IZMO Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Segment-wise

Performance

Your company consolidated and expanded its reach and penetration across key segments globally.

Visual Media

The visual media division of your company has studios in Long Beach, USA and Brussels, Belgium, state-of-the-art image processing facilities in Bangalore, India, and clients operating in 32 countries including the USA, Canada, Colombia, Chile, Brazil, Peru, Belgium, France, Germany, Italy, Netherlands, Portugal, Russia, Spain, Switzerland, Austria, Czech Republic, Denmark, Finland, Greece, Hungary, Luxembourg, Morocco, Norway, Poland, Romania, Sweden, Slovakia, South Africa, China, Japan, and India.

Presently, izmo is serving:

• The worlds top corporations

• Automotive OEMs and Portals

• Companies in automotive related businesses like leasing, rental, etc.

• Media

• Video Game Developers

• Ad Agencies and creative studios

• Retail clients

The visual media and marketing solutions offered by izmo play a key role in the global automotive retail transformation.

Global CGI Vehicle Visualizer Platform and Kinetic CGI

Your company continues to expand and grow its CG business under the izmofx branding, with a major CG 3D WebGL visualizer platform for automotive clients and a Kinetic CGI solution that has breakthrough potential in transforming virtual retail.

Computer Generated Imagery (CGI) is versatile, and offers possibilities far beyond the realm of traditional photography. izmofx is leading the CGI wave in automotive retailing.

CG Assets for Leading Global Video Game Developers

Your company continues to serve the video game segment with CG assets. izmos clients include one of the worlds top game developers. izmo is also expanding izmofx into a leading CG art resource for video game companies.

Your company continues to develop its consumer products CG line. Negotiations are on with leading Agencies to supply CG assets.

Kinetic CGI

Kinetic CGI has the potential to transform online retail, and izmo expects to make major strides in this area.

Intellectual Property Rights

Measures taken to protect the intellectual property of izmo continued to produce results in this financial year.

Rental Car and Leasing Industry Solutions

The izmo Rental Car and Leasing Industry Solutions continued to dominate the market, and major rental car companies worldwide are izmo clients. The worlds largest online travel portals use izmo images and 75% of all global rental car listings are powered by izmocars.

CGI based production has further enabled izmo to expand global model coverage in markets outside of the regions served by izmos studios. We now cover most automotive models in key markets worldwide, except China.

Websites and Portals

Premier automotive web solutions provider in France

Your company is the premier auto retail solutions provider in France.

izmo is presently dominating French auto retail, serving prominent retail groups. Apart from delivering retail websites to dealers belonging to prominent automotive OEMs, izmo has direct partnerships with two global OEMs and also delivered and continue to operate an OEM automotive portal for new cars.

Spain

izmo worked in partnership with a prominent OEM to create a used car portal that has huge market potential in the country. With a new local partnership gaining ground, we are all set to make big strides in Spain.

Italy

Your company has opened its account in Italy and we expect to see significant market traction in the coming years.

Industry Structure and Developments

USA

Automotive sales in the US is facing a dip again, with production levels dropping due to microchip shortages. In 2021, the 16, 676 franchised light-vehicle dealers sold 14 .9 million light-duty vehicles valued at $1 .18 trillion, per NADA (National Association of Automotive Dealers) statistics. EVs and alternative-fuel powertrains are now a sizable trend, accounting for 9.5% of sales.

Customer shopping preferences are decisively shifting online, and faced with sparse inventories, dealers need new ways to compete and win market-share. This is one reason why izmos virtual showroom solutions, WebGL vehicle configurators, data analytics solutions, responsive dealer websites, digital marketing, reputation management, and parts and accessories management solutions are expected to gain significant traction in the coming financial year.

European Union

Vehicle sales continued to fall in Europe, hit by persistent supply chain issues including microchip shortages and rising inflation. New car registrations reported a downslide of 17% in June.

In Europe, your company operates in France, Italy, Belgium, Portugal and Spain. izmo continues to be the premier auto dealer website and marketing solutions provider dominating the French retail market, serving dealers and groups belonging to 36 OEMs.

India

Belying global trends, Indian auto dealers registered a 118% growth in sales last June, selling 2,55,397 vehicles, as compared to 1,16,927 in June 2020.

With online showrooms serving dealers belonging to 13 OEM brands, izmocars India continues to be a leading car retail solutions provider in India.

izmoEmporio, FrogBI Analytics, FDAP Decision Analytics, WarrantyBoost, WarrantyMind, PartsGorilla, CGI, and VR are among the latest in a long series of trend-setting market innovations from izmo, starting with izmoflix ver.1 that introduced the interactive automotive marketing experience to U S consumers as early as 2003.

To this day, izmo remains invested in its global market leadership in the automotive retail space.

Meanwhile, izmos vehicle retail solutions continue to be the first choice of the worlds leading automotive 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 is a strategic advantage that greatly supports the organic growth of your company.

Unlike other players in the market, the India component is not merely another cost-cutting measure for izmo - it is integral to the performance culture of the company, built into its corporate DNA.

Opportunities and Threats

To begin with, izmo is a blue ocean company that creates value out of breakthrough innovation and not price-competition. Our company owns deep domain expertise in all its areas of operations.

Between these two, the entry barriers to any competition is quite formidable, and potential competitors in areas like AI and Data analytics, CGI, VR, Imagery, Parts and Accessories Configurators, etc. are unlikely to be price-competitive for a long period of time.

Presently your company is exploring the newest opportunities in its operating space, namely virtual retailing, data analytics and CGI/VR/AR. Previous experience tells us that companies who enter the market arena at the commencement of the bell curve are the ones likely to reap the richest dividends.

The only possible threat to the company is new ground-breaking innovation, which is extremely unlikely, given that your company never ceases to explore new opportunities.

Outlook

Having reported significant improvements in terms of revenue, and profits, we share a positive outlook for the year ahead.

izmo is in the process of introducing breakthrough products like 3D virtual vehicle configurators in the US and EU markets, and we expect very positive results in the months to come.

Risks and Concerns

Your company doesnt foresee any major risks in our operating space.

However, izmo is a global company operating in 3 continents, and major currency fluctuations may impact our bottom-line, either positively or negatively.

Internal Control System

izmo has in place adequate Internal Control Systems commensurate to its size and nature of operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safe guarding the assets from unauthorized use or loss, extending transactions with proper operation and ensuring compliance of corporate policies.

Internal Control is supplemented by regular management review, documented policies and procedures, and internal audits. The Company has an Audit Committee, details of which have been provided in the Corporate Governance report. The Audit Committee reviews Audit Reports submitted by Internal Auditors. Suggestions for improvement are considered and the Audit Committee follows up implementation of corrective actions.

The Committee also meets the Companys statutory auditors to ascertain their views on the adequacy of internal control systems in the Company and keeps the Board informed of its major observations from time to time.

Human Resources

izmo has 306 employees on payroll as on March 31, 2022. Employee relations remained satisfactory during the period under review.

The Company would like to record its appreciation to its employees and their whole hearted support and co-operation.

Financial Performance with respect to Operational Performance

Discussion on financial performance with respect to operational performance is available in detail in the beginning pages of the Boards Report of this Annual Report.