COMPANY BACKGROUND:
 
 Nettlinx Limited is a Category B licensed ISP, with operations in
 Andhra Pradesh started in 1999.  Currently Nettlinx has its operations
 Across Major cities in Andhra Pradesh.
 
 Nettlinx Limited provides a portfolio of high quality Internet
 solutions for data voice and security, to cater to the corporate
 customer needs. Leveraging its technological, and Regional presence,
 Nettlinx is able to bring value and strong support to the customers.
 Nettlinx has strategic and long lasting relationships with major
 Telecom Operators in India.
 
 The Company backed by over 14 years of experience, not to mention an
 uncompromising stan- dard in the provision of best-in-class products
 and uninterrupted services. The Company deliver maximum uptime,
 expertise and specialist knowledge to assist both individuals and
 businesses in harnessing the benefits of Internet technology for real
 business productivity.
 
 1. Provision for Diminution in the value of Investment
 
 During the year ended 31st March 2011 the company has assessed the
 operations of Subsidiaries including the future projections to identify
 the indicators of diminution other than temporary, in the value of
 Investments recorded in the books of accounts and accordingly has made
 the following provision.
 
 Name f the subsidiary                 Amount (Rs.)
 
 Host Department LLC USA              1,44,19,466
 
 Total                                1,44,19,466
 
 2.  Taxes on income - Tax expense for the year consists of deferred
 tax. Deferred tax assets and liabilities are measured using tax rates
 and tax laws that have been enacted or substantively enacted by the
 balance sheet date. The effect on deferred tax assets and liabilities
 of a change in tax rates is recognized for the profit and loss account
 in the year of change. This year the company has recognized and carries
 forward Deferred Tax Asset only to the extent of reasonable certainty
 that sufficient future taxable income will be available against which
 Deferred Tax Asset can be realized.
 
 3.  Contingent liabilities- 
                                       As on          As on 
                                    31.03.2011    31.03.2010 
                                        Rs.           Rs.
 
 Unexpired Bank Guarantee           18,53,000      12,00,000
 
 (with 100% cash margin)
 
 Provisional License fee 
 Assessment                       1,07,31,323         Nil
 
 Company has received provisional license fee assessment notice from
 Department of Tele- communications-AP circle for the years 2005-06,
 2006-07and 2007-08 w.r.t ISP(IT) License for Rs.1,07,31,323/- which is
 disclosed as contingent liability for the year ended 31st March
 2011.However the management feels that the demand is not tenable and
 hence liability is not provided in the books of accounts.
 
 6.  None of the suppliers had informed the company that they are in the
 nature of small scale undertaking (SMEs). Hence, information regarding
 dues to small scale undertaking, if any, could not be furnished.
 
 7.  Related Party Disclosures
 
 Information relating to related party transactions as per Accounting
 Standard 18 issued by The Institute of Chartered Accountants of India
 
 Associates -
 
 Northeast Broking Services Ltd Northeast Commodities Pvt.Ltd
 
 9. Since, the Appeal is pending before the Honourable High Court of
 A.P., in respect of Income Tax for the Assessment years 1996-97 and
 1997-98 of Northeast Spinners Limited, a company in existence prior to
 amalgamation with Nettlinx Limited, the balance lying in TDS Adjustment
 account Rs.28,62,989/- is shown separately in Current Assets.
 
 10.  In Case of Integrated Broadcasting Pvt Ltd the company has issued
 legal notice for not paying outstanding debt amounting to Rs 65,98,028
 as on 30th June 2011. The debtor has not responded for the notice,
 whereas it has specified that appropriate legal action would be
 initiated against the debtor both Civil & Criminal for the recovery of
 amount, and accordingly legal proceedings for winding up of company U/S
 433 (a) of the Companies Act 1956 are initiated against the debtors by
 filing a petition in the High Court Judicature of Andhra Pradesh. The
 court decision is till date not finalized. However the management is
 confident of recovering the amount.
 
 11.  Figures for the previous year have been regrouped, recast and
 rearranged to confirm to those of the current year wherever
 necessary.