AFFLUENCE

DIRECTORS’ REPORT

To

The Members,

Your Directors have pleasure in presenting their 17th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2016.

1. Financial summary or highlights/Performance of the Company (Standalone)

The Board’s Report shall be prepared based on the stand alone financial statements of the company. (IN LAKHS)

2.      Performance:

Your company has extended its presence in the entire state of Andhra Pradesh, Telangana and in about 20 towns of Karnataka and is in the processes of entering in more small places in these states which has resulted in increase of revenue by the end of 2016-2017 your company will have total presence in these states . Your company has entered into providing of triple play services in gated communities as of now your company has successfully implemented this service in twenty one gated communities the revenue from this sector is very encouraging , hence your company is targeting another ten complexes in this finical year i.e 10000 households. All this factors have helped your company to increase its turnover and the Board of Directors is confident that your company will show more than 100% growth in finical year 2016-2017.

3.      Dividend

The company has not declared any Dividend during the Financial Year.

4.      Reserves

Since, the company has not declared the dividend during the financial year transfer of amount from profits to reserves does not arise.

5.      Directors and Key Managerial Personnel

Mrs. S. Naga Durga Non- Executive Director retire by rotation at the forthcoming Annual General Meeting and being eligible, offer herself for reappointment.

a)      In accordance with the provisions of Companies Act, 2013, Mr S. Raghava Rao, Chairman cum Managing Director of the Company is hereby reappointed as Chairman cum Managing Director of the company for a period of three years w.e.f. 01st September, 2016.

b)      In accordance with the provisions of Companies Act, 2013, Mr. R. Krishna Mohan, Director(Finance and Administration ) of the Company be and is hereby appointed as Chief Financial officer of the company for a period of three years w.e.f. 01st September, 2016.

c)      In accordance with the provisions of Companies Act, 2013, Mr. Ch. Harinath, Executive Director of the Company would retire by rotation and, being eligible, offer himself for re-appointment.

6.       Particulars of Employees

Pursuant to the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, statement of particulars of employees is annexed as Annexure I.

7.      Meetings

A calendar of Meetings is prepared and circulated in advance to the Directors. During the year Five Board Meetings and Five Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

8.      Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Compliance Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

9.       Declaration by an Independent Director(s) and re- appointment, if any

Declaration by independent directors The Company has received necessary declaration from each independent director under Section 149(7) of the Companies Act, 2013, that he / she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

An independent director shall hold office for a term up to five consecutive years on the Board of a Company, but shall be eligible for reappointment for next five years on passing of a special resolution by the Company and disclosure of such appointment in the Board’s report.

10. Remuneration Policy

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.

11. Details of Subsidiary/Joint Ventures/Associate Companies

Pursuant to sub-section (3) of section 129 of the Act, the statement containing the salient feature of the financial statement of a company’s subsidiary or subsidiaries, associate company or companies and joint venture or ventures is given as Annexure-II

Further, the Annual Accounts and related documents of the subsidiary company shall be kept open for inspection at the Registered & Corporate Office of the Company. The Company will also make available copy thereof upon specific request by any Member of the Company interested in obtaining the same. Further, pursuant to Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company in this Annual Report include the financial information of its subsidiary.

12. Auditors

The Auditors, M/s. Seshachalam & Co, Chartered Accountants, Secunderabad retire at the ensuing Annual General Meeting and, being eligible; offer themselves for reappointment from the conclusion of this Annual General Meeting [AGM] until the conclusion of Third Annual General Meeting to be held after this meeting.

13. Auditors’ Report

The Auditors’ Report does not contain any qualification. Notes to Accounts and Auditors remarks in their report are self-explanatory and do not call for any further comments.

14.  Secretarial Audit Report 

 In terms of Section 204 of the Act and Rules made there under, M/s. VCSR & Associates, Company Secretaries have been appointed Secretarial Auditors of the Company. The report of the Secretarial Auditors is enclosed as Annexure III to this report. The report is self-explanatory and do not call for any further comments.

15.  Internal Audit & Controls

The Company continues to engage M/s. D Rambabu & Co., Chartered Accountants, Hyderabad as its Internal Auditors. During the year, the Company continued to implement their suggestions and recommendations to improve the control environment. His scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Internal Auditor findings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations.

16.  Vigil Mechanism

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. The Vigil Mechanism Policy has been uploaded on the website of the Company at www.cityonlines.com under investors/policy documents/Vigil Mechanism Policy link.

17.  Risk management policy

A statement indicating development and implementation of a risk management policy for the Company including identification therein of elements of risk, if any, this in the opinion of the Board may threaten the existence of the company.

18.  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 as a part of this Annual Report  as ANNEXURE IV.

19.  Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report

Material changes occurred subsequent to the close of the financial year of the Company to which the balance sheet relates and the date of the report like settlement of tax liabilities, operation of patent rights, depression in market value of investments, institution of cases by or against the company, sale or purchase of capital assets or destruction of any assets etc.

20. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future

There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status and the Company’s future operations.

21. Details in respect of adequacy of internal financial controls with reference to the Financial Statements. 

The Company has in place adequate internal financial control commensurate with the size, scale and complexity of its operations. During the year, such controls were tested and no reportable material weakness in the design or operations were observed. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

The Company has adopted accounting policies which are in line with the Accounting Standards and the Act. These are in accordance with generally accepted accounting principles in India. The Company has a robust financial closure, certification mechanism for certifying adherence to various accounting policies, accuracy of provisions and other estimates.

22. Particulars of contracts or arrangements with related parties

The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arm’s length transactions under third proviso thereto shall be disclosed in Form No. AOC-2. As Annexure V (Format enclosed).

23.  Deposits

The Company has not accepted any Fixed Deposits covered under Chapter V of the Act.

24.  Corporate Governance Certificate

The Compliance certificate from the auditors or practicing company secretaries regarding compliance of conditions of corporate governance as stipulated in Clause 49 of the Listing agreement shall be annexed with the report.

25.  Particulars of loans, guarantees or investments under section 186

Details of Loans:

Details of Investments:-

During the year the company has not made any investments.

Details of Guarantee / Security Provided: Not Applicable

26.  Management Discussion And Analysis Report

The Management Discussion and Analysis Report forms part of this Annual Report for the year ended 31st March 2016.

27.              Obligation of company under the Sexual Harassment Of Women At Workplace (Prevention, Prohibition And Redressal) Act, 2013

In order to prevent sexual harassment of women at work place a new act The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. Under the said Act every company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee.

Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up Committee for implementation of said policy. During the year Company has not received any complaint of harassment.

28.  Conservation of energy, technology absorption and foreign exchange earnings and outgo

The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:

a) Conservation of energy

(b) Technology absorption

(c) Foreign exchange earnings and Outgo

During the year, the total foreign exchange used was Rs. 6, 06, 260 and the total foreign exchange earned was NIL

29.  Human Resources

Your Company treats its “human resources” as one of its most important assets.

Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement.

30.  Directors’ Responsibility Statement

The Directors’ Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, shall state 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, in the case of a listed company, 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.

31.  Listing with stock exchanges:

The Company confirms that it has paid the Annual Listing Fees for the year 2015-2016 to BSE where the Company’s Shares are listed.

32.  Acknowledgements

An acknowledgement to all with whose help, cooperation and hard work the Company is able to achieve the results.

For and on behalf of the Board of Directors

Place: Hyderabad                                S. Raghava Rao

Date: 13.08.2016                                            Managing Director

(DIN - 01441612)

2. Performance: Your company has extended its presence in the entire state of Andhra Pradesh, Telangana and in about 20 towns of Karnataka and is in the processes of entering in more small places in these states which has resulted in increase of revenue by the end of 2016-2017 your company will have total presence in these states . Your company has entered into providing of triple play services in gated communities as of now your company has successfully implemented this service in twenty one gated communities the revenue from this sector is very encouraging , hence your company is targeting another ten complexes in this finical year i.e 10000 households. All this factors have helped your company to increase its turnover and the Board of Directors is confident that your company will show more than 100% growth in finical year 2016-2017.

a) Conservation of energy (i) the steps taken or impact on conservation of energy (ii) the steps taken by the company for utilizing alternate sources of energy (iii) the capital investment on energy conservation equipment’s

Technology absorption (i) the efforts made towards technology absorption (ii) the benefits derived like product improvement, cost reduction, product development or import substitution (iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)- (a) the details of technology imported (b) the year of import; (c) whether the technology been fully absorbed (d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof (iv) the expenditure incurred on Research and Development

Foreign exchange earnings and Outgo During the year, the total foreign exchange used was Rs. 6, 06, 260 and the total foreign exchange earned was NIL

30. Directors’ Responsibility Statement The Directors’ Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, shall state 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, in the case of a listed company, 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.