|BSE: 532341||Sector: IT|
|NSE: IZMO||ISIN Code: INE848A01014|
|BSE 00:00 | 22 Mar||58.50||
|NSE 00:00 | 22 Mar||59.50||
|Mkt Cap.(Rs cr)||76|
|Mkt Cap.(Rs cr)||76.46|
IZMO Ltd. (IZMO) - Director Report
Company director report
Your Directors have pleasure in presenting the Twenty Third Annual Report together withthe Audited statements of accounts for the year ended 31st March 2018.
Consolidated financial statements of accounts for the year ended 31st March2018.
Performance on a Consolidated Basis
The Company's performance on a consolidated basis have shown a significant improvementover the previous year. The revenues have increased by 17% whereas profits have increasedby 30%. Higher sales of the company's products coupled with a tight rein on expenses haveresulted in the sharp increase in profitability. The company is endeavoring to continuethis trend in the next fewyears as well.
The Company hopes to achieve higher growth in the current year as it has made seriousinroads into the Automotive OEM market. The company now counts leading OEMs such as NissanMotors PSA Peugeot Citroen Lexus etc. among its clients. The Company is also the largestprovider of Automotive Images to the Car Rental industry having Hertz Enterprise AVISand Europcar as its clients.
The Data Analytics division is expected to contribute to the revenues as well inFY18-19 and should form a significant part of US revenues in FY 19-20.
The company's foray into the defence manufacturing space is also gathering steam. FY18-19should see the first private sector manufacturing facility for small and mediumcaliber ammunition commencing production in Goa. This will be an Export Oriented Unitunder the subsidiary Hughes Precision Pvt. Ltd. The 2nd projectfor manufacture of assaultrifles is expected to go online in FY 19-20.
Stand Alone Financials statements of accounts for the year ended 31st March2018.
The Company's sales on a standalone basis has shown nearly a 5% increase overtheprevious year.
The other income has shown a sharp rise primarily on account of gain on redemption ofshort term investments during the year.
Analysis of Expenses
Employee benefit expenses have shown a sharp increase over the previous year. This isprimarily due to an increase in the employee count in India due to the expansion of theCGI and VR development divisions.
Depreciation has shown a sharp decrease due to lower capital expenditure incurredduring the year. Profitability
The company's profitability has reduced slightly due to the increase in employeeexpenses. However the company expects to increase its profitability during the currentyear as a result of higher sales in the United States Mexico Europe and India.
In order to augment the ongoing expansion programs the Directors have decided toplough back the profits into the system and regret inability to recommend dividend.
Business is changing. And izmo is showing the way
Plentiful bandwidth. Inexpensive Cloud Storage. Sophisticated Smartphones. Togetherthey are creating perpetually connected communities and seamless experiences and izmo isshaping innovative marketing paradigms that enable businesses to navigate the new normaland win more customers.
Take PartsGorilla for instance. It's your 800-pound gorilla driving accessories salesat dealerships. Nothing ever comes anywhere close to it as it pushes accessories todelighted customers which is why dealerships are selling more accessories than ever withstratospheric profit margins.
PartsGorilla is perfect at making accessories selection seamless and delightful butconnected communities demand much more from car dealers. Prospective car buyers now begintheir journey months before they ever make contact with a dealership and they expectdealerships to be active partners all the way.
To succeed dealers now need to know the priorities and concerns of their prospects asthey start researching their vehicle and be visible to them at every stage. Dealers needto streamline their operations and make the entire dealership client-facing. Dealers alsoneed to plug every source of wasteful expenditure and exploit every revenue opportunity.
That's why we developed FrogData the world's first data analytics platform forautomotive retail.
FrogData. Bringing Data Driven Decision-making to Dealerships
FrogData helps dealers in taking decisions that drive dealerships in an insightful waybacked by actionable information constantly garnered from deep data analytics.
In other words we connect the dots that open newsales opportunities bring morerevenue drive up profits and create more customer connections fordealers.
Deploying FrogData results in more deals higher margins improved employee andequipment utilization high inventory turnover higher lifetime customer loyalty and muchmore.
FrogData is built on a state-of-the-art open architecture platform that can easilyaccommodate virtually any type of data. With the explosion of new technologies and thedwindling of old database platforms it is
steadily becoming difficult to get such varied systems to "talk" to eachother. FrogData solves this particular problem with its ability to accept any form of datafrom any type of system new or old and collating it in a centralized easily usabledatabase.
What's more FrogData offers the flexibility to commence data analytics deployment at ascale and scope which is comfortable to dealers. They can start with just a fewdepartments or the entire dealership in one shot.
Partnerships with DealerTrak CDK and Hunter Engineering make. FrogData even easier toadapt for dealers.
izmoFx: Virtual Reality (VR) Experiences and CGI
If big data analytics brings business clarity across multiple layers and complexdimensions to dealerships Virtual Reality (VR) is the great industry disruptor that cantake the dealership experience to where the customers are.
By creating an immersive hands-on experience for car shoppers that simulates realityizmoVR has the potential to convert prospective customers into buyers than any other toolavailable. izmoVR utilizes advanced CGI technology within izmocars1 proprietaryVR Solution Platform to create a spectacular user experience at affordable costs. TheizmoVR showroom solution which can include dealer branding is delivered using thelightweight portable and wireless Samsung Gear VR headset.
Delivering Immersive Experiences Anywhere
With izmoVR dealers can deploy VR in the showroom in the service wait area oreven ontheir website. Each interaction will invoke user interest and generate leads.
Users experience vehicles in a completely immersive manner and get information aboutfeatures that are not usually possible in a traditional demo. For example airbags are anunseen but important safety feature that consumers never see in the buying process. izmoVRcan literally bring this to life within the VR presentation wowing the user and helpingthem understand its impact better.
By creating a powerful immersive hands-on experience for car shoppers that simulatesreality izmoVR has the potential to move buyers down the sales funnel considerably fasterthan any other visual marketing tool available.
Computer generated imagery (CGI) can not only deliver greater cost savings but alsofaster speed- to- market and unlimited scope of reuse for automotive retail clients fromOEMs to dealers. Precisely because of this reason the amount of regular photography ofactual vehicles is steadily going down. Automotive OEMs have largely moved on to CGI andall related auto business websites are following suit.
The ability to place a vehicle in any location any backdrop any lighting and anycamera angle which were previously unavailable with traditional photo-shoots is too bigan advantage to ignore. Changes that previously required a new photo-shoot like a trimchange or a different angle are quite easy to accomplish with CGI which makes vehiclephotography obsolete.
In addition CGI opens up possibilities for animated vehicle narrations videos aswell as licensing for other markets like film games and other applications all from thesame CGI data.
CGI is a technically sophisticated three-step process that starts with vehiclescanning 3D Build and Render. The izmo CGI solution can also directly processmanufacturer CAD data to create lifelike imagery of cars not yet available in the market.
izmo: a long tradition of innovation
PartsGorilla FrogData and izmoFx are the latest in a long series of trend-settingmarket innovations from izmo starting from the izmoflix ver.1 which delivered theinteractive automotive marketing experience to U S consumers as early as 2003. To thisday izmo remains invested in its global market leadership in the automotive retail space.
Meanwhile izmo dealer websites continue to be the first choice of the world's leadingautomotive retailers and portals from North America to Europe to Asia. SalesVelocity theizmo CRM suite is also gaining traction with auto dealerships.
After an initial projection of 16.7 million vehicles major market watchers haveincreased their sales estimate for 2018 to 16.9 million vehicles down from the 17.25million vehicles sold last year. The market is continuing with a downward trend after therecord-breaking sales of 17.6 million vehicles in 2016.
A significant market development is a shift in consumer tastes to SUVs crossovers andpickup trucks which command highertransaction prices and more profitsforthe automotiveindustry.
Even as we continue to acquire and engage top-tier clients like Microsoft MitsubishiMotors Toyota Ford Enterprise Chevrolet Enterprise Morpace Jato Dynamics and Avis inthe photography and visual marketing space we keep expanding into new possibilitiesnewterritories and newverticals.
With the combined market push of new products like FrogData Online and SocialMarketing products like FranchiseNow and izmoLeads izmoAuto websites and new avatars ofexisting market-leading products like izmoflix we expect to see steady progress in the USmarket.
Auto sales in Mexico dropped 8.4% with 680699 vehicles sold in the first half of theyear. This is in line with the projections of the Mexican Association of Auto Dealers(AMDA) which predicts total sales of 1.45 million vehicles in 2018.
Your company continues to be the largest auto dealer website service provider inMexico serving Ford Nissan Honda Infinity Toyota Acura Porsche Audi HyundaiRenault Mazda Suzuki and Kia dealers with OEM relations with global brands like Fordand Nissan. The company is also a strong presence in the 2- wheelersegment with KTM andBMW websites.
The izmo client portfolio in Mexico features all prominent auto groups in the country.
In the European Union (EU) and EFTA countries new car sales contracted by 5% duringthe first quarter of 2018. Germany the largest car market in Europe expanded by 4%. Carsales in France were higher while the Spanish new car market expanded by more than 10%.
Car sales were sharply down by 12% in the UK while the Italian car market contractedslightly.
izmo continues to be the leading auto dealer website and marketing solutions providerto the French automotive Industry serving prominent groups like PGA HESS VolkswagenRetail Metin Lamirault Goupe Schumacher Riester and others.
The dealer portfolio of your company in France includes all prominent auto brands - theFrench Brands Peugeot Citroen and Renault as well as Audi Alfa Romeo Abarth BMWChrysler Chevrolet Dacia Dodge Fiat Fiat Professional Hyundai Jeep Jaguar LandRover Kia Lancia Lexus Mini Mercedes Benz Nissan Opel Porsche Saab Seat SkodaSubaru Suzuki Toyota Volkswagen and Volvo as well as automotive portals.
Your company has a significant presence in Spain serving Audi Honda Seat Skoda VWand Nissan dealers.
The Portuguese operations of izmo include the popular auto service portal Ancra withhundreds of dealers signing up forthe service.
Your company is also a prominent presence in the body shop segment with generic bodyshop websites as well as websites for Citroen Ford Seat Iveco Morgan and Renaultbrands.
In Italy izmo serves Citroen Jeep Kia Peugeot Skoda and Volvo dealers withstate-of-the-art auto dealer websites and services.
Dealers of Audi Honda Nissan Seat Skoda and VW vehicles continue to be izmocustomers in Belgium where yourcompany serves prominent groups like PGA.
2018 is promising to be a good yearfor India in the automotive retail segment. Julysales are pegged at 2.90 lakh vehicles a little less than the 2.99 lakh units sold lastyear.
Maruti Suzuki continues to lead the market with 1.5 lakh vehicles sold. Tata Motorsand Honda posted double-digit growth driven by new launches. Hyundai gained 1.1% whileMahindra & Mahindra Toyota Kirloskar and Ford India sales declined. In thetwo-wheelersegment TVS Motors BajajAuto and Suzuki Motorcycle registered double-digitgrowth supported by strong rural buying and new launches. However Royal Enfieldregistered a growth drop of 6%.
With 109 online showrooms izmocars India continues to be the preferred car dealerwebsite provider in India. The izmocars website portfolio includes Maruti Suzuki MarutiSuzuki NEXA Chevrolet Fiat Jeep Honda Hyundai Isuzu Mahindra & MahindraSsangyong Nissan & Datsun Renault Skoda Tata Motors and Volkswagen in the autodealer segment Yamaha Hero Bajaj TVS KTM and Suzuki in the bike segment and BharatBenz in the heavy vehicles segment.
The World's Largest Provider of automotive imagery video VR and visual marketingsolutions
Presently izmocars is the world's leading provider of automotive imagery video VRCGI and visual marketing solutions. With state-of-the-art automotive studios located inclose proximity to global automotive nerve centers in Long Beach USA and BrusselsEurope and sophisticated image processing facilities in Bangalore izmo consolidated itsposition as the world's largest producer of automotive images and animation morethan adecade back.
The full-spectrum izmo visual product portfolio includes a Virtual Reality (VR) and CGIplatform automotive imagery animations videos and visual marketing solutions.
Presently izmomedia is serving:
The world's top corporations
Companies in automotive related businesses like leasing etc.
Ad Agencies and creative studios
Our client list includes Microsoft Ford Alphabet EUROPCAR JATO JDPA Hertz AvisLease Plan Orange WheelsZenith Mobile Auction123 Auto Point MEINAUTO AutoTraderand ARVAL.
The izmomedia division operates in 16 countries with clients in the USA MexicoColombia Belgium Brazil China France Germany Italy Netherlands Portugal RussiaSpain Switzerland Turkey and India.
Top Automotive web solutions provider in France Mexico and India
Your company is the #1 auto dealer website provider in France Mexico and India. Theizmoweb "Responsive" web platform which hosts all izmo websites is the mostadvanced automotive web platform in the world. Your company also offers a world-classautomotive CRM with marketing automation accessories selling solutions and dataanalytics for auto dealers.
With significant investments in technology infrastructure and talent we hope to makegreat progress in the automotive business segment this fiscal.
The India advantage of high-end human resources right from IP to support services at arelatively modest cost is a strategic advantage that greatly supports the organic growthof your company.
Unlike other players in the market the India component is not merely anothercost-cutting measure for izmo - it is integral to the performance culture of the companybuilt into its corporate DNA.
Enterprise Products: Strategizing New Breakthroughs
With the near-total domination of the market segment izmo's enterprise productdivision achieved 50% business growth over the last year.
In the last fiscal the division added Calcutta Electric Supply Corporation (CESC) CapGemini Corporation and SQS India BFSI Ltd. to its existing customer base consisting ofcorporate majors like Mercedes Benz IBM Kotak Mahindra Bank HCL Technologies RambusChip Technologies Textron India Pvt. Ltd. Schneider Electric System Infosys TechMahindra Bharti Airtel Synopsys India Vedanta 3DPLM Maruti Suzuki India Ltd. andmore.
With the Industry focus shifting to hacker-proof security the Enterprise productsdivision of your company is poised to grow exponentially.
Unlike other players in the market the India component is not merely anothercost-cutting measure for izmo - it is integral to the very corporate structure of thecompany built into its corporate DNA.
Instant Business Websites in just 3 steps
A couple of years back izmo entered the generic website space with izmoweb - "MyWebsite My Identity". The results are encouraging.
From lawyers and doctors to hospital chains and yoga studios izmoweb is findingtraction in markets as diverse as the U.S. and India. Your company is now reinventing thisbusiness around the franchise website model which brings in dozens of websites with oneorder.
New Opportunities: Defence Manufacturing
Make in India Make for the World
Defence & Aerospace is one of the 10 Champion Sectors identified under the Make inIndia version 2.0 of the Government of India due to their "potential to becomeglobal champions drive double-digit growth in manufacturing and generate significantemployment opportunities." Capitalizing on this "Make in India" initiativeizmo is entering the defence manufacturing sectorthrough its subsidiary Hughes PrecisionPvt. Ltd. with two major projects-manufacturing of ammunition and assault rifles.
The global demand for reliable high-quality arms ammunition and spares continues tobe as high as ever with The Stockholm International Peace Research Institute (SIPRI) dataon the international arms trade showing a continuing growth trend in major conventionalweapons with the volume of transfers from 20132017 being 10% higherthan it was over2008-2012.
The five largest importers in 2013-17 were India Saudi Arabia Egypt the UAE andChina receiving 35% of all arms imports. Countries like Vietnam with close ties withIndia increased their arms imports to become the world's 11th largest armsimporter.
The Global Arms Import-Export Gap: While India is the Largest Importer of Arms thecountry is yet to claim a significant market share in arms exports
India is the largest importer of major arms in 2013-17 and accounted for 12 per cent ofthe global arms imports. India's arms imports increased 24% between 2008-12 and 2013-17with Russia accounting for62%. In the same period arms imports from the USA increased by557% making it India's second largest arms supplier.
India also owns the world's third largest armed forces and recently overtook the UK asthe fifth-largest defence spender in the world in 2017 at $52.5 billion according to the"Military Balance 2018" report by the International Institute for StrategicStudies (IISS). Presently about 60% of defence related requirements of the Indian ArmedForces are met by imports which offers a huge opportunity for eventual importsubstitution.
The "Make in India Make for the World" initiative by izmo is aimed atcapitalizing on India's huge arms trade deficit by manufacturing several categories ofhigh-quality arms spares and ammunition which adhere to NATO certification with DODICnumbers.
As of now izmo has entered into extensive partnerships with Global defence OEMs toset up the first of the proposed defence manufacturing plants namely ammunitionmanufacturing and assault rifles manufacturing.
Manufacturing Friendly Government Policies
In addition to the "Make in India' initiatives the 2011 Defence Production Policyof the Government of India encourages indigenous manufacturing of defence equipment anddefence Procurement Procedure (DPP) has been amended in 2016 to encourage indigenousdesign development and manufacture of arms as well as the transfer of technology.
The Government of India licensing norms has also been liberalized to encourage privateparticipation in defence manufacturing. The initial validity period of industrial licenseshas been increased from 3 to 15 years with a provision to grant an extension for a periodof 3 years.
Global Arms Ammunition Equipment and Spares Hub
Apart from strengthening India's armament sourcing capabilities the new izmoinitiative will help the company to develop its defence manufacturing division into aglobal hub for arms and equipment procurement.
The first project envisaged primarily for export is the production of military caliberammunition. The license is expected shortly and commercial production expected to commencein March 2019 in Goa.
Hughes Precision Manufacturing Pvt. Ltd. is collaborating with JSC Concern Kalashnikovmakers of the AK 47 rifle for a world-class assembly facility for the AK 100 Seriesrifles/ Carbines and its various modifications under the "Make In India"initiative. JSC Concern Kalashnikov will provide all the relevant technical assistance andadvice toset up the facility. A Letter of Intent has been issued on the 20th of February2018.
PartsGorilla is the next generation car visualizer and Accessories VisualizationPlatform from izmocars
CGI Vehicle Models deliver authentic real life visuals
Every trim and accessory is available for demo
Customers can accessorize and visualize their cars
Designed for pricing and availability updates by brand
Works on any device - Computer Tablet Cell Phone and Touch Screen Monitor
Sells more accessories with very little effort!
Frogdata analyses data from all available applications - web analytics CRM DMS orinventory tools and offers advanced reporting customer insights predictive decisionanalytics and much more helping companies to improve profitability salespersonefficiency and cost of operations.
izmofx takes automotive marketing beyond the realm of the ordinary with CGI graphicsand Virtual Reality. With our virtual automotive technology & CGI expertise the onlylimit to visual marketing is your own imagination. If you can dream it we will deliverit.
Fully developed mobile-ready responsive websites for any business.
Ready to go no development required - Just add your name logo and address
Comes with pre-built content
The most advanced web platform in the world
Latest responsive website technology - your website will work well on anydevice from big screen PCs to laptops tablets and mobiles.
In-built booking system for appointments Create as many new pages as you like -Completely flexible
Designed forSearch Engines. See your profile growonline
No hassle deployment. We buyyourdomain setup your website and do everything
izmoRainmaker is a comprehensive interactive Internet marketing solution developedexclusively for the automotive retail industry by online marketing experts.
Social Media Marketing - Facebook Twitter Linkedin etc.
Interactive Marketing Campaigns
OrganicSearch Engine Optimization
Online Brand Marketing
Research & Data Analysis
SalesVelocity is an enterprise class Customer Relationship Management solutionindustry. SalesVelocity is delivered as a service is cloud-based and contains thefollowing core functionalities:
Sales Force Automation
Finance & Insurance
Business Development Center (BDC)
SalesVelocity is certified by Ford Jaguar Lincoln Volvo Land Rover Mercury GMbrands including Buick GMC Pontiac Cadillac Hummer Saturn Honda Acura NissanInfiniti Mercedes Benz Chrysler Subaru Saab and Mazda.
The izmotion Video Platform offers auto retailers powerful video sales pitchesdelivered in just 100 seconds video email and ad banners on video.
The video demos include:
Engine & performance
Seating and colors
All izmotion videos include a full-length sales pitch voiceover with a selectionofsales personalities.
izmomedia is the world leader in Digital Imagery and Interactive Media Solutions forthe Automotive vertical since 2002. izmomedia produces High Quality Photographic imagesvideo and Digital Animations for the North American and EU markets covering all majormakes and models.
Large Automotive Photography Studios strategically located in Long Beach USA andBrussels Belgium combined with state-of-the-art post-production facilities in Bangaloreenable izmomedia to quickly produce large volumes of work covering about 500 automotivemodels.
Presently the izmomedia client list includes leading portals like Yahoo! AOLAutoUSA and Jato Dynamics as well as OEMs like GM Ford and Mitsubishi Motors.
izmostock is the world's leading automotive stock photography provider with dedicatedvehicle photography studios in the USAand Europe.
izmostock produces high volume automotive stock photography for over 800 vehicles peryear. In addition to our consistent quality standard picture sets of car stock photos wealso produce the video with voiceover CGI enhanced imagery high resolution (HDRI)interactive interior panoramas 360 exterior animations and several other high resstop-frame animations of every car in the U.S.A. and Europe.
The automotive images library at izmostock is the largest and most comprehensive carstock photography collection of its kind with hundreds of thousands of images availablefor download since 2002.
EXTRACT OF ANNUAL RETURN
Details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as Annexure A.
NUMBER OF MEETINGS OF THE BOARD
During the year under review 4 (Four) meetings of the Board of Directors were helddetails of which are set out in the Corporate Governance Report which forms part of thisReport.
Detailed composition of the Board committees namely Audit Committee Nomination andRemuneration Committee and Stakeholders Relationship Committee number of meetings heldduring the year under review and other related details are set out in the CorporateGovernance Report which forms part of this Report.
There have been no instances where the Board has not accepted any recommendation of theAudit Committee.
DIRECTORS' RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134 OF THE COMPANIES ACT2013
The Directors confirm that -
a) in the preparation of the annual accounts for the financial year ended 31st March2018 the applicable accounting standards had been followed and there were no materialdepartures;
b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year as at31st March 2018 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 adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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;
e) the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively;
f) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
STATEMENT ON DECLARATION OF INDEPENDENT DIRECTORS
The Board of Directors of the Company comprises of optimum number of IndependentDirectors. Based on the confirmation / disclosures received from the Directors thefollowing Non-Executive Directors are Independent in terms of the Section 149(6) of theCompanies Act 2013 and Regulation 16(1)(b) of the SEBI (LODR) Regulations 2015 as on31st March 2018:
1. Mr. Perur Phaneendra
2. Mr. Ramanujam Krishnamurthy
3. Mr. Vijay Gupta
NOMINATION & REMUNERATION POLICY
The Company's policy on Directors' appointment and remuneration containing requisiteinformation for determining qualifications positive attributes independence of aDirector and other matters provided under Section 178 (3) is enclosed with this Report asAnnexure B.
EXPLANATION AND COMMENTS BY THE BOARD ON EVERY QUALIFICATION/RESERVATION/ADVERSEREMARK/ DISCLAIMER BY THE AUDITORS IN THEIR REPORTS
The statutory Auditor's Report does not contain any qualification disclaimerreservation or adverse remark.
Further the Secretarial Audit Report does not contain any qualification disclaimerreservation or adverse remark.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The particulars of the loan granted are mentioned in the Note No.39 of Notes to theStandalone financial statement pursuant to Section 186 (4) read with Companies (Meetingsof Board and its Powers) Rules 2014. The details of guarantee given and security providedby the Company are stated in Note. No. 46 of Notes to the Standalone financial statement.Full particulars of investments made are stated in Note No.8 & 12 to the standalonefinancial statement.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business.
All Related Party Transactions are placed before the Audit Committee. Requisiteapproval of the Audit Committee is obtained on periodic basis for the transactions whichare repetitive in nature or otherwise. The actual transactions entered into pursuant tothe approval so granted are placed at quarterly meetings of the Audit Committee.
Your directors draw attention of the members to Note. No.39 of notes to the financialstatement which sets out related party disclosures.
The Company has formulated a Policy on related party transactions. This policy approvedby the Board is uploaded on the Company's website on the below link:
The Company has entered in material transaction with one of its wholly owned subsidiaryCompany during the year under review which requires reporting in Form AOC 2 in terms ofCompanies Act 2013 read with Companies (Accounts) Rules 2014. However the requisitedisclosures under the IND AS form part of the Notes to Accounts in this report.(Annexure-C)
TRANSFER TO RESERVE
Your Directors does not propose to carry any amount to reserves during the financialyear ended 31st March 2018.
In order to augment the ongoing expansion programmes the Directors have decided toplough back the profit into the system and regret inability to recommend dividend.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY
There are no Material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year on 31st March 2018 towhich the financial statements relate and the date of this report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
A. CONSERVATION OF ENERGY
The operations of the Company are not energy intensive. Adequate measures have beentaken to conserve and optimize the use of energy through improved operations methods.
The provisions relating to disclosure of details regarding energy consumption bothtotal and per unit of production are not applicable as the Company is engaged in theservices sector and provides IT and IT related services.
B. TECHNOLOGY ABSORPTION AND RESEARCH & DEVELOPMENT (R&D)
The Company uses the latest technology available in modern technology applications.Indigenous technology available is continuously being upgraded to improve overallperformance. The Company has a dedicated team of technically competent personnel whorelentlessly work on technology up gradation and development related fields.
Research and Development continues to be given very high priority in SoftwareTechnology in the area of telecommunications and hardware technology in the area ofembedded systems.
C. FOREIGN EXCHANGE EARNINGS & OUTGO
During the year the details of Foreign Exchange transactions were:
Earnings - Rs 2109.17 Lakhs (PY Rs 2015.33 Lakhs)
Outgo - Rs 96.37 Lakhs (PY Rs 135.74 Lakhs)
A detailed report on Risk Management is included in Management Discussion and Analysiswhich forms part of this Report. The report clearly states development and implementationof a risk management policy for the Company including identification therein of elementsof risks along with risk mitigation plan.
CORPORATE SOCIAL RESPONSIBILITY
It is not mandatory for your company to constitute a CSR Committee as it does not fallunder the criteria mentioned in Section 135 of Companies Act 2013.
FORMAL ANNUAL EVALUATION OF BOARD AND ITS COMMITTEES
Pursuant to the Companies Act 2013 and Regulation 17 of the SEBI (Listing Obligation& Disclosure Requirements) Regulations 2015 evaluation of performance is carried outby the Company. Evaluating Board's effectiveness by assessing performance of the Board asa whole performance of individual director and committees of the Board namely AuditCommittee Nomination and Remuneration Committee Stakeholders Relationship Committee
CHANGE IN THE NATURE OF BUSINESS
During the year under review there is no change in the nature of the business.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the financial year ended 31st March 2018 under review it has been observedthat there is no any changes have occurred in the Board of Directors as well as KeyManagerial Personnel.
The Company has not accepted Deposits under Chapter V of the Companies Act 2013.
PECUNIARY RELATIONSHIP OR TRANSACTIONS OF THE NON-EXECUTIVE DIRECTORS AND DISCLOSURESON THE REMUNERATION OF THE DIRECTORS
All pecuniary relationship or transactions of the non-executive Directors vis-a-vis theCompany containing requisite information for such payments and disclosures on theremuneration of the Directors along with their shareholding are disclosed in CorporateGovernance Report and Form MGT 9 which forms part of this Report.
The Company complies with all the applicable Secretarial Standards.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS
There are no significant and material orders passed by the Regulators or Courts orTribunals impacting the going concern status and Company's operations in future.
INTERNAL FINANCIAL CONTROL
Details in respect of adequacy of internal financial controls with reference to theFinancial Statements are stated in Management Discussion and Analysis which forms part ofthis Report.
Your Company along with subsidiaries provides software solutions and services globally.A Report on the performance and financial position of each of the subsidiaries pursuant toRule 8 (1) and Form AOC 1 read with Rule 5 of Companies (Accounts) Rules 2014 is annexedas Annexure D and forms a part of this Report. The Company has framed policy fordetermining material subsidiaries as per requirement of explanation to Regulation 16 (1)(c) in SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 hasuploaded the same on company's website:http://www.izmoltd.com/policies-and-code-of-conduct-en-in.htm
Stand-alone Financial Statements and Consolidated Financial Statements of your Companyalong with its subsidiaries prepared in accordance with the relevant Accounting Standardsissued by The Institute of Chartered Accountants of India forms a part of this AnnualReport.
PARTICULARS OF EMPLOYEES PURSUANT TO SECTION 197 READ WITH RULE 5 OF THE COMPANIES(APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014
Particulars of employees pursuant to Section 197 read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are annexed with thisreport as Annexure E.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has established a vigil mechanism to report genuine concerns. The Policyprovides for Directors and employees to report concerns about unethical behaviour actualor suspected fraud or violation of Company's Code of Governance and Ethics. The policy isuploaded on the website of the Company:http://www.izmoltd.com/policies-and-code-of-conduct-en-in.htm
FAMILIARIZATION PROGRAMMES FOR INDEPENDENT DIRECTORS
The Company has Familiarization programme and the details have been uploaded on thewebsite of the Company: http://www .izmoltd.com/policies-and-code-of-conduct-en-in.htm
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed Management Discussion and Analysis Report is given as a separate section inthis Annual Report and is annexed to this Report as Annexure F.
AUDITORS Statutory Auditor:
Pursuant to the provisions of the Companies Act 2013 read with the Companies (Auditand Auditors) Rules 2014 Mr. Guru Prakash V Chartered Accountant (Membership Number228938) has been appointed as the Statutory Auditors of the Company to conduct the auditof the financial statement of the Company from FY 2017-18 till FY 2021-22.
The aforesaid appointment of the Statutory Auditor was required to be ratified at everyAnnual General Meeting. However pursuant to the amendment in the proviso to Section 139which has been made effective on May 07 2018 the requirement of ratification ofappointment of Statutory Auditors at every Annual General Meeting has been omitted. Inview of such omission of proviso agenda item relating to ratification of StatutoryAuditor is not included in the Notice of Annual General Meeting.
Pursuant to the same Mr. Guru Prakash V Chartered Accountant (Membership Number228938) continues to hold the office of Statutory Auditors for the FY 2018-19. TheStatutory Auditors' Report for the FY 2017-18 does not contain any qualificationsreservations adverse remarks or disclaimer and no frauds were reported by the Auditors tothe Company under sub-section (12) of Section 143 of the Act.
As per the Section 204 of the Companies Act 2013 and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board had appointed M/s V.Sreedharan & Associates Company Secretaries Bengaluru to conduct the SecretarialAudit of the company for F.Y. 2017-18.The report of the Secretarial Audit in Form MR-3 isannexed herewith as Annexure-G.
The Board had appointed Mr. M. Venkatesha Chartered Accountant having Membership No.:232131 as Internal Auditors of the Company pursuant to Section 138 of the Companies Act2013 for the F.Y. 2017-18 and He has completed the internal audit as per scope given bythe Audit Committee for the financial year 2017-18.
The Company continues to benchmark itself with the best-of-the-class practices as faras corporate governance standards are concerned. The Company has complied with therequirements provided in Securities Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015. The compliance report on the variousrequirements under the said clause along with the Auditor's certification thereof isprovided in the corporate governance section of this report at Annexure H.
EMPLOYEES STOCK OPTION PLAN
Currently the Company has two Employees Stock Option Schemes namely 'Employee StockOption Plan 2013' and 'Employee Stock Option Plan 2016'.
1. Employee Stock Option Plan 2016
With regards to Employee Stock Option Plan 2016 we have obtained only the approvalfrom the shareholders of the company by passing the special resolution on the AGM held on10th September 2016 and further course of action and approval from the various regulatorywill be obtained with due course of time with the direction/approval from the Board ofdirector/committee. Hence further disclosure with regards Section 62 read with Rule 12 ofthe Companies (Share Capital and Debenture) Rules 2014 & other disclosure with regardto clause 14 of SEBI (Share Based Employee Benefits) Regulation 2014 does not arise as onthis report date.
2. Employee Stock Option Plan 2013
Disclosures for the financial year ended 31st March 2018 regarding Employee StockOption Plan 2013 in terms of Companies (Share Capital and Debenture) Rules 2014 are asbelow:
Employee wise details of options granted to :
Disclosure on ESOPs details of options granted shares allotted on exercise etc. asrequired under Employee Benefits Regulations read with SEBI circular no.CIR/CFD/POLICYCELL/2/2015 dated June 16 2015 are available on the Company's website:
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place an Anti-Sexual Harassment Policy inter-alia in line with therequirements of the Sexual Harassment of Women at the Workplace (Prevention Prohibitionand Redressal) Act 2013.
Internal Complaints Committee has been set up to redress complaints. The following isthe summary of complaints received and disposed off during the year under review:
Number of complaints received and disposed off - Nil
The company has issued 600000 equity shares to EARC TRUST-SC38 on preferential basisduring the F.Y. 2017-18. Detail of such issue is part of corporate governance report.
The Board of Directors of the Company at its meeting held on 30th May 2018 approvedfor the issuance of 1000000 Convertible Warrants to the Promoters on preferential basis& further the Board has also approved for obtaining enabling approvals of shareholdersfor issue of shares to Qualified institutional Buyer upto Rs. 40 Crores subject toapproval of the Members and such other authorities as may be necessary.
Further board has given its approval for modifications made in issue of convertibleshare warrants in the board meeting held on 13th August 2018.
The Board places on record its appreciation of the contribution of Associates at alllevels customers Business and technology partners vendors investors GovernmentAuthorities and all other stakeholders towards the performance of the Company during theyear under review.
Date: 13th August 2018