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City Online Services Ltd.

BSE: 538674 Sector: Others
NSE: N.A. ISIN Code: INE158C01014
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NSE 05:30 | 01 Jan City Online Services Ltd
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VOLUME 523
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Mkt Cap.(Rs cr) 2
Buy Price 2.89
Buy Qty 1000.00
Sell Price 3.04
Sell Qty 418.00
OPEN 3.04
CLOSE 3.04
VOLUME 523
52-Week high 3.54
52-Week low 2.89
P/E
Mkt Cap.(Rs cr) 2
Buy Price 2.89
Buy Qty 1000.00
Sell Price 3.04
Sell Qty 418.00

City Online Services Ltd. (CITYONLINESER) - Director Report

Company director report

To

The Members

The Directors have pleasure in presenting before you the 20th Director'sReport of the Company together with the Audited Statements of Accounts for the year ended31st March 2019.

1. FINANCIAL SUMMARY/HIGHLIGHTS OPERATIONS STATE OF AFFAIRS:

The performance during the period ended 31st March 2019 has been as under:

(Rs. In Lakhs)
Particular 2018-19 2017-18
Total Income 1358.25 1661.81
Total Expenditure 1400.84 1695.58
Profit/ Loss Before Tax (42.59) (33.77)
Provision for Tax 41.07 15.83
Profit/Loss after Tax (83.66) (49.60)
Transfer to General Reserves - -
Profit available for appropriation (83.66) (49.60)
Provision for Proposed Dividend - -
Provision for Dividend Tax - -
Balance Carried to Balance Sheet (83.66) (49.60)

2. MATERIAL CHANGES AND COMMITMENTS:

There were no material changes and commitments affecting financial position of thecompany between 31st March and the date of Board's Report. (i.e. 14.08.2019)

3. CHANGE IN THE NATURE OF BUSINESS IF ANY:

During the period under review and the date of Board's Report there was no change inthe nature of Business.

4. DIVIDEND:

The Directors have not recommended dividend for the year.

5. RESERVES:

The Company has not carried any amount to the reserves.

6. BOARD MEETINGS:

The Board of Directors duly met 4 (four) times on 30.05.2018 14.08.2018 13.11.2018and 13.02.2019 and in respect of which meetings proper notices were given and theproceedings were properly recorded and signed in the Minutes Book maintained for thepurpose.

7. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

The Company has received a declarations from Mr. M. Nageswara Rao Mr. Thomos P.Nicodemus and Mr. V Satyanarayana Independent directors of the company to the effect thatthey are meeting the criteria of independence as provided in Sub-section (6) of Section149 of the Companies Act 2013 and Regulation 25 of SEBI (Listing Obligations andDisclosure Requirement) Regulations 2015.

8. APPOINTMENT/RE-APPOINTMENT/RESIGNATION/RETIREMENT OF DIRECTORS /CEO/ CFO AND KEYMANANGERIAL PERSONNEL

Ms. Kriti Singh resigned and Mr. Sanchit Chaturvedi was appointed as Company Secretaryand Compliance officer of the Company with effect from 05.10.2018. Mr. Sanchit Chaturvediresigned as Company Secretary and Compliance Officer with effect from 24.04.2019

As required under regulation 36 (3) of the SEBI (LODR) Regulations 2015 briefparticulars of the Directors seeking appointment/ re-appointment and Directors resigningare given as under:-:

No Directors or Key Managerial Personnels have appointed or resigned during the year.

Name of the Director Mr. Satyanarayana Vasi Reddy Mr. Thomas Pradhan Nicodemus Mr. Nageswara Rao Mandavill
Date of Birth 02.05.1937 24.09.1950 23.08.1953
Qualification Graduate Graduate Graduate
Expertise in specific functional areas Administration Accounts and Finance Sales and Marketing
Names of listed entities in which the person also holds the directorship and the membership of Committees of the board Nil Ube Industries Limited Nil
No. of Shares held in the Company Nil Nil Nil
Inter se relationship with any Director Nil Nil Nil

 

Name of the Director Mr. Harinath Chavva (Reappointment) S. Raghava Rao Mr. Krishna Mohan Ra- mineni Mrs. S. Nagadurga
Date of Birth 13.01.1965 11.04.1959 14.11.1959 01.02.1964
Qualification M.Tech B.Tech B.Tech Intermediate
Expertise in specific functional areas Marketing and purchase Technical Policy making Accounts and finance Administration
Names of listed entities in which the person also holds the directorship and the membership of Committees of the board Nil Nil Nil Nil
No. of Shares held in the Company 201750 684500 270600 40000
Inter se relationship with any Director Nil Husband of Mrs. S. Nagadurga Nil Wife of Mr. S. Raghava Rao

9. FAMILIARISATION PROGRAMMES FOR INDEPENDENT DIRECTORS:

Independent Directors are familiarized about the Company's operations and businesses.Interaction with the Business heads and key executives of the Company is also facilitated.Detailed presentations on important policies of the Company is also made to the directors.Direct meetings with the Chairman is further facilitated to familiarize the incumbentDirector about the Company/ its businesses and the group practices.

The details of familiarisation programme held in FY 2018-19 are also disclosed on theCompany's website at https:// www. cityonlines.com

10. POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION AND OTHER DETAILS:

The assessment and appointment of Members to the Board is based on a combination ofcriterion that includes ethics personal and professional stature domain expertisegender diversity and specific qualification required for the position. The potential BoardMember is also assessed on the basis of independence criteria defined in Section 149(6) ofthe Companies Act 2013 and Regulation 27 of SEBI (LODR) Regulations 2015.

In accordance with Section 178(3) of the Companies Act 2013 and Regulation 19(4) ofSEBI (LODR) Regulations 2015 on the recommendations of the Nomination and RemunerationCommittee the Board adopted a remuneration policy for Directors Key Management Personnel(KMPs) and Senior Management.

11. NON-EXECUTIVE DIRECTORS' COMPENSATION AND DISCLOSURES:

None of the Independent/Non-Executive Directors has any pecuniary relationship ortransactions with the Company which in the Judgment of the Board may affect theindependence of the Directors.

12. COMPOSITION OF COMMITTEES:

AUDIT COMMITTEE:

(Audit Committee constituted in terms of sec. 177 of Companies Act 2013 read with reg.18 of SEBI (LODR) Regulations 2015)

A. BRIEF DESCRIPTION OF TERMS OF REFERENCE:

The terms of reference of the Audit Committee encompasses the requirements of Section177 of Companies Act 2013 and as per Regulation 18 of SEBI (LODR) Regulations 2015 andinteralia includes.

1. Over view of the Company's financial reporting process and disclosure of itsfinancial information to ensure that the financial statement reflects a true and fairposition and that sufficient and credible information is disclosed.

2. Recommending the appointment and removal of statutory auditors internal auditorsand cost auditors fixation of their audit fees and approval for payment of any otherservices.

3. Discussion with external auditors before the audit commences of the nature andscope of audit as well as post-audit discussion to ascertain any area of concern.

4. Reviewing the financial statement and draft audit report including quarterly/halfyearly financial information.

5. Reviewing with the management the annual financial statements before submission tothe Board focusing primarily on:

i) Any changes in accounting policies and practices.

ii) Major accounting entries based on excises of judgment by the management.

iii) Qualifications in draft audit report.

iv) Significant adjustment arises out of audit.

v) The going concern assumption.

vi) Compliance with accounting standards stock exchange and legal requirementconcerning financial statements.

vii) Review and approval of related party transactions.

6. Reviewing the company's financial and risk management's policies.

7. Disclosure of contingent liabilities.

8. Reviewing with management external and internal auditors the adequacy of internalcontrol systems.

9. Reviewing the adequacy of internal audit function including the audit characterthe structure of the internal audit department approval of the audit plan and itsexecution staffing and seniority of the official heading the department reportingstructure coverage and frequency of internal audit.

10. Discussion with internal auditors of any significant findings and follow-upthereon.

11. Reviewing the findings of any internal investigations by the internal auditors intothe matters where there is suspected fraud or irregularity or a failure of internalcontrol systems of a material nature and reporting the matter to the Board.

12. Looking into the reasons for substantial defaults in payments to the depositorsdebenture holders shareholders (in case of non-payment of declared dividends) andcreditors.

13. Reviewing compliances as regards the Company's Whistle Blower Policy.

B. COMPOSITION MEETINGS & ATTENDANCE

There were four (4) Audit Committee Meetings held during the year on 30.05.201814.08.2018 13.11.2018 and 13.02.2019.

Name Designation Category

Number of meetings during the year 2018-2019

Held Attended
M. Nageswara Rao Chairman NED(I) 4 4
Thomos P. Nicodemus Member NED(I) 4 4
R. Krishna Mohan Member ED 4 4

NED (I): Non Executive Independent Director

ED: Executive Director

C. The previous Annual General Meeting of the Company was held on 28.09.2018 andChairman of the Audit Committee attended previous AGM.

NOMINATION & REMUNERATION COMMITTEE

The terms of reference of the Nomination and Remuneration committee constituted interms of Section 178 of Companies Act 2013 and as per Regulation 19 of SEBI (LODR)Regulations 2015 are as under:

A. BRIEF DESCRIPTION OF TERMS OF REFERENCE

• To approve the fixation/revision of remuneration of Executive Directors of theCompany and while approving:

a. To take into account the financial position of the Company trend in the industryappointee's qualification experience past performance past remuneration etc.

b. To bring out objectivity in determining the remuneration package while strikingbalance between the interest of the Company and the Shareholders.

• To identify persons who are qualified to become Directors and who may beappointed in senior management in accordance with the criteria laid down and to recommendto the Board their appointment and /or removal.

• To carry out evaluation of every Director's performance.

• To formulate the criteria for determining qualifications positive attributesand independence of a Director and recommend to the Board a policy relating to theremuneration for the Directors key managerial personnel and other employees.

• To formulate the criteria for evaluation of Independent Directors and the Board.

• To recommend/review remuneration of the Managing Director and Whole-timeDirector(s) based on their performance and defined assessment criteria.

• Recommend to the board all remuneration in whatever form payable to seniormanagement.

B. COMPOSITION OF THE COMMITTEE MEETINGS & ATTENDANCE

There was one Nomination and Remuneration Committee Meetings held during the financialyear on 13.02.2019

Name Designation Category No of Meetings held No of Meetings attended
Thomos P. Nicodemus Chairman NED(I) 1 1
M. Nageswara Rao Member NED(I) 1 1
S. Naga Durga Member NED 1 1

NED (I): Non Executive Independent Director Remuneration Policy:

The objectives of the remuneration policy are to motivate Directors to excel in theirperformance recognize their contribution and retain talent in the organization and rewardmerit.

The remuneration levels are governed by industry pattern qualifications and experienceof the Directors responsibilities shouldered individual performance etc.

The details of the remuneration paid to whole time directors are mentioned in thefinancial statements.

None of the Directors is drawing any Commission Perquisites Retirement benefits etc.

POLICY FOR SELECTION OF DIRECTORS AND DETERMINING DIRECTORS' INDEPENDENCE

1. Scope:

This policy sets out the guiding principles for the Nomination & RemunerationCommittee for identifying persons who are qualified to become Directors and to determinethe independence of Directors in case of their appointment as independent Directors ofthe Company.

2. Terms and References:

2.1 "Director" means a director appointed to the Board of a Company.

1.2 "Nomination and Remuneration Committee means the committee constituted inaccordance with the provisions of Section 178 of the Companies Act 2013 and reg. 19 ofSEBI (Listing Obligation and Disclosure Requirement) Regulations 2015.

2.3 "Independent Director" means a director referred to insub-section (6) of Section 149 of the Companies Act 2013 and Regulation 16(1) (b) of theSEBI (Listing obligations and Disclosure Requirements) Regulations 2015.

3. Policy: Qualifications and criteria

3.1.1 The Nomination and Remuneration Committee and the Board shall review on annualbasis appropriate skills knowledge and experience required of the Board as a whole andits individual members. The objective is to have a board with diverse background andexperience that are relevant for the Company's operations.

3.1.2 In evaluating the suitability of individual Board member the NR Committee maytake into account factors such as:

• General understanding of the company's business dynamics global business andsocial perspective;

• Educational and professional background

• Standing in the profession;

• Personal and professional ethics integrity and values;

• Willingness to devote sufficient time and energy in carrying out their dutiesand responsibilities effectively.

3.1.3 The proposed appointee shall also fulfil the following requirements:

• shall possess a Director Identification Number;

• shall not be disqualified under the Companies Act 2013;

• shall Endeavour to attend all Board Meeting and Wherever he is appointed as aCommittee Member the Committee Meeting;

• shall abide by the code of Conduct established by the company for Directors andsenior Management personnel;

• shall disclose his concern or interest in any company or companies or bodiescorporate firms or other association of individuals including his shareholding at thefirst meeting of the Board in every financial year and thereafter whenever there is achange in the disclosures already made;

• Such other requirements as may be prescribed from time to time under theCompanies Act 2013 SEBI (Listing obligations and Disclosure Requirements) Regulations2015 and other relevant laws.

3.1.4 The Nomination & Remuneration Committee shall evaluate each individual withthe objective of having a group that best enables the success of the company's business.

3.2 criteria of independence

3.2.1 The Nomination & Remuneration Committee shall assess the independence ofDirectors at time of appointment/ re-appointment and the Board shall assess the sameannually. The Board shall re-assess determinations of independence when any new interestor relationships are disclosed by a Director.

3.2.2 The criteria of independence shall be in accordance with guidelines as laid downin Companies Act 2013 and reg. 16(1) (b) of the SEBI (Listing obligations and DisclosureRequirements) Regulations 2015.

3.2.3 The Independent Director shall abide by the "Code for Independent Directors"as specified in Schedule IV to the companies Act 2013.

9.3 Other Directorships/ Committee Memberships

3.3.1 The Board members are expected to have adequate time and expertise and experienceto contribute to effective Board performance Accordingly members should voluntarily limittheir directorships in other listed public limited companies in such a way that it doesnot interfere with their role as Director of the company. The NR Committee shall take intoaccount the nature of and the time involved in a Director service on other Boards inevaluating the suitability of the individual Director and making its recommendations tothe Board.

3.3.2 A Director shall not serve as director in more than 20 companies of which notmore than 10 shall be public limited companies.

3.3.3 A Director shall not serve an independent Director in more than 7 listedcompanies and not more than 3 listed companies in case he is serving as a whole-timeDirector in any listed company.

3.3.4 A Director shall not be a member in more than 10 committee or act chairman ofmore than 5 committee across all companies in which he holds directorships.

For the purpose of considering the limit of the committee Audit committee andstakeholder's relationship committee of all public limited companies whether listed ornot shall be included and all other companies including private limited companiesforeign companies and companies under section 8 of the Companies Act 2013 shall beexcluded.

Remuneration policy for Directors key managerial personnel and other employees

1. Scope:

1.1 This policy sets out the guiding principles for the Nomination and Remunerationcommittee for recommending to the Board the remuneration of the directors key managerialpersonnel and other employees of the company.

2. Terms and Reference:

In this policy the following terms shall have the following meanings:

2.1 "Director" means a Director appointed to the Board of the company.

2.2 "key managerial personnel" means

(i) The Chief Executive Office or the managing director or the manager;

(ii) The company secretary;

(iii) The whole-time director;

(iv) The chief finance Officer; and

(v) Such other office as may be prescribed under the companies Act 2013

2.3 "Nomination and Remuneration Committee" means the committee constitutedby Board in accordance with the provisions of section 178 of the companies Act2013 andreg. 19 of SEBI (Listing obligations and Disclosure Requirements) Regulations 2015.

3. Policy:

3.1 Remuneration to Executive Director and Key Managerial Personnel

3.1.1 The Board on the recommendation of the Nomination and Remuneration (NR) committeeshall review and approve the remuneration payable to the Executive Director of the companywithin the overall approved by the shareholders.

3.1.2 The Board on the recommendation of the NR committee shall also review and approvethe remuneration payable to the key managerial personnel of the company.

3.1.3 The Remuneration structure to the Executive Director and key managerial personnelshall include the following components:

(i) Basic pay

(ii) Perquisites and Allowances

(iii) Commission (Applicable in case of Executive Directors)

(iv) Retirement benefits

(v) Annual performance Bonus

3.1.4 The Annual plan and Objectives for Executive committee shall be reviewed by theNR committee and Annual performance Bonus will be approved by the committee based on theachievement against the Annual plan and Objectives.

3.2 Remuneration to Non - Executive Directors

3.2.1 The Board on the recommendation of the Nomination and Remuneration Committeeshall review and approve the remuneration payable to the Non - Executive Directors of theCompany within the overall limits approved by the shareholders as per provisions of thecompanies act.

3.2.2 Non - Executive Directors shall be entitled to sitting fees attending themeetings of the Board and the Committees thereof..

3.3. Remuneration to other employees

3.3.1. Employees shall be assigned grades according to their qualifications and workexperience competencies as well as their roles and responsibilities in the organization.Individual remuneration shall be determined within the appropriate grade and shall bebased on various factors such as job profile skill sets seniority experience andprevailing remuneration levels for equivalent jobs.

C. REMUNERATION POLICY:

The objectives of the remuneration policy are to motivate Directors to excel in theirperformance recognize their contribution and retain talent in the organization and rewardmerit.

The remuneration levels are governed by industry pattern qualifications and experienceof the Directors responsibilities shouldered and individual performance.

POLICY FOR SELECTION OF DIRECTORS AND DETERMINING DIRECTORS' INDEPENDENCE:

1. Scope:

This policy sets out the guiding principles for the Nomination & RemunerationCommittee for identifying persons who are qualified to become Directors and to determinethe independence of Directors in case of their appointment as independent Directors ofthe Company.

2. Terms and References:

2.1 "Director" means a Director appointed to the Board of a Company.

2.2 "Nomination and Remuneration Committee means the committee constitutedin accordance with the provisions of Section 178 of the Companies Act 2013 and Regulation19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

2.3 "Independent Director" means a Director referred to in sub-Section(6) of Section 149 of the Companies Act 2013 and Regulation 16 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.

3. Policy:

Qualifications and criteria

3.1.1 The Nomination and Remuneration Committee and the Board shall review on annualbasis appropriate skills knowledge and experience required of the Board as a whole andits individual members. The objective is to have a board with diverse background andexperience that are relevant for the Company's operations.

3.1.2 In evaluating the suitability of individual Board member the NR Committee maytake into account factors such as:

• General understanding of the Company's business dynamics global business andsocial perspective;

• Educational and professional background

• Standing in the profession;

• Personal and professional ethics integrity and values;

• Willingness to devote sufficient time and energy in carrying out their dutiesand responsibilities effectively.

3.1.3 The proposed appointee shall also fulfill the following requirements:

• shall possess a Director Identification Number;

• shall not be disqualified under the companies Act 2013;

• shall Endeavour to attend all Board Meeting and Wherever he is appointed as aCommittee Member the Committee Meeting;

• shall abide by the code of Conduct established by the Company for Directors andsenior Management personnel;

• shall disclose his concern or interest in any Company or companies or bodiescorporate firms or other association of individuals including his shareholding at thefirst meeting of the Board in every financial year and thereafter whenever there is achange in the disclosures already made;

• Such other requirements as any prescribed from time to time under thecompanies Act 2013 Regulation 19 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and other relevant laws.

3.1.4 The Nomination & Remuneration Committee shall evaluate each individual withthe objective of having a group that best enables the success of the Company's business.

3.2 Criteria of Independence

3.2.1 The Nomination & Remuneration Committee shall assess the independence ofDirectors at time of appointment/ re-appointment and the Board shall assess the sameannually. The Board shall re-assess determinations of independence when any new interestor relationships are disclosed by a Director.

^ A

3.2.2 The criteria of independence shall be in accordance with the guidelines as laiddown in Companies Act 2013 and Regulation 16 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.

An independent Director in relation to a Company means a Director other than amanaging Director or a whole-time Director or a nominee Director-

a. who in the opinion of the Board is a person of integrity and possesses relevantexpertise and experience;

b. (i) who is or was not a promoters of the Company or its holding subsidiary orassociate Company;

(ii) who is not related to promoters or Directors of the Company its holdingsubsidiary or associate Company

c. who has or had no pecuniary relationship with the Company its holding subsidiaryor associate Company or their promoters or Director during the two immediatelypreceding financial year or during the current financial year;

d. none of whose relative has or had pecuniary relationship or transaction with theCompany its holding subsidiary or associate Company or their promoters or Directorsamounting to two per cent or more of its gross turnover or total income or fifty lakhrupees or such higher amount as may be prescribed whichever is lower during the twoimmediately preceding financial year or during the current finance year;

e. who neither himself nor any of his relative-

(i) Holds or has held the position of a key managerial personnel or is or has beenemployee of the or associate Company in any of the three finance years immediatelypreceding the finance year in which he is proposed to be appointed;

(ii) Is or has been an employee or proprietor or a partner in any of the three financeyear immediately preceding the financial year in which he is proposed to be appointed of-

(A) a firm of auditors or Company secretaries in practice or cost auditors of theCompany or its holding subsidiary or associate Company; or

(B) any legal or a consulting firm that has or had any transaction with the Companyits holding subsidiary or associate Company amounting to ten per cent or more of the grossturnover of more of the gross turnover of such firm;

(i) holds together with his relatives two per cent or more of the total voting power ofthe Company; or

(ii) is a chief Executive or Director by whatever name called of any non-profitorganization that receives twenty-five per cent or more of its receipt from the Companyany of its promoters Directors or its holding subsidiary or associate Company or thatholds two per cent or more of the total voting power of the Company; or

(iii) is a material supplier service provider or customer or a lesser or lessee of theCompany.

f. Shall possess appropriate skills experience and knowledge in one or more field offinance law management sales marketing administration research corporate governancetechnical operations corporate social responsibility or this disciplines related to theCompany's business.

g. Shall possess such other qualifications as may be prescribed from time to timeunder the Companies Act 2013.

h. who is not less than 21 years of age

3.2.3 The independent Director shall abide by the "code for independent Directors"as specified in Schedule IV to the companies Act 2013.

3.3 Other Directorships/ Committee Memberships

3.3.1 The Board members are expected to have adequate time and expertise and experienceto contribute to effective Board performance Accordingly members should voluntarily limittheir Directorships in other listed public limited companies in such a way that it doesnot interfere with their role as Director of the Company. The NR Committee shall take intoaccount the nature of and the time involved in a director service on other Boards inevaluating the suitability of the individual Director and making its recommendations tothe Board.

3.3.2 A Director shall not serve as Director in more than 20 companies of which notmore than 10 shall be public limited companies.

3.3.3 A Director shall not serve an independent Director in more than 7 listedcompanies and not more than 3 listed companies in case he is serving as a whole-timeDirector in any listed Company.

3.3.4 A Director shall not be a member in more than 10 committee or act as chairman ofmore than 5 committee across all companies in which he holds Directorships.

For the purpose of considering the limit of the committee Audit committee andstakeholder's relationship committee of all public limited companies whether listed ornot shall be included and all other companies including private limited companiesforeign companies and companies under Section 8 of the companies Act 2013 shall beexcluded.

Remuneration policy for Directors key managerial personnel and other employees:

The objectives of the remuneration policy are to motivate Directors to excel in theirperformance recognize their contribution and retain talent in the organization and rewardmerit.

The remuneration levels are governed by industry pattern qualifications and experienceof the Directors responsibilities shouldered and individual performance.

Remuneration policy for Directors key managerial personnel and other employees

1. Scope:

1.1 This policy sets out the guiding principles for the Nomination and Remunerationcommittee for recommending to the Board the remuneration of the Directors key managerialpersonnel and other employees of the Company.

2. Terms and Reference:

In this policy the following terms shall have the following meanings:

2.1 "Director" means a Director appointed to the Board of the Company.

2.2 "key managerial personnel" means

(i) The Chief Executive Officer or the managing Director or the manager;

(ii) The Company Secretary;

(iii) The Whole-time Director;

(iv) The Chief Financial Officer; and

(v) Such other office as may be prescribed under the companies Act 2013

2.3 "Nomination and Remuneration committee" means the committee constitutedby Board in accordance with the provisions of Section 178 of the companies Act 2013 andRegulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

3. Policy:

3.1 Remuneration to Executive Director and key managerial personnel

3.1.1 The Board on the recommendation of the Nomination and Remuneration (NR) committeeshall review and approve the remuneration payable to the Executive Director of the Companywithin the overall approved by the shareholders.

3.1.2 The Board on the recommendation of the NR committee shall also review and approvethe remuneration payable to the key managerial personnel of the Company.

3.1.3 The remuneration structure to the Executive Director and key managerial personnelshall include the following components:

(i) Basic pay

(ii) Perquisites and Allowances

(iii) Stock Options

(iv) Commission (Applicable in case of Executive Directors)

(v) Retrial benefits

(vi) Annual performance Bonus

3.1.4 The Annual plan and Objectives for Executive committee shall be reviewed by theNR committee and Annual performance bonus will be approved by the committee based on theachievement against the Annual plan and Objectives.

3.2 Remuneration to Non - Executive Directors

3.2.1 The Board on the recommendation of the NR Committee shall review and approvethe remuneration payable to the Non - Executive Directors of the Company within theoverall limits approved by the shareholders as per the provisions of the Companies Act.

3.2.2 Non - Executive Directors shall be entitled to sitting fees attending themeetings of the Board and the Committees thereof. The Non- Executive Directors shall alsobe entitled to profit related commission in addition to the sitting fees.

3.3. Remuneration to other employees

3.3.1. Employees shall be assigned grades according to their qualifications and workexperience competencies as well as their roles and responsibilities in the organization.Individual remuneration shall be determined within the appropriate grade and shall bebased on various factors such as job profile skill sets seniority experience andprevailing remuneration levels for equivalent jobs.

D. MECHANISM FOR EVALUATION OF THE BOARD

Evaluation of all Board members is performed on an annual basis. The evaluation isperformed by the Board Nomination and Remuneration Committee and Independent Directorswith specific focus on the performance and effective functioning of the Board andIndividual Directors.

In line with Securities and Exchange Board of India Circular No.SEBI/HO/CFD/CMD/CIR/P/2017/004 dated January 5 2017 and the Companies Amendment Act2017 the Company adopted the recommended criteria by Securities and Exchange Board ofIndia.

The Directors were given six Forms for evaluation of the following:

(i) Evaluation of Board;

(ii) Evaluation of Committees of the Board;

(iii) Evaluation of Independent Directors;

(iv) Evaluation of Chairperson;

(v) Evaluation of Non-Executive and Non-Independent Directors; and

(vi) Evaluation of Managing Director.

The Directors were requested to give following ratings for each criteria:

1. Could do more to meet expectations;

2. Meets expectations; and

3. Exceeds expectations.

The Directors have sent the duly filled forms to Nomination & Remunerationcommittee. Based on the evaluation done by the Directors the Committee has prepared areport and submitted the Evaluation Report. Based on the report the Board of Directorshas informed the rankings to each Director and also informed that the performance ofDirectors is satisfactory and they are recommended for continuation as Directors of theCompany.

4 . STAKEHOLDERS RELATIONSHIP COMMITTEE:

During the year April 2018 to March 2019 Four (4) Stakeholders Relationship CommitteeMeetings were held. The dates on which the said meetings were held are 30.05.201814.08.2018 13.11.2018 and 13.02.2019.

A. COMPOSITION AND ATTENDANCE FOR MEETINGS:

Name Designation Category

Number of meetings during the year 2018-2019

Held Attended
Mr. M. Nageswara Rao Chairman NED(I) 4 4
Mr. Thomos P. Nicodemus Member NED(I) 4 1
Mr. R. Krishna Mohan Member ED 4 4

NED (I): Non Executive Independent Director

ED: Executive Director

B) Powers:

The Committee has been delegated with the following powers:

• To redress shareholder and investor complaints relating to transfer of sharesDematerialization of Shares non-receipt of Annual Reports non-receipt of declareddividend and other allied complaints.

• To approve transfer transmission and issue of duplicate/fresh sharecertificate(s)

• Consolidate and sub-division of share certificates etc.

• To redress approve and dispose off any other complaints transactions andrequests etc. received from any shareholder of the company and investor in general.

The Board has delegated the power to process the transfer and transmission of shares tothe Registrar and Share Transfer Agents who process share transfers within a week oflodgement in the case of shares held in physical form.

The Company has designated an exclusive e-mail ID called Investorcare@erpsoft.com forcomplaints/grievances.

10. VIGIL MECHANISM/WHISTLE BLOWER POLICY:

In pursuant to the provisions of Section 177(9) & (10) of the Companies Act 2013and Regulation 22 of SEBI(Listing Obligation and Disclosure Requirements) 2015 a vigilMechanism for Directors and employees to report genuine concerns has been established. Italso provides for necessary safeguards for protection against victimization for whistleblowing in good faith.

Vigil Mechanism Policy has been established by the Company for directors and employeesto report genuine concerns pursuant to the provisions of section 177(9) & (10) of theCompanies Act 2013. The same has been placed on the website of the Company.

11. DIRECTOR'S RESPONSIBILITY STATEMENT:

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

(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(b) The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;

(c) The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

(d) The Directors had prepared the annual accounts on a going concern basis; and

(e) The Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

(f) The Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

12. INFORMATION ABOUT THE FINANCIAL PERFORMANCE/FINANCIAL POSITION OF THESUBSIDIARIES/ASSOCIATES/ JOINT VENTURES:

As on 31st March 2019 the Company has a wholly owned subsidiary Companies namely M/sCity Online Digital Private Limited and M/s City Online Media Private Limited. TheFinancial performance of the subsidiary company is mentioned in Form AOC- 1 inaccordance with Section 129(3) of the Companies Act 2013 which is annexed to this report.

Further audited financial statements together with related information and otherreports of each of the subsidiary companies have also been placed on the website of theCompany at www.cityonlines.com.

13. NAMES OF THE COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINTVENTURES OR ASSOCIATE COMPANIES DURING THE YEAR.

Nil

14. EXTRACT OF ANNUAL RETURN:

As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in MGT9 annexed as a part of this Annual Report.

15. STATUTORY AUDITORS:

The Auditors M/s. Sheshachalam & Co. Chartered Accountants retire at the ensuingAnnual General Meeting and M/s. Laxminivas & Co. Chartered Accountants are beingappointed in place of the retiring auditors for a period of five years from the conclusionof this Annual General Meeting [AGM] till the conclusion of 25th AGM.

Your Board of Directors have recommended the appointment of M/s. Laxminivas & Co.based on the recommendation of the Audit Committee to the members for their approval atthe forthcoming Annual general meeting

16. INTERNAL AUDITORS

Pursuant to the provisions of Section 138 of the Companies read with rules made thereunder the Board has appointed M/s. D. Rambabu & Co. Chartered Accountants asInternal Auditors for the financial year 2019-20.

17. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB SECTION (12) OF SECTION143 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT:

There have been no frauds reported by the auditors u/s 143(12).

18. SECRETARIAL AUDIT:

Pursuant to the provisions of Section 134(3) (f) & Section 204 of the CompaniesAct 2013 Secretarial audit report as provided by Mr. Vivek Surana Practicing CompanySecretary is annexed to this Report as an annexure.

19. QUALIFICATIONS IN AUDIT REPORTS:

Explanations or comments by the Board on every qualification reservation or adverseremark or disclaimer made—

(a) Statutory Auditors Report:

The Board has duly reviewed the Statutory Auditor's Report on the Accounts for the yearended March 31 2019 and has noted that the same does not have any reservationqualification or adverse remarks. However the Board decided to further strengthen theexisting system and procedures to meet all kinds of challenges and growth in the marketexpected in the coming years.

(b) Secretarial Audit Report:

The Board has duly reviewed the Secretarial Audit Report for the year ended March 312019 on the Compliances according to the provisions of section 204 of the Companies Act2013 and the same does not have any reservation qualifications or adverse remarks.

20. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:

The required information as per Sec.134 (3) (m) of the Companies Act 2013 is providedhereunder:

A. Conservation of Energy:

Your Company's operations are not energy intensive. Adequate measures have been takento conserve energy wherever possible by using energy efficient computers and purchase ofenergy efficient equipment.

B. Technology Absorption:

1. Research and Development (R&D): NIL

2. Technology absorption adoption and innovation: NIL

C. Foreign Exchange Earnings and Out Go:

Foreign Exchange Earnings: NIL Foreign Exchange Outgo: NIL

21. DETAILS RELATING TO DEPOSITS COVERING THE FOLLOWING:

Your Company has not accepted any deposits falling within the meaning of Sec.73 74& 76 of the Companies Act 2013 read with the Rule 8(v) of Companies (Accounts) Rules2014 during the financial year under review. Further there are no deposits which are notin compliance with the requirements of Chapter V of the Companies Act 2013.

22. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS:

During the period under review there were no significant and material orders passed bythe regulators or Courts or Tribunals impacting the going concern status and the company'soperations in future.

23. DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

Your Company has well established procedures for internal control across its variouslocations commensurate with its size and operations. The organization is adequatelystaffed with qualified and experienced personnel for implementing and monitoring theinternal control environment. The internal audit function is adequately resourcedcommensurate with the operations of the Company and reports to the Audit Committee of theBoard.

24. INSURANCE:

The properties and assets of your Company are adequately insured.

25. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

The company has not given loans Guarantees or made any investments attracting theprovisions of Section 186 of the Companies Act 2013 during the year under review.

26. CREDIT & GUARANTEE FACILITIES:

The details of the loan taken by the Company is given in the financial statements.

27. SHARE CAPITAL

The authorised share capital of the Company stands at Rs.77000000/-.

The paid up share capital of the Company stands at Rs. 56098330 /- divided into5609833 equity shares of Rs.10/- each.

28. MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT:

The Management Discussion and Analysis Report pursuant to the SEBI (LODR) Regulationappended as Annexure III for information of the Members.

29. INVESTOR EDUCATION AND PROVIDENT FUND

During the year the company has not transferred any amount to Investor Education andProvident Fund.

30. COMPOSITION OF CSR COMMITTEE AND CONTENTS OF CSR POLICY:

Since the Company does not have the net worth of Rs. 500 Crore or more or turnover ofRs. 1000 Crore or more or a net profit of Rs. 5 Crore or more during the financial yearsection 135 of the Companies Act 2013 relating to Corporate Social Responsibility is notapplicable and hence the Company need not adopt any Corporate Social ResponsibilityPolicy.

31. RISK MANAGEMENT POLICY:

The Company as formulated a Risk Management Policy under which various risks associatedwith the business operations is identified and risk mitigation plans have been put inplace.

32. 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 business. There were no materialsignificant related party transactions made by the Company with the Promoters DirectorsKey Managerial Personnel or the Senior Management which may have a potential conflict withthe interest of the Company at large.

All related party transactions were placed before the Audit Committee/Board forapproval. Prior approval of the Audit Committee was obtained for the transactions whichare foreseen and are in repetitive in nature.

None of the Directors have any pecuniary relationship or transactions with the Companyexcept payments made to them in the form of remuneration and sitting fees.

The Company has not entered into any contracts/arrangements with related partiesreferred to Section 188(1) of the Companies Act 2013 except certain arm lengthtransaction during the year. Accordingly no disclosure or reporting is required coveredunder this Section.

33. DISCLOSURE ABOUT COST AUDIT:

Cost Audit is not applicable to your Company.

34. STATEMENT SHOWING THE NAMES OF THE TOP TEN EMPLOYEES IN TERMS OF REMUNERATION DRAWNAND THE NAME OF EVERY EMPLOYEE:

A table containing the particulars in accordance with the provisions of Section 197(12)of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is appended to this Report.

A statement showing the names of the top ten employees in terms of remuneration drawnand the name of every employee is annexed to this Annual report.

During the year NONE of the employees is drawing a remuneration of Rs.10200000/- andabove per annum or Rs.850000/- and above in aggregate per month the limits specifiedunder the Section 197(12) of the Companies Act2013 read with Rules 5(2) and 5(3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

35. RATIO OF REMUNERATION TO EACH DIRECTOR:

Under section 197(12) of the Companies Act 2013 and Rule 5(1)(2) & (3) of theCompanies (Appointment & Remuneration) Rules 2014 read with Schedule V of theCompanies Act 2013 the ratio of remuneration of Mr. S. Raghava Rao Chairman &Managing Director of the Company to the median remuneration of the employees is 8.65:1 andof Mr. R. Krishna Mohan WholeTime director & CFO and Mr. Ch. Harinath WholetimeDirector of the Company is 8.36:1.

36. CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:

Since the paid up capital of the Company is less than Rs. 10 Crores and Net worth ofthe Company is less than Rs. 25 Crores Corporate Governance as envisaged in SEBI (LODR)Regulations 2015 is not applicable.

37. SECRETARIAL STANDARDS

The Company is in compliance with the applicable secretarial standards.

EVENT BASED DISCLOSURES

During the year under review the Company has not taken up any of the followingactivities:

1. Issue of sweat equity share: NA

2. Issue of shares with differential rights: NA

3. Issue of shares under employee's stock option scheme: NA

4. Disclosure on purchase by company or giving of loans by it for purchase of itsshares: NA

5. Buy back shares: NA

6. Disclosure about revision: NA

7. Preferential Allotment of Shares: NA

38. MD/ CFO Certification

The Managing Director and CFO certification of the financial statements for the year2018-19 is annexed in this Annual Report.

39. POLICIES:

The SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 mandatedthe formulation of certain policies for all listed companies. All the policies areavailable on our website (https:// www.cityonlines.com). The policies are reviewedperiodically by the Board and updated based on need and new compliance requirement.

Name of the policy Brief Description Website link
Board Diversity Policy We believe that a truly diverse board will leverage differences in thought perspective knowledge skill regional and industry experience cultural and geographical background age ethnicity race and gender which will help us retain our competitive advantage. The Board has adopted the Board Diversity Policy which sets out the approach to diversity of the Board of Directors. http://www.cityonlines.com/investorrelations. html
Nomination and Remuneration Policy This policy formulates the criteria for determining qualifications competencies positive attributes and independence for the appointment of a director (executive/non-executive) and also the criteria for determining the remuneration of the directors key managerial personnel and other employees. http://www.cityonlines.com/investorrelations. html
Policy on Material Subsidiaries The policy is used to determine the material subsidiaries and material non-listed Indian subsidiaries of the Company and to provide the governance framework for them. http://www.cityonlines.com/investorrelations. html
Related Party Transaction Policy The policy regulates all transactions between the Company and its related parties http://www.cityonlines.com/investorrelations. html

40. ENVIRONMENTS AND HUMAN RESOURCE DEVELOPMENT:

Your Company always believes in keeping the environment pollution free and is fullycommitted to its social responsibility. The Company has been taking upmost care incomplying with all pollution control measures from time to time strictly as per thedirections of the Government.

We would like to place on record our appreciation for the efforts made by themanagement and the keen interest shown by the Employees of your Company in this regard.

41. STATUTORY COMPLIANCE:

The Company has complied with the required provisions relating to statutory compliancewith regard to the affairs of the Company in all respects.

42. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at workplace (Prevention Prohibition and Redressal)Act 2013. Internal Complaint Committee (ICC) has been set up to redress complaintsreceived regarding sexual harassment.

Committee:

Name Designation
Vijaya Laxmi Presiding Officer
G. Renuka Member
B. Ramanaiah Member
D. Joji External Member

All employees are covered under this policy. During the year 2018-2019 there were nocomplaints received by the Committee.

43. CODE OF CONDUCT FOR THE PREVENTION OF INSIDER TRADING:

The Board of Directors has adopted the Insider Trading Policy in accordance with therequirements of the SEBI (Prohibition of Insider Trading) Regulation 2015 and theapplicable US Securities laws. The Insider Trading Policy of the Company lays downguidelines and procedures to be followed and disclosures to be made while dealing withshares of the Company as well as the consequences of violation. The policy has beenformulated to regulate monitor and ensure reporting of deals by employees and to maintainthe highest ethical standards of dealing in Company securities.

The Insider Trading Policy of the Company covering code of practices and procedures forfair disclosure of unpublished price sensitive information and code of conduct for theprevention of insider trading is available on our website www.cityonlines.com

44. CEO/ CFO Certification

The Managing Director cum CEO and CFO certification of the financial statements for theyear 2018-2019 is annexed in this Annual Report.

45. ACKNOWLEDGEMENTS:

Your Directors wish to place on record their appreciation of the contribution made bythe employees at all levels to the continued growth and prosperity of your Company.

Your Directors also wish to place on record their appreciation of businessconstituents banks and other financial institutions and shareholders of the Company ROCSEBI BSE NSDL CDSL etc. for their continued support for the growth of the Company.

For and on behalf of the Board
City Online Services Limited
Sd/- Sd/-
Place: Hyderabad R. Krishna Mohan S. Raghava Rao
Date: 14.08.2019 Whole-Time Director & CFO Chairman & Managing Director
(DIN: 01678152) (DIN: 01441612)

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