TO THE MEMBERS OF NETWORK LIMITED
Your Directors have pleasure in presenting their 28th Annual Report of theCompany together with the Audited Accounts of the Company for the Financial Year ended 31stMarch 2017.
The highlights of Financial Results for the Financial Year ended 31st March2017 in comparison to the Financial Year ended 31st March 2016 are as follows:
(Rs in Lacs)
|PARTICULARS ||31st March 17 ||31st March 16 |
|Revenue from Operations ||280.64 ||870.85 |
|Total Income ||280.64 ||870.85 |
|Total Expenditure ||250.95 ||899.33 |
|Profit/(Loss) before depreciation ||29.69 ||(28.48) |
|Depreciation ||- ||2.11 |
|Profit / (Loss) before Tax ||29.69 ||(30.59) |
|Exceptional Items ||(775.58) ||(2997.50) |
|Total Profit / (Loss) ||(745.89) ||(3028.09) |
The year under review witnessed a marginal growth in the world economy attributable toa feeble pace of global investment dwindling world trade flagging productivity and highlevels of debt. The Company thrust is on trading and investment in commodities forex andderivative products. This will be supplemented through more research and qualitativetechniques for decision making.
During the financial year under review the company has earned an operational profit ofRs. 29.69 lac against the operational loss of Rs. 30.59 lac in previous year. Themanagement of your company expects further improvement in the current year with thegrowing economic scenario and market conditions.
During the year under review there was no change in the nature of business of theCompany.
The global economy continued to be subdued in 2016. The slowdown in the advancedeconomies of the West adversely impacted growth levels resulting in the slowing of theworld economic growth to 3.1% from 3.4% in the earlieryear.
India emerged as a 'bright spot' in an otherwise subdued world economy when it overtookChina in 2015-16 as the fastest- growing major economy in the world. Though India'sfundamentals still remain strong the recent demonetisation initiative undertaken by theIndian Government is expected to lower India's GDP growth from 7.6% in FY16 to 6.8% inFY17. India's GDP growth is expected to remain stable during FY18. The Government'sstimulus for improving overall business sentiments will be the major growth drivers.Implementation of GST will have a positive impact going forward.
The Indian Government's decisive policy manoeuvres towards ensuring fiscalconsolidation and pegging back inflation will help it maintain economic stability in theyears ahead. India's eight core infrastructure industries - coal crude oil natural gasrefinery products fertilisers steel cement and electricity registered cumulative growthof 4.9% during the April- November period compared to 2.5% a year ago.
Your Company is seeking great opportunities in its business segment considering theexpected economic development & growths initiatives taken by the government.
OPPORTUNITIES AND THREATS
The Indian economy and markets are standing on stronger and exciting fundamentals.Equities have already begun to discount the prospects of higher growth in earnings withthe BSE 200 appreciating 23% during the fiscal year ended March 2017. The Company islooking forward to grasp the available opportunities. The company is continuing with taskto build businesses with long term goals through intrinsic strength in corporate andinvestment research. To accelerate further value creation your company continues to workon new fields through collaboration association and strategic investments. The uncertainstate of the global economy however remains a cause of concern. OUTLOOK RISKSAND CONCERNSYour Company has been making use of available opportunities in the capital and thecommodities markets for its operations keeping in view its business objectives.
The underlying strength of Indian consumption and demand continues to remain robust.The country's equity markets remain a favourite of global investors. The performance ofyour Company is closely linked to those of the stock and commodities markets and moreparticularly to stock markets. The growth tendencies for 2017-18 are expected to be mostlyreflective of the developments in these areas. Your Company is cautiously optimistic inthe current scenario and will focus on a well- adjusted portfolio mix resourceful costmanagement and risk containment measures in order to sustain profitability. DIVIDEND
Your directors do not recommend any dividend for the Financial Year ended 31stMarch 2017.
During the year Company has received the Order of National Company Law Tribunal NewDelhi confirming the Scheme of Reduction of Share Capital. In terms of the approvedscheme of Reduction of Share Capital the paid up value of each Equity Share of the Companyis reduced from Rs.10 per share to Rs. 2 per share and the total paid up Share Capital ofthe Company is reduced from Rs. 491484980 divided into 49148498 Equity Shares ofRs.10 each fully paid-up to Rs. 98296996 divided into 49148498 Equity Shares ofRs. 2 each fully paid-up. DEPOSITS
The Company has not accepted any deposits from the public in terms of Section 73 of theCompanies Act 2013 during the year under review.
PARTICULARS OF LOANS GUARANTEE OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT2013
The Company has not granted any loans secured or unsecured guarantee to companiesfirm or other parties covered under section 186. Particulars of Investments has beendisclosed in financial statement of the Company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL Mr. Ashok Sawhney and Mr. Avinash ChanderSharma Directors retire by rotation at the forthcoming Annual General Meeting and beingeligible offer themselves for reappointment. The Board recommends their reappointments atthe ensuing Annual General Meeting of the Company.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors of the Company met 5 (Five) times in the FY2016-17. The detailspertaining to the Board Meetings and attendance are provided in the Corporate GovernanceReport. The intervening gap between two Board Meetings was within the period prescribedunder Companies Act 2013.
DIRECTORS' RESPONSIBILITY STATEMENT AS REQUIRED U/S134 (5) OF THE COMPANY ACT 2013Pursuant to the requirements under Section 134(5) of the Companies Act 2013 with respectto Directors' Responsibility Statement it is hereby confirmed:
a. that in the preparation of the Annual Accounts the applicable accounting standardshave been followed;
b. that the Directors have selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at March 31 2017 andof Profit and Loss Account of the Company for that period;
c. that the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
d. that the Directors have prepared the Annual Accounts for the Financial Year endedMarch 31 2017 on a going concern basis;
e. that the Directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and
f. that the Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
DECLARATION BY INDEPENDENT DIRECTORS The company has received necessary declarationfrom each independent director under section 149(7) of the Companies Act 2013 that he/shemeets the criteria of independence laid down in section 149(6) of the Companies Act 2013and regulation 25 of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015.
ADOPTION OF NEW SET OF MEMORANDUM & ARTICLES OF ASSOCIATION
The Memorandum & Articles of Association of the Company as currently in force areno longer be in conformity with the Companies Act 2013. In view of the above it isproposed to amend the existing Articles of Association to align it with the provisions ofCompanies Act 2013 including the Rules framed thereunder and adoption of specificsections from Table "A" & "F" to Schedule I to the Companies Act2013 which sets out the model memorandum & articles of association for a companylimited by shares.
Pursuant to the provisions of Section 13 & 14 of the Companies Act 2013 read withthe Rules framed thereunder amendment of Memorandum & Articles of Associationrequires approval of shareholders by way of special resolution and the resolution isplaced before the shareholders at the ensuing Annual General Meeting.
In terms of the provisions of the Companies Act 2013 and the Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015 theBoard has carried out the evaluation of its own performance the Directors individuallyincluding the Chairman of the Board and that of its Committees. The evaluation of theIndependent Directors was carried out by the entire Board and that of the Chairman andNonIndependent Directors were carried out by Independent Directors.
The Directors were satisfied with the evaluation results which reflected the overallengagement of the Board and its Committees.
The process of evaluation is explained in the Corporate Governance Report.
COMMITTES OF BOARD
Currently the Board has three committees: the audit committee stakeholders' grievancecommittee and nomination and remuneration committee. The details of the committee's alongwith the meetings held during the year are covered in corporate governance report.
AUDITORS & AUDITORS OBSERVATIONS Statutory Auditors
M/s. S. Kapoor & Associates Chartered Accountants (Firm Registration Number FRN003528M) existing Statutory Auditors have been in office for more than 5 years and incompliance with the provisions of the Act the Audit Committee and the Board of Directorsof the Company at their meetings held on August 10 2017 recommended the appointment ofM/s. B.K Sood & Co. Chartered Accountants (Firm Registration No. 000948N) as theStatutory Auditors (new auditors) of the Company in place of the existing StatutoryAuditors to hold office from the conclusion of the forthcoming Annual General Meeting(AGM) until the conclusion of the 33rdAGM of the Company subject toratification by the members at every AGM. The necessary resolution is being placed beforethe shareholders for approval.
The new Auditors have confirmed their eligibility to the effect that their appointmentif made would be within the prescribed limits under the Act and that they are notdisqualified for appointment.
The Report given by M/s. S. Kapoor & Associates Chartered Accountants (FirmRegistration Number FRN 003528M) Statutory Auditors on the financial statement of theCompany for the year 2016-17 is part of the Annual Report. There has been noqualification reservation or adverse remark or disclaimer in their Report.
Mrs. Anchal Mittal of AM & Associates. Practicing Company Secretary was appointedto conduct the secretarial audit of the Company for the financial year 2016-17 asrequired under Section 204 of the Companies Act 2013 and Rules made there under. TheSecretarial Audit report for FY. 2016-17 in form MR-3 part of the Annual Report asAnnexure 1 of the Board' Report. The report does not contain any qualification. EXTRACTSOFANNUALRETURN
The Extracts of Annual Return is prepared in Form MGT-9 as per the provisions of theCompanies Act 2013 and Rule 12 of Companies (Management and Administration) Rules 2014and the same is enclosed as Annexure - 2 to this Report.
INTERNAL CONTROL SYSTEMS ANDADEQUACY The board has adopted the policies and proceduresfor ensuring the orderly and efficient conduct of the business including adherence to thecompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial disclosures. SUBSIDIARY COMPANY
The Company does not have any subsidiary Company. PARTICULARS OF EMPLOYEES
During the year under review none of employees are covered under the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014.
LISTING OF COMPANY'S SHARES ON STOCK EXCHANGES
The Company's shares are listed on "BSE Limited". The listing fee up to theyear 2017-2018 has already been paid to the Stock Exchange.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
Your Company is not involved in any manufacturing or processing activities and did notcarry out any activity relating to Research & Development Technology Absorptionduring the year under review. Hence particulars in this regard in accordance withprovisions of the Section 134(3)(m) of the Companies Act 2013 read with Rule 8 of theCompanies (Accounts) Rules 2014 are not required.
There are no foreign exchange earnings or outgo during the current financial period.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
During the year no significant and material orders were passed by the regulators orcourts or tribunals impacting the going concern status and company's operations in future.
RELATED PARTY TRANSACTIONS During the year ended March 31 2017 there were nomaterially significant related party transactions which had potential conflict with theinterests of the Company at large. The transactions with related parties has beendisclosed in the financial statements of the Company.
In terms of the Securities and Exchange Board oflndia (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board of Directors of the Company haveadopted a policy to determine Related Party Transactions.
VIGIL MACHANISM / WHISTLE BLOWER POLICY The Board of Directors has adopted WhistleBlower Policy. The Whistle Blower Policy aims for conducting the affairs in a fair andtransparent manner by adopting highest standards of
professionalism honesty integrity and ethical behavior. All permanent employees ofthe Company are covered under the Whistle Blower Policy. A mechanism has been establishedfor employees to report concerns about unethical behavior actual or suspected fraud orviolation of Code of Conduct and Ethics. It also provides for adequate safeguards againstthe victimization of employees who avail of the mechanism and allows direct access to theChairperson of the audit committee in exceptional cases.
CODE OF CONDUCT
The Company has a well defined policy which lays down procedures to be followed by theemployees for ethical professional conduct. The code of conduct has been laid down for allthe Board Members and Senior Management of the Company. The Board members and SeniorManagement personnel have affirmed compliance with the Company's code of conduct for theyear 2016-17. This code has been displayed on the Company's website.
HUMAN RESOURCEAND INDUSTRY RELATIONS
The Company recognizes the importance and contribution of its human resources for itsgrowth and development and is committed to the development of its people.
The Company has cordial relations with employees and staff. There are no industryrelation problems during the year and company does not anticipate any material problems onthis count in the current year.
Corporate Governance is an ethically driven business process that is committed to valueaimed at enhancing an organization's brand and reputation. This is ensured by ethicalbusiness decisions and conduction business with a firm commitment to value while meetingstakeholders' expectations. AtNetwork it is imperative that our company affairs aremanaged in a fair and transparent manner. This is vital to gain and retain the trust ofour stakeholders.
In terms of the listing agreement with Stock Exchange we comply with the corporategovernance provisions. As a listed company necessary measures have been taken to complywith the listing agreements with the stock exchange. Several aspects of the Act such asvigil mechanism and code of conduct have been incorporated into our policies.
The annexed report on Corporate Governance along with a certificate of compliance fromthe practicing Company Secretary forms part of this report.
Your Directors acknowledge the support of the shareholders and also wish to place onrecord their appreciation of employees for their commendable efforts teamwork andprofessionalism. The Directors also express their grateful thanks to the Banks GovernmentAuthorities Customers Suppliers Employees and other Business Associates for theircontinued cooperation and patronage.
For and on behalf of the Board of Directors
|Sd/- ||Sd/- |
|ASHOKSAWHNEY ||AMANSAWHNEY |
|Chairman ||Manager/ Director |
Place: New Delhi Date : 10thAugust 2017