 31, 2009 to Rs.4.02/- per share in March 31, 2010, an increase of 13.24%.

Business Overview

Your Company achieved important mile stones in the year 2009-10. During the year, the Company has scaled new heights and set several benchmarks in terms of networth, turnover and profts.

In order to meet the capital requirements for various expansions in business, your Company has made an allotment of 1,697,812 Equity Shares of Rs. 10 each for cash at a premium of Rs. 77.76 per Share vide its Board Meeting dated December 8, 2009 to M/s. Madison India Capital HC, Mauritius and the consent of the shareholders in the form of Special Resolution in terms of Section 81(1A) of the Companies Act, 1956 has been obtained at the Extra- ordinary General Meeting of the Company held on 9th November, 2009.

A detailed discussion on the same and future opportunities is provided in the Management Discussion and Analysis Statement is presented in a separate section forming part of Annual Report.

Subsidiaries

Your Company has two Wholly-Owned Subsidiaries, M/s Net 4 Singapore Pte Limited and M/s Net 4 Communications Limited.

Net 4 Singapore Pte Limited

Net 4 Singapore Pte Limited was incorporated primarily to manage the Companies’ proposed International Whole- sale VoIP Business. The Company has already been awarded with the Service Based Operator (SBO) License in Singapore in the previous year. However, the Company is yet to start its business operations.

Net 4 Communications Limited

Net 4 Communications Limited was incorporated in the year 2005 having its Registered Offce at Kolkata. During the year under review, Total Income of the Company increased to Rs. 8,682 Lacs from 6,235.70 Lacs, at a growth rate of 39.23%. The Proft after Tax increased from Rs. 297.32 Lacs to Rs. 459.73 Lacs an increase of 54.62%.

Particulars under Section 212 of the Companies Act, 1956

As per Section 212 of the Companies Act, 1956, we are required to attach the Directors’ Report, Balance Sheet, and Proft and Loss Account of our subsidiaries to the Balance Sheet of the Company. As per the requirement of Section 212 (1) of the Companies Act, 1956, the documents of the Subsidiary Companies has been attached to the Balance Sheet of M/s Net 4 India Limited. These documents will also be available for inspection during business hours at our Registered Offce and also at the Registered Offce of the concerned Subsidiaries.

Dividend

The Board of Directors of your Company have recommended Dividend @ 10% (Rupee 1 per Share) for the year 2009-10 (previous year 10%) to the shareholders other than Promoters and Promoter’s group, subject to the ap- proval of shareholders in their ensuing Annual General Meeting.

Directors

During the year Mr. Surya S. Chadha was appointed as a Non-Executive Director of the Company vide Extra- ordinary General Meeting of the members of the Company held on November 9, 2009.

Thereafter, Ms. Biba Sawhney resigned as Director from the Board of Directors of the Company w.e.f. December 8, 2009 due to some other pre-occupations. The Board placed on record deep sense of appreciation for the valuable contribution made by Ms. Biba Sawhney during her tenure as a Director of the Company.

Further, in accordance with the provisions of the Companies Act, 1956 read with Articles of Association of the Com- pany, Mr. Sandip K. Ghosh and Mr. Brijesh Chand Mathur, Directors of the Company are retiring by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. The Board recom- mends the appointment of the above Directors.

Directors Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors’ Re- sponsibility Statement, it is hereby confrmed that:

(i) in the preparation of the Annual Accounts, the applicable accounting standards had been followed and wherever required, proper explanations relating to material departures have been given;

(ii) 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 as at March 31, 2010 and of the proft of the Company for the year ended on that date;

(iii) the Directors have taken proper and suffcient care for maintenance of adequate accounting records in ac- cordance 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

(iv) the Directors have prepared the Annual Accounts of the Company on a “going concern” basis.

Human Resource

Net4 takes pride in its highly motivated and competent human resource that contributed its best to bring the Com- pany to its present heights. The productivity of the employees is refected in the consistent improvement over the years. We have also set up a scalable recruitment and human resources management process, which enables us to attract and retain high caliber employees.

Your Company provides an environment which encourages initiative, innovative thinking and rewards performance without regard to various external factors such as race, sex, color, creed, religion, national origin, citizenship, age, marital status or orientation.

Your Company ensures and focused on training and development of its personnel through various internal and ad- vanced training programs, succession planning, participation at national and international conferences, job rotation, on-the-job training, and various workshops.

Fixed Deposit

During the year under review your Company has accepted deposits within the meaning of Section 58 A of the Com- panies Act, 1956 read with Companies (Acceptance of Deposit) Rules, 1975 for Rs. 3,88,14,000/-. In terms of the provisions of Investor Education and Protection Fund (IEPF) Rules, 2001, there was no unclaimed interest and / or principal amount due for transfer to Investors Education & Protection Fund, established by the Central Government under Section 205C(1) of the Companies Act, 1956 for the year ended March 31, 2010.

Corporate Governance

Your Company is committed to maintain the highest standards of Corporate Governance. The Company adheres to the requirements set out by the Securities and Exchange Board of India’s Corporate Governance practices and the requirements of the Listing Agreement and has implemented all the mandatory stipulations prescribed there under. Report on Corporate Governance for the year ended March 31, 2010 in terms of Clause 49 of the Listing Agree- ments entered into with the Stock Exchanges in India forms part of the Annual Report. Certifcate from the Auditors of the Company, M/s. Sandy Associates, Charatered Accountants, New Delhi confrming compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement, is annexed to this Report.

Management Discussion and Analysis Statement

Management Discussion and Analysis Statement on the Company’s performance, industry trends and other mate- rial changes with respect to the Company and its Subsidiaries, wherever applicable is attached to this Report.

Code of Conduct

In terms of Clause 49 of the Listing Agreement, the Company has formulated a Code of Conduct for the Directors and Senior Managerial Personnel. All the Board Members and Senior Managerial Personnel have given their con- sent to adhere to the Code of Conduct to the Compliance Offcer of the Company. As per the requirement of Listing Agreement, the Code of Conduct is also available on Company’s website www.net4.in.

The Company has also formulated a ‘Code of Internal Procedures and Conduct for prevention of Insider Trading in Shares of the Company’ as per the provisions of SEBI (Prevention of Insider Trading Regulations) 2000, as amend- ed from time to time, providing guidelines to the designated employees while dealing in shares of the Company.

Listing Information

Your Company is listed on the Bombay Stock Exchange (Scrip Code: 532912) and Delhi Stock Exchange (Scrip Code: 113089). The listing fee for the year 2009-10 has been paid to both the Stock Exchanges. The application with the National Stock Exchange had already been fled for listing and the same is pending for its approval.

Auditors and Auditors’ Report

M/s. Sandy Associates, Statutory Auditors of the Company, retire at the ensuing Annual General Meeting and have confrmed their eligibility and willingness to accept the offce, if re-appointed.

The Auditors’ Report and Notes to on Accounts referred to in the Auditors’ Report are self-explanatory and therefore, does not call for any further comments.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings & Outgo

Information as required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 in respect of Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo is en- closed and marked as Annexure I to this Report.

Particulars of the Employees

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are given in Annexure II to the Directors’ Report.

Mr. Jasjit Singh Sawhney, Chairman & Managing Director and Mr. Amarjit Singh Sawhney, Whole Time Director of the Company are relatives and particulars in respect thereof are given in Corporate Governance Report. None of other employee is relative of any of the Directors of the Company.

Acknowledgements

The Directors place on record the appreciation and gratitude for the co-operation and assistance extended by vari- ous departments of the Union Government, State Government, Bankers and Financial Institutions.

The Directors also place on record their appreciation of dedicated and sincere services of the employees of the Company at all levels.

The Company will make every effort to meet the aspirations of its Shareholders and wish to sincerely thank them for their whole hearted co-operation and support at all times.

For and on behalf of

the Board of Directors



Sd/-

Jasjit Singh Sawhney

Place: Noida

Chairman & Managing Director

Dated: August 31, 2010 (DIN: 00111020)

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Mar 31, 2009

On behalf of the Board of Directors of your Company, it is my privilege to present the 23rd Annual Report along with Audited Statement of Accounts for the financial year ended March 31, 2009 and Auditor’s Report thereon.

Results of Operations

(Rs. in lacs, except per share data)

Year Ended March 31st 2009 2008

Particulars Consolidated Standalone Consolidated Standalone

Operating Income 16067 9790 13516 8580

Depreciation & Amortization 1707 924 1435 781

Interest & Finance Charges 628 415 578 402

Other Expenditure 12642 7934 10338 6780

Net Profit before Tax 1307 906 1411 999

Provision for Taxation (including 467 311 463 351 Deferred Tax)

Net Profit after Tax/ Amount 840 595 948 649 available for Appropriation

Dividend 167.50 167.50 167.50 167.50

Tax on Dividend 28 28 38 28

Amount Transferred to General 15 15 41 16 Reserve

Balance retained in Profit & Loss A/c 630 384 701 437

Earning Per Share-Basic & Diluted 5.02 3.55 5.80 3.97

Performance

The year under review witnessed an improved Turnover as compared to the previous year figure. But the Profit after tax and consequently EPS of the Company has been decreased as compared to previous year figure. Even though the previous year was extremely difficult for businesses the world over, your Company has shown an increase in sales. A brief comparison year on year (YoY) is as under:

Consolidated Results

Total income for the year ended March 31, 2009 was Rs.16284.89 lacs as compared to Rs. 13763.10 lacs recorded during the previous fiscal, an increase of 18.5%. Profit after Tax reduced to Rs. 840.42 lacs against Rs. 948.09 lacs in the previous year; a decrease of 11% . Earnings per share reduced to Rs.5.02, 13% down as compared to last year’s Rs. 5.80.

Standalone Results

Total income for the year ended March 31, 2009 was Rs. 10179 lacs as compared to Rs. 8847 lacs recorded during the previous fiscal, an increase of 15%. Profit after Tax reduced to Rs. 595.32 lacs against Rs. 648.81lacs in the previous year; a decrease of 8.98%. Earnings per share reduced to Rs. 3.55, a decrease of 11.8% as compared to last year’s Rs. 3.97. ortant mile stones during the year 2008-09. A detailed discussion on the same provided in the management discussion and analysis. owned subsidiaries namely Net 4 Singapore Pte Ltd and Net 4 Communications

Net 4 Singapore Pte Limited

Net 4 Singapore Pte Ltd. was incorporated in 2007 primarily to setup the Companies’ International wholesale VoIP business and VPN Voice/data network services. The Company has been awarded with the Service Based Operator (SBO) license in Singapore. Under the license, the Company will now be able to provide a range of enhanced retail and wholesale VoIP (Voice over Internet Protocol) services.

Net 4 Communications Limited

Net 4 Communications Limited was incorporated in the year 2005 having its Registered Office at Kolkata. During the year under review, Total income of the Company increased to Rs. 62.36 Cr. from 50.62 Cr., at a growth rate of 23%. The Profit after Tax reduced to Rs. 297.32 lacs against Rs. 332.72 lacs, a decrease of 11%.

We are expecting our expanded and improved Data centers at Chennai and Mumbai to be operational this year. These locations will provide us the space ammunition to bring in enterprise and corporate clients with higher capacity requirements.

PARTICULARS UNDER SECTION 212 OF THE COMPANIES ACT, 1956

As per Section 212 of the Companies Act, 1956, we are required to attach the Directors’ Report, Balance Sheet, and Profit and Loss Account of our subsidiaries to the Balance Sheet of the Company. As per the requirement of Section 212 (1) of the Companies Act, 1956 the required documents of the Subsidiary Companies has been attached to the Balance Sheet of M/s Net 4 India Limited. These documents will also be available for inspection during business hours at our registered office and also at the registered office of the concerned subsidiary.

Consolidated Financial Statements

In accordance with the Accounting Standard AS-21 on Consolidated Financial Statements read with Accounting Standard AS-23 on Accounting for Investments in Associates, the audited Consolidated Financial Statements are provided in the Annual Report.

Dividend

The Board of Directors of your Company have recommended dividend @ 10% (Rupee 1 per Share) for the year 2008-2009 (previous year 10%) to shareholders other than promoters and promoter group, subject to approval of members in their ensuing Annual General Meeting.

Directors

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Bharat Chawla and Mr. Manish Wadhawan, Directors are retiring by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. The Board recommends the appointment of the above Directors.

Managing Director and Whole Time Director

Mr. Jasjit Singh Sawhney, Managing Director of the Company, whose term expired on 28th February, 2009, has been re-appointed as the Managing Director of the Company w.e.f. 01st March, 2009 by the Board of Directors.

Mr. Amarjit Singh Sawhney, Whole Time Director of the Company, whose term expired on 31st March, 2009, has been re-appointed as the Whole Time Director of the Company w.e.f. 01st April, 2009 by the Board of Directors.

The appointment of Managing Director and Whole Time Director by the Board of Directors is subject to the approval of the Shareholders in General Meeting. The resolution has been set in the Annual General Meeting notice. The Board recommends to pass the resolution to approve the above said appointments.

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:

(i) in the preparation of the Annual Accounts, the applicable accounting standards had been followed and wherever required, proper explanations relating to material departures have been given;

(ii) 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 as at 31st March 2009 and of the profit of the Company for the year ended on that date;

(iii) the Directors have taken proper and sufficient care for 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

(iv) the Directors have prepared the annual accounts of the Company on a “going concern” basis.

Human Resource

Net4 is an equal opportunity employer and ensures that all employment decisions and personnel policies are made without regard to factors such as race, sex, color, creed, religion, national origin, citizenship, age, marital status, sexual preference or orientation,.

Net4 offers several types of diversity training. New employees learn of Net4’s environment of inclusion through the New Hire Orientation program and there are other training programs offered for continuous learning.

We have created a favorable work environment that encourages innovation and meritocracy. Every employee is encouraged to optimize his/her full potential by availing of opportunities that exist across multiple functions, disciplines as well as geographies. We have also set up a scalable recruitment and human resources management process, which enables us to attract and retain high caliber employees.

Fixed Deposit

During the year under review your Company has not accepted any deposits within the meaning of Section 58 A of the Companies Act, 1956. As such, no amount of principal or interest was outstanding as on the Balance Sheet date.

Corporate Governance

Your Company is committed to maintain the highest standards of Corporate Governance. The Company adheres to the requirements set out by the Securities and Exchange Board of India’s Corporate Governance practices and the requirements of the Listing Agreement and have implemented all mandatory stipulations prescribed there under. Report on Corporate Governance for the year ended 31st March 2009 in terms of Clause 49 of the Listing Agreements entered into with the Stock Exchanges in India forms part of the Annual Report. Certificate from the Auditors of the Company, M/s. Sandy Associates, confirming compliance of conditions of Corporate Governance as stipulated under the aforesaid Clause 49, is attached to this Report.

Management Discussion and Analysis Statement

Management Discussion and Analysis Statement on the Company’s performance, industry trends and other material changes with respect to the Company and its subsidiaries, wherever applicable is attached to this report.

Code of Conduct

In terms of Clause 49 of the Listing Agreement the Company has formulated a Code of Conduct for the Directors and Senior Managerial Personnel. All the Board members and senior managerial persons have given their consent to adhere to the Code of Conduct to the Compliance Officer. As per requirement of Listing Agreement, the code of conduct is also available on Company’s website www.net4.in.

The Company has also formulated a ‘Code of Internal Procedures and conduct for prevention of Insider trading in shares of the Company’ as per the provisions of SEBI (Prevention of Insider Trading Regulations) 2000, as amended from time to time, providing guidelines to the designated employees while dealing in shares of the Company.

Listing Information

Your Company is listed on the Bombay Stock Exchange (Scrip Code: 532912) and Delhi Stock Exchange (Scrip Code: 113089). The listing fee for the year 2009-2010 has been paid to the Bombay Stock Exchange and Delhi Stock Exchange.

Auditors and Auditors’ Report

The Auditors, M/s. Sandy Associates, Chartered Accountants, Statutory Auditors, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re-appointed. The Auditors’ Report and Notes on Accounts referred to in the Auditors’ Report are self-explanatory and therefore do not call for any further comments.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings & Outgo

Information as required under the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 in respect of energy conservation, Technology absorption and Foreign Exchange earnings and outgo is given in Annexure-I to this report.

Particulars of the Employees

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are given in Annexure I to the Directors’ Report. Mr. Jasjit Singh Sawhney, Chairman & Managing Director, Mr. Amarjit Singh Sawhney, Whole-time Director and Ms. Biba Sawhney, Director are relatives, particulars thereof are given in corporate Governance Report. None of other employee is relative of any of the Directors.

Acknowledgements

Your Directors would like to express their grateful appreciation for assistance and co-operation received from the Banks, Government Authorities, Customers, Vendors and Members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services of the all employees of the Company.

For and on behalf of the Board of Directors Sd/- Place: New Delhi JASJIT SINGH SAWHNEY Dated: 30th June, 2009 Chairman & Managing Director

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Mar 31, 2000

The Directors have the pleasure in presenting their 14th Annual Report together with the audited Accounts for the year ended 31st day of March, 2000.

WORKING OF THE COMPANY

During the year the company started the software Business and income from the said business amounts to Rs. 7,00,000/- (Rupees Seven Lacs) and the better results are expected in the current financial year.

FINANCIAL RESULTS

( The details of financial results are summarised herein below:

AMOUNT IN RUPES THOUSAND

S.No PARTICULARS FOR THE YEAR ENDED ON

31.3.2000 31.3.99

1 Income (current year Rs.1336.69 8085.58 figures includes Income of Rs. 7.00 Lacs from software business)

2.Profit before Depreciation 341.06 299.22 & Tax

3. Less:-Depreciation For 192.00 243.84

The Year

4. Less Provision For Tax 057.26 013.92

5. Profit After Depreciation 091.80 041.46 & Tax

6. Add (+) Less(-) Provision (-) 008.35 (+)008.57 Made previous year

7. Balance Brought Forward (+) 1503.29 1453.26

8. Balance C/O To 1586.74 1503.29 Balance Sheet

DIVIDEND

Keeping in view of the fact that Company requires funds to meet out its future working capital requirements in the new field of business, your Directors do not recommend any dividend for declaration.

FUTURE PROSPECTS

The Directors are exploring International Market for Software Export in which there is wide scope and company can procure the remunerative business.

CHANGE OF NAME OF THE COMPANY

Considering the fact that the company has started the business of Software and in the line other related fields the name of the company was changed to NET FOUR INTERNET.COM Limited. The Registrar of Companies NCT Delhi & Haryana vide fresh Certificate of Incorporation dated 3rd day of August, 2000 had confirmed the said change of name

DEPOSITS

The Company has not invited, accepted or renewed any deposits from Public during the year, hence the provisions of Section 58-A are not attracted.

AUDITORS

M/s Sandy Associates the existing auditors of the company, whose term expire at the conclusion of this meeting being eligible offer themselves for re-appointment. The members are requested to consider their appointment and to fix up their remuneration.

AUDITORS REPORT

The observations of Auditors have been suitably dealt with. Notes on accounts in this regard are self-explanatory and need no further comments.

PARTICULARS OF EMPLOYEES

No employee of the company fall with in the perview of Section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 as amended.

ADDITIONAL INFORMATION u/s 217 (1) e

Energy Conservation : The Company has taken all possible measures to optimise the use of electricity at its operating units. However your company does not require to furnish the details, in form A with regard to disclosure for conservation of energy.

Technology Absorption : NOTHING TO BE DISCLOSED

Earning in Foreign Exchange; - NIL -

Outgo in Foreign Exchange - NIL -

APPRECIATION

Your Directors wish to place on record their sincere appreciation for the overwhelming support and co-operation they received from the customers, Bankers and Shareholders of the Company.

PLACE : NEW DELHI For & On Behalf Of The Board

DATED : 28th Aug., 2000 (DIRECTOR) (DIRECTOR)