Cityon Systems India Ltd Directors Report

STATE OF THE COMPANYS AFFAIRS AND NATURE OF BUSINESS

The nature of the business of the Company during the year remains unchanged.

DEPOSITS

The Company has not accepted any deposit from public/shareholders in accordance with Section 73 & 76 of the Companies Act, 2013 and, as such, no amount on account of principal or interest on public deposits was outstanding on the date of the Balance Sheet.

DIVIDEND

The Board of Directors does not recommend any dividend due to loss incurred

during the financial year.

CHANGES IN SHARE CAPITAL

There has been no change in the Share Capital of the company during the year.

PARTICULARS OF LOANS, GUARANTEES, OR INVESTMENTS

The particulars of loans or guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013, if any, have been disclosed in the financial statements.

TRANSFER TO RESERVES

No amount was transferred to the Reserve and Surplus Account during the year, due

to a loss incurred by the company.

MATERIAL CHANGES AND COMMITMENTS

There have been no material changes and commitments during the year.

INTERNAL CONTROL SYSTEM AND ITS ADEQUACY

The Company has an Internal Control System commensurate with the size, scale, and complexity of its operations. The scope and authority of the Internal Auditors are subject to provisions of the Companies Act, 2013, and rules made thereunder. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board and to the Managing Director.

The Internal Audit Department monitors and evaluates the efficiency and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures, and policies of the Company. Based on the report of the internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL DIRECTORS

Mr. Gyan Singh and Mr. Yugank Gadi were appointed as the Non-Executive Independent Directors of the Company in the Annual General Meeting held on 19^th September, 2024.

The second tenure of Mr. Gaya Prasad Gupta and Mr. Anoop Srivastava, Independent Directors of the Company, expired on 19^th September, 2024.

Mr. Mukesh Kumar was re-appointed as the Managing Director of the Company for a term of 5 years, effective from 31^st July 2024 to 30^th July 2029.

Mr. Abhishek Tandon retires by rotation and, being eligible, offers himself for re-appointment. Your directors recommend his re-appointment.

Mrs. Sushila Aggarwal was appointed as the Independent Director of the Company on 11^th February 2025, for a term of 5 years, subject to the approval of the members of the Company. Your director recommends her appointment in the ensuing Annual General Meeting.

DECLARATION BY THE INDEPENDENT DIRECTORS OF THE COMPANY

Your Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 and under Regulation 16 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and there has been no change in the circumstances from last Financial Year which may affect their status as Independent Director during the year. As required under Regulation 36 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the particulars of the Directors proposed for appointment or re-appointment have been given in the Notice of the Annual General Meeting.

KEY MANAGERIAL PERSONNEL

There has not been any change in Key Managerial Personnel(s) during the financial year 2024-25.

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 Companies Act, 2013, read with rules made thereunder and pursuant to the regulations of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

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, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed by the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the

best of their knowledge and ability, state the following:

material departures, if any;

AUDITORS & AUDITORS REPORT

M/s Srivastava S & Co. Chartered Accountants (ICAI Firm Registration No.

015187C) were appointed as Statutory Auditors of the company for five years on the terms mutually agreed by the parties. The said auditor conducted the audit of the Company for the financial year 2024-25.

The auditors report for the financial year 2024-25 does not contain any qualifications, reservations, or adverse remarks, and Notes to the financial statements referred in the Auditors Report are self-explanatory and therefore, do not call for any comments under Section 134 of the Companies Act, 2013.

SECRETARIAL AUDITORS REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the rules made thereunder, the Company had appointed M/s V. Agnihotri & Associates, Practicing Company Secretaries, Kanpur, to undertake the Secretarial Audit of the Company for the Financial Year 2024-25. The Secretarial Audit Report for the financial year 2024-25 is annexed, which forms part of this report as Annexure-A.

Further, as per the latest amendment in regulation 24A, SEBI (LODR),2015, the appointment of Auditor shall be for 5 consecutive years subject to the approval of the members in their Annual General Meeting. Considering the same, the board, on the recommendation of the Audit Committee, appointed M/s V. Agnihotri & Associates, a practicing company secretaries firm in Kanpur, as the secretarial Auditor for a term of 5 years (i.e., 2025-26 to 2029-30). The board recommends approval of the members for the resolution stated in the notice.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year, if any, were on arms length basis and were in the ordinary course of the business. Further, there were no materially significant transactions entered with related party during the year by the Company. Since, there were no material contracts/arrangements made during the year, and all such contracts/arrangements were made in ordinary course of business and at arms length basis and details of such transactions have been given in financial statements of the Company and this fact has been mentioned in attached Annexure-B in FORM AOC-2.

Details of all such contracts/arrangements are available for inspection at the Registered Office of the Company till the ensuing Annual General Meeting and if any, member is interested in inspecting the same, such member may write to the Company Secretary in advance.

Policy of the Related Party Transactions of available on the companys website https://www.cityonsystems.in/.

CODE OF CONDUCT

SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES

There are no Subsidiaries, Joint Ventures or Associate Companies.

DISCLOSURES REGARDING COMMITTEES

AUDIT COMMITTEE

The Audit Committee comprises of following Directors, namely:

The Audit Committee played an important role during the year. It coordinated with the Statutory Auditors, Internal Auditors and other key Managerial Personnel of the Company and has rendered guidance in the areas of internal audit and control, finance, and accounts. All the recommendations made by the Audit Committee were accepted by the Board. Four meetings of the Audit Committee were held during the year, as follows: 28^th May 2024, 20^th August 2024, 8^th November 2024, and 11^th February 2025. All the members were present at all the meetings.

STAKEHOLDERS RELATIONSHIP COMMITTEE:

The Committee comprises of the following directors, namely

The Committee has met once during the year on 28/05/2024. the Committee oversees the usual requests received for Dematerialization, transfer/transmission of shares, and resolves or answers the complaints of members.

NOMINATION AND REMUNERATION COMMITTEE:

The Committee comprises of the following directors, namely

The Nomination and Remuneration Committee recommends to the Board the suitability of candidates for appointment as Key Managerial Personnel, Directors, and the remuneration packages payable to them and other employees. The Nomination and Remuneration Committee met thrice during the year on 31.07.2024, 20.08.2024, and 11.02.2025.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has established a Whistleblower Policy and Vigil Mechanism to

provide a framework for responsible and secure reporting of concerns about unethical behavior, actual or suspected fraud, or violation of the Companys Code of Conduct. This policy aims to protect employees who report such concerns from unfair treatment and encourages them to raise issues without fear of reprisal. Key aspects of the policy include:

Confidentiality of the whistleblowers identity

Protection against victimization

Direct access to the Chairperson of the Audit Committee in appropriate cases

Proper investigation and resolution of reported concerns

The Company is committed to maintaining the highest standards of ethical, moral, and legal conduct, and this policy reinforces that commitment.

NUMBER OF MEETINGS OF THE BOARD

Five meetings of the Board were held during the year, which are as follows:

28.05.2024, 31.07.2024, 20.08.2024, 08.11.2024 & 11.02.2025. The intervening gap

between the Meetings was within the period prescribed under the Companies Act, 2013. Details of the Directors attendance and other particulars are given below:

PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading in line with SEBI (Prohibition of Insider Trading) Regulations, 2015, including System Driven Disclosure (SDD) requirements as amended. The Code regulates, monitors, and reports trading by Directors and designated employees, mandating pre-clearance and prohibiting trading while in possession of unpublished price sensitive information (UPSI). PANs of such individuals are blocked in the NSDL system to ensure compliance. The Board oversees implementation, and all concerned individuals have confirmed adherence to the Code.

BUSINESS RISK MANAGEMENT

The main identified risks at the Company are business operating risks. Your

Company has established a comprehensive business risk management policy to ensure the risk to the Companys continued existence as a going concern and to its development are identified and addressed on timely basis. Risk management

strategy as approved by the Board of Directors is implemented by the Company

Management.

CORPORATE SOCIAL RESPONSIBILITY STATEMENT

Provisions relating to section 135 of the Companies Act 2013 of Corporate Social

Responsibility are not applicable on the Company.

STATEMENT OF PARTICULARS OF EMPLOYEES

Details (Pursuant to the provisions of section 197(12) of the Companies Act, 2013, read with rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014) as stated as under: -

2014:-

Drawing salary of 1.02 Crore or above for the Year, if employed throughout the year- NIL

Drawing salary of 8.5 Lakhs p/m or above for a month, if employed for part of the year- NIL

Company of the Company.

INDEPENDENT DIRECTORS MEETING

The Independent Directors met on 11^th February, 2025, without the attendance of

Non-Independent Directors and members of the Management. The Independent

Directors reviewed the performance of non-independent directors and the Board as a whole; the performance of the Chairman of the Company, taking into account the views of Executive Directors and Non-Executive Directors and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information required under Section 134(3)(M) of the Companies Act, 2013 read

with Rule 8(3) of The Companies (Accounts) Rules, 2014 is as under:-

Conservation of Energy

Technology Absorption

Foreign Exchange Earnings and

Conservation of Energy a) Energy Conservation Measures taken: The Company has taken all measures for the conservation of energy most economically. b) The steps taken by the Company for utilizing alternate source of energy:- No such steps have been taken by the Company. c) The capital Investments on energy conservation equipment: - No such investment has been made by the Company. d) Impact of measures at (a) above for energy conservation: -These measures have led

to the consumption of energy more economically.

Technology Absorption

Since there is no manufacturing activity in the Company hence the information under

this heading is not applicable to the Company.

Foreign Exchange Earnings and Outgo

During the year, there were no Foreign Exchange earnings and outgo.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to the provisions of Regulation 15 (2) (b) which is stated hereunder:

Since our company is listed on the Innovators Growth Platform (erstwhile ITP) of the BSE SME Exchange. Therefore, the clauses of Corporate Governance do not apply to us for the year ended 31 March 2025.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS, OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANYS OPERATIONS IN THE FUTURE

There was no such order passed by the Regulations or Courts, or Tribunals that may impact the going concern status and the companys operations in the future.

DISCLOSURE OF SEXUAL HARASSMENT OF WOMEN

There were no complaints received during the financial year 2024-25, and hence no complaint is outstanding as on 31.03.2025 for redress. Further Company ensures that there is a healthy and safe atmosphere for every woman employee at the workplace and has made the necessary policies for a safe and secure environment for women employees. The following is a summary of sexual harassment complaints received and disposed off during the year 2024-25:

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION (12) OF SECTION 143, IF ANY

There is no such reporting by the auditor.

MAINTENANCE OF COST RECORDS BY THE COMPANY

The provision relating to the maintenance of Cost Records by the Company is not

applicable on the Company.

DETAILS OF APPLICATION MADE OR PROCEEDING PENDING UNDER INSOLVENCY AND BANKRUPTCY CODE 2016;

During the year under review, there were no applications made or proceedings pending in the name of the Company under the Insolvency and Bankruptcy Code, 2016.

DETAILS OF DIFFERENCE BETWEEN THE AMOUNTS OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH REASON THEREOF

During the year under review, there has been no one time settlement of Loans.

THE WEB ADDRESS FOR ANNUAL RETURN

The Annual Returns of the company for the previous financial years are available at

https://www.cityonsystems.in/general-4 for the convenience of the shareholders.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis report is attached in the Annual Report

as Annexure C.

INTERNAL FINANCIAL CONTROL

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

KEY FINANCIAL RATIOS FOR THE F.Y. 2024-2025 AS COMPARED TO F.Y. 2023-2024

The Key Financial ratios for the financial year 2024-25, together with the ratio of

2023-24, are given below;

MATERNITY BENEFIT:

Not applicable during the year under review.

ACKNOWLEDGEMENTS:

Your directors take this opportunity to extend their thanks to the customers, business, partners, business associates, and bankers of the Company for their continued support during the year. The directors also sincerely acknowledge the dedication and commitment of the employees of the company at all levels.

FOR CITYON SYSTEMS (INDIA) LIMITED