Key Event: Proposed Sale of Business/Undertaking

The Board of Directors at its meeting held on August 14, 2026, approved a proposal to sell/dispose of the whole or substantially the whole of the business/undertaking of the Company.

Rationale

The Board reviewed the financial and operational performance and observed that the business has been incurring losses and has not generated adequate returns on capital deployed. Despite efforts to improve performance, the business continues to face challenges with unsatisfactory financial performance. The Board believes continued deployment of resources may not be commercially prudent and that an exit would be in the best interests of the Company and its stakeholders.

Approval Requirements

  • Requires shareholders' approval by Special Resolution under Section 180(1)(a) of Companies Act, 2013
  • Requires prior approval under Regulation 37A of SEBI Listing Regulations
  • The proposal is listed as Item 3 in the AGM notice for September 30, 2026

Current Status

  • No definitive agreement with any purchaser as of the notice date
  • Purchaser(s) to be identified through appropriate commercial process
  • Consideration expected primarily in cash, not less than fair market value determined by independent valuer
  • Exact completion timeline cannot be determined as no definitive agreement exists
  • Cannot determine if transaction will constitute a related party transaction as purchaser not identified

Financial Performance Highlights (FY 2025-26)

Income Statement

  • Total Income: ₹812.47 lakhs (Previous year: ₹779.50 lakhs)
  • Revenue from Operations: ₹772.22 lakhs (Previous year: ₹750.81 lakhs)
  • Other Income: ₹40.24 lakhs (Previous year: ₹28.69 lakhs)
  • Profit/(Loss) Before Interest and Depreciation: ₹4.10 lakhs (Previous year: ₹68.14 lakhs)
  • Net Loss After Tax: ₹(47.21) lakhs (Previous year: Profit of ₹3.51 lakhs)
  • Earnings Per Share (Basic & Diluted): ₹(0.91) (Previous year: ₹0.07)

Balance Sheet Position (as at March 31, 2026)

  • Negative Net Worth: ₹(54.72) lakhs (Previous year: ₹(7.51) lakhs)
  • Current Assets: ₹284.97 lakhs
  • Current Liabilities: ₹501.06 lakhs
  • Current Ratio: 0.57 (Previous year: 0.62)
  • Total Assets: ₹464.05 lakhs (Previous year: ₹564.75 lakhs)

Capital Structure

  • Authorized Share Capital: ₹770.00 lakhs (77,00,000 equity shares of ₹10 each)
  • Paid-up Share Capital: ₹516.47 lakhs (51,64,700 equity shares of ₹10 each)
  • No change in share capital during the year

Statutory Auditors' Qualifications

M/s. Komandoor & Co LLP issued a qualified opinion with the following key issues:

Going Concern Issue

Net worth is completely eroded with current liabilities exceeding current assets, indicating material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern. Negative net worth of ₹54.72 lakhs as at March 31, 2026.

GST Discrepancies

  • Revenue under-reported in GST returns by ₹42.06 lakhs compared to books of accounts
  • Input tax credit discrepancy: CGST overstated by ₹2.13 lakhs, SGST overstated by ₹2.26 lakhs, IGST understated by ₹0.69 lakhs

Other Accounting Issues

  • Unbilled revenue of ₹18.88 lakhs for services rendered but not invoiced
  • Non-recognition of Expected Credit Loss on financial assets as required by Ind AS 109
  • Loans to related party (City Online Digital Private Limited) of ₹0.54 lakhs during year, totaling ₹15.51 lakhs outstanding, exceeding limits under Section 186 of Companies Act without requisite approvals

Board and Committee Structure

Board of Directors

1. Mr. Suryadevara Raghava Rao - Chairman & Managing Director (DIN: 01441612)

2. Mr. Harinath Chava - Whole-time Director (DIN: 01441704)

3. Mr. Krishna Mohan Ramineni - Whole-time Director & CFO (DIN: 01678152)

4. Mrs. Suryadevara Naga Durga - Non-Executive Director (DIN: 06697556) - Retiring by rotation

5. Mr. Seshu Babu Kanuri - Independent Director (DIN: 05272233)

6. Mr. Rambabu Talluri - Independent Director (DIN: 07507003)

Board Meetings

5 meetings held during FY 2025-26 on: 29.05.2025, 13.08.2025, 01.09.2025, 14.11.2025, and 13.02.2026

Key Committees

  • Audit Committee: Mr. Rambabu Talluri (Chairman), Mr. Seshu Babu Kanuri, Mr. Krishna Mohan Ramineni
  • Nomination & Remuneration Committee: Mr. Seshu Babu Kanuri (Chairman), Mr. Rambabu Talluri, Mrs. Suryadevara Naga Durga
  • Stakeholder Relationship Committee: Mr. Rambabu Talluri (Chairman), Mr. Seshu Babu Kanuri, Mr. Krishna Mohan Ramineni

Dividend

No dividend recommended for the year 2025-26.

AGM Details

  • Date: Wednesday, September 30, 2026
  • Time: 10:30 A.M.
  • Venue: Registered Office at 701, 7th Floor, Aditya Trade Center, Ameerpet, Hyderabad, Telangana - 500034

Business to be Transacted

1. Ordinary Business: Adoption of financial statements and reports

2. Ordinary Business: Re-appointment of Mrs. Suryadevara Naga Durga who retires by rotation

3. Special Business: Sale/disposal of business/undertaking of the Company

E-voting Details

  • Remote e-voting period: September 27, 2026 (9:00 A.M.) to September 29, 2026 (5:00 P.M.)
  • Cut-off date: September 23, 2026
  • Scrutinizer: M/s. Vivek Surana & Associates, Practicing Company Secretaries

Other Material Information

  • No material changes and commitments affecting financial position after year-end except the proposed divestment
  • No frauds reported by auditors under Section 143(12) of Companies Act, 2013
  • No significant material orders passed by regulators/courts impacting going concern status
  • Company has not accepted any deposits during the year
  • Corporate Governance report not applicable as paid-up capital < ₹10 Crores and net worth < ₹25 Crores