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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 2017.

FINANCIAL RESULTS:

Financial Results of the Company for the year under review along with figures for theprevious year are as follows:

Amount in (Rs.)

PARTICULARS

FINANCIAL YEAR ENDED

31.03.2017 31.03.2016
Total Revenue 120027314.00 63264195.00
Total Expenses 119481565.00 63042912.00
Profit before Depreciation and Tax (PBT) 561409.00 640321.00
Less: Depreciation 15660.00 14805.00
Profit before Tax 545749.00 625516.00
Less: Provision for taxation 165698.00 191955.00
Profit after Tax (PAT) 380051.00 433561.00
EPS (Basic) 0.02 0.03
Diluted 0.02 0.03

DEPOSITS:

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

DIVIDEND:

In order to conserve the resources of the Company the Board of Directors does notrecommend any dividend.

CHANGES IN SHARE CAPITAL:

During the year there has been no change in Share Capital.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

The particulars of loans or guarantees and investments covered under the provisions ofSection 186 of the Companies Act 2013 have been disclosed in the financial statements.

STATE OF THE COMPANY'S AFFAIRS AND NATURE OF BUSINESS:

Since last there were no changes in the State of company's affairs and there have beenno change in nature of business of the Company during the Year.

TRANSFER TO RESERVES:

The Company earned Net Profit of Rs. 380051.00 during the Financial Year 2016-17 andthis amount has been transferred to Reserves & Surplus Account during the Year.

MATERIAL CHANGES AND COMMITEMENTS:

There have been no material changes and commitments during the year.

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 and to the Chairman & 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:

Directors:

Mr. Ankur Agarwal (DIN: 06598310) retires by rotation and being eligible offers himselffor re-appointment. Your Directors recommend his re-appointment.

On the recommendation of the Board of Directors the Members of the Company at theAnnual General Meeting held on September 29 2016 approved appointment of:

(a) Mr. Abhishek Tandon as Director of the Company who was liable to retire at AGM andoffered himself for re-appointment.

Declaration by the Independent Directors of the Company:

Your Company has received declarations from all the Independent Directors of theCompany confirming that they meet with the criteria of independence as prescribed undersub-section (6) of Section 149 of the Companies Act 2013 and under Regulation 16 ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 and there has been no change in the circumstances from last FinancialYear which may affect their status as Independent Director during the year.

As required under Regulation 36 of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 the particulars of theDirectors proposed for appointment/re-appointment has been given in the Notice of theAnnual General Meeting.

Key Managerial Personnel:

There have been changes in Key Managerial Personnel(s) during the financial year 2016-17 Details are given as under:

S.No. Name Designation Date of Appointment Date of Resignation
1 Mr. Ravi Kumar Sablok Managing Director 27/07/2015 Continuing
2 Mr. Ashok Kumar Sharma Chief Financial Officer 02/02/2015 Continuing
3 Ms. Disha Bajpai Company Secretary cum Compliance Officer 01/01/2016 05/02/2017
4 Mr. Mohit Choudhary Company Secretary cum Compliance Officer 01/08/2017 Continuing

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 Companies Act2013 readwith rules made thereunder and under Regulation 16 of Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015.

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 by the meeting of theindependent Directors at which the performance of the Board its committees andindividual directors was also discussed.

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 accounts the applicable accounting standardshave been followed along with proper explanation relating to material departures if any;

b. that directors have selected such accounting policies and applied consistently andjudgements and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit of the Company for that period;

c. The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with provisions of this Act for safeguarding the assetsof the Company and for preventing and detecting fraud and other irregularities;

d. The Directors have prepared the annual accounts on a going concern basis;

e. The Directors have laid down such internal financial controls that are adequate andoperating effectively;

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

AUDITORS & AUDITOR'S REPORT:

Pursuant to the provisions of Section 139 of the Act and the rules framed thereunderthe Members of the Company at their extra-ordinary general meeting held on January 212017 approved appointment of Rajani Mukesh & Associates Chartered Accountants (ICAIFirm Registration No. 004072C) as Statutory Auditors of the Company till the conclusion ofthis Annual General Meeting now the Board of Directors of the Company are recommendingthe appointment of Rajani Mukesh & Associates as Statutory Auditors of the Company for5 years from the conclusion of this Annual General Meeting (AGM) of the Company till theconclusion of the Annual General Meeting (AGM) to be held in the year 2022 subject toratification of their re-appointment at every AGM if required by the Companies Act 2013.

The Company has received a letter from statutory auditors to the effect that theirre-appointment if made would be within the provision prescribed under Section 139 141and 144 of the Companies Act 2013 read with Companies (Audit & Auditors) Rules 2014.Your Directors recommend their appointment for 5 years.

The auditor's report does not contain any qualifications reservations or adverseremarks and Notes to the financial statements referred in the Auditors Report areself-explanatory and therefore do not call for any comments under Section 134 of theCompanies Act 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 Ms. Neha Jain Practising Company Secretary Kanpurto undertake the Secretarial Audit of the Company for the Financial Year 2016- 17. TheSecretarial Audit Report for financial year 2016-17 is annexed which forms part of thisreport as Annexure-A.

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. Further there were nomaterially significant with the related party transactions during the year made by theCompany with Promoters Directors Key Managerial Personnel or other designated persons.Since there were no material contracts/arrangements made during the year and all suchcontracts/arrangements were made in ordinary course of business and at arm's length basisand details of such transactions have been given in financial statements of the Companyand this fact has been mentioned in attached Annexure-B in FORM AOC-2.

Details of all such contracts/arrangements are available for inspection at theRegistered Office of the Company till ensuing Annual General Meeting and if any member isinterested in inspecting the same such member may write to the Company Secretary inadvance.

CODE OF CONDUCT:

All the Members of the Board and all the employees of the Company have followed thepolicy of Code of Conduct in the course of day to day business operations of the Company.The Code has been placed on the Company's website www.cityonsystems.in.

The Code lays down the standard procedure of business conduct which is expected to befollowed by the Directors and the designated employees in their business dealings and inparticular on matters relating to integrity in the work place in business practices andin dealing with stakeholders.

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

SUBSIDIARIES JOINT VENTURES OR ASSOCIATE COMPANIES:

There are no Subsidiaries Joint Ventures or Associate Companies.

DISCLOSURES:

Audit Committee:

The Audit Committee comprises of Independent Directors namely Mr. Om Prakash AgarwalMr. Gaya Prasad Gupta Mr. Anoop Srivastava and Mr. Mukesh Kumar as Executive Director ofthe Company.

The Audit Committee played an important role during the year. It coordinated with theStatutory Auditors Internal Auditors and other key Managerial Personnel of the Companyand has rendered guidance in the areas of internal audit and control finance andaccounts.

All the recommendations made by the Audit Committee were accepted by the Board. Fourmeetings of the Audit Committee were held during the year.

Stakeholders Relationship Committee:

The Committee has met four times during the year the Committee overlook the usualrequests received for Dematerialization transfer/transmission of shares and resolved oranswered the complaints of members.

Nomination and Remuneration Committee:

The Nomination and Remuneration Committee recommends to the Board the suitability ofcandidates for appointment as Key Managerial Personnel Directors and the remunerationpackages payable to them and other employees. The Nomination and Remuneration met fourtimes during the year.

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‘Whistle Blower Policy' for its Directors and employees to report instances ofunethical behaviour actual or suspected fraud or violation of the Company's Code ofConduct. The aim of the policy is to provide adequate safeguards against victimization ofwhistle blower who avails of the mechanism and also provide direct access to the Chairmanof the Audit 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.

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.

Number of Meetings of the Board:

Eight meetings of the board were held during the year. For details of the meetings ofthe board please refer to the corporate governance report which forms part of thisreport. The intervening gap between the Meetings was within the period prescribed underthe Companies Act 2013.

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:

The main identified risks at the Company are business operating risks. Your Company hasestablished a comprehensive business risk management policy to ensure the risk to theCompany's continued existence as a going concern and to its development are identified andaddressed on timely basis. Risk management strategy as approved by the Board of Directorsis implemented by the Company Management.

Corporate Social Responsibility Statement:

Provisions relating the Corporate Social Responsibility are not applicable on theCompany.

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.

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-C.

Independent Directors Meeting:

The Independent Directors met on 24th March 2017 without the attendance ofNon Independent Directors and members of the Management. The Independent Directorsreviewed the performance of non-independent directors and the Board as a whole; theperformance of the Chairman of the Company taking into account the views of ExecutiveDirectors and Non-Executive Directors and assessed the quality quantity and timeliness offlow of information between the Company Management and the Board that is necessary for theBoard to effectively and reasonably perform their duties.

Energy Conservation Technology Absorption Foreign Exchange Earnings and Outgo:

The information required under Section 134(3)(M) of the Companies Act 2013 read withRule 8(3) of The Companies (Accounts) Rules 2014 is as under:-

[A] CONSERVATION OF ENERGY

a) Energy Conservation Measures taken: The Company has taken all measures forconservation of energy most economically.

b) The steps taken by the Company for utilizing alternate source of energy:- No suchsteps have been taken by the Company.

c) The capital Investments on energy conservation equipments: - No such investment hasbeen made by the Company

d) Impact of measures at (a) above for energy conservation: -These measures have led toconsumption of energy more economically.

B. TECHNOLOGY ABSORPTION:

Since there is no manufacturing activity in the Company hence the information underthis heading is not applicable to the Company

C. FOREIGN EXCHANGE EARNINGS AND OUTGO:

During the year there were no Foreign Exchange earnings and outgo.

Corporate Governance and Management Discussion and Analysis Report:

Separate reports on Corporate Governance compliance and Management Discussion andAnalysis as required under Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 which forms part of this Annual Report alongwith the Certificate from Statutory Auditors of the Company regarding compliance of theconditions of Corporate Governance as stipulated in Chapter IV of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.

In compliance with Corporate Governance requirements your Company has formulated andimplemented a Code of Business Conduct and Ethics for all Board members and seniormanagement personnel of the Company who have affirmed the compliance thereto.

Details of significant and material orders passed by the Regulators or Courts orTribunals impacting the going concern status and company's operations in future:

There were no such order passed by the Regulations or Courts or Tribunals which mayimpact the going concern status and company's operations in future.

Disclosure under Sexual Harassment of Women:

The Company has Sexual Harassment Policy in place and available on the Company'swebsite www.cityonsystems.in . During the year under review there were no complaints fromany of the employee.

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 (Ravi Kumar Sablok) (Ankur Agarwal)
Date: 29.08.2017 Managing Director Director
DIN: 07241345 DIN:06598310

FORM NO. AOC -2

Form for disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub-section (1) of Section 188 of theCompanies Act 2013 including certain arms length transactions under third provisothereto.

[Pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014].

1. Details of contracts or arrangements or transactions not at arm's length basis: N.A.

(a) Name (s) of the related party & nature of relationship-

(b) Nature of contracts/arrangements/transactions-

(c) Duration of the contracts/arrangements/transactions-

(d) Salient terms of the contracts or arrangements or transaction including the valueif any-

(e) Justification for entering into such contracts or arrangements or transactions-

(f) Date(s) of approval by the Board-

(g) Amount paid as advances if any:

(h) Date on which the special resolution was passed in General meeting as requiredunder first proviso to Section 1882. Details of material contracts or arrangements ortransactions at arm's length basis: see note given below*.

(a) Name (s) of the related party & nature of relationship-

(b) Nature of contracts/arrangements/transactions-

(c) Duration of the contracts/arrangements/transactions-

(d) Salient terms of the contracts or arrangements or transactions including the valueif any-

(e) Date(s) of approval by the Board if any:

(f) Amount paid as advances if any:

*Note: all the contracts or arrangements or transactions were made in ordinary courseof business and at arm's length basis during the financial year 2016-17 and there were nomaterial contracts or arrangements or transactions.