Your Directors are pleased to present 24th Annual Report together with the AuditedFinancial Statements for the Financial Year ended March 31 2019.
Consolidated financial statements of accounts for the year ended 31st March 2019.
|Particulars ||2018-19 ||2017-18 |
|Revenue from Operations ||9216.52 ||6298.66 |
|Other Income ||395.04 ||507.48 |
|Total Revenue ||9611.56 ||6806.14 |
|Direct cost of operations ||72.26 ||71.62 |
|(Increase)/Decrease in Stocks/WIP ||(4.57) ||0.55 |
|Employee Benefit Expenses ||3815.94 ||2961.30 |
|Financial Expenses ||137.99 ||118.67 |
|Depreciation ||1516.95 ||1225.61 |
|Other Expenses ||3333.00 ||1533.37 |
|Total Expenses ||8871.57 ||5911.12 |
|Profit/ (Loss) before Tax & Exceptional Item ||739.99 ||895.02 |
|Exceptional or Extraordinary Items ||- ||191.22 |
|Profit/ (Loss) before Tax ||739.99 ||703.79 |
|Provision for Taxation ||(36.64) ||(34.54) |
|MAT Tax Credit ||34.91 ||- |
|Deferred Tax ||(61.86) ||(64.11) |
|Profit / (Loss) after Tax ||676.40 ||605.15 |
|Other Comprehensive Income ||15.58 ||23.07 |
|Total Comprehensive Income for the year ||691.98 ||628.23 |
Performance on a Consolidated Basis
The Company's performance on a consolidated basis has shown a significant improvementover the previous year. The revenues have increased by 41% whereas profits have increasedby approximately 10%. The Company has achieved higher sales as a result of expansion inthe European market. The company's revenues from the European market have increasedsignificantly in the last 3 years and now constitute nearly 40% of the total revenues.
The Company hopes to achieve higher growth in the current year due to several newproducts which have been introduced for the Automotive Market. The Company is now a marketleader in France. Out of the Top 10 dealer groups in France 6 are customers of ourproducts.
The Data Analytics division is also seeing a wider acceptance of its solution in the USmarket. Since this was a new concept the product went through a lot of iterations beforethe customers expressed their satisfaction with the product suite. This division'srevenues are increasing steadily and is expected to contribute significantly to thecompany's revenues in the US market in 2019-2020.
The Company has added several new clients for its images and CGI production servicesincluding the largest entertainment company in the world !!! This is a major breakthroughfor the company and substantial business is expected from this client in the future.
Standalone financial statements of accounts for the year ended 31st March 2019
|Particulars ||2018-19 ||2017-18 |
|Revenue from Operations ||2582.21 ||2260.00 |
|Other Income ||229.12 ||463.38 |
|Total Revenue ||2811.33 ||2723.38 |
|Direct cost of operations ||72.26 ||71.62 |
|(Increase)/Decrease in Stocks/WIP ||(4.57) ||0.55 |
|Employee Benefit Expenses ||1718.96 ||1665.94 |
|Financial Expenses ||136.08 ||118.67 |
|Depreciation ||262.54 ||121.16 |
|Other Expenses ||546.19 ||597.28 |
|Total Expenses ||2731.46 ||2575.22 |
|Profit/ (Loss) before Tax & Exceptional Item ||79.87 ||148.15 |
|Exceptional or Extraordinary Items ||- ||- |
|Profit/ (Loss) before Tax ||79.87 ||148.15 |
|Provision for Taxation ||(36.64) ||(34.53) |
|MAT Tax Credit ||34.91 ||- |
|Deferred Tax ||(61.86) ||(64.10) |
|Profit / (Loss) after Tax ||16.27 ||49.50 |
|Total Other Comprehensive Income ||15.58 ||23.08 |
|Total Comprehensive Income for the period ||31.85 ||72.58 |
The Company's sales on a standalone basis has shown nearly 14% increase over theprevious year. The other income has shown a sharp drop since there were no one-timecapital gains in the current year as compared to the previous year.
Analysis of Expenses
Employee benefit expenses have shown a slight increase over the previous year. This isprimarily due to increase in the employee count in India due to the expansion of the CGIand VR development divisions.
Depreciation has increased by more than 100% as the company has decided to acceleratethe write o3 of earlier capitalized costs.
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 India and Europe.
In order to augment the ongoing expansion programmes the Directors have decided toplough back the profits into the system and regret inability to recommend dividend.
Vehicle marketing is unpredictable. Customer preferences change overnight and mostmarketing vendors are struggling to fulfil promises.
At izmo there has never been a better time to be in business.
Interestingly the last financial year has been one of the best years for izmo interms of business customers and revenue.
Management Discussion and Analysis Report
Performance on the face of tough competition is what separates high-performingcompanies with deep domain expertise from the rest. Take izmostock for instance. The izmoautomotive stock photography portal is now amongst the top 3 Automotive Stock Imagewebsites in the world and is growing at a rate of 50% annually.
Rental Car and Leasing Industry Solutions
The Rental Car Industry Solution launched by your company was also a spectacularsuccess and now all of the major rental car companies worldwide are izmo clients.
The world's largest online travel portals use izmo images and 75% of all global rentalcar listings are now powered by izmocars.
During the financial year izmo also launched a Leasing Industry Solution. This is animportant market sector and many major leasing companies are now clients serving allmajor automotive markets worldwide.
CGI based production has further enabled izmo to expand global model coverage inmarkets outside of the regions served by izmo's studios. We now cover more than 75% of theautomotive models in all major markets worldwide except China.
World's First CG 3D WebGL automotive visualizer platform
Your company continues to expand and grow its CG business under the izmofx brandingwith the launch of a major CG 3D WebGL visualizer platform for automotive clients.
CG Assets for Leading Global Video Game Developers
Additionally we've begun expanding into providing CG assets for video game platformswith one of the world's top game developers as our first client. Assets are being producedfor an already shipping video game on a world-leading gaming platform. We are alsodeveloping izmofx into a leading CG art resource for video game companies.
Finally we've begun developing our new consumer products CG line and are in talkswith leading Agencies to supply CG assets. CG is flexible and provides unlimitedpossibilities and izmofx is leading the way.
The visual media divisions of your company operate in 16 countries with studios inLong Beach USA and Brussels Belgium state-of-the-art image processing facilities inBangalore India and clients in the USA Mexico Colombia Belgium Brazil ChinaFrance Germany Italy Netherlands Portugal Russia Spain Switzerland Turkey andIndia.
Presently izmo is serving:
The world's top corporations Automotive OEMs Prominent Portals
Companies in automotive related businesses like leasing rental etc.
Video Game Developers
Ad Agencies and creative studios Retail clients
If the first part of izmo s business automotive imagery video CGI vehicle andAccessories Visualizer and Virtual Reality - offers automotive OEMs retailers andservice organizations powerful visual marketing solutions the second part produceswebsites class-leading automotive marketing and data analytics to drive data-drivendecision-making.
Even a decade earlier customers used to visit car showrooms before deciding whichvehicle to buy. Not anymore. Now they visit showrooms after deciding which car to buy andat what price. Left to themselves dealers have no way of influencing these decisions atthe showroom level.
To reach out to customers when they are yet to decide dealers need auto dealerwebsites powerful online and social marketing and paid promotions plus data analyticsto grasp business trends and customer priorities and pin-point opportunity as it emerges.
Your company is the only one that provides all of these out of the box.
Websites and Portals
Top Automotive web solutions provider in France and Mexico.
Your company is the #1 auto dealer website provider in France and Mexico. In additionto automotive OEMs your company has added two prominent Motorbike OEMs to the retailcustomer list.
Apart from delivering retail websites to dealers belonging to 30 prominent automotiveOEMs izmo is now directly working with an automotive OEM to produce an automotive portalfor new cars.
In addition izmo is also rolling out a portal for a prominent tractor manufacturertargeting customers in France Luxembourg and Switzerland.
Your company is presently serving all seven prominent retail groups in the country.
In Mexico izmo added two more automotive OEMs to the existing list of 13 OEMs forretail websites. Your company also added 2 more Motorbike OEMs to the existing list of twoOEMs.
Your company opened its account in Columbia with websites for dealers belonging to 5major OEMs. We expect to see significant market traction in Columbia in the coming years.
The izmoweb Cloud Platform
The izmoweb "Responsive" web platform which hosts all izmo websites is themost advanced automotive web platform globally with unmatched enterprise levelfunctionality which helps dealers scale up and down e3ortlessly.
Top Tier Digital Marketing and Advertising Partner
Your company is a top tier full-spectrum digital marketing and advertising partner inthe automotive retail space. From search marketing and social conversations to paidpromotions izmoRainmaker connects all the dots in the digital marketing roadmap todeliver a comprehensive solution that brings everyone onboard and delivers measurableresults.
Every izmoRainmaker customer is serviced by a dedicated team comprising of a ProjectManager backed by content specialists digital marketing experts social influencersgraphic designers and programmers.
Our advanced web analytics and customer insights ensure that customers are always ontop of the game.
FranchiseNow and izmoLeads
Your company is also o3ering lead-generation services to Franchise companies with over60 companies in the U.S. and India being serviced in the financial year.
Frog Data. Bringing Data Centric Decision-making to Dealerships
With 57 dealers belonging to 23 OEM brands using FrogData in the U.S. at the initialstage the data analytics platform of your company is poised to enter the market in a bigway.
The decision-making part of car buying now happens even before customers step into carshowrooms. FrogData helps dealers take informed decisions backed by actionableinformation constantly garnered from deep data analytics.
FrogData is built on a state-of-the-art open architecture platform that can easilyaccommodate virtually any type of data from any system new or old and collate it in acentralized easily usable database.
FrogData also o3ers dealers the flexibility to commence data analytics deployment at ascale and scope comfortable to them. They can start with just a few departments or theentire dealership in one shot.
Partnerships with major players in the automotive vertical makes FrogData even easierto adapt.
Automotive Parts Management
DistrigoBoost/ Parts Velocity/ Parts Gorilla
The parts management solution of your company is fast gaining significant traction inEurope with hundreds of users spanning seven countries including France NetherlandsItaly Belgium Germany Spain and Portugal.
The parts management sector has significant order bookings and should see significantbreakthroughs in the coming years.
Industry structure and developments
After the slowest start to a year since 2014 U.S. auto sales is now pegged at 16.6vehicles for 2019. Light trucks are expected to account for more than 70% of all newvehicles sold.
The average new-vehicle transaction price in June was $36642 up 3.3% compared to lastyear and the average used-vehicle transaction price in April was $20979 up 3.8%.
Mexico's Institito Nacional de Estadistica y Geografia (INEGI) reported sales of105699 light vehicles in July representing a 7.9% decrease from the 114811 sales inJuly 2018 continuing the trend right from April this year. As with the US market marketvolatility is usually favorable for izmo.
Your company continues to be the favorite auto dealer website service provider inMexico serving dealers belonging to15 OEMs.
New car sales in the European Union (EU) contracted by 3.1% during the first half of2019 with registrations declining 7.8% in June. Car sales declined 1.8% in France duringthe first half of the year.
Your company continues to be the top auto dealer website and marketing solutionsprovider to the French automotive Industry serving dealers and groups belonging to 30prominent OEMs. In addition izmo is working with an automotive OEM to provide anautomotive portal for new cars as well as a prominent tractor manufacturer to deliver aportal targeting customers in France Luxembourg and Switzerland.
Your company has a significant presence in Spain serving dealers belonging to 6 OEMs.
The Portuguese operations of izmo includes the popular auto service portal Ancra withhundreds of dealers signing up for the service. Your company is also a prominent presencein the body shop segment with generic body shop websites as well as websites for 6 OEMbrands.
In Italy izmo serves dealers belonging to 6
OEM brands with state-of-the-art auto dealer websites and services.
Dealers of 6 automotive OEMs continue to be izmo customers in Belgium where yourcompany serves prominent dealer groups.
Indian auto sales fell for the 9th consecutive month with Maruti Suzuki sales down35.52% and Hyundai Motor down 10.28%.
In the two-wheeler segment Suzuki Motorcycle India was the only two-wheeler maker toreport positive growth.
With 87 online showrooms izmocars India continues to be a leading car dealer websiteprovider in India.
Enterprise Products: Strategizing New Breakthroughs
In the last fiscal the division added ZF India PVT LTD GE India PVT LTD and MerrillTechnology Services India PVT LTD to the existing client list of Mercedes Benz IBM KotakMahindra Bank HCL Technologies Rambus Chip Technologies Textron India Pvt. Ltd.Schneider Electric System Infosys Tech Mahindra Bharti Airtel Synopsys India Vedanta3DPLM Maruti Suzuki India Ltd. Calcutta Electric Supply Corporation (CESC) Cap GeminiCorporation SQS India BFSI Ltd. and more.
With the Industry focus shifting to hacker-proof zero-tolerance cyber security theEnterprise products division of your company is poised to grow exponentially.
Instant Business Websites in just 3 steps
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 in the process of reinventing this business around the franchisewebsite model which brings in dozens of websites with one order.
izmo: a long tradition of innovation
PartsGorilla FrogData CGI and VR are among a long series of trend-setting marketinnovations from izmo starting with izmoflix ver.1 that introduced the interactiveautomotive marketing experience to U S consumers as early as 2003. To this day izmoremains 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 the Americas to Europe to Asia.
The India Advantage
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 thecompany built into its corporate DNA.
Opportunities and Threats
On the one hand izmo is a blue ocean company which consistently creates value out ofbreakthrough innovation and not price-competition. On the other your company owns deepdomain expertise in all its areas of operations.
Between these two the entry barriers to any new competition is quite formidable andpotential competitors in areas like CGI VR Imagery Parts and Accessories Visualizeretc. are unlikely to be price-competitive for a long period of time.
Presently your company is exploring the newest opportunities in its operating spacenamely data analytics and CGI/ VR which is innovation driven. Previous experience tellsus that companies who enter the market arena at the commencement of the bell curve are theones likely to reap the richest dividends.
The only possible threat to the company is new ground-breaking innovation which isextremely unlikely given that your company constantly explores new opportunities.
Having reported one of the best years in its entire history in terms of businessrevenue and customers we share a very positive outlook for the years ahead.
We are now looking forward to the re-launch of some major izmo products in the U.Smarket.
Risks and Concerns
As described earlier we do not foresee any major risks in our operating space.
However ours is a global company operating in 3 continents and major currencyfluctuations may impact our bottom-line either positively or negatively.
Internal Control System
izmo has in place an adequate Internal Control System commensurate to its size andnature of operations. These have been designed to provide reasonable assurance with regardto recording and providing reliable financial and operational information complying withapplicable statutes safe guarding the assets from unauthorized use or loss extendingtransactions with proper operation and ensuring compliance of corporate policies.
Internal Control is supplemented by regular management review documented policies andprocedures as also internal audits. The Company has an Audit Committee details of whichhave been provided in the Corporate Governance report. The Audit Committee reviews AuditReports submitted by Internal Auditors. Suggestions for improvement are considered and theAudit Committee follows up implementation of corrective actions.
The Committee also meets the Company's statutory auditors to ascertain their views onthe adequacy of internal control systems in the Company and keeps the Board informed ofits major observations from time to time.
izmo is having 263 employees as on March 31 2019. Employee relations remainedsatisfactory during the period under review.
The Company would like to record its appreciation to its employees and their wholehearted support and co-operation during these di3cult periods.
Financial Performance with respect to Operational Performance
Financial performance with respect to operational performance is discussed in detail inthe beginning pages of the Board's Report of this Annual Report.
Key Financial Ratios
As per Listing Regulations the Company is required to give details of significantchanges (Change of 25% or more as compared to the immediately previous Financial Year) inkey sector - sepecific financial ratio.
|Particulars ||FY |
|Detailed Explanation for change |
(Where the change is 25% or more as
compared to the immediately previous
|1 Revenue (Rs. In Lakhs) ||2582.21 ||2260.00 ||14% ||Not applicable |
|2 Net Profit ||16.27 ||49.51 ||-67% ||The reduction in net profit is mainly due to higher depreciation charged during FY 2018-19. |
|3 EBITDA ||478.48 ||387.98 ||23% ||Not applicable |
|4 Return on Net worth ||0.10% ||0.29% ||-67% ||The reduction is mainly due to higher depreciation charged during FY 2018-19. |
|5 EPS (Basic) ||0.13 ||0.39 ||-67% ||The reduction is mainly due to higher depreciation charged during FY 2018-19. |
|6 EPS (Diluted) ||0.13 ||0.39 ||-67% ||The reduction is mainly due to higher depreciation charged during FY 2018-19. |
|7 Debtor Turnover Ratio ||1.05 ||1.04 ||1% ||Not applicable |
|8 Interest Coverage Ratio ||3.52 ||3.27 ||8% ||Not applicable |
|9 Current Ratio ||1.32 ||1.40 ||-6% ||Not applicable |
|10 Debt Equity Ratio ||0.20 ||0.20 ||-2% ||Not applicable |
|11 Operating Profit Margin (%) ||18.53% ||17.17% ||8% ||Not applicable |
|12 Net Profit Margin (%) ||0.63% ||2.19% ||-71% ||The reduction is mainly due to higher depreciation charged during FY 2018-19. |
TRANSFER TO RESERVE
Your Directors does not propose to carry any amount to reserves during the financialyear ended 31st March 2019.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to Section 124 of Companies Act 2013 and IEPF Authority (Accounting AuditTransfer and Refund) Rules 2016 the Company has transferred the 64860 number of sharesto IEPF upon completion of period of Seven years.
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 anyof the Committees of the Board.
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 thefinancial year ended 31st March 2019 the applicable accounting standards had beenfollowed and there were no material departures;
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 a3airs of the Company at the end of the financial year as at 31stMarch 2019 and of the profit and loss of the Company for that period;
c) the directors had taken proper and su3cient 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 operatinge3ectively.
f) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating e3ectively.
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 2019:
1. Mr. Perur Phaneendra
2. Mr. Ramanujam Krishnamurthy
3. Mr. Vijay Gupta
The Company has received Certificate of Independence from the Independent Directorsinter- alia pursuant to Section 149 of the Companies Act 2013 and under ListingRegulations confirming and certifying that they have complied with all the requirements ofbeing an Independent Director of the Company as on the date. The said Certificate(s) weretaken on record by the Board at its Meeting held on May 30 2019.
NOMINATION & REMUNERATION POLICY
The Company has nomination and remuneration policy (Policy) on nomination andremuneration of Directors Key Managerial Personnel ("KMP") Senior ManagementPersonnel (SMP) and other employees in terms of provisions of the Companies Act 2013 andListing Regulations as amended from time to time.
The salient features of the Policy are:
1. appointment and remuneration of Directors KMP and SMP.
2. determination of qualifications positive attributes and independence forappointment of a Director (Executive/Non-Executive/ Independent) and recommendation to theBoard matters relating to the remuneration for the Directors KMP and SMP.
3. formulating the criteria for performance evaluation of all Directors.
4. Board Diversity
Further during the year under review Company amended the Policy pursuant to theamended listing Regulations. The said Policy is available on the website of Company at
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.36 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.43 of Notes to the Standalone financial statement.Full particulars of investments made are stated in Note No.7 to the standalone financialstatement.
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.36 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:
MATERIAL TRANSACTIONS WITH RELATED PARTIES
The Company has not entered any material transaction with related parties during theyear under review which requires reporting in Form AOC 2 in terms of Companies Act 2013read with Companies (Accounts) Rules 2014. However the requisite disclosures in thisregard is given in this report as Annexure B.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY
There are no Material changes and commitments a3ecting the financial position of theCompany which have occurred between the end of the financial year on 31st March 2019 towhich the financial statements relate and the date of this report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND RESEARCH & DEVELOPMENT (R&D)& FOREIGN EXCHANGEEARNINGS & 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 Rs2420.48 Lakhs (PY Rs 2109.17 Lakhs) Outgo Rs 105.01 Lakhs (PY Rs 96.37 Lakhs)
A detailed report on Risk Management is included in Management Discussion and Analysiswhich forms part of this Report.
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 e3ectiveness by assessing performance of the Board as awhole 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
As on Board Meeting dated 07th August 2019 under review it has beenobserved that there is following changes have occurred in the Board of Directors as wellas Key Managerial Personnel.
The Nomination and Remuneration Committee based on a propos business expertisequalifications and the performance evaluation of Mr. Ramanujam Krishnamurthy Mr. PerurPhaneendra and Mr. Vijay Gupta recommended to the Board their reappointment for thesecond term of 5 (five) consecutive years e3ective from September 30 2019 up to September302024. The Board at its meeting held on May 30 2019 has recommended the same forapproval of the Members.
B. Key Managerial Personnel
The Nomination and Remuneration Committee recommended to the Board for reappointment ofMr. Sanjay Soni as Managing Director for a term of 3 years with e3ect from 1st April 2019to 31st March 2022. The Board at its meeting held on 06th February 2019 has recommendedthe same for approval of the Members.
The Nomination and Remuneration Committee recommended to the Board for reappointment ofMrs. Shashi Soni as Chairperson and Whole time Director for 3 years with e3ect from 1stOctober 2019 to 30th September 2022. The Board at its meeting held on 06th May 2019 hasrecommended the same for approval of the Members.
Mr. Suraj Kumar Sahu tendered his resignation & which is accepted by Board as on 07thAugust 2019. His tenure will end w.e.f. 12th September 2019
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--visthe Company 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 C 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 D the statement showing the names of the top ten employees in terms ofremuneration drawn for the year ended March 31 2019 pursuant to Rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as annexedwith this report 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
Pursuant to Regulation 25(7) of Listing Regulations the Company has conductedFamiliarisation programmes and/or sessions for the Independent Directors and Board as awhole during the FY 2018-19. Details of the same are available on the website of theCompany athttps://s3-ap-southeast-1.amazonaws.com/assetsin.izmocars.com/userfiles/103042/1-6-2018/izmoltd_FAMILIARISATION%20PROGRAMME%20FOR%20INDEPENDENT%20DIRECTORS%20_%202018_19.pdf
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.
Pursuant to the same Mr. Guru Prakash V Chartered Accountant (Membership Number228938) continues to hold the o3ce of Statutory Auditors for the FY 2019-20.3The StatutoryAuditors' Report for the FY 2018-19 does not contain any qualifications reservationsadverse remarks or disclaimer and no frauds were reported by the Auditors to the Companyunder 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. 2018-19.The report of the Secretarial Audit in Form MR-3 isannexed herewith as Annexure F & SEBI Compliance Report Izmo Limited 2018-19 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. 2019-20 and He has completed the internal audit as per scope given bythe Audit Committee for the financial year 2018-19.
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 Statutory Auditors' certificationthereof is provided 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 EmployeeStock Option 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 2019 regarding Employee StockOption Plan 2013 in terms of Companies (Share Capital and Debenture) Rules 2014 are asbelow:
| ||Employee Stock Option Plan 2013 || || |
|Particulars || || || |
| ||(F.Y 2018-19) ||(F.Y 2017 -2018) ||(F.Y 2016 |
| || || ||-2017) |
|Option granted ||NIL ||686000 ||NIL |
|Option vested ||320600 ||86100 ||86100 |
|Option exercised ||245500 ||59400 ||63600 |
|The total no. of shares arising as a result ||245500 ||59400 ||63600 |
|of exercise of option || || || |
|Options lapsed/cancelled during the ||75100 ||26700 ||22500 |
|year || || || |
|The exercise price ||Rs. 10 /- ||Rs. 10 /- ||Rs. 10 /- |
|Variation of terms of options ||No variation in the terms of options during the year under review. ||No variation in the terms of options during the year under review. ||No variation in the terms of options during the year under review. |
|Money realized by exercise of options ||Rs. 2455000 ||Rs.594000 ||Rs.636000 |
|Total no. of options in force ||480200 ||800800 ||200900 |
Employee wise details of options granted to :
|Key Managerial Personnel (KMP) ||No options were granted to KMPs during the year under review. ||4000 options were granted to Company Secretary & No other options were granted to any other KMPs during the year under review. ||No options were granted to KMPs during the year under review. |
|Any other employee who receives a grant of options in any one year of option amounting to five percent or more of options granted during that year ||NIL ||NIL ||NIL |
|Identified employees who were granted option during any one year equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant. ||NIL ||NIL ||NIL |
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:http://www. izmoltd.com/policies-and-code-of-conduct-en-in.htm
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 o3 during the year under review:
Number of complaints received and disposed o3 - Nil
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
|Place ||: Bangalore || ||By order of the Board |
|Date ||:07th August 2019 || ||for IZMO Limited |
|Sd/- ||Sd/- |
|Sanjay Soni ||Shashi Soni |
|Managing Director ||Chairperson and Wholetime Director |
|DIN: 00609097 ||DIN: 00609217 |
|Address: Flat No. 9 ||Address: Flat No. 9 Prestige Casablanca |
|Prestige Casablanca Apartments 12/1 ||Apartments 12/1 Airport Road |
|Airport Road Bangalore-560017 ||Bangalore-560017 |