city online services ltd Directors report

To,

The Members of City Online Services Limited.

We have pleasure in presenting the 24th Directors Report on the business and operations of the Company together with the audited Financial Statements for the year ended 31st March, 2023.

1. FINANCIAL SUMMARY/HIGHLIGHTS:

The performance of the Company during the year has been as under:

(Rs. In Lakhs)

Particular	2022-23	2021-22
Revenue from Operations	1142.45	979.87
Total Expenses	1105.49	1062.77
Profit Before Tax	36.96	(82.90)
Less: Provision for Taxation	-	(22.13)
Profit / (Loss) After Tax	36.96	(60.77)
Earning per Equity Share
Basic	0.72	(1.18)
Diluted (in Rs.)	0.72	(1.18)

REVIEW OF OPERATIONS:

During the Year under the review, the Company has recorded an Income of Rs. 1,142.45 Lakhs and achieved a profit of Rs. 36.96 Lakhs as against the Income of Rs. 979.87 Lakhs and incurred a loss of Rs. 60.77 Lakhs in the previous Financial Year ending 31.03.2022.

BUSINESS UPDATE AND STATE OF COMPANYS AFFAIRS:

The information on Companys affairs and related aspects is provided under Management Discussion and Analysis report, which has been prepared, inter-alia, in compliance with Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) regulations, 2015 and forms part of this Report.

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

During the period under review and the date of Boards Report there was no change in the nature of Business.

3. RESERVES:

The Company has not carried any amount to the reserves.

4. DIVIDEND:

Your directors have decided not to recommend dividend for the year 2022-23.

5. MATERIAL CHANGES & COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

There are no major material changes and commitments affecting the financial position of the Company after the end of the Financial Year and up to date of this report.

6. SHARE CAPITAL:

During the year under review there has been no change in the share capital of the Company.

The authorised share capital of the Company as on 31.03.2023 is Rs. 7,70,00,000/- divided into 77,00,000 equity shares of Rs. 10/- each.

The paid-up share capital of the Company as on 31.03.2023 is Rs. 5,16,47,000/- divided into 51,64,700 equity shares of Rs.10/- each.

7. BOARD MEETINGS:

The Board of Directors duly met Seven (07) times during the Financial Year from 1st April 2022 to 31st March 2023. The dates on which the meetings were held are 17.05.2022, 30.05.2022, 12.08.2022, 06.09.2022, 09.11.2022, 14.11.2022 and 14.02.2023.

ATTENDANCE OF DIRECTORS:

S Name of Director no.	Total Meetings Held During the tenure of the director	Attended
1. Suryadevara Raghava Rao	7	7
2. Harinath Chava	7	7
3. Krishna Mohan Ramineni	7	7
4. Suryadevara Nagadurga	5	5
5. Satyanarayana Vasireddy	5	5
6. Nageswara Rao Mandavilli	5	5
7. Thomas Pradhan Nicodemus	5	5

8. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

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

9. RELATED PARTY TRANSACTIONS:

Our Company has formulated a policy on related party transactions which deals with the review and approval of 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.

Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 in the prescribed Form AOC-2 is appended as Annexure - 1 which forms part of this Report.

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. Members may refer to note no. 37 to the financial statements which sets out related party disclosures pursuant to IND AS- 24.

10. APPOINTMENT / RE-APPOINTMENT / RESIGNATION / RETIREMENT OF DIRECTORS /CEO/ CFO AND KEY MANANGERIAL PERSONNEL:

• Mr. Naresh Swami has resigned from the Company from the designation of Company Secretary and Compliance Officer w.e.f. 10.05.2022.

• Subsequently Ms. Deepika Vaid has been appointed as the Company Secretary and Compliance Officer of the company w.e.f. 09.11.2022.

• Mrs. S. Naga durga retires by rotation and being eligible offers herself for re-appointment.

As required under regulation 36 (3) of the SEBI (Listing Obligations and

Disclosure Requirements), Regulations, 2015, brief particulars of the

Directors seeking appointment/re-appointment are given as under:

Name of the Director	S. Nagadurga
Designation	Non-Executive Director
Age	59 Years
Date of First Appointment on the Board	29.09.2014
Brief resume of the director	She has rich experien ce in administration.
Qualification and Experience	Intermediate and She has rich experience in administration.
Nature of expertise in specific functional are as	Administration
Disclosure of relationships between directors inter-se	Wife of Mr. S. Raghava Rao, Chairman & Managing Director
Names of Listed entities in which the person also holds the Directorship and the membership of Committees of the boardalong with listed entities from which the person has resigned in the past three years	Nil
Shareholding of non-executive Directors	40,000 Equity shares

11. STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO INTEGRITY, EXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORS APPOINTED DURING THE YEAR:

No Independent Directors were appointed during the period under review.

12. ANNUAL RETURN:

Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company as on March 31,2023 is available on the website of the Company

13. AUDITORS:

a. 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.

Statutory Auditors Report

The Board has duly reviewed the Statutory Auditors Report on the Accounts for the year ended March 31,2023 and has noted the following Qualification:

Sl Qualification No.	Explanation
1. The Companys “Loans & Advances” are carried in the Balance Sheet at Rs.14.48 Lakhs. A party having a loan outstanding of Rs.14.48 Lakhs carries negative net worth and recovery of the same is unascertainable However, no provision has been made in the books of accounts.	(i) In respect of audit qualification of auditors report paragraph 1 management pursuing the recovery of above advance, hope the City Online Digital Private Limited will improve p e r f o r m a n c e a n d expecting recovery of the advance granted.
Further, the Company has “Trade Receivables” amounting to Rs. 227.38 Lakhs as on the balance sheet date out of which Rs. 26.64 Lakhs is outstanding for more than 2 years & the recovery of the same is unascertainable. However, provision has been made in the books of accounts only to the extent of Rs. 14 Lakhs and provision for an amount of Rs. 12.64 Lakhs is not created.	(ii) In respect of audit qualification of auditors report paragraph 2 the Trade Receivables of Rs 227.38 lakhs. The management is confident of recovery of the said balances and monitoring with customers for recovery of balances.
	(iii) In respect of audit qualification of auditors report paragraph 4 the sales turnover reporting to GST authorities management initiated steps for reconciliation of sales turnover to set right the discrepancy observed in statutory audit.

b. Secretarial Auditor

Pursuant to the provisions of Section 134(3) (f) & Section 204 of the Companies Act, 2013, the Board has appointed M/s. Vivek Surana & Associates, Practicing Company Secretaries to undertake Secretarial Audit of the Company for Financial Year ending 31.03.2023. The report of the Secretarial Auditor is enclosed herewith vide Annexure - 2 of this Report.

Secretarial Audit Report:

The Board has duly reviewed the Secretarial Audit Report for the Financial Year ended March 31, 2023 and has noted t the following Qualification:

Sl. Qualification No.	Explanation
1. The Company has sold its 100% stake in City Online Digital Private Limited on 15.11.2022 and City Online Digital Private Limited ceased to be the subsidiary of the Company w.e.f. 15.11.2022, in this regard the Company has not made disclosure under Regulation 30 read with Part A of Schedule III	As City Online Digital Private Limited is not material subsidiary, Company has not made disclosure under Regulation 30.
2. BSE has imposed penalty under Regulation 33 for non-filing of Consolidated Financial Results of the Company for the Quarter ended 31.12.2022 and 31.03.2023.	I n t h i s r e g a r d Company has replied to Exchange stating that the subsidiaries ceases to exist, therefore company is not required to file Consolidated Financial Results of the Company for the said periods. Further Company will be applying for the penalties imposed.

Annual Secretarial Compliance Report

Annual Secretarial Compliance Report is not applicable to the Company for Financial Year ending 31.03.2023.

c. Cost Auditor

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Act, are not applicable for the Company for the Financial Year 2022-23.

d. Internal Auditor

Pursuant to the provisions of Section 138 of the Companies read with rules made there under, the Board has appointed M/s. D. Rambabu & Co, Chartered Accountant, as Internal Auditors of the Company.

14. DEPOSITS:

Your Company has not accepted any deposits falling within the meaning of Section 73, 74 & 76 of the Companies Act, 2013 read with rules made thereunder, during the Financial Year under review.

15. COMMITTEES:

A. Audit Committee:

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 (Listing Obligations and Disclosure Requirements) Regulations, 2015 and interalia, includes:

a) Over view 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.

b) 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.

c) Reviewing the utilization of loans and/ or advances from/investment by the holding company in the subsidiary exceeding Rs. 100 Crores or 10% of the asset size of the subsidiary, whichever is lower including existing loans / advances / investments existing as on the date of coming into force of this provision.

d) consider and comment on rationale, cost-benefits and impact of schemes involving merger, demerger, amalgamation etc., on the listed entity and its shareholders.

e) Review with the management, the annual financial statements and Auditors Report before submission to the Board with particular reference to;

i. Matters required to be included in the directors responsibility statement to be included in the boards report in terms of clause (c) of sub-section (3) of Section 134 of the Act;

ii. Changes, if any, in accounting policies and practices and reasons for the same;

iii. Major accounting entries involving estimates based on the exercise of judgment by management;

iv. Significant adjustments made in the financial statements arising out of audit findings;

v. Compliance with listing and other legal requirements relating to financial statements;

vi. Disclosure of any related party transactions;

vii. Modified opinion(s) in the draft audit report;

f) Review of the quarterly financial statements with the management before submission to the board for approval;

g) Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency monitoring the utilization of proceeds of a public or rights issue, and making appropriate recommendations to the board to take up steps in this matter;

h) Review and monitor statutory auditors independence and performance and effectiveness of audit process;

i) Approval or any subsequent modification of transactions with related parties;

j) Scrutiny of inter-corporate loans and investments;

k) Review of valuation of undertakings or assets of the company wherever it is necessary;

l) Evaluation of internal financial controls and risk management systems;

m) Review with the management, statutory auditors and the internal auditors about the nature and scope of audits and of the adequacy of internal control systems;

n) Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure, coverage and frequency of internal audit;

o) discussion with internal auditors of any significant findings and follow up there on;

p) Reviewing the findings of any internal investigations by the internal auditors into 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;

q) discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;

r) Look into the reasons for any substantial defaults in payment to the depositors, debenture-holders, shareholders (in case of non-payment of declared dividend) and creditors, if any;

s) Review the functioning of the whistle blower mechanism;

t) Approval of appointment of Chief Financial Officer after assessing the qualifications, experience and background, etc. of the candidate

u) Review of the following information:

i. Management discussion and analysis of financial condition and results of operations;

ii. Management letters / letters of internal control weaknesses issued by the statutory auditors;

iii. Internal audit reports relating to internal control weaknesses;

iv. The appointment, removal and terms of remuneration of the Chief Internal Auditor;

v. Statement of deviations

v) Quarterly statement of deviation(s) including report of monitoring agency, if applicable, submitted to stock exchange(s) in terms of Regulation 32(1) of the Listing Regulations.

w) Annual statement of funds utilized for purposes other than those stated in the offer document/ prospectus in terms of Regulation 32(7) of the Listing Regulations.

x) Carrying out any other function as may be referred to the Committee by the Board.

xxii) Authority to review / investigate into any matter covered by Section 177 of the Companies Act, 2013 and matters specified in Part C of Schedule II of the Listing Regulations.

y) Authority to review / investigate into any matter covered by Section 177 of the Companies Act, 2013 and matters specified in Part C of Schedule II of the Listing Regulations.

During the Financial Year 2022-23, (4) four meetings of the Audit Committee were held on the 30.05.2022, 12.08.2022, 14.11.2022 and 14.02.2023.

The details of the composition of the Committee and attendance of the members at the meetings are given below:

Name	Designation	Category	No. of Meetings held	No. of meetings attended
Mr. M. Nageswara Rao	Chairman	NED(I)	4	4
Mr. Thomos P. Nicodemus	Member	NED(I)	4	4
Mr. R. Krishna Mohan	Member	ED	4	4

NED (I): Non-Executive Independent director ED: Executive director

During the year, all recommendations of Audit Committee were approved by

the Board of Directors.

B. 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 (Listing Obligation and Disclosure Requirements Regulations, 2015 are as under:

Brief Description of Terms of Reference:

a) To approve the fixation/revision of remuneration of Executive Directors of the Company and while approving:

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

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

b) 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.

c) To carry out evaluation of every Directors performance.

d) 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.

e) For every appointment of an independent director, the Nomination and

Remuneration Committee shall evaluate the balance of skills, knowledge and experience on the Board and on the basis of such evaluation, prepare a description of the role and capabilities required of an independent director. The person recommended to the Board for appointment as an independent director shall have the capabilities identified in such description. For the purpose of identifying suitable candidates, the Committee may:

i. use the services of an external agencies, if required;

ii. consider candidates from a wide range of backgrounds, having due regard to diversity; and

iii. consider the time commitments of the candidates.

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

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

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

i) devising a policy on diversity of board of directors;

j) whether to extend or continue the term of appointment of the independent director, on the basis of the report of performance evaluation of independent directors.

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

During the Financial Year 2022-23, (2) two meetings of the Nomination &

Remuneration Committee meeting held on the 09.11.2022 and 12.02.2023.

Name	Designation	Category	No. of Meetings held	No. of meetings attended
Mr. Thomos P. Nicodemus	Chairman	NED(I)	2	2
Mr. M. Nageswara Rao	Member	NED(I)	2	2
Mrs. S. Naga Durga	Member	NED	2	2

NED (I): Non-Executive Independent director NED: Non-Executive director

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 and individual performance.

C. STAKEHOLDERS RELATIONSHIP COMMITTEE

Terms of reference of the committee comprise of various matters provided under Regulation 20 of the Listing Regulations and section 178 of the Companies Act, 2013 which inter-alia include:

Brief description of terms of reference:

a) Resolving the grievances of the security holders of the Company including complaints related to transfer/ transmission of shares, nonreceipt of annual report, non-receipt of declared dividends, issue of new/duplicate certificates, general meetings etc;

b) Review of measures taken for effective exercise of voting rights by shareholders;

c) Review of adherence to the service standards adopted by the Company in respect of various services being rendered by the Registrar & Share Transfer Agent;

d) Review of the various measures and initiatives taken by the Company for reducing the quantum of unclaimed dividends and ensuring timely receipt of dividend warrants/annual reports/statutory notices by the shareholders of the company;

e) Such other matter as may be specified by the Board from time to time.

f) Authority to review / investigate into any matter covered by Section 178 of the Companies Act, 2013 and matters specified in Part D of Schedule II of the Listing Regulations.

During the Financial Year 2022-23, (1) one meeting of the Stakeholders and Relationship Committee meeting held on the 14.02.2023.

Name	Designation	Category	No. of Meetings held	No. of meetings attended
Mr. M. Nageswara Rao	Chairman	NED (I)	1	1
Mr. Thomos P Nicodemus	Member	NED (I)	1	1
Mr. R. Krishna Mohan	Member	ED	1	1

NED (I): Non-Executive Independent director ED: Executive director

16. CORPORATE SOCIAL RESPONSIBILITY (CSR, COMPOSITION OF CSR COMMITTEE AND CONTENTS OF CSR POLICY):

Since your Company does not have net worth of Rs. 500 Crores or more or turnover of Rs. 1000 Crores or more or a net profit of Rs. 5 Crores or more during the Financial Year 2022-23, section 135 of the Companies Act, 2013 relating to Corporate Social Responsibility is not applicable and hence the Company need not to adopt any Corporate Social Responsibility Policy.

17. INTERNAL AUDIT AND FINANCIAL CONTROLS:

The Company has adequate internal controls consistent with the nature of business and size of the operations, to effectively provide for safety of its assets, reliability of financial transactions with adequate checks and balances, adherence to applicable statues, accounting policies, approval procedures and to ensure optimum use of available resources. These systems are reviewed and improved on a regular basis. It has a comprehensive budgetary control system to monitor revenue and expenditure against approved budget on an ongoing basis.

18. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS:

The Company has received declarations from all the 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 Requirements) Regulations, 2015.

The Independent Directors have also confirmed that they have complied with the Companys Code of Conduct.

In terms of Regulations 25(8) of the Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence.

During the year, Independent Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board of Directors and Committee(s).

19. FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS:

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 are also made to the directors. Direct meetings with the Chairman are further facilitated to familiarize the incumbent Director about the Company/its businesses and the group practices.

20. SIGNIFICANT & MATERIAL ORDERS PASSED BY COURTS / REGULATORS / TRIBUNALS:

There are no significant and material orders passed by the regulators /courts that would impact the going concern status of the Company and its future operations.

21. CONSOLIDATED FINANCIAL STATEMENT:

Since the Company does not have any subsidiary or associate company, there is no requirement of preparing the Consolidated Financial Statements during the Financial Year 2022-23 in accordance with relevant accounting standard issued by the Institute of Chartered Accountants of India.

22. REVISION OF FINANCIAL STATEMENTS:

There was no revision of the financial statements for the year under review.

23. INVESTOR EDUCTION AND PROTECTION FUND (IEPF):

Pursuant to the provisions of Section 124 of the Act, Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (“IEPF Rules”) read with the relevant circulars and amendments thereto, the amount of dividend remaining unpaid or unclaimed for a period of seven years from the due date is required to be transferred to the Investor Education and Protection Fund (“IEPF”), constituted by the Central Government.

During the Year, no amount of dividend was unpaid or unclaimed for a period of seven years and therefore no amount is required to be transferred to Investor Education and Provident Fund under the Section 125(1) and Section 125(2) of the Act.

24. DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars as prescribed under Section 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. Research & Development and Technology Absorption:

a) Research and Development (R&D): NIL

b) Technology absorption, adoption and innovation: NIL

C. Foreign Exchange Earnings and Out Go:

Foreign Exchange Earnings: NIL Foreign Exchange Outgo: NIL

25. VIGIL MECHANISM/WHISTLE BLOWER POLICY:

Your Company has adopted a whistle blower policy and has established the necessary vigil mechanism for directors and employees in confirmation with Section 177 of the Act and Regulation 22 of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 to facilitate reporting of the genuine concerns about unethical or improper activity, without fear of retaliation.

The vigil mechanism of your Company provides for adequate safeguards against victimization of directors and employees who avail of the mechanism and also provides direct access to the Chairman of the Audit Committee. The said policy has been uploaded on the website of the Company.

26. RISK MANAGEMENT POLICY:

Business Risk Evaluation and Management is an ongoing process within the Organization. The Company has a robust risk management

framework to identify, monitor and minimize risks and also to identify business opportunities. As a process, the risks associated with the business are identified and prioritized based on severity, likelihood and effectiveness of current detection. Such risks are reviewed by the senior management on a periodical basis.

27. MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT:

The Management Discussion and Analysis Report, pursuant to the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 provides an overview of the affairs of the Company, its legal status and autonomy, business environment, mission & objectives, sectoral and operational performance, strengths, opportunities, constraints, strategy and risks and concerns, as well as human resource and internal control systems is appended as Annexure - 3 for information of the Members.

28. PARTICULARS OF REMUNERATION:

A table containing the particulars in accordance with the provisions of Section 197(12) of the Act, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended as Annexure-4 to this Report.

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 as Annexure-5.

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, Mr. Ch. Harinath, Whole time Director and R. Krishna Mohan, Whole time Director of the Company to the median remuneration of the employees is 0.41:1,0.39:1 and 0.39:1 respectively

29. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 134(3) (c) and 134(5) of the Companies Act, 2013 and on the basis of explanation given by the executives of the Company and subject to disclosures in the Annual Accounts of the Company from time to time, we state as under:

a) That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) That the Directors have selected such accounting policies and applied them consistently and made judgment 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 or loss of the Company for that period;

c) That the Directors have 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) That the Directors have prepared the annual accounts on a going concern basis;

e) That the Directors have lain down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) That the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

30. 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 under Section 143(12) of the Companies Act, 2013.

31. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

As per the requirement of the provisions of the sexual harassment of women at workplace (Prevention, Prohibition & Redressal) Act, 2013 read with rules made thereunder, the Company has constituted Internal Complaints Committees as per requirement of the Act which are responsible for redressal of complaints relating to sexual harassment against woman at workplace. During the year under review, there were no complaints pertaining to sexual harassment against women pending at the beginning of the year or received during the year.

32. BOARD EVALUATION:

The Company has adopted a formal mechanism for evaluation of the performance of the Board, its committees and individual directors, including the Chairman of the Board, in accordance with the requirement under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and accordingly evaluation of the performance of the Board and its Committees have been carried out annually.

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 criteria for performance evaluation covers the areas relevant to the functioning of the Board and Board Committees such as its composition, oversight and effectiveness, performance, skills and structure etc.

33. SECRETARIAL STANDARDS:

The Company is in compliance with the applicable secretarial standards.

34. EVENT BASED DISCLOSURES:

During the year under review, the Company has not taken up any of the following activities except as mentioned:

a) Issue of sweat equity share: NA

b) Issue of shares with differential rights: NA

c) Issue of shares under employees stock option scheme: NA

d) Disclosure on purchase by Company or giving of loans by it for purchase of its shares: NA

e) Buy back shares: NA

f) Disclosure about revision: NA

g) Preferential Allotment of Shares: NA

35. SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES:

During the year under review no Company has become its subsidiary, joint venture or associate Company.

However, City Online Media Private Limited, a wholly owned subsidiary of the Company ceased to be its Subsidiary w.e.f. 12.08.2022 and City Online Digital Private Limited, a wholly owned subsidiary of the Company ceased to be its Subsidiary w.e.f. 15.11.2022

36. POLICY FOR SELECTION OF DIRECTORS AND DETERMINING DIRECTORS INDEPENDENCE:

A. 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.

B. Terms and References:

(i) “Director” means a director appointed to the Board of a Company.

(ii) “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.

(iii) “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.

C. Policy:

a. Qualifications and criteria:

(i) 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.

(ii) 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.

(iii) 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, 2015and other relevant laws.

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

b. Criteria of independence:

(i) The Nomination & Remuneration Committee shall assess the independence of Directors at time of appointment/ re-appointment and the Board shall assess the same annually.

(ii) The Board shall re-assess determinations of independence when any new interest or relationships are disclosed by a Director.

(iii) 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.

(iv) The Independent Director shall abide by the “Code for Independent Directors “as specified in Schedule IV to the companies Act, 2013.

c. Other Directorships/Committee Memberships:

(i) 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.

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

(iii) 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.

(iv) A Director shall not be a member in more than 10 committee or act chairman of more than5 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.

37. REMUNERATION POLICY:

A. Scope:

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.

B. Terms and Reference:

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

(i) “Director” means a director appointed to the Board of the company.

(ii) “Key managerial personnel” means

• The Chief Executive Office or the managing director or the manager;

• The company secretary;

• The whole-time director;

• The chief finance Officer; and

• Such other office as may be prescribed under the companies Act, 2013

(iii) “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.

C. Policy:

a) Remuneration to Executive Director and Key Managerial Personnel:

(i) 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.

(ii) 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.

(iii) The Remuneration structure to the Executive Director and key managerial personnel shall include the following components:

• Basic pay

• Perquisites and Allowances

• Commission (Applicable in case of Executive Directors)

• Retrial benefits

• Annual performance Bonus

(iv) 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.

b) Remuneration to Non-Executive Directors:

(i) 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.

(ii) Non-Executive Directors shall be entitled to sitting fees attending the meetings of the Board and the Committees thereof. The Non-Executive Directors shall also be entitled to profit related commission in addition to the sitting fees.

c) Remuneration to other employees:

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.

38. 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, 2018. 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.

39. DISCLOSURE OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate. The Company maintains appropriate system of internal control, including monitoring procedures, to ensure that all assets are safeguarded against loss from unauthorized use or disposition. Company policies, guidelines and procedures provide for adequate checks and balances, and are meant to ensure that all transactions are authorized, recorded and reported correctly.

During the period under review, there is no material or serious observations have been noticed for inefficiency or inadequacy of such controls.

Further, details of internal financial control and its adequacy are included in the Management Discussion and Analysis Report which forms part of this Report.

40. INSURANCE:

The properties and assets of your Company are adequately insured.

41. CREDIT & GUARANTEE FACILITIES:

During the year under review, the Company has not availed credit and guarantee facilities.

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. CORPORATE GOVERNANCE:

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 is Not Applicable.

44. CEO/ CFO CERTIFICATION:

The Managing Director and CFO certification of the Financial Statements for the Financial Year 2022-2023 is annexed in this Annual Report as Annexure-6.

45. CORPORATE INSOLVENCY RESOLUTION PROCESS INITIATED UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (IBC):

During the year under review, there were no applications filed or remained pending for corporate insolvency resolution process, by a financial or operational creditor or by the company itself under the IBC before the NCLT.

46. THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF:

Not applicable.

47. 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 for their continued support for the growth of the Company.

For and on behalf of the Board City Online Services Limited

	Sd/-
	S. Raghava Rao
Place: Hyderabad	Chairman & Managing Director
Date: 14.08.2023	(DIN: 01441612)