Network Ltd Management Discussions.

TO THE MEMBERS OF NETWORK LIMITED

Your Directors have pleasure in presenting their 30th Annual Report of the Company together with the Audited Accounts of the Company for the Financial Year ended 3Tst March, 20T9.

FINANCIAL HIGHLIGHTS

The Financial Highlights of the Company for the financial year ended on 31‘ March 20T9, as compared to the previous year are summarized below: -

(Rs in Lacs)
Particulars 31st March 19 31st March 18
Revenue from operations 503.14 512.70
Other Income 0.99 0.98
Total Expenditure 545.89 582.12
Profit / (Loss) before Tax & Exceptional Items (41.76) (68.44)
Exceptional Items - -
Profit / (Loss) after Tax & Exceptional Items (41.76) (68.44)
Other Comprehensive Income (538.56)
Total Comprehensive Income for the period (41.76) (607.00)

During the financial year under review, the company has incurred a loss of Rs. 41.76 lac against the loss of Rs. 68.44 lac in previous year. The management of your company expects further improvement in the current year with the growing economic scenario and market conditions.

During the year under review, there was no change in the nature of business of the Company. The Company thrust is on trading and investment in commodities, forex and derivative products. This will be supplemented through more research and qualitative techniques for decision making.

ECONOMIC SCENARIO

In the financial year 2018-19, Indian economy witnessed some degree of slowdown, especially in the second half of the fiscal year. The full financial economy growth was 7% as per government estimates. The year 2018-19 was marked by a lot of disruption and dislocations in the financial markets. Economic parameters were mixed for the year with full year Index of Industrial Production at three year low of 3.6% (vs. 4.8% last year). Inflation (Consumer Price Index) has hovered between 2% to 3% for most part of the year with pushes and pulls from food and fuel and services in different directions. While the macro remains relatively stable for FY 2018-19, the micros showed distinct sign of slowing albeit with some divergences. So while indicators like auto sales and consumer durable growth slowed down sharply, cement sales and steel production grew smartly. For the past five years, the growth has averaged 7.2% which is largely the average growth since the start of the new millennium. However, within the overall Gross Domestic

Product (GDP), its the manufacturing growth which has been the most encouraging with full year growth expected to be around 7.3%. Agriculture remains a concern area with full year growth expected to languish around 2.7% only. Investment growth showed sign of pick up indicating pick up in the capex cycle. As far as investments flows are concerned, Foreign Institutional Investors turned net buyers for the year for equity (+$ 1 billion) largely on account of primary market investments and Foreign Portfolio Investor inflows in the last quarter of the fiscal year and where the sellers in the debt markets (- $ 7 billion). The Domestic Institutional Investors however pumped up in a sizeable commitment, upwards of Rs. 70,000 crore.

Amongst various large equity markets, India was the best performing equity market (Nifty up 15%), followed by Brazil (up 12%) and US (up 7%), whereas South Korea (down 13%), Germany (down 5%) and Italy (down 5%) were amongst the worst performers. As far as Indian equity markets were concerned large cap indices fared much better than their mid- cap and small- cap counterparts (Nifty FY returns of 14.9% vs Nifty Mid-cap FY 2018-19 returns of -2.7%). Indian bond yield however had a mixed year, rising to nearly 8.2% in the first half of the fiscal year and then cooling off to 7.5% in the second half. The Indian equity market is expanding in terms of listed companies and market cap, widening the playing filed for brokerage firms. Sophisticated products segment is growing rapidly, reflected in the sleep rise in growth of derivative trading. With the increasing retail penetration there is immense potential to tap the untapped market. Growing financial awareness is expected to increase the fraction of population participating in equity market.

Your Company is seeking great opportunities in its business segment considering the expected economic development & growths initiatives taken by the government.

INDUSTRY STRUCTURE AND DEVELOPMENT

In recent years, due to higher inflation, Indias economy tilted more towards consumption. As inflation expectations moderate and real interest rates turn positive, that balance will shift in favor of saving leading to a higher savings ratio for the country. Capital market activity in FY 20T8- T9 remained subdued owing to sharp sell-off in broader markets, liquidity issues, disrupted financial markets, election uncertainty, surge in oil prices etc. Fund raising activity took a backseat as financial markets were under pressure. One of the biggest challenges for the broking industry has long been fall in share of high yielding cash segment volumes as against low yielding derivative. Finalization of savings, which has picked up pace since Demonetization, is still lower as compared to developed nations. With SIP book now at record high and incremental investments expected into equities by pension funds, insurance companies and other long term institutional investors, money flow into equity is likely to remain robust in the future. The future outlook for the Capital Markets is dependent upon key factors like global (and domestic)

economic growth pick up, buoyancy in the primary markets, lack of alternate investment opportunities and technology up-gradation. A broad based macroeconomic recovery will lead to improved corporate profits thus supporting higher stock prices and positive equity market sentiments. FIIs have begun their buying spree since past few weeks which we expect to stay for a while considering improving Indias macro. This shall keep the capital market conditions buoyant for the forthcoming quarters.

FUTURE PROSPECTS

The future prospectus for the Indian equity markets look extremely promising in the current backdrop of events in the Global financial markets. The euphoria in other emerging markets is likely to settle down soon as earning have failed to catch up with the spectacular rise in the stock prices.

GDP growth of India is set to be around 6-7% for FY 2019 and is expected to improve higher with the stable and formidable government formation. The inflation rate is under control now at less than 4% and RBI is now targeting growth oriented monetary policies with infusion of strong liquidity.

It is further said private consumption, which has remained resilient, is also expected to get a fillip from public spending in rural areas and an increase in disposable incomes of households due to tax benefits. Business expectations continue to be optimistic.

With the European markets not performing as per expectations, Indian equity markets are looking attractively valued. The management is confident of a strong year ahead for the Indian equity markets. This will augur well for the performance of your company, which largely depends on the direction of the stock market.

OUTLOOK, RISKS AND CONCERNS

Your Company has been making use of available opportunities in the capital and the commodities markets for its operations, keeping in view its business objectives.

The Indian economy is growing strongly and remains a bright spot in the global landscape. Indias overall outlook remains positive, although growth was slow temporarily as a result of disruptions to consumption and business activity from the recent withdrawal of high-denomination banknotes from circulation. The countrys economy has recovered from effect of demonetization and GST. The nations expansion will pick up as economic reforms accelerate. The government has made significant progress on important economic reforms, which will support strong and sustainable growth going forward. Therefore, the company is optimistic about the recovery of Indian economy and the capital market. India is relatively less impacted from global protectionist measures as domestic consumption is around 63% ofGDP.

The capital market industry is mainly dependent on economic growth of country and capital market is also further affected by number of issues arising out of

international policies of foreign government as well any change in international business environment. The industrial growth is very sensitive which is dependent on many factors which may be social, financial, economical or political and also natural climatic conditions in the country. However, with the positive attitude of country which can mitigate the avoidable risks. Geopolitical tensions, raising crude oil prices, rising US bond yields, scams in the banking sector are some of the affecting factors that the country witnessed during the year under review. The country faced the said concerns with positive measures by way of making amendments or introducing new laws that can assist to grow the economy. Foreign investors are very positive for India and trust its policies which are very much investor friendly. It is expected that the said efforts shall continue during the coming years irrespective of the Government which is in power.

The nature of Companys business is susceptible to various kinds of risks. The Company encounters risks like Market Risk, Credit Risk, Technology Risk, Reputation Risk, Regulatory & Compliance Risk, and Operational Risks on daily business operations. For overcoming such risks Company adopts risk management techniques and safeguards, to ensure that major risks are properly assessed, analyzed and appropriate mitigation tools are applied. These techniques remain dynamic and align with the continuing requirements and demands of the market.

DIVIDEND

Your directors do not recommend any dividend for the Financial Year ended 31st March, 2019.

SHARE CAPITAL

During the year under review, there was no change in the Companys issued, subscribed and paid-up share capital. On March 31, 2019, it stood at Rs. 9,82,96,996 divided into 4,91,48,498 Equity Shares of Rs. 2 each.

DEPOSITS

The Company has not accepted any deposits from the public in terms of Section 73 of the Companies Act, 2013 during the year under review.

PARTICULARS OF LOANS, GUARANTEE OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT 2013

The Company has not granted any loans, secured or unsecured, guarantee to companies, firm or other parties covered under section 186. Particulars of Investments has been disclosed in financial statement of the Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Ashok Sawhney, Director and Mr. Avinash Chander Sharma, Director retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment. The Board recommends their reappointments at the ensuing Annual General Meeting of the Company.

Brief resumes of the Directors who are proposed to be reappointed at the forthcoming Annual General meeting, as required as per SEBl (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided in the notice convening the Annual General Meeting of the Gompany.

The company has received necessary declaration from each independent director under section 149(7) of the Companies Act, 2013 that he/she meets the criteria of independence laid down in section 149(6) of the Companies Act, 2013 and regulation 25 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

The Board of Directors of the Company met 4 (Four) times in the FY 2018-19. The details pertaining to the Board Meetings and attendance are provided in the Corporate Governance Report. The intervening gap between two Board Meetings was within the period prescribed under Companies Act, 2013.

DIRECTORS RESPONSIBILITY STATEMENT AS REQUIRED U/S 134 (5) OF THE COMPANY ACT, 2013

Pursuant to the requirements under Section 134(5) of the Companies Act, 2013, with respect to Directors Responsibility Statement, it is hereby confirmed:

a. that in the preparation of the Annual Accounts, the applicable accounting standards have been followed;

b. that 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, 2019 and of Profit and Loss Account of the Company for that period;

c. that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the 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 ended March 31, 2019 on a going concern basis;

e. that the Directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

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

BOARD EVALUATION

In terms of the provisions of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board

has carried out the evaluation of its own performance, the Directors individually including the Chairman of the Board and that of its Committees. The evaluation of the Independent Directors was carried out by the entire Board and that of the Chairman and Non-independent Directors were carried out by Independent Directors.

The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees.

The process of evaluation is explained in the Corporate Governance Report.

COMMITTED OF BOARD

Currently, the Board has three committees: the audit committee, stakeholders grievance committee and nomination and remuneration committee. The details of the committees along with the meetings held during the year are covered in corporate governance report.

AUDITORS & AUDITORS OBSERVATIONS Statutory Auditors

M/s. B.K Sood & Go., Chartered Accountants (Firm Registration No. 000948N), the Statutory Auditors of the Company were appointed by the members at the 28th Annual General Meeting of the Company for a term of initial term of 5 years i.e. from the conclusion of 28th Annual General Meeting till the conclusion of the 33rd Annual General Meeting of the Company pursuant to section 139 of the Companies Act, 2013. They have confirmed that they are not disqualified from continuing as Auditors of the Company.

The Report given by M/s. B.K Sood & Go., Chartered Accountants (Firm Registration No. 000948N), Statutory Auditors on the financial statement of the Company for the year 2018-19 is part of the Annual Report. There has been no qualification, reservation or adverse remark or disclaimer in their Report.

Secretarial Auditor

Mr. Vikash Kumar Singh of V K Singh & Go., Practicing Company Secretary was appointed to conduct the secretarial audit of the Company for the financial year 2018-19, as required under Section 204 of the Companies Act, 2013 and Rules made thereunder. The Secretarial Audit report for FY. 2018-19 in form MR-3 part of the Annual Report as Annexure A of the Board Report. The report does not contain any qualification.

EXTRACTS OF ANNUAL RETURN

The Extracts of Annual Return is prepared in Form MGT-9 as per the provisions of the Companies Act, 2013 and Rule 12 of Companies (Management and Administration) Rules, 2014 and the same is enclosed as \ - B to this Report.

INTERNAL CONTROL SYSTEMS AND ADEQUACY

The board has adopted the policies and procedures for ensuring the orderly and efficient conduct of the business,

including adherence to the companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation 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.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company is not involved in any manufacturing or processing activities and did not carry out any activity relating to Research & Development, Technology Absorption during the year under review. Hence particulars in this regard in accordance with provisions of the Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (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 or courts or tribunals impacting the going concern status and companys operations in future.

RELATED PARTY TRANSACTIONS

During the year ended March 31, 2019, there were no materially significant related party transactions, which had potential conflict with the interests of the Company at large. The transactions with related parties has been disclosed in the financial statements of the Company.

In terms of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the Company have adopted a policy to determine Related Party Transactions.

VIGIL MACHANISM/WHISTLE BLOWER POLICY

The Board of Directors has adopted Whistle Blower Policy. The Whistle Blower Policy aims for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. All permanent employees of the Company are covered under the Whistle Blower Policy. A mechanism has been established for employees to report concerns about unethical behavior, actual or suspected fraud or violation of Code of Conduct and Ethics. It also provides for adequate safeguards against the victimization of employees who avail of the mechanism and allows direct access to the Chairperson 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 the employees for ethical professional conduct. The code of conduct has been laid down for all the Board Members and Senior Management of the Company. The Board members and Senior Management personnel have affirmed compliance with the Companys code of conduct for the year 2018-19. This code has been displayed on the Companys website.

HUMAN RESOURCE AND INDUSTRY RELATIONS

The Company recognizes the importance and contribution of its human resources for its growth and development and is committed to the development of its people.

The Company has cordial relations with employees and staff. There are no industry relation problems during the year and company does not anticipate any material problems on this count in the current year.

CORPORATE GOVERNANCE

Corporate Governance is an ethically driven business process that is committed to value aimed at enhancing an organizations brand and reputation. This is ensured by ethical business decisions and conduction business with a firm commitment to value, while meeting stakeholders expectations. At Network, it is imperative that our company affairs are managed in a fair and transparent manner. This is vital to gain and retain the trust of our stakeholders.

In terms of the listing agreement with Stock Exchange, we comply with the corporate governance provisions. As a listed company, necessary measures have been taken to comply with the listing agreements with the stock exchange. Several aspects of the Act, such as vigil mechanism and code of conduct, have been incorporated into our policies.

The annexed report on Corporate Governance along with a certificate of compliance from the practicing Company Secretary forms part of this report.

ACKNOWLEDGEMENT

Your Directors acknowledge the support of the shareholders and also wish to place on record their appreciation of employees for their commendable efforts, teamwork and professionalism. The Directors also express their grateful thanks to the Banks, Government Authorities, Customers, Suppliers, Employees and other Business Associates for their continued cooperation and patronage.

For and on behalf of the Board of Directors
Sd/- Sd/-
ASHOK SAWHNEY AMAN SAWHNEY
DIRECTOR DIRECTOR & MANAGER
Date: 10.08.2019
Place: New Delhi