| Dear Members,
On behalf of the Board of Directors, it is our pleasure to present the
27th Annual Report together with the Audited Statement of Accounts of
IO SYSTEM LIMITED ("the Company") for the year ended March 31, 2015.
Financial Performance
The summarized results of your Company are given in the table below.
(Amount in Rs.)
PARTICULARS 31.03.2015 31.03.2014
Total Income 23,877 5,847
Profit/(loss) before Interest,
Depreciation & Tax (EBITDA) (52,05,511) (52,53,969)
Finance Charges 28,34,280 30,11,956
Depreciation 24,399 9,551
Net Profit/(Loss) After Tax (52,29,910) (52,63,520)
Profit/(Loss) brought forward
from previous year (19,59,82,038) (19,07,18,518)
Profit/(Loss) carried to
Balance Sheet (20,12,11,948) (19,59,82,038)
*previous year figures have been regrouped/rearranged wherever
necessary.
Summary of Operations
During the year under review, your company only earned through other
income which stood at 23,877/- as compared to that of Rs.5,847/-. The
Company incurred a loss of Rs.52.30 lacs during the year as compared to
a loss of Rs.52.63 lacs during the the previous year.
Business Review/State of the company's affairs
During the year under review, the Company did not carry on any
business. This was mainly due to the fact that the Company has been
incurring losses for the past many years and is yet to overcome the
same.
However, considering the opportunities now available in the industry
your company has been operating, viz., office automation industry, your
Directors are optimistic that the Company is expected to do better in
the years to come.
Dividend
In view of the losses incurred during the year and also in view of the
losses incurred in previous years, your Directors do not recommend any
dividend.
Subsidiary(ies), Associate(s), Joint Venture(s)
The Company does not have any subsidiary(ies), associate(s), joint
venture(s). However, the Company continues to be the subsidiary of
Smart Entertainment Private Limited.
Directors' Responsibility Statement
Pursuant to the provisions of sub-section (5) of Section 134 of the
Companies Act, 2013, the Board of Directors, to the best of their
knowledge and ability, confirm 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 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.
Capital/ Finance
During the year under review, there was no enhancement or reduction in
capital of the Company. As on 31st March, 2015, the capital break up of
the Company is as under :
1. Authorized Capital : Rs. 25,00,00,000/-, divided into 2,00,00,000
Equity Shares of Rs.10/- each and 5,00,000 Preference Shares of
Rs.100/- each.
2. Issued, subscribed and fully paid up share capital : Rs.
16,90,00,000/-, divided into 1,69,00,000 Equity shares of Rs.10/- each.
Directors and Key Managerial Personnel
Pursuant to the provisions of Section 149 of the Companies Act, 2013,
which came into effect from April 1, 2014, Mr. Ramesh Chandra Agarwal
and Mr. Satish Kumar Gupta, were appointed as independent directors at
the annual general meeting of the Company held on September 29, 2014.
The terms and conditions of appointment of independent directors are as
per Schedule IV of the Act. They have submitted a declaration that each
of them meets the criteria of independence as provided in Section
149(6) of the Act and there has been no change in the circumstances
which may affect their status as independent director during the year.
Also pursuant to the provisions of Section 149(1) of the Act, Ms.
Gunjan Arora was appointed as a non-executive woman Director of the
Company. The resolutions seeking approval of the Members for the
appointment of Ms. Gunjan Arora have been incorporated in the notice of
the forthcoming annual general meeting of the Company along with brief
details about her. The Company has received a notice under Section 160
of the Act along with requisite deposit proposing the appointment of
Ms. Gunjan Arora.
Mr. Arun Seth continues to be on Board as a Non-Independent Director
and is liable to retire by rotation at this Annual General Meeting and
being eligible offers himself for re-appointment.
Mr. Dinkar Sharma continues to be the Company Secretary and compliance
officer of the company.
Pursuant to the provisions of Section 203 of the Companies Act, 2013,
Mr. Gopal Singh Negi was appointed as Chief Executive Officer (CEO) of
the Company with effect from 1st June, 2015. Mr. Rakesh Kumar Bhatnagar
was appointed as Chief Financial Officer (CFO) of the Company with
effect from 1st March, 2015.
During the year Mr. Ravi Garg and Mr. Munish Garg were appointed as CEO
and CFO of the Company, respectively, with effect from 14th August,
2014. However, Mr. Munish Garg resigned from the Office of CFO with
effect from 29th September, 2014 and Mr. Ravi Garg resigned from the
office of CEO with effect from 15th December, 2014.
Number of Meetings of the Board
Four meetings of the Board were held during the year. For details of
the meetings of the Board, please refer to the corporate governance
report, which forms part of this report.
Board Evaluation
The board of directors has carried out an annual evaluation of its own
performance, Board committees and individual directors pursuant to the
provisions of the Act and the corporate governance requirements as
prescribed by Securities and Exchange Board of India ("SEBI") under
Clause 49 of the Listing Agreements ("Clause 49").
The performance of the Board was evaluated by the Board after seeking
inputs from all the directors on the basis of the criteria such as the
Board composition and structure, effectiveness of board processes,
information and functioning, etc.
The performance of the committees was evaluated by the board after
seeking inputs from the committee members on the basis of the criteria
such as the composition of committees, effectiveness of committee
meetings, etc.
The Board and the Nomination and Remuneration Committee ("NRC")
reviewed the performance of the individual directors on the basis of
the criteria such as the contribution of the individual director to the
Board and committee meetings like preparedness on the issues to be
discussed, meaningful and constructive contribution and inputs in
meetings, etc.
In a separate meeting of independent Directors, held on 31st March,
2015, performance of non-independent directors, performance of the
board as a whole was evaluated, taking into account the views of all
the directors. The same was discussed in the board meeting that
followed the meeting of the independent Directors, at which the
performance of the Board, its committees and individual directors was
also discussed.
Policy on Directors' appointment and remuneration and other details
The Company's policy on directors' appointment and remuneration and
other matters provided in Section 178(3) of the Act has been disclosed
in the corporate governance report, 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 in the Management Discussion and Analysis which forms part
of this report.
Audit Committee
The details pertaining to composition of audit committee are included
in the Corporate Governance Report, which forms part of this report.
Statutory Auditors
The current Statutory Auditors of the Company, M/s Gupta Garg &
Agrawal, Chartered Accountants, retire at the ensuing Annual General
Meeting of the Company and being eligible offer themselves for
re-appointment. The audit committee has recommended their appointment.
Internal Auditors
The Company had appointed M/s. RBAS & Associates, Chartered
Accountants, Delhi, as Internal Auditors of the Company for the
financial year 2014-15.
Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and rules made there under, the Company has appointed M/s S K Batra &
Associates, Company Secretaries, New Delhi, to conduct the Secretarial
Audit of the Company for the financial year 2014-15. The Secretarial
Audit Report is annexed to this report.
Material Change
There is no material change or commitments after the closure of the
financial year.
Auditors' Report and Secretarial Auditors' Report
The Auditors' Report and Secretarial Auditors' Report (which form part
of this annual report) are self explanatory and do not contain any
qualifications, reservations or adverse remarks. However, as observed
by the Statutory Auditors and Secretarial Auditors, the company has
incurred losses over the last few years and as a result the entire
capital of the company has been eroded. Also, the company incurred cash
loss of Rs. 52.06 lacs during the year as against cahs loss of Rs.
52.54 lacs during the previous year. Presently the company is not
carrying on any business activity since last few years due to recession
and other factors and your Director are exploring the opportunities to
revive the company.
Risk Management
The Board of the Company has formed a risk management committee to
frame, implement and monitor the risk management plan for the Company.
The committee is responsible for reviewing the risk management plan and
ensuring its effectiveness. The audit committee has additional
oversight in the area of financial risks and controls. Major risks
identified by the businesses and functions are systematically addressed
through mitigating actions on a continuing basis. The development and
implementation of risk management policy has been covered 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 the financial statements.
Transactions with related parties
None of the transactions with related parties falls under the scope of
Section 188(1) of the Act. 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 are 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 under Section 135 of the Companies Act, 2013 are not
applicable to the Company and once the said provisions become
applicable to the Company, the Board of Directors of the Company shall
accordingly constitute / form a CSR Committee
Extract of Annual Return
As provided under Section 92(3) of the Act, the extract of annual
return is given in Annexure II in the prescribed Form MGT- 9, which
forms part of this report.
Cash Flow Statment
In conformity with the provisions of Clause 32 of the listing agreement
cash flow statement for the year ended 31st March, 2015 is attached.
Particulars of employees
The information required under Section 197 of the Act read with rule
5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 are given below:
A. No employee was paid remuneration in excess of Rs.5 Lacs per month
or Rs.60 lacs per annum during 2014-15 and hence there is no disclosure
requirement as per Rule 5(2) of the Companies (Appointment &
Remuneration of Managerial Personnel) Rules, 2014.
B. The ratio of the remuneration of each director to the median
remuneration of the employees of the company for the financial year:
This is NIL as none of the Directors of the Company has received any
remuneration from the Company except for a sitting fee for independent
Directors.
C. Percentage increase in remuneration of each director, Chief
Financial Officer, Chief Executive Officer, Company Secretary or
Manager, if any, in the financial year.
Name of the
Employee* Designation Remuneration
for FY Remuneration
for FY % change
2014-15 2013-14
Gopal Singh
Negi CEO N/a since he was appointed
w.e.f. 1st June, 2015 N/a
Rakesh Kumar
Bhatnagar CFO 46,220 Nil (appointed
w.e.f N/a
1.3.2015)
Dinkar Sharma Company
Secretary 9,93,600 9,93,600 No Change
*No remuneration was paid to any of the Directors of the Company during
the Financial Year 2014-15 except for the sitting fee paid to
independent Directors.
D. Number of Permanent Employees on roll of the Company : There were
two employees on the rolls of the Company as on 31st March, 2015.
However, as on the date of this report, there are three employees on
the rolls of the Company.
E. The explanation on the relationship between average increase in
remuneration and Company performance:
Since there has been no increase in the remuneration and the Company
did not carry on any operations during the year, the comparison is not
feasible.
F. Comparison of the remuneration of the key managerial personnel
against the performance of the Company:
Since the Company did not carry on any operations during the year, such
comparison is not feasible.
G. Variations in the market capitalisation of the Company, price
earnings ratio as at the closing date of the current financial year and
previous financial year:
Particulars March 31, 2015 March 31, 2014 % Change
Market
Capitalization 4.95 Crores 4.08 Crores 0.09
Price Earning
(PE) Ratio*
* Since the Company incurred losses in these years, the P/E ratio
cannot be computed and compared.
H. Percentage increase / decrease in market quotations of the shares of
the Company in comparison with the last public offer: Not applicable as
the last public offer was made more than 2 decades back and the data
would be incomparable.
I. Average percentage increase already made in the salaries of
employees other than the managerial personnel in the last financial
year - Nil as Company does not have any employee except Key Managerial
Personnel.
J. Percentage increase in the managerial remuneration - Not applicable
as there was no increase in remuneration.
K. Comparison of the above and justification thereof - Not Comparable
L. Point out if there is any exceptional circumstances for increase in
the managerial remuneration - None M. Key parameters for any variable
component of remuneration availed by the Directors - Not Applicable as
no remuneration was paid to any of the Director.
N. Ratio of remuneration of the highest paid director of that of the
employees who are not directors but receive remuneration in excess of
the highest paid director during the year - Not Applicable as no
remuneration was paid to any of the Director.
O. Affirmation that the remuneration is as per the remuneration policy
of the Company: The Company affirms remuneration is as per the
remuneration policy of the Company.
Disclosure requirements
As per Clause 49 of the listing agreements entered into with the stock
exchanges, corporate governance report with auditors' certificate
thereon and management discussion and analysis are attached, which form
part of this report.
Details of the familiarization programme of the independent directors
are available on the website of the Company (www. iosystem.co.in).
Policy on dealing with related party transactions is available on the
website of the Company (www.iosystem.co.in).
Vigil Mechanism
The Company has formulated and published a Whistle Blower Policy to
provide Vigil Mechanism for employees including directors of the
Company to report genuine concerns. The provisions of this policy are
in line with the provisions of the Section 177(9) of the Act and the
revised Clause 49 of the Listing Agreements with stock exchanges
(www.iosystem.co.in).
Significant and Material Order passed against the Company
There is no significant and material order passed against the company
by any regulator or court or tribunal impacting the going concern
status and company's operations in future.
Deposits from public
The Company has not accepted any deposits from public and as such, no
amount on account of principal or interest on deposits from public was
outstanding as on the date of the balance sheet.
Conservation of energy, technology absorption, foreign exchange
earnings and outgo
(a) Conservation of energy
(i) the steps taken or impact on conservation of energy Since there is
no manufacturing activity
(ii) the steps taken by the company for utilizing alternate sources of
in the Company, therefore, there is no energy scope for energy
consumption and its
(iii) the capital investment on energy conservation equipments
conservation.
(b) Technology absorption
(i) the efforts made towards technology absorption Nil
(ii) the benefits derived like product improvement, cost reduction, Nil
product development or import substitution (iii) in case of imported
technology (imported during the last three No such technology was used
by the years reckoned from the beginning of the financial year)-
Company during the 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 Nil
(c) Foreign exchange earnings and Outgo : There was no foreign exchange
earning or outgo during the year.
Appreciation
The Company expresses its appreciation for the continued co-operation
of the Statutory Authorities both State and Central, Banks & Financial
Institutions. Your Company also wishes to thank all employees for their
contribution and support throughout the year.
For and on Behalf of the Board of Directors,
For IO System Limited,
Place : Noida
Date : 14th August, 2015 Gunjan Arora Arun Seth
Director Director
DIN:07134573 DIN:00007895 |