Your Directors have pleasure in submitting the 33rd Annual Report togetherwith the Statement of Accounts for the year ended 31st March 2021.
The summarized results of the Company are given in the table below :
|PARTICULARS ||31.03.2021 ||31.03.2020 |
|Total Income (Other Income) ||1.76 ||50166.76 |
|Profit/(loss) before Interest Depreciation & Tax (EBITDA) ||(7347.50) ||39682.74 |
|Finance Charges ||2962.47 ||5365.06 |
|Depreciation ||11.58 ||3.62 |
|Net Profit/(Loss) After Tax ||(7347.50) ||39682.74 |
|Profit/(Loss) brought forward from previous year ||(196853.17) ||(236535908) |
|Profit/(Loss) carried to Balance Sheet ||(204200.67) ||(196853.17) |
Summary of Operations
During the year under review the Company did not carry on any business activity andonly earnings for the Company was through other income which stood at Rs.(in'000) 1.76 ascompared to that of Rs.(in'000) 50166.76 during the previous year. The Company incurred aloss of Rs. (in'000) 7347.50 during the year though during the previous year it earned aprofit of Rs.(in'000) 39682.74. The profit during the previous year was due to the otherincome which Company earned because loan payable by the Company was written back.
The Novel Coronavirus disease (COVID-19) was declared a global pandemic by the WorldHealth Organization in March 2020. The Government of India took various actions to containthe COVID-19 pandemic such as closing of borders and lockdown restrictions whichresulted in significant disruption to people and businesses all over the country. It wasfollowed by restricted ease of operations and localized restrictions in various parts ofthe country.
In response to COVID-19 pandemic situation the Company quickly instituted measures totrace all employees and be assured of their safety health and well-being. Keeping in viewthe safety of our employees and in line with the guidelines issued by the Government theoffices were closed and the employees were shifted to an entirely new 'work-from-home'model.
Your Company which is already in losses since last many years is taking all necessarymeasures in terms of mitigating the impact of the challenges being faced due to thepandemic and accrued losses and is working hard to come out of the red and start doingsome business at the earliest.
Transfer to Reserves
The Company has not transferred any amount to General Reserve in the current year.
Business Review/State of the company's affairs
During the year under review the Company did not carry any business activity. TheCompany has been incurring losses for the past many years and is yet to overcome the same.The Company has stopped its commercial production owing to huge losses over the past manyyears.
In view of the losses incurred during the year as well as in the previous years yourDirectors do not recommend any dividend.
The Company does not have any subsidiary. However the Company continues to be thesubsidiary of Smart Bharat Private Limited (erstwhile Smart Entertainment Pvt. Ltd.) withSmart Global Corporate Holdings Private Limited as the Ultimate Holding Company.
Directors' Responsibility Statement
Pursuant to the provisions of sub-section (5) of Section 134 of the Companies Act2013 the Directors of your Company to the best of their knowledge and ability confirm:
that in the preparation of annual accounts the applicable accounting standardshave been followed alongwith explanation relating to material departures; that thedirectors had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as on March 31 2021 and of the profit / loss ofthe Company for that period; that proper and sufficient care has been taken for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; that the annual accounts have been prepared on agoing concern basis; that internal financial controls have been laid down to be followedby the company and that such internal financial controls are adequate and were operatingeffectively; that proper systems have been devised to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
During the year under review there was no enhancement or reduction in capital of theCompany. As on 31st March 2021 the capital break-up of the Company is asunder : i) Authorised Capital: Rs. 250000000/- divided into 20000000 EquityShares of Rs.10/- each and 500000 Preference Shares of Rs.100/- each. ii) Issuedsubscribed and fully paid up share capital: Rs. 169000000/- divided into16900000 Equity shares of Rs.10/- each.
Directors and Key Managerial Personnel
Composition : The Board comprises 5 (Five) Directors of which Two are non-executiveIndependent Directors and the others are non-executive non-independent Directors.Appointment/ resignation of Board of Directors and/or Key Managerial Personnel : There isno change in the Directorship and the Key Managerial Personnel of the Company since thelast Annual General meeting. Ms. Vidya Chhabra (DIN : 03386692) Director of the Companyretires by rotation at the ensuing Annual General Meeting and being eligible offersherself for reappointment. Declaration by Independent Directors : Pursuant to theprovisions of Section 149(6) of the Companies Act 2013 and Regulation 16(1)(b) of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") the Company has received declaration from both the IndependentDirectors of the Company confirming their compliance with the criteria of independence andtheir independence from the management. In the opinion of the Board the IndependentDirectors fulfil the conditions of independence specified in Section 149(6) of theCompanies Act 2013 and Regulation 16(1) (b) of the Listing Regulations. There has been nochange in the circumstances affecting their status as Independent Directors of theCompany. In the opinion of the Board both the Independent Directors of the Companypossess requisite qualifications experience and expertise and hold highest standards ofintegrity.
Number of Meetings of the Board
Four meetings of the Board were held during the year Financial Year 2020-21 on30/06/2020 02/09/2020 11/11/2020 and 12/02/2021. All the Directors attending the meetingactively participated in the deliberations at these meetings. The intervening gap betweenany two meetings was with the period prescribed under the Companies Act 2013 and the SEBI(LODR) 2015. More details of the Board meetings have been provided in the Report onCorporate Governance.
Pursuant to the provisions of the Companies Act 2013 and Rules made thereunderSchedule IV of the Act and SEBI (LODR) Regulations 2015 the Board of Directors hascarried out an annual evaluation of its own performance Board committees and individualdirectors pursuant to the provisions of the Act and the corporate governance requirementsas prescribed by Securities and Exchange Board of India ("SEBI"). Theperformance of the Board was evaluated by the Board after seeking inputs from all thedirectors on the basis of the criteria such as the Board composition and structureeffectiveness of board processes information and functioning etc. The performance of thecommittees was evaluated by the board after seeking inputs from the committee members onthe basis of the criteria such as the composition of committees effectiveness ofcommittee meetings etc. The Board and the Nomination and Remuneration Committee("NRC") reviewed the performance of the individual directors on the basis of thecriteria such as the contribution of the individual director to the Board and committeemeetings like preparedness on the issues to be discussed meaningful and constructivecontribution and inputs in meetings etc. In a separate meeting of independent Directorsheld on 12th February 2021 performance of non-independent directors and theperformance of Board as a whole was evaluated. The same was discussed in the board meetingthat followed the meeting of the independent Directors.
Policy on Directors' appointment and remuneration and other details
The Company's policy on directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Act has been disclosed in the corporate governancereport which forms part of the directors' report.
Internal Financial Control Systems and their adequacy
The details in respect of internal financial control and their adequacy are included inthe Management Discussion and Analysis which forms part of this report.
M/s H S Gupta & Co. (Firm Registration No. 000326C) Chartered Accountants theStatutory Auditors of the Company were appointed at the 29th Annual General Meeting of theCompany held on 29th September 2017 to hold office for a period of five years i.e. uptothe conclusion of 34th Annual General meeting of the Company subject to ratification bythe members of the Company at every Annual General Meeting. However Vide notificationdated May 7 2018 the Ministry of Corporate Affairs has done away with the requirement ofseeking ratification of members for appointment of auditors at every Annual GeneralMeeting. Accordingly no resolution is being proposed for ratification of appointment ofstatutory auditors at the 33rd Annual General Meeting.
The Company had appointed M/s Krishan Kumar & Co. Chartered Accountants Delhi asInternal Auditors of the Company for the financial year 2020-21.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethereunder the Company has appointed M/s Divyanshu Sahni & Associates CompanySecretaries New Delhi to conduct the Secretarial Audit of the Company for the financialyear 2020-21. The Secretarial Audit Report forms part of this report.
Auditors' Report and Secretarial Auditors' Report - Explanation and Comments
The reports of Statutory auditors and that of the Secretarial Auditors areself-explanatory and do not require further comments.
The details pertaining to composition of audit committee are included in the CorporateGovernance Report which forms part of this report.
There is/are no material change(s) or commitment(s) after the closure of the financialyear.
As per Regulation 34(3) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 a separate section on Corporate Governance together with a certificatefrom the practicing Company Secretary confirming compliance is set out in the Annexureforming part of this report. A compliance Certificate on Corporate Governance as perChapter IV of SEBI (LODR) Regulations 2015 issued by M/s Divyanshu Sahni &Associates Company Secretaries forms part of this Report.
Certificate of Non-disqualification of Directors
A Certificate of non-disqualification of Directors pursuant to Regulation 34(3) andSchedule V Para C Clause (10)(i) of SEBI (LODR) 2015 obtained from M/s Divyanshu Sahni& Associates Company Secretaries forms a part of this report
The Board of the Company has formed a risk management policy. The audit committee hasadditional oversight in the area of financial risks and controls. Major risks identifiedby the businesses and functions are systematically addressed through mitigating actions ona continuing basis. The development and implementation of risk management policy has beencovered in the management discussion and analysis which forms part of this report.
Particulars of loans guarantees and investments
The particulars of loans guarantees and investments have been disclosed in thefinancial statements.
Transactions with related parties
All transactions entered into with Related parties as defined under Companies Act 2013and SEBI (LODR) Regulations 2015 during the Financial Year were in the ordinary courseof business and on arms' length basis and do not attract provisions of Section 188 of theCompanies Act 2013. However since Company from time to time takes loan from itsHolding Company viz. Smart Bharat Pvt. Ltd. (erstwhile Smart Entertainment Pvt. Ltd.)the approval of shareholders was obtained through Special Resolution at the Annual GeneralMeeting of the Company held on 30th September 2016 to approve for such transactionsupto a limit of Rs.50 Crores. Information on transactions with related parties pursuant toSection 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules 2014are given in Annexure I in Form AOC-2 and the same forms part of this report.
Corporate Social Responsibility (CSR) Policy
The provisions regarding formation / constitution of CSR Committee prescribed underSection 135 of the Companies Act 2013 are presently not applicable to the Company.
Extract of Annual Return
As provided under Section 92(3) of the Act the extract of annual return is given inAnnexure II in the prescribed Form MGT- 9 which forms part of this report.
Particulars of Employees
a) Details as per Rule 5(2) of the Companies (Appointment & Remuneration ofManagerial Personnel) Rules 2014 :
No employee was paid remuneration in excess of Rs.8.50 Lacs per month (if employed fora part of the year) or Rs.1.02 Crores per annum (if employed throughout the year) during2020-21 and hence there is no disclosure requirement as per Rule 5(2) of the Companies(Appointment & Remuneration of Managerial Personnel) Rules 2014.
No employee of the Company if employed throughout the financial year or part thereofwas in receipt of remuneration during the financial year 2020-21 which in the aggregateor as the case may be at a rate which in the aggregate is in excess of that drawn bythe managing director or whole-time director or manager and holds by himself or along withhis spouse and dependent children not less than two percent of the equity shares of thecompany.
b) Details as per Rule 5(1) of the Companies (Appointment & Remuneration ofManagerial Personnel) Rules 2014.
|S.No. Particulars ||Remarks |
|1. The ratio of the remuneration of each director to the median remuneration of the employees of the Company during the Financial year. ||Not comparable as at present there is no director of the Company who is drawing any remuneration from the Company except the sitting fee paid to Independent Directors. |
|2. The percentage increase in remuneration of each Director Chief Financial Officer (CFO). ||NIL |
|Executive Officer Company Secretary or Manager if any in the financial year. || |
|3. The percentage increase in median remuneration of the employees in the financial year. ||There are no other employees in the Company except KMP's mentioned above. |
|4. The number of permanent employees on rolls of the Company. ||3 |
|5. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in managerial remuneration. ||Since there are no employees other than the KMPs of the Company such comparison is not possible and there has been no increase in their salaries. |
|6. Affirmation that the remuneration is as per the remuneration policy of the Company. ||Yes. |
|7 The explanation on the relationship between average increase in remuneration and company performance ||Not comparable as the Company did not carry any business activity during the year. |
|8 Comparison of the remuneration of the key managerial personnel against the performance of the Company: ||Not comparable as the Company did not carry any business activity during the year. However the increase in salaries was made considering the inflation and other indices prevalent. |
The Company has implemented a Vigil Mechanism (Whistle Blower Policy) and is posted onthe Company's website i.e. www.iosystem.in and no person is denied access to the AuditCommittee.
The maintenance of cost records has not been specified by the Central Government underSection 148(1) of the Companies Act 2013 for the business activities carried out by theCompany. Thus reporting under Clause 3(vi) of the order is not applicable to the Company.
The equity shares of the Company are being compulsorily traded in dematerialized form.As on 31st March 2021 16321600 shares of the Company have been dematerializedrepresenting 96.5% of the total equity Share Capital of the Company.
The Directors state that applicable secretarial standards i.e. SS- 1 and SS-2relating to Meetings of the Board of Directors' and General Meetings'respectively have been duly followed by the Company.
Other Disclosure requirements
- The corporate governance report with auditors' certificate thereon and managementdiscussion and analysis are attached which form part of this report.
- The extract of the Annual Return of the Company is annexed herewith and forms anintegral part of this Report.
- Details of the familiarization programme of the independent directors are availableon the website of the Company.
- Policy on dealing with related party transactions is available on the website of theCompany.
Deposits from public
The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet.
Conservation of energy technology absorption foreign exchange earnings and outgo
(a) Conservation of energy
|1. Energy Conservation measures taken ||Since there is no manufacturing activity in the Company therefore there is no scope for energy consumption and its conservation. |
|2. Additional investments & proposals if any being implemented for reduction of consumption of energy. || |
|3. Impact of above measures for reduction of energy consumption and consequent impact on production of goods. || |
|4. Total energy consumption and energy consumption per unit of production. || |
(b) Technology Absorption
|1 Specific areas in which R&D is carried out ||NIL |
|2 Benefits derived as a result ||N/a |
|3 Future plan of action ||Not required as of now |
|4 Expenditure on R&D ||NL |
Disclosure under Sexual Harassment of Women at Workplace (Prevention Prohibition &Redressal) Act 2013 The Company has in place Sexual Harassment Policy and an InternalComplaints Committee in line with the requirements of the Sexual Harassment of Women atthe Workplace (Prevention Prohibition and Redressal) Act 2013. All the employees(permanent contractual temporary trainees) are covered under this Policy. This policyprovides for protection against sexual harassment of women at work place and forprevention and redressal of such complaints.
During the year the Company has complied with the provisions of Sexual Harassment ofWomen At Workplace (Prevention Prohibition And Redressal) Act 2013 read with SexualHarassment of Women At Workplace (Prevention Prohibition And Redressal) Rules 2013 andhas formed necessary committees During the year under review the number of complaint(s)received were Nil.
Statements in the Board's Report and the Management Discussion & Analysis Reportdescribing the Company's objectives expectations or forecasts may be forward lookingwithin the meaning of applicable laws. Actual results may differ materially from thoseexpressed in the statement.
Your Company expresses its appreciation for the continued co-operation of the StatutoryAuthorities Banks and employees of the Company. Your Company also wishes to thank all itsstakeholders for their contribution and support throughout the year and look forward totheir continued support in future.
|On behalf of the board of directors || |
| ||For IO System Limited |
|Kamalapati Kashyap ||Arun Seth |
|Director ||Director |
|DIN:02359002 ||DIN:00007895 |
|Place : ||NOIDA |
|Dated : ||13th August 2021 |