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Cityon Systems (India) Ltd.

BSE: 780013 Sector: Others
NSE: N.A. ISIN Code: INE324P01014
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Cityon Systems (India) Ltd. (CITYONSYSTEMS) - Director Report

Company director report

Your Directors have pleasure in presenting the Annual Report together with the AuditedStatement of Accounts for the year ended on 31st March 2015.

FINANCIAL RESULTS:

The financial results of the Company are fairly reasonable:-

S. NO. PARTICULARS YEAR ENDED 31st MARCH 2015
AMOUNT (Rs.)
1. Profit after Tax 378262.00
2. Depreciation 70914.00
3. Cash Profit for the year 449176.00

DEPOSITS:

The Company has no public deposits as of date and will not accept any deposits withoutprior approval of the Statutory Authorities concerned.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

The particulars of loans and investments covered under the provisions of Section 185 ofthe Companies Act 2013 have been disclosed in the financial statements.

During the year the Company has not given any guarantees as covered under aforesaidprovisions of the Act.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Auditors is subjectto provisions of the Companies Act 2013 and rules made thereunder. To maintain itsobjectivity and independence the Internal Audit function reports to the Chairman of theAudit Committee of the Board & to the Managing Director.

The Internal Audit Department monitors and evaluates the efficiency and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies of the Company. Based on the report of internal audit functionprocess owners undertake corrective action in their respective areas and therebystrengthen the controls. Significant audit observations and recommendations along withcorrective actions thereon are presented to the Audit Committee of the Board.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Mr. Ankur Agarwal retires by rotation and being eligible offers himself forreappointment. Your Directors recommend his reappointment.

During the year the Board of Directors appointed Mrs. Kavita Awasthi as an AdditionalDirector with effect from 27th March 2015 to hold office up to the date of forthcomingAnnual General Meeting. Being eligible Mrs. Kavita Awasthi offered herself to beappointed as the Independent Woman Director of your Company.

Pursuant to the provisions of Section 149 of the Act which came into effect from 1stApril 2014 Mr. Gaya Prasad Gupta Mr. Om Prakash Agarwal and Mr. Anoop Srivastava wereappointed as Independent Directors at the Annual General Meeting of the Company held on30lh September 2014 The terms and conditions of appointment of Independent Directors areas per Schedule IV of the Act. Your Company has received declarations from ail theIndependent Directors of the Company confirming that they meet with the criteria ofindependence as prescribed both under sub-section (6) of Section 149 of the Companies Act2013 and under Clause 42 of the Listing Agreement (BSE SME{ITP}) with the Stock Exchangesand there has been no change in the circumstances which may affect their status asIndependent Director during the year.

As required under Clause 42 of the Listing Agreement (BSE SME{ITP}) with the StockExchange the information on the particulars of the Directors proposed for appointment/re-appointment has been given in the Notice of the Annual General Meeting.

Pursuant to the provisions of Section 203 of the Act which came into effect from April1 2014 the appointments of Key Managerial Personnel were formalized during the financialyear 2014-15. There has been change (s) in Key Managerial Personnel during the financialyear 2014-15 due to resignation(s).

BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its own performanceBoard committees and individual directors pursuant to the provisions of the Act and thecorporate governance requirements as prescribed by Securities and Exchange Board of India("SEBI") in the Listing Agreements BSE SME{ITP}).

The performance of the Board was evaluated by the Board after seeking inputs from allthe directors on the basis of the criteria such as the Board composition and structureeffectiveness of board processes information and functioning etc.

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

The Board and the Nomination and Remuneration Committee ("NRC") reviewed theperformance of the individual directors on the basis of the criteria such as thecontribution of the individual director to the Board and committee meetings likepreparedness on the issues to be discussed meaningful and constructive contribution andinputs in meetings etc. In addition the Chairman was also evaluated on the key aspectsof his role.

In a separate meeting of independent Directors performance of non-independentdirectors performance of the board as a whole and performance of the Chairman wasevaluated taking into account the views of executive directors and non-executivedirectors. The same was discussed in the board meeting that followed the meeting of theindependent Directors at which the performance of the Board its committees andindividual directors was also discussed.

NUMBER OF MEETINGS OF THE BOARD:

Ten meetings of the board were held during the year. For details of the meetings of theboard please refer to the corporate governance report which forms part of this report.The intervening gap between the Meetings was within the period prescribed under theCompanies Act 2013.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability state the following:

a. that in the preparation of the annual financial statements the applicableaccounting standards have been followed along with proper explanation relating to materialdepartures if any;

b. that such accounting policies have been selected and applied consistently andjudgement and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as at 31st March 2015 and ofthe profit of the Company for the year ended on that date;

c. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

d. that the annual financial statements have been prepared on a going concern basis;

e. that proper internal financial controls were in place and that the financial controlwere adequate and were operating effectively;

f. that proper systems to ensure compliance with the provisions of all applicable lawswere in place and were adequate and operating effectively.

AUDITORS & AUDITOR'S REPORT:

Pursuant to the provisions of Section 139 of the Act and the rules framed thereunderM/s J Agaryval & Associates Chartered Accountants (ICAI Firm Registration No.002601C) were appointed as statutory auditors of the Company from the conclusion ofannual general meeting (AGM) of the Company held on September 30 2014 till the conclusionof the annual general meeting (AGM) to be held in the year 2017 subject to ratificationof their appointment at every AGM.

The Company has received a letter from statutory auditors to the effect that theirreappointment if made would be within the provision prescribed under Section 139 of theCompanies Act 2013. Your Directors recommend their re-appointment.

The auditor's report does not contain any qualifications reservations or adverseremarks & Notes to the financial statements referred in the Auditors Report are self-explanatory and therefore do not call for any comments under Section 134 of the CompaniesAct 2013.

SECRETARIAL AUDITOR'S REPORT:

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the rules madethereunder the Company had appointed Mr. Pushp Raj Singh Practising Company Secretary toundertake the Secretarial Audit of the Company but due to resignation tendered by Mr.Pushp Raj Singh Company appointed another Secretarial Auditor. The Secretarial AuditReport for financial year 2014-15 is annexed which forms part of this report as Annexure-A.There were no qualifications reservation or adverse remarks given by SecretarialAuditor of the Company.

EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in Form MGT-9 are annexedto this Report as Annexure-B.

RELATED PARTY TRANSACTIONS:

All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of the business. There are nomaterially significant related party transactions made by the company with Promoters KeyManagerial Personnel or other designated persons which may have potential conflict withinterest of the company at large.

CODE OF CONDUCT:

The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all employees in the course of day to day business operations ofthe company. The Code has been placed on the Company's website www.cityonsystems.in. The Code lays down thestandard procedure of business conduct which is expected to be followed by the Directorsand the designated employees in their business dealings and in particular on mattersrelating to integrity in the work place in business practices and in dealing withstakeholders.

All the Board Members and the Senior Management personnel have confirmed compliancewith the Code.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company is committed to the high standards of Corporate Governance and stakeholderresponsibility. The Company has established a vigil mechanism to be known as the 'WhistleBlower Policy' for its Directors and employees to report instances of unethicalbehaviour actual or suspected fraud or violation of the Company's Code of Conduct. Theaim of the policy is to provide adequate safeguards against victimization of whistleblower who avails of the mechanism and also provide direct access to the Chairman of theAudit Committee in appropriate or exceptional cases.

Accordingly 'Whistle Blower Policy' has been formulated with a view to provide amechanism for the Directors and employees of the Company to approach the Ethics Counselloror the Chairman of the Audit Committee of the Company.

The purpose of this policy is to provide a framework to promote responsible and securewhistle blowing. It protects employees willing to raise a concern about seriousirregularities within the Company.

PREVENTION OF INSIDER TRADING:

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated employees of theCompany. The Code requires pre-clearance for dealing in the Company's shares and prohibitsthe purchase or sale of Company shares by the Directors and the designated employees whilein possession of unpublished price sensitive information in relation to the Company. TheBoard is responsible for implementation of the Code. All Board Directors and thedesignated employees have confirmed compliance with the Code.

BUSINESS RISK MANAGEMENT:

Pursuant to section 134 (3) (n) of the Companies Act 2013 & Clause 49 of thelisting agreement the company has constituted a business risk management committee. Thedetails of the committee and its terms of reference are set out in the corporategovernance report forming part of the Boards report.

At present the company has not identified any element of risk which may threaten theexistence of the company.

INFORMATION PURSUANT TO SECTION 134(3) OF THE COMPANIES ACT 2013

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 employeesof the Company will be provided upon request. In terms of Section 136 of the Act thereports and accounts are being sent to the members and others entitled thereto excludingthe information on employees' particulars which is available for inspection by the membersat the Registered office of the company during business hours on working days of thecompany up to the date of ensuing Annual General Meeting. If any member is interested ininspecting the same such member may write to the Company Secretary in advance.

AUDIT COMMITTEE:

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

INDEPENDENT DIRECTOR'S MEETING:

The Independent Directors met on 25th March 2015 without the attendance of Non-Independent Directors and members of the Management. The Independent Directors reviewedthe performance of non-independent directors and the Board as a whole; the performance ofthe Chairman of the Company taking into account the views of Executive Directors andNon-Executive Directors and assessed the quality quantity and timeliness of flow ofinformation between the Company Management and the Board that is necessary for the Boardto effectively and reasonably perform their duties.

ENERGY CONSERVATION TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO: NIL

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Separate reports on Corporate Governance compliance and Management Discussion andAnalysis as stipulated by Clause 42 of the Listing Agreement (BSE SME{ITP}) forms part ofthis Annual Report along with the required Certificate from Statutory Auditors of theCompany regarding compliance of the conditions of Corporate Governance as stipulated byClause 42 of the Listing Agreement (BSE SME{ITP}).

In compliance with Corporate Governance requirements as per Clause 42 of the ListingAgreement (BSE SME{ITP}) your Company has formulated and implemented a Code of BusinessConduct and Ethics for all Board members and senior management personnel of the Companywho have affirmed the compliance thereto.

ACKNOWLEDGEMENTS:

Your directors take this opportunity to extend their thanks to the customers businesspartners business associates and bankers of the Company for their continued supportduring the year. The directors also sincerely acknowledge the dedication and commitment ofthe employees of the company at all levels.

FOR CITYON SYSTEMS (INDIA) LIMITED
Place: Delhi (Mukesh Kumar) (Ankur Agarwal)
Date: 29.05.2015 Director Director
DIN:06573251 DIN:06598310

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