City Online Services Ltd Directors Report.

To

The Members,

The Directors have pleasure in presenting before you the 21st Directors Report of the Company together with the Audited Statements of Accounts for the year ended 31st March, 2020.

1. FINANCIAL SUMMARY/HIGHLIGHTS, OPERATIONS, STATE OF AFFAIRS:

The performance during the period ended 31st March, 2020 has been as under:

Consolidated Particular

Standalone

2019-20 2018-19 2019-20 2018-19
1,248.67 1,406.84 Total Revenue 1,226.12 1,358.25
1,447.87 1,455.84 Total Expenditure 1,432.67 1,400.84
(199.20) (49.00) Profit/ Loss Before Tax (206.55) (42.59)
(94.55) 41.64 Provision for Tax (94.95) 41.07
(104.64) (90.64) Profit/Loss after Tax (111.60) (83.66)
(104.64) (90.64) Balance Carried to (111.60) (83.66)
Balance Sheet

During the year under review, the company has achieved total revenue of Rs.1,226.12 Lakhs and net profit/loss of Rs. (111.60) Lakhs as compared to total revenue of Rs. 1,358.25 Lakhs and net profit/loss of Rs. (83.66) Lakhs achieved in the previous financial year.

During the year under review, the company on consolidated basis has achieved total revenue of Rs. 1,248.67 Lakhs and net profit/loss of Rs. (104.64) Lakhs as compared to total revenue of Rs. 1,406.84 Lakhs and net profit/loss of Rs. (90.64) Lakhs achieved in the previous financial year.

2. MATERIAL CHANGES AND COMMITMENTS:

There were no material changes and commitments affecting financial position of the company between 31st March and the date of Boards

Report. . (i.e. 31.07.2020)

3. CHANGE IN THE NATURE OF BUSINESS, IF ANY:

During the period under review and the date of Boards Report there was no change in the 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. SHARE CAPITAL:

There is no change in the share capital of the Company.

7. BOARD MEETINGS:

The Board of Directors duly met 5 (five) times on 24.04.2019, 30.05.2019, 14.08.2019, 13.11.2019 and 11.02.2020 and in respect of which meetings, proper notices were given and the proceedings were properly recorded and signed in the Minutes Book maintained for the purpose.

Meetings held and attended:

Name of the Director

Number of Board Meetings

Held Attended
S. Raghava Rao 5 5
M. Nageswara Rao 5 5
Thomos P. Nicodemus 5 5
V. Satyanarayana 5 5
S. Naga Durga 5 5
Ch. Harinath 5 5
R. Krishna Mohan 5 5

8. INVESTOR EDUCATION AND PROVIDENT FUND:

The Company was not required to transfer any amount to Investor Education and Provident Fund.

9. 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 that they are meeting the criteria of independence as provided in Sub-section (6) of Section 149 of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015.

10. MANAGEMNET DISCUSSION AND ANALYSIS REPORT:

Management Discussion and Analysis Report is appended to this Report.

11. DIRECTORS OR KMP APPOINTED, RE-APPOINTED OR RESIGNED:

As required under Regulation 36 (3) of the SEBI (LODR), Regulations, 2015, brief particulars of the Directors seeking appointment/ re-appointment and Directors resigning are given as under:-

Name of the Director S. Naga Durga
Director Identification No 06697556
Date of Birth 01/02/1964
Date of appointment 29/09/2014
Occupation Business
Qualification Intermediate
Profile She has rich experience
in administration
and HR activities
Relationship between directors inter-se Wife of Mr. S. Raghava Rao
Nature of expertise in specific functional area Administration
Directorship in other Listed Entities Nil
Membership of Committees of other Listed Nil
Companies
Shareholding in the Company 40,000

During the year under review Mr. Naresh Swami was appointed as the Company Secretary and Compliance Officer of the Company w.e.f. 17.08.2019 and Mr. Sanchit Chaturvedi has resigned as Company Secretary and Compliance Officer of the Company w.e.f. 24.04.2019 due to his personal commitments.

12. FAMILIARISATION PROGRAMMES:

Independent Directors are familiarized about the Companys 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 incumbent Director about the Company/its businesses and the group practices.

The details of familiarisation programme held in FY 2019-20 are also disclosed on the Companys website at www.cityonlines.com.

13. AUDIT COMMITTEE:

A. BRIEF DESCRIPTION OF TERMS OF REFERENCE:

The terms of reference of the Audit Committee encompasses the requirements of Section 177 of Companies Act, 2013 and as per Regulation 18 of SEBI (LODR) Regulations, 2015 and, interalia, includes:

1. Overview of the Companys financial reporting process and disclosure of its financial information to ensure that the financial statement reflects a true and fair position and that sufficient and credible information is disclosed.

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

3. Discussion with external auditors before the audit commences, of the nature and scope 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/half - yearly financial information.

5. Reviewing with the management the annual financial statements before submission to the Board, focusing primarily on: 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 requirement concerning financial statements.

vii. Review and approval of related party transactions.

6. Reviewing the companys financial and risk management policies.

7. Disclosure of contingent liabilities.

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

9. Reviewing the adequacy of internal audit function, including the audit character, the structure of the internal audit department, approval of the audit plan and its execution, staffing and seniority of the official heading the department, reporting structure, coverage and frequency of internal audit.

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

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

12. Looking into the reasons for substantial defaults in payments to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors.

13. Reviewing compliances as regards the Companys Whistle Blower

Policy.

B. COMPOSITION, MEETINGS & ATTENDANCE:

There were four (4) Audit Committee Meetings held during the year on 30.05.2019, 14.08.2019, 13.11.2019 and 11.02.2020.

Name Designation Category Number of meetings during the year 2019-2020
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

28.09.2019 and Chairman of the Audit Committee, attended previous AGM.

14. NOMINATION AND REMUNERATION COMMITTEE:

The terms of reference of the Nomination and Remuneration committee constituted in terms 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 the Company and while approving:

a. To take into account the financial position of the Company, trend in the industry, appointees qualification, experience, past performance, past remuneration etc.

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

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

• To carry out evaluation of every Directors performance.

• To formulate the criteria for determining qualifications, positive attributes and independence of a Director, and recommend to the Board a policy, relating to the remuneration 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-time Director(s) based on their performance and defined assessment criteria.

• Recommend to the board, all remuneration, in whatever form, payable to senior management.

B. COMPOSITION OF THE COMMITTEE, MEETINGS & ATTENDANCE:

There was one Nomination and Remuneration Committee Meetings held during the financial year on 13.02.2020

Name Designation Category No. of meetings held No. of meeting 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

NED: Non-Executive Director

C. REMUNERATION POLICY:

The objectives of the remuneration policy are to motivate Directors to excel in their performance, recognize their contribution and retain talent in the organization and reward merit.

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

The details of the remuneration paid to whole-time directors are mentioned in the financial 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 & Remuneration Committee for identifying persons who are qualified to become Directors and to determine the independence of Directors, in case of their appointment as independent Directors of the 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 constituted in accordance with the provisions of Section 178 of the Companies Act, 2013 and reg. 19 of SEBI (Listing Obligation and Disclosure Requirement), 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(1) (b) of the SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015.

3. Policy:

3.1 Qualifications and criteria

3.1.1 The Nomination and Remuneration Committee, and the Board, shall review on annual basis, appropriate skills, knowledge and experience required of the Board as a whole and its individual members. The objective is to have a board with diverse background and experience that are relevant for the Companys operations.

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

• General understanding of the companys business dynamics, global business and social 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 duties and 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 a Committee Member, the Committee Meeting;

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

• shall disclose his concern or interest in any company or companies or bodies corporate, firms, or other association of individuals including his shareholding at the first meeting of the Board in every financial year and thereafter whenever there is a change in the disclosures already made;

• Such other requirements as may be prescribed, from time to time, under the Companies Act, 2013, SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015 and other relevant laws.

3.1.4 The Nomination & Remuneration Committee shall evaluate each individual with the objective of having a group that best enables the success of the companys business.

3.2 criteria of independence

3.2.1 The Nomination & Remuneration Committee shall assess the independence of Directors at time of appointment/re-appointment and the Board shall assess the same annually. The Board shall re-assess determinations of independence when any new interest or relationships are disclosed by a Director.

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

An independent Director in relation to a Company, means a Director other than a managing 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 relevant expertise and experience;

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

(ii) who is not related to promoters or Directors of the Company its holding, subsidiary or associate Company;

c) who has or had no pecuniary relationship with the Company, its holding, subsidiary or associate Company, or their promoters, or Director, during the two immediately preceding financial year or during the current financial year;

d) none of whose relative has or had pecuniary relationship or transaction with the Company, its holding, subsidiary or associate Company, or their promoters, or Directors, amounting to two per cent or more of its gross turnover or total income or fifty lakh rupees or such higher amount as may be prescribed, whichever is lower, during the two immediately preceding financial year or during the current financial 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 been employee of the or associate Company in any of the three financial years immediately preceding 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 finance year 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 the Company or its holding, subsidiary or associate Company; or

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

(ii) is a chief Executive or Director, by whatever name called, of any nonprofit organization that receives twenty-five per cent or more of its receipt from the Company any of its promoters, Directors or its holding subsidiary or associate Company or that holds 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 the Company.

f) Shall possess appropriate skills experience and knowledge in one or more field of finance, law management, sales, marketing administration, research, corporate governance, technical operations, corporate social responsibility or this disciplines related to the Companys business.

g) Shall possess such other qualifications as may be prescribed from time to time, under 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 experience to contribute to effective Board performance. Accordingly, members should voluntarily limit their directorships in other listed public limited companies in such a way that it does not interfere with their role as Director of the company. The NR Committee shall take into account the nature of and the time involved in a Director service on other Boards, in evaluating the suitability of the individual Director and making its recommendations to the Board.

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

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

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

For the purpose of considering the limit of the committee, Audit committee and stakeholders relationship committee of all public limited companies, whether listed or not, shall be included and all other companies including private limited companies, foreign companies and companies under section 8 of the Companies Act, 2013 shall be excluded.

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 Remuneration committee for recommending to the Board the remuneration of the directors, key managerial personnel 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 constituted by Board in accordance with the provisions of section 178 of the companies Act,2013 and reg. 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) committee shall review and approve the remuneration payable to the Executive Director of the company within the overall approved by the shareholders.

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

3.1.3 The Remuneration structure to the Executive Director and key managerial personnel shall 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 the NR committee and Annual performance Bonus will be approved by the committee based on the achievement 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 Committee, shall review and approve the remuneration payable to the Non-Executive Directors of the Company within the overall limits approved by the shareholders as per provisions of the companies act.

3.2.2 Non-Executive Directors shall be entitled to sitting fees attending the meetings 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 work experience, competencies as well as their roles and responsibilities in the organization. Individual remuneration shall be determined within the appropriate grade and shall be based on various factors such as job profile skill sets, seniority, experience and prevailing remuneration levels for equivalent jobs.

15. STAKEHOLDERS RELATIONSHIP COMMITTEE:

There were four (4) Stakeholders Relationship Committee Meetings held during the year on 30.05.2019, 14.08.2019, 13.11.2019 and 11.02.2020.

A. COMPOSITION AND ATTENDANCE FOR MEETINGS:

The Details of composition of the Committee are given below:

Name Designation Category
Mr. M. Nageswara Rao Chairman NED(I)
Mr. Thomos P. Nicodemus Member NED(I)
Mr. R. Krishna Mohan Member ED

NED (I): Non-Executive, Independent Director

NED: Non-Executive Director

B. POWERS:

The Committee has been delegated with the following powers:

• To redress shareholder and investor complaints relating to transfer of shares, Dematerialization of Shares, non-receipt of Annual Reports, non-receipt of declared dividend and other allied complaints.

• To approve, transfer, transmission, and issue of duplicate / fresh share certificate(s).

• Consolidate and sub-division of share certificates etc.

• To redress, approve and dispose off any, other complaints, transactions and requests 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 to the Registrar and Share Transfer Agents, who process share transfers within a week of lodgement in the case of shares held in physical form.

The Company has designated an exclusive e-mail ID called corp@cityonlines.com for complaints/grievances.

16. VIGIL MECHANISM/WHISTLE BLOWER POLICY:

In pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013, a vigil Mechanism for Directors and employees to report genuine concerns has been established. It also provides for necessary safeguards for protection against victimization for whistle blowing in good faith.

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

17. DIRECTORS RESPONSIBILITY STATEMENT:

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

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

(b) The Directors had 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 at the end of the financial year and of the profit and loss of the company for that period;

(c) The Directors had 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) 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 the company and that such internal financial controls are adequate and were operating effectively.

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

18. INFORMATION ABOUT THE FINANCIAL PERFORMANCE /

FINANCIAL POSITION OF THE SUBSIDIARIES / ASSOCIATES/ JOINT VENTURES:

As on 31st March, 2020 the Company has a wholly owned subsidiary Companies namely M/s. City Online Digital Private Limited and M/s. City Online Media Private Limited. The Financial performance of the subsidiary company is mentioned in Form AOC-1 in accordance with Section 129(3) of the Companies Act, 2013 which is annexed to this report.

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

19. NAMES OF THE COMPANIES WHICH HAVE BECOME OR CEASED

TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR.

During the year neither any Company became its subsidiary nor ceased to be its subsidiary.

20. EXTRACT OF ANNUAL RETURN:

As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 annexed as a part of this Annual Report.

21. STATUTORY AUDITORS:

The members of the company in accordance with section 139 of the Companies Act, 2013 had passed a resolution for appointment of M/s. Laxminivas & Co., as Statutory Auditors of the company for a period of 5 years in the AGM held on 28.09.2019 to hold office up to the conclusion of 25th Annual General Meeting of the company.

22. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS

UNDER SUB SECTION (12) OF SECTION 143 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT:

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

23. SECRETARIAL AUDIT:

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

24. QUALIFICATIONS IN AUDIT REPORTS:

Explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made—

(a) Statutory Auditors Report:

The Board has duly reviewed the Statutory Auditors Report on the Accounts for the year ended March 31, 2020 and has noted that the statutory auditors have qualified their report for the following:

• "Loans & Advances" in the Balance Sheet are carried at a cost of Rs. 82.68 Lakhs. A party having a loan outstanding of 48.36 Lakhs carries negative net worth and recovery of the same is unascertainable. However, no provision has been made in the books of accounts. Had the company created a provision of Rs. 48.36 Lakhs, the results of the operations of the company for the current financial year would have resulted in a loss of Rs. 254.91 Lakhs and the amount under "Loans & Advances" under current assets would be lower by Rs. 48.36 Lakhs.

The Board has noted the same and is confident of recovering the said amount.

(b) Secretarial Audit Report:

The Board has duly reviewed the Secretarial Audit Report for the year ended March 31, 2020 on the Compliances according to the provisions of section 204 of the Companies Act 2013, and the same does not have any reservation, qualifications or adverse remarks.

25. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND

FOREIGN EXCHANGE OUTGO:

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

A. Conservation of Energy:

Your Companys operations are not energy intensive. Adequate measures have been taken to conserve energy wherever possible by using energy efficient computers and purchase of energy 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

26. RISK MANAGEMENT POLICY:

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

27. CODE OF CONDUCT FOR THE PREVENTION OF INSIDER

TRADING:

The Board of Directors has adopted the Insider Trading Policy in accordance with the requirements of the SEBI (Prohibition of Insider Trading) Regulation, 2015 and the applicable US Securities laws. The Insider Trading Policy of the Company lays down guidelines and procedures to be followed, and disclosures to be made while dealing with shares of the Company, as well as the consequences of violation. The policy has been formulated to regulate, monitor and ensure reporting of deals by employees and to maintain the highest ethical standards of dealing in Company securities.

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

28. 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) Rules 2014, during the financial year under review. Further, there are no deposits which are not in compliance with the requirements of Chapter V of the Companies Act, 2013.

29. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE

REGULATORS:

During the period under review there were no significant and material orders passed by the regulators or Courts or Tribunals impacting the going concern status and the companys operations in future.

30. DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

Your Company has well established procedures for internal control across its various locations, commensurate with its size and operations. The organization is adequately staffed with qualified and experienced personnel for implementing and monitoring the internal control environment. The internal audit function is adequately resourced commensurate with the operations of the Company and reports to the Audit Committee of the Board.

31. INSURANCE:

The properties and assets of your Company are adequately insured.

32. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

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

33. CREDIT & GUARANTEE FACILITIES:

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

34. 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 of Rs. 1000 Crore or more, or a net profit of Rs. 5 Crore or more during the financial year, section 135 of the Companies Act, 2013 relating to Corporate Social Responsibility is not applicable and hence the Company need not adopt any Corporate Social Responsibility Policy.

35. RELATED PARTY TRANSACTIONS:

All related party transactions that were entered into during the financial year were on arms length basis and were in the ordinary course of business. There were no material significant related party transactions made by the Company with the Promoters, Directors, Key Managerial Personnel or the Senior Management which may have a potential conflict with the interest of the Company at large.

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

The Company has not entered into any contracts/arrangements with related parties referred to Section 188(1) of the Companies Act, 2013 including certain arm length transaction during the year. Accordingly no disclosure or reporting is required covered under this Section.

36. DISCLOSURE ABOUT COST AUDIT:

Cost Audit is not applicable to your Company.

37. STATEMENT SHOWING THE NAMES OF THE TOP TEN

EMPLOYEES IN TERMS OF REMUNERATION DRAWN AND 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 of Managerial Personnel) Rules, 2014 is annexed to this Annual Report as annexure.

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

During the year none of the employees is drawing a remuneration of Rs.1,02,00,000/- and above per annum or Rs.8,50,000/- and above in aggregate per month, the limits specified under the Section 197(12) of the Companies Act,2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

38. RATIO OF REMUNERATION TO EACH DIRECTOR:

Under section 197(12) of the Companies Act, 2013, and Rule 5(1)(2) & (3) of the Companies(Appointment & Remuneration) Rules, 2014 read with Schedule V of the Companies 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 7.75:1 and of Mr. R. Krishna Mohan, Whole-Time director & CFO and Mr. Ch. Harinath, Wholetime Director of the Company is 7.5:1.

39. C O R P O R AT E G O V E R N A N C E A N D S H A R E H O L D E R S

INFORMATION:

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

40. SECRETARIAL STANDARDS:

The Company is in compliance with the applicable secretarial standards.

41. MECHANISM FOR EVALUATION OF THE BOARD:

Evaluation of all Board members is performed on an annual basis. The evaluation is performed by the Board, Nomination and Remuneration Committee and Independent Directors with specific focus on the performance and effective functioning of the Board and Individual 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 Act, 2017 the Company adopted the recommended criteria by Securities and Exchange Board of India.

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 & Remuneration committee. Based on the evaluation done by the Directors, the Committee has prepared a report and submitted the Evaluation Report. Based on the report, the Board of Directors has informed the rankings to each Director and also informed that the performance of Directors is satisfactory and they are recommended for continuation as Directors of the Company.

42. ENVIRONMENTS AND HUMAN RESOURCE DEVELOPMENT:

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

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

43. NON-EXECUTIVE DIRECTORS COMPENSATION AND

DISCLOSURES:

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

44. STATUTORY COMPLIANCE:

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

45. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT

WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

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

Committee:

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

All employees are covered under this policy. During the year 2019-20, there were no complaints received by the Committee.

46. CEO/ CFO CERTIFICATION:

The Managing Director cum CEO and CFO certification of the financial statements for the year 2019-2020 is annexed in this Annual Report.

47. ANNUAL SECRETARIAL COMPLIANCE REPORT:

Annual Secretarial Compliance Report pursuant to Regulation 24A of SEBI (Listing Obligations and Disclosure Requirement) (Amendment) Regulations, 2018 read with SEBI Circular dated 08.02.2019 and BSE circular dated 09.05.2019 and 14.05.2019 is not applicable to the Company as it does not attract the provisions of Regulation 15(2) of SEBI (LODR) Regulations, 2015 on Corporate Governance since paid up equity share capital as on 31.03.2020 is not exceeding Rs. 10 Crores and the net worth of the Company has not exceeded Rs. 25 Crores on the last day of previous financial year (i.e. 31.03.2020) or during the financial year (2019-20).

In view of the above, our Company is not required to submit Annual Secretarial Compliance Report for the year ended 31.03.2020 to the Stock Exchange/s pursuant to Regulation 24A of SEBI (Listing Obligations and Disclosure Requirement) (Amendment) Regulations, 2018.

48. IMPACT OF COVID-19:

The Company basis its assessment believes that the probability of the occurrence of forecasted transactions is not impacted by COVID-19. The Company has also considered the effect of changes, if any, in both counterparty credit risk and own credit risk while assessing hedge effectiveness and measuring hedge ineffectiveness and continues to believe that there is no impact on effectiveness of its hedges.

49. ACKNOWLEDGEMENTS:

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

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

For and on behalf of the Board

For City Online Services Limited

Sd/- Sd/-
S. Raghava Rao R. Krishna Mohan
Chairman & Managing Director Whole-Time Director & CFO
(DIN: 01441612) (DIN: 01678152)
Place: Hyderabad
Date: 31.07.2020

Certificate of Code of Conduct for the year 2019-20

The shareholders

City Online Services Limited

The Company has formulated and implemented a Code of Conduct for Board Members and Senior Management of the Company. Requisite annual affirmations of compliance with the respective Codes have been made by the Directors and Senior Management of the Company.

Certificate of Code of Conduct for the year 2019-2020 as per Regulation 17(5) read with Regulation 34 (3) Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

City Online Services Limited is committed for conducting its business in accordance with the applicable laws, rules and regulations and with highest standards of business ethics. The Company has adopted a "Code of Ethics and Business Conduct" which is applicable to all Director, officers and employees.

I hereby certify that all the Board Members and Senior Management have affirmed the compliance with the Code of Ethics and Business Conduct, under a certificate of Code of Conduct for the year 2019-2020.

For and on behalf of the Board For City Online Services Limited

Sd/-
S. Raghava Rao
Chairman & Managing Director
(DIN: 01441612)

Place: Hyderabad Date: 31.07.2020

CERTIFICATE BY THE MANAGING DIRECTOR AND CFO OF THE COMPANY

To

The Board of Directors

As required under Regulation 17(8) read with Part B, Schedule II of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we state that:

1. We have reviewed the financial statements and the cash flow statement for the year ended 31st March, 2020 and to the best of our knowledge and belief;

a. These statements do not contain any materially untrue statement nor omit any material fact nor contain statements that might be misleading, and

b. These statements present a true and fair view of the companys affairs and are in compliance with the existing accounting standards, applicable laws and regulations.

2. There are, to the best of my knowledge and belief, no transactions entered into by the company during the year, which are fraudulent, illegal or violative of the companys code of conduct.

3. We accept responsibility for establishing and maintaining internal controls, I have evaluated the effectiveness of the internal control systems of the company and I have disclosed to the auditors and the audit committee, deficiencies in the design or the operation of internal controls, if any, of which I was aware and the steps that I have taken or propose to take and rectify the identified deficiencies and,

4. That we have informed the auditors and the audit committee of: a) Significant changes in the internal control during the year;

b) Significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and

c) Instances of significant fraud of which we have become aware and the involvement of any employee having a significant role in the companys internal control system.

For and on behalf of the Board For City Online Services Limited

Sd/- Sd/-
S. Raghava Rao R. Krishna Mohan
Chairman & Managing Director Whole-Time Director & CFO
(DIN: 01441612) (DIN: 01678152)

Place: Hyderabad

Date: 31.07.2020