DIRECTORS' REPORT

Dear Members,

Your Directors are pleased to present the Nineteenth Annual Report and the Company's audited financial statement for the financial year ended 31st March, 2015.

Result of Operations and the state of Company's affairs:

The consolidated income of Rs. 2943.37 lakhs during the year against previous year income of Rs. 3611.11 lakhs and Net Profit of Rs. 14.74 lakhs during the year against previous year Net Profit of Rs. 24.13 lakhs and stand alone of Rs.581.38 lakhs during the year against previous year income of Rs. 555.66 lakhs and Net Profit of Rs. 10.49 lakhs during the year against previous year Net Profit of Rs. 1.86 lakhs.

BUSINESS OVERVIEW:

Increasing internet and smartphone penetration along with rising spend on entertainment by Indian youth will drive the on-demand digital content industry," "Digital media consumption pattern has drastically changed since a decade ago .With remarkable improvement in mobile devices technology and internet connectivity, marketers are shifting their business models in tune with the shift of viewer preference towards digital media from traditional media."

India's digital media landscape augurs well for all the stakeholders. Internet traffic originating from mobile devices has already surpassed the desktop internet traffic. Total internet users crossed 254 million in September 2014, out of which 235 million users accessed internet through mobile devices. The growth in internet users was seen both in rural and urban parts of India. Internet users in rural India is expected to reach 138 million by June 2015, while 216 million internet users are expected to be in urban India by then.

While the internet user base in India is growing at a rapid rate, most of these users (75%) belong to the age group of less than 35 years. More than half of the app users in India are between 18 and 24 years, and a further 29% between 25 and 35. Social media and entertainment (Music & Video) are the two activities on which the Indian mobile internet users spend their time the most followed by games, general search, and emails. Out of the total time spent on digital media by youths, about 21% of the time is spent on audio and video entertainment.

On-demand entertainment services led by audio and video content are at the cusp of inflection point in India. A whole ecosystem around such services is coming up, including content providers / aggregators, Distribution channels, Technology Platforms, Advertising Platforms, Payment Channels and marketing channels. Users have shown willingness to pay for premium services / content and convenience to use that make better value proposition for them. Leading OTT players are monetizing this opportunity across audio and video services through multiple monetization models like subscription and advertisement. Evolving payment mechanisms like OTT mobile wallets will drive on-demand content monetization. Your company is a key player in this area.

Marketers are also shifting their advertising spends towards digital media and about 36% of their ad spend is expected to go to digital space. The s-curve growth expectations for the overall digital ad market in India that include probable cannibalization of ad revenues from other traditional segments like TV, radio, and print media indicate the digital ad market size of INR 354 billion by 2020.

Video industry in India is also seeing the shift towards digital content. Younger demographics are guiding the video consumption. With improved network speeds, demand for HD and UHD video content is expected to rise along with standard definition video streaming online. Total Internet video traffic in India is expected to be 72% of all Indian Internet traffic in 2018, up from 45% in 2013. Like digital music players, digital video players are adopting both subscription and ad monetization models and offering personalized offerings to maximize adoption

Your company has focused on Media and Technology to have a professionally developed and adapted internet and mobile strategy to future-proof the company to the changing media habits of consumers in the area of internet entertainment which is now poised for a big leap as the major IT players are now venturing into this sphere and technology is also maturing to enable full screen high quality video delivery.

Your company has developed a rugged and robust streaming hardware to be located in all public transport - an entertainment system that wirelessly streams content to your own device. Whether they travel for business or pleasure, we're designing Private Screening to ensure our customers have access to content that is entertaining, interesting, wide-ranging and relaxing.

The media sector is currently experiencing a smaller paradigm shift, moving away from TV, radio, newspapers and magazines and over to newer media like the Internet and mobile. The paradigm shift is resulting in media consumption moving from TV and newspapers, to the Internet and mobile, with especially Internet consumption significantly increasing and thereby resulting in TV and newspaper consumption decreasing.

Your company's focus on the content syndication as well as delivery technologies on Internet and mobile devices is on sync with the changing trends . APP development and deployment is a continuous phenomenon at your company.

Your Company owns a huge repository of content both acquired a well as developed in-house, this year the focus has been on Short films, we have on date over 600 contributors/ creators who make short films for your company. Your company's association with YouTube has crossed over 1bn video views and 1.8mn subscribers.

TORI - Worlds First Telugu Global Radio: Teluguone Radio on Internet popularly known as TORI has emerged as a household brand with NRI telugu community and has a monthly tune-in's of over

For strategic reasons your company has disinvested in ObjectNet Technologies Inc. and acquired Stiaos Technologies Inc. a Texas corporation and expects a good returns on the investment.

Consolidated Financial Statement:

In accordance with the Companies Act, 2013 ("the Act") and Accounting Standard (AS) - 21 on Consolidated Financial Statements, the audited consolidated financial statement is provided in the Annual Report.

2. Subsidiaries:

M/s. ObjectNet Technologies Inc, USA is 100% subsidiary company of ObjectOne Information Systems Limited at the 31st March 2015.The subsidiary company was sold in the month of June, 2015. Your Company has procured a foreign Subsidiary Company namely M/s. Stiaos Technologies Inc. in the month of July, 2015.

3. Number of Meetings of the Board:

During the year Six meetings were held. They are as follows 30.05.2014, 30.07.2014, 03.09.2014 , 05.11.2014, 04.02.2015 and on 09.03.2015.

4. Statement on the declaration given by the independent directors as per 149(6):

Whenever Independent Director is appointed a declaration is given by the Independent Director who has been getting appointed to the Company

5. Dividend, Fixed Deposits and General Reserves:

In order to conserve cash, your Directors are not recommending any dividend on equity shares.

Your Company has not accepted any fixed deposits and no amount has been carried to General Reserves during the year.

6. Contract and Arrangement with Related Parties:

Company is not entered any contracts/agreements/transactions during the financial year with related parties.

The Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 - Not Applicable.

7. Explanation/ comments by the Board on every Qualifications, Reservations, Adverse Remarks or Disclaimers made by the Statutory Auditors & the Practicing Company Secretary in their Reports:

The Notes on financial statements referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark on accounts.

Company Secretary, Auditors in their Report have raised few qualifications and the following are the measures we have taken for such qualifications

The Company has not found an appropriate Company secretary, Chief Financial Officer & Internal Auditors and the company is of the view that it will appoint company secretary, Chief Financial Officer & Internal Auditors at the earliest

2. The Company has not filed MGT-10 as required under Section 93 read with rule 13 of the Companies (Management and Administration) Rules, 2014 for changes of 2% in the shareholding of Top Ten Shareholders as compared to their existing shareholding. In this regard the Company has expressed that in their opinion the 2% change is in relation to the total company share capital but not individual shareholding of each shareholder. Hence awaiting the clarification from the MCA for filing the same.

3. The Company has filed some forms with MCA21 with delay and has paid the additional fee as required under the Act.

8. Particulars of Contracts or Arrangements with the Related Parties along with the justification for entering into such transactions as per 188(1) - 134(3)(h)& Rule 8(2):

Nil

9. Material changes & commitments, if any affecting the financial position of the company, occurred between the end of the financial year to which this financial statements relate and the date of the Report:

There have been no 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.

10. Directors Responsibility Statement:

Your Directors state that:

a) in the preparation of the annual accounts for the year ended 31st March, 2015, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and of the profit of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a 'going concern' basis;

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

f) 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.

11. Corporate Governance:

The Company is committed to maintain the highest standard of corporate governance and adhere to the corporate governance requirements set out by Securities Exchange Board of India. The Report on corporate governance as stipulated under the Listing Agreement forms an integral part of this report.

The requisite certificate from the Statutory Auditors of the Company confirming compliance with the conditions of corporate governance is enclosed as Annexure-A

12. Nomination and Remuneration Policy:

The Nomination and Remuneration Committee of the Company identifies the persons, who are qualified to become Directors of the Company / who may be appointed in Senior Management in accordance with the criteria laid down and recommend to the Board their appointment and removal. The Committee also carries out evaluation of every Director's performance. The Committee has formulated the criteria for determining qualifications, positive attributes, independence of the Directors and recommend to the Board a Policy, relating to the remuneration for the Directors, Key Managerial Personnel and other employees.

13. Vigil Mechanism/Whistle Blower Policy:

Pursuant to Section 177 of the Companies Act, 2013 read with Rule 7 of Companies (Meetings of Board and its Powers) Rules, 2014, the Company has established a Whistle Blower Policy to deal with instance of fraud and mismanagement, if any.

14. Risk Management:

Pursuant to section 134 (3) (n) of the Companies Act, 2013 and Clause 49 of the listing agreement, the company has formulated a policy on risk management. At present the company has not identified any element of risk which may threaten the existence of the company.

15. Internal Financial Controls and Management Discussion & Analysis

The company has Adequate Internal Financial Control System and the Management has Discussed and Analysed time to time on various matters.

16. Board of Directors and Key Managerial Personnel:

None of the directors and key managerial personnel of the company are disqualified under the provisions of the Act or under the Listing Agreement with the Stock Exchanges.

Resignation:

Mr. Viswanath Dasari, Independent Directors of the company resigned from the office of directorship on 29th January, 2015 the same was taken note by the Board of Directors at its meeting held 27th May, 2015. Your Board places on record their appreciation for the contribution made by him during his tenure as Director.

17. Details in respect of the adequacy of Internal Financial Controls with reference to the Financial Statements - Rule 8(5)(viii):

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

18. Disclosure regarding receipt of commission by a director from the holding or subsidiary of a company, in which such person is a managing or whole-time director:

None of the Directors have received any commission from any Holding or Subsidiary

19. In case of listed Company and every other public company having paid-up share capital of twenty five crore rupees or more, calculated at the end of preceding financial year, a statement indicating the manner in which formal annual evaluation has been made by the Board of its own performance and that of its committees and individual Directors:

Your Companies Directors has evaluated their own performance in one of the Board Meeting conducted during the Year and the Board was satisfied with their performance and that of its Committees and of Individual Directors

20. Statutory Auditors:

Pursuant to the provisions of section 139 of the Act and the rules framed thereunder, M/s. P. Murali& Co., Chartered Accountants, were appointed as statutory auditors of the company from the conclusion of the 19thAnnual General Meeting of the company held on 30th September, 2015 till the conclusion of the 20th Annual General Meeting to be held in the year 2016, subject to ratification of their appointment at every Annual General Meeting

The Notes on financial statements referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark.

21. Appointment of Internal auditors:

The Company not appointed Internal Auditors as required under Section 138 of the Companies Act, 2013. However company is finding a Chartered Accountant to appoint as Internal Auditor.

22. Secretarial Auditor:

The Board has appointed Mr.S.Chidambaram, Practising Company Secretary, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended 31st March, 2015 is annexed herewith as Annexure - B.

23. Audit Committee:

The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report.

24. Stakeholders Relationship Committee:

A Committee of the Board, designated as stakeholders relationship committee to specifically look into the redresses of Shareholder/investor complaints and to strengthen investors relations.

Name of the Non-Executive Director heading the Committee: The Committee functions under the chairmanship of Mr. Sana Satish Babu, a Non-Executive and Independent Director.

25. Particulars of Loans given, Investments made, Guarantees given and Securities provided:

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement.

26. Change in the nature of business, if any:

There is no material change in the nature of business affecting the financial position of the Company for the year ended 31st March, 2015.

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

The Disclosures required under Section 217(1)(e) of the Companies Act, 1956 read with Companies(Disclosure of particulars in the Report of the Board of Directors) Rules, 1988, for the year ended March 31st, 2015 are as follows:

A) Conservation of Energy: The Company is monitoring the consumption of energy and is identifying measures for saving energy wherever possible.

B) Technology absorption, adaptation and innovation: No technology either indigenous or foreignis involved.

C) Research and Development (R&D): No research and development has been carried out during the year.

D) Foreign Exchange earnings and outgo:

Foreign Exchange earnings: Rs 3,27,21,638/- against IT, IT enabled Services and other

income

Foreign Exchange outgo: Rs NIL

28. Extract of Annual Return:

Extract of Annual Return of the Company is annexed herewith as Annexure C

29. Particulars of Employees and related disclosures

There are no Related Disclosures

30. Disclosure under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redress) Act, 2013:

The Company has in place an Internal Complaints Committee which has been set up to redress complaints regarding sexual harassment. The following is the summary of sexual harassment complaints received and disposed off during the year:

i) No. of complaints received: nil

ii) No. of complaints disposed off: nil

31. Managing Director Certification pursuant to Clause 49(IX) of the Listing Agreement:

The Managing Director certification to the board pursuant to clause 49(V) of the listing agreement is annexed herewith as Annexure-D

32. Personnel / Industrial Relations:

The Company maintained cordial and harmonious relations at all levels at the offices of the Company and its subsidiaries throughout the year under review.

33. The 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:

In terms of sub rule 5(vii) of Rule 8 of Companies (Accounts) Rules, 2014, there are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

Appreciation:

Your directors take this opportunity to express their appreciation for the co-operation to all the suppliers and customers who have been associated with the Company as partners of growth. The Directors would also like to take this opportunity to thank the financial institution, banks, regulatory and government authorities as well as the shareholders for their continued co-operation and support. The directors also wish to place on record their appreciation of the devoted and dedicated services rendered by all employees of the Company. We look forward to further support.

By order of the Board

ObjectOne Information Systems Limited

Sd/- K Ravi Shankar

Managing Director

Place: Hyderabad Date: 12-08-2015