To

The Members,

The Directors take pleasure in presenting their Twenty Fifth Annual Report and the audited Statement of Accounts, highlighting the business operations and financial results for the financial year ended March 31, 2018. Consolidated performance of the Company and its subsidiaries has been referred to wherever required.

1. FINANCIAL SUMMARY OR HIGHLIGHTS/ PERFORMANCE OF THE COMPANY:

The summarized standalone and consolidated results of your Company and its subsidiaries are given in the table below:

On the basis of standalone financial statements, the performance of the Company appears as follows:

On the basis of consolidated financial statements, the performance of the Company appears as follows:

(Amount Rs. in Lakhs)

2. BRIEF DESCRIPTION OF THE COMPANY’S WORKING DURING THE YEAR/STATE OF COMPANY’S AFFAIR:

During the year under review, the gross revenue of the Company increased to Rs.1038.91 Lakhs as compared to Rs.934.49 Lakhs in the previous year. The Profit after tax for the year was Rs. 265.57 Lakhs as compared to Rs. 285.48 Lakhs in the previous year.

3. CHANGE IN THE NATURE OF BUSINESS, IF ANY:

Consolidation of Clients, rationalization of market segments & expansion of Sales force will be the Focused approach in Financial Year 2018 - 2019 to achieve the targeted numbers. During the Financial Year 2018-2019. The plan is to profitably balance out and integrate Top line growth with reasonable bottom lines.

4. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

There are no Material changes and commitments affecting the financial position of the company.

5. FUTURE OUTLOOK:

Renewed thrust with a larger Sales force to tap the growing market during Q 2 , Q 3 & Q 4 will take up the Top line under stand alone to a level of Rs.1300.00 lakhs, up from the previous year’s Rs.1038.91 Lakhs, an estimated growth of around 20 % YoY .

Standalone:

In the ISP segment, there is immense competition in both the twin states of Telangana State & Andhra Pradesh State. On one hand, Home grown and dominant localized State level A & B category ISPs are fighting for larger market shares with bigger brand presence & reach. On the other side, National TELCOs are also directly marketing all their Voice, Data & Video service offerings in the same markets. Margins are shrinking with incremental fixed costs. Fall in Internet Bandwidth buying prices is getting negated with higher demand from end consumers from the point of view of both quality & quantity of bandwidth, which poses a challenge in optimizing usage of Internet bandwidth management. State Governments on both sides are exploring the possibility of providing Free Wi-Fi in select Cities & principal towns. This may add to the existing fierce competition. Additionally, Reliance Jio is expected to play havoc in the market with their aggressive combo offerings and marketing campaigns. Against the above backdrop, Nettlinx has strategically positioned itself in a niche market segment comprising of larger reliance on SMEs, Educational Institutions & Business Broadband than relying on third party Cable Operators network as opposed to only the home broadband segment & whole sale bandwidth by most others. Under these circumstances, Nettlinx will be able to overcome competition and scale over all the hurdles and achieve the desired and budgeted financial numbers.

Consolidated:

Nettlinx Realty Private Limited:

With an objective of profitable diversification under the Nettlinx Holding Company, Nettlinx Realty Private Limited has chalked out ambitious plans as the real estate sector is booming across the principal cities in India and is poised to grow rapidly in the next few years. As a first step towards achieving this objective, The Company, several years back, has acquired a land at Gachibowli at Hyderabad. Additionally it has bought another land at Nagpur identifying its potential and to take advantage of Nagpur becoming a major multi modal cargo hub and this land is very close to the SEZ. The Company has initiated the process of considering possible tie up with leading Companies to jointly leverage this land bank for possible conversion into residential / commercial property development projects.

The initial investments on these two lands got appreciated manifold owing to huge demand and land rates going up north. In Both these specific locations where the land is situated, exponential residential apartments are coming up from multiple developers. We should be able to monetize over a period of 2 - 3 years as we are going to enter development agreements with leading Companies.

Nettlinx Aqua Culture Private Limited:

In the current millennium, intensification of aquaculture is the need of the hour to meet the ever growing demand in the country & overseas markets. The Government is focusing in meeting the domestic requirement and helping marine exports through aquaculture in the coming 10 years and aquaculture has a major role as well as responsibility to achieve this objective. Intensification of aquaculture necessitates system and species diversification, proper feed and feeding strategies, diseases monitoring and surveillance, application of modern biotechnological tools , maintenance of optimum soil and water health, efficient use of water resources and efficiently and productively relying on successful technologies and taking advantage of robust Logistic management systems . Its expected and proposed that all these action points and measures will culminate into better yield and maximizing profits for the Organization in the medium term. In view of this and take part in the growth story for future, The Company has bought land at Gogullanka Village, H/o Guttinadevi, I Polavaram Mandal, East Godavari District, Andhra Pradesh State.

SALION SE:

Salion SE is a subsidiary of Nettlinx Aquaculture Private Limited. It has acquired 95% of Salion SE of Germany.

Salion SE is an Management consultant company based out of Berlin, Germany. The Corporation manages more than Euro 1.70 Million investments. It has a specialized team which advises on M&A and financing of M&A transactions.

This strategic investment will help Nettlinx build a war chest for future acquisitions of High tech companies in the industrial space in Germany.

The Company derives advantage through this route on account of extended leverage it gets in a low interest country where in the current interest rates are lesser than 2% PA against the interest rates prevailing in India which hover around 10% PA.

Salion SE has excellent credit rating and presently can leverage this investment to the tune of around Euro 20 Million. For overseeing this new project, Mr. Abraham Joy will be on the supervisory board of Salion SE to take care of the overall operations along with his team.

NETTLINX INC:

Nettlinx Inc. is a 17-year-old US (registered office in NJ) corporation. We are into software consulting, network services, application development, and outsourcing and managed cloud services. Clients include big companies like IBM, Microsoft, Vanguard, HCL to name a few.

Currently, we are developing a micro ERP application framework. It is aimed at small businesses which do not need the complex structure that a full-fledged ERP provides. The target market small businesses which do not have the need or utilize their own IT department. Currently, it is in production with two pharmaceutical distributors.

SRI VENKATESWARA GREEN POWER PROJECTS LIMITED:

Sri Venkateswara Green Power Projects Limited (SVGPPL) was incorporated in the year 1999 to establish power projects in the non renewable energy sector. “12 MW Waste to Energy Power Plant based on RDF” facility at Yacharam Village & Mandal, Ranga Reddy District, Telangana State, utilizing the MSW from GHMC.

SVGreen has entered into a Concession Agreement with GHMC on 10^th November 2010 for the supply of 700 TPD Hyderabad MSW to the project site - Re Ratified vide G.O. No. 448 dated 26.07.2017. (MA&UD - Govt. of Telangana).

With all the required permissions in place, the present project envisages developing and implementing a viable and environmentally sustainable 12 MW Energy from Waste, which would scientifically process and dispose the MSW. The project facility covers processing and treatment of MSW, which includes:

- 700 TPD MSW receipt and processing plant

- 12 MW Waste to Energy Plant for combustible component

- Leachate collection and treatment system

- Inert management facility

The company has already acquired land admeasuring about 25 Acres in Yacharam Village, near Hyderabad. The project site is about 2kms. From SH-19, Nagarjuna sagar Highway, 55 km from City Center, 22 km from ORR.

- The project has received Consent for Establishment from State Pollution Control Board.

6. SUBSIDIARIES:

Company has Four wholly owned subsidiaries namely Nettlinx Inc., Nettlinx Realty Private Limited, Nettlinx Aquaculture Private Limited (formerly known as Nettlinx Channel Private Limited) and Salion SE(Subsidiary of Nettlinx Aquaculture Private Limited) and One Subsidiary namely SrI Vekateswara Green Power Projects Limited. There are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013 (“Act”).

On 14^th February, 2017 The Board of Directors of the company has passed the resolution for amalgamation of Nettlinx Aquaculture Private Limited into Nettlinx Limited.

The details of financial performance of Subsidiary/ Joint Venture/Associate Company is furnished in Annexure-A.

7. RESERVES:

The Directors do not propose to transfer any amount to the General Reserves. Rs. 2,65,57,292/- has been transferred to the Reserves during the financial year 2017-18, being the surplus for the year end 31^st March, 2018.

8. SHARE CAPITAL:

The Authorized Share Capital of the company is Rs. 30,00,00,000 divided into 3,00,00,000 equity shares of Rs. 10 (Rupees Ten Only) each.

The Issued, Subscribed and Paid up Capital of the Company as on March 31 , 201 8 is Rs. 11,46,33,120 divided into 1,14,63,312 equity shares of Rs.10 (Rupees Ten Only) each.

The company has issued and allotted 1795127 convertible share warrants.

A. BUY BACK OF SECURITIES:

The Company has not bought back any of its securities during the year under review.

B. SWEAT EQUITY:

The Company has not issued any Sweat Equity Shares during the year under review.

C. BONUS SHARES:

No Bonus Shares were issued during the year under review.

D. EMPLOYEES STOCK OPTION PLAN:

The Company has not provided any Stock Option Scheme to the employees.

9. DIVIDEND:

Due to conservation of Profits, your Board could not recommend any dividend for the financial year 2017-18.

10. DEPOSITS:

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

11. DIRECTORS AND KEY MANAGERIAL PERSONNEL: DIRECTORS:

In terms of the recently notified Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, consent of the Members by way of Special Resolution is required for continuation of a Non-Executive Director beyond the age of seventy five years.

The appointment of Mr. Kothuri Kameswara Rao, aged 75 years is required to be approved by members by way of Special Resolution to continue his term till 28th September, 2019.

The appointment of Dr. Erwin Leopold Dieck, aged 78 years also requires to be approved by members by way of Special Resolution to continue his term till 28th September, 2021

The Board recommends the resolution as set forth in item No. 4 and 5 of the notice for approval of the members. For the perusal of the shareholders, a brief resume of the Director being re-appointed along with necessary particulars are given in the Explanatory statement of the notice.

RE-APPOINTMENTS:

In accordance with the provisions of Companies Act, 2013, Mr.Chandra Sekhar Pogula, Whole Time Director cum CEO of the company would liable to retire by rotation and, being eligible, offer himself for re-appointment. The Board recommends his reappointment at the ensuing Annual general Meeting of the company.

RESIGNATIONS:

1. Mr. Abraham Joy (Holding DIN:01993517), NonExecutive Director has resigned as Director of the company with effect from 13.12.2017.

2. Mr. Vijay Kumar Maistry (Holding DIN:02060345), Independent Non-Executive Director has resigned as Director of the company with effect from 13.12.2017.

3. Mr. Rohith Loka Reddy (Holding DIN:06464331), Managing Director has resigned as Managing Director and Director of the company with effect from 10.08.2018.

Statement on the declaration given by the Independent Directors as per Section 149(6) of Companies Act, 2013:

The company has received necessary declarations from the Independent Directors under section 149(7) of Companies Act, 2013 , that they meet the criteria of independence as laid down under section 149 (6) of the Companies Act, 2013 and Regulation 25 of Securities And Exchange Board Of India (Listing Obligations And Disclosure Requirements) Regulations, 2015.

DETAILS OF KEY MANAGERIAL PERSONNEL (KMP):

Pursuant to the provisions of section 203 of the Act, the key managerial personnel of the Company are -Mr.Rohith Loka Reddy, Managing Director,Mr. Chandra Sekhar Pogula, Chief Executive Officer and Whole Time Director, Mr. S. Mahaganesh, Chief Financial Officer and Mr. Sai Ram Gandikota, Company Secretary.

NUMBER OF MEETINGS OF THE BOARD:

Five meetings of the board were held during the year. For details of the meetings of the board, please refer to the corporate governance report, which forms part of this report.

One Extraordinary General Meetings of the company was held on 22.03.2018.

Meeting of Independent Directors of the company was held on 09.02.2018.

The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

Board evaluation:

The board of directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 (“SEBI Listing Regulations”).

The performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of the criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The board and the nomination and remuneration committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the chairman was also evaluated on the key aspects of his role.

In a separate meeting of independent directors, performance of non-independent directors, performance of the board as a whole and performance of the chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent directors, at which the performance of the board, its committees and individual directors was also discussed. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.

POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION AND OTHER DETAILS:

The Company’s policy on directors’ appointment and remuneration and other matters provided in section 178(3) of the Act has been disclosed in the corporate governance report, which forms part of this report.

12. DIRECTORS’ RESPONSIBILITY STATEMENT:

In pursuance of Section 134(5) of the Companies Act, 2013, your directors confirm:

(a) That the directors in the preparation of the annual accounts the applicable accounting standards have been followed along with proper explanations relating to material departures.

(b) That the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the Company for that period.

(c) That the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safe guarding the assets of the company and for preventing and deleting fraud and other irregularities.

(d) That the directors had prepared the annual accounts on the going concern basis.

(e) That the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

(f) That the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

13. AUDITORS AND AUDITOR’S REPORT: STATUTORY AUDITORS:

M/s. C.Ramachandram & Co, Chartered Accountants (Firm Registration No. 002864S) allotted by The Institute of Chartered Accountants of India (ICAI) was appointed as Auditors of the company for a term of consecutive five years at the 24^th Annual General Meeting held on 27^th September, 2017.

They have confirmed that they are not disqualified from continuing as auditors of the company.

The notes on financial statements referred to in the Auditor’s report are self-explanatory and do not call for any further comments. The auditor’s report does not contain any qualification, reservation, adverse remark or disclaimer.

SECRETARIAL AUDITORS:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s VCSR & Associates, Company Secretaries, to carry out Secretarial Audit for the financial year 2017-2018.

SECRETARIAL AUDITORS’ REPORT:

The auditors’ report and secretarial auditors’ report does not contain any qualifications, reservations or adverse remarks. The Secretarial Audit report is annexed herewith as “(Annexure B)” & “(Annexure B1)”. The report is self-explanatory and do not call for any further comments.

AUDITORS CERTIFICATE ON CORPORATE GOVERNANCE:

As required by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 (“SEBI Listing Regulations”) the Auditor’s Certificate on Corporate Governance is enclosed as Annexure-C to the Board’s Report. The Auditors certificate for Financial Year 2017-2018 does not contain any qualifications, reservations or adverse remarks.

14. EXTRACT OF ANNUAL RETURN:

As provided under section 92(3) of the Act, the extract of annual return is given in Annexure- D in the prescribed Form MGT-9, which forms part of this report.

15. PARTICULARS OF EMPLOYEES:

a) The information required under section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure-E to this report.

b) Pursuant to Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, during the Year under review, None of the employees of the company employed throughout the financial year, was in receipt of remuneration for that year which, in the aggregate, was not less than sixty lakh rupees; None of the employees of the company employed for a part of the financial year, was in receipt of remuneration for any part of that year, at a rate which, in the aggregate, was not less than five lakh rupees per month; None of the employees of the company employed throughout the financial year or part thereof, was in receipt of remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the managing director or wholetime director or manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company.

16. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS:

The Corporate Governance and Management Discussion & Analysis Report, which form an integral part of this Report, are set out as Annexure-F and Annexure-G respectively together with the Certificate from the auditors of the Company regarding compliance with the requirements of Corporate Governance as per SEBI Listing Regulations.

17. TRANSACTIONS WITH RELATED PARTIES:

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm’s length basis.

There are no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc, which may have potential conflict with the interest of the Company at large. Hence no disclosure in Form AOC-2 is required. All related party transactions are presented to the Audit Committee and the Board for its approval.

The Related Party Transaction Policy has been devised by your company for determining the materiality of transactions with related parties and dealings with them.

18. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The details in respect of internal financial control and their adequacy are included in the management discussion & analysis, which forms part of this report.

19. AUDIT COMMITTEE:

The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report.

20. VIGIL MECHANISM:

In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company at www.nettlinx.com

21. RISK MANAGEMENT:

The board of directors of the Company has formed a risk management committee to frame, implement and monitor the risk management plan for the Company. The committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The audit committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

The development and implementation of risk management policy has been covered in the management discussion and analysis, which forms part of this report.

22. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE:

No significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status and Company’s operations in future.

23. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186:

The particulars of loans, guarantees or investments made under section 186 of the Companies Act 2013 are covered in the notes of the Financial Statement for the year ended 31st March, 2018.

24. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees are covered under this policy.

The following is the summary of sexual harassment complaints received and disposed during the calendar year.

- No. of complaints received: Nil

- No. of complaints disposed off: Nil

25. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

(A) Conservation of Energy:

The operations of the company involve low energy consumption. However adequate measures have been taken to conserve energy wherever practicable.

(B) Technology Absorption:

The company continues to use the latest technologies for improving the quality of its operations. Provision of state of the Art communication facilities to all software development centers and total technology solutions to its clients contribute to technology absorption and innovation.

(C) Foreign exchange earnings and Outgo: The Foreign Exchange earned in terms of actual inflows during the year and the Foreign Exchange outgo during the year in terms of actual outflows is as follows:

Foreign Exchange Inflows : 3,65,34,328 /-

Foreign Exchange Outflows: Rs. 1,21,231 /-

26. CORPORATE SOCIAL RESPONSIBILITY (CSR):

Even though the provisions of Companies Act, 2013 regarding Corporate Social Responsibility are not attracted to the company, yet the Company has been, over the years, pursuing as part of its corporate philosophy, an unwritten CSR policy voluntarily which goes much beyond mere philanthropic gestures and integrates interest, welfare and aspirations of the community with those of the Company itself in an environment of partnership for inclusive development.

27. HEALTH AND SAFETY/ INDUSTRIAL RELATIONS:

The company continues to accord high priority to health and safety of employees at manufacturing locations. During the year under review, the company conducted safety training programmes for increasing disaster preparedness and awareness among all employees at the plants. Training programmes and mock drills for safety awareness were also conducted for all employees at the plants. Safety Day was observed with safety competition programmes with aim to imbibe safety awareness among the employees at the plant.

During the year under review, your Company enjoyed cordial relationship with workers and employees at all levels.

28. LISTING WITH STOCK EXCHANGES:

The Company confirms that it has paid the Annual Listing Fees for the year 2017-2018 to BSE and MSEI where the Company’s Shares are listed.

29. PREVENTION OF INSIDER TRADING:

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company, during the period (the Trading Window is closed). The Board is responsible for implementation of the Code.

All Board Directors and the designated employees have confirmed compliance with the Code.

30. ACKNOWLEDGEMENTS:

Your Directors wish to place on record their appreciation of the contribution made by the employees at all levels, to the continued growth and prosperity of your Company.

Your Directors also wish to place on record their appreciation of business constituents, banks and other financial institutions and shareholders, of the Company for their continued support.

By order of the Board of Directors

For Nettlinx Limited

Sd/-

Date: 10.08.2018 Dr. Manohar Loka Reddy

Place: Hyderabad Chairman

DIN:00140229