IZMO Ltd Directors Report.

Dear Members,

Your Directors are pleased to present 24th Annual Report together with the Audited Financial 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 9,216.52 6,298.66
Other Income 395.04 507.48
Total Revenue 9,611.56 6,806.14
Direct cost of operations 72.26 71.62
(Increase)/Decrease in Stocks/WIP (4.57) 0.55
Employee Benefit Expenses 3,815.94 2,961.30
Financial Expenses 137.99 118.67
Depreciation 1,516.95 1,225.61
Other Expenses 3,333.00 1,533.37
Total Expenses 8,871.57 5,911.12
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 Companys performance on a consolidated basis has shown a significant improvement over the previous year. The revenues have increased by 41%, whereas profits have increased by approximately 10%. The Company has achieved higher sales as a result of expansion in the European market. The companys revenues from the European market have increased significantly 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 new products which have been introduced for the Automotive Market. The Company is now a market leader in France. Out of the Top 10 dealer groups in France, 6 are customers of our products.

The Data Analytics division is also seeing a wider acceptance of its solution in the US market. Since this was a new concept, the product went through a lot of iterations before the customers expressed their satisfaction with the product suite. This divisions revenues are increasing steadily and is expected to contribute significantly to the companys revenues in the US market in 2019-2020.

The Company has added several new clients for its images and CGI production services including the largest entertainment company in the world !!! This is a major breakthrough for 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 2,582.21 2,260.00
Other Income 229.12 463.38
Total Revenue 2,811.33 2,723.38
Direct cost of operations 72.26 71.62
(Increase)/Decrease in Stocks/WIP (4.57) 0.55
Employee Benefit Expenses 1,718.96 1,665.94
Financial Expenses 136.08 118.67
Depreciation 262.54 121.16
Other Expenses 546.19 597.28
Total Expenses 2,731.46 2,575.22
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

Performance

The Companys sales on a standalone basis has shown nearly 14% increase over the previous year. The other income has shown a sharp drop since there were no one-time capital 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 is primarily due to increase in the employee count in India due to the expansion of the CGI and VR development divisions.

Depreciation has increased by more than 100% as the company has decided to accelerate the write o3 of earlier capitalized costs.

Profitability

The companys profitability has reduced slightly due to the increase in employee expenses. However, the company expects to increase its profitability during the current year as a result of higher sales in the United States, Mexico, India and Europe.

Dividend

In order to augment the ongoing expansion programmes, the Directors have decided to plough back the profits into the system and regret inability to recommend dividend.

Vehicle marketing is unpredictable. Customer preferences change overnight, and most marketing vendors are struggling to fulfil promises.

Business Overview

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, in terms of business, customers, and revenue.

Business Review,

Management Discussion and Analysis Report

Segment-wise Performance

Performance on the face of tough competition is what separates high-performing companies with deep domain expertise from the rest. Take izmostock, for instance. The izmo automotive stock photography portal is now amongst the top 3 Automotive Stock Image websites 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 spectacular success, and now all of the 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 now powered by izmocars.

During the financial year, izmo also launched a Leasing Industry Solution. This is an important market sector and many major leasing companies are now clients, serving all major automotive markets worldwide.

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 more than 75% of the automotive models in all major markets worldwide, except China.

Worlds First CG 3D WebGL automotive visualizer platform

Your company continues to expand and grow its CG business under the izmofx branding, with the launch of a major CG 3D WebGL visualizer platform for automotive clients.

CG Assets for Leading Global Video Game Developers

Additionally, weve begun expanding into providing CG assets for video game platforms, with one of the worlds top game developers as our first client. Assets are being produced for an already shipping video game on a world-leading gaming platform. We are also developing izmofx into a leading CG art resource for video game companies.

Finally, weve begun developing our new consumer products CG line, and are in talks with leading Agencies to supply CG assets. CG is flexible, and provides unlimited possibilities, and izmofx is leading the way.

The visual media divisions of your company operate in 16 countries, with studios in Long Beach, USA and Brussels, Belgium, state-of-the-art image processing facilities in Bangalore, India, and clients in the USA, Mexico, Colombia, Belgium, Brazil, China, France, Germany, Italy, Netherlands, Portugal, Russia, Spain, Switzerland, Turkey, and India.

Presently, izmo is serving:

The worlds top corporations Automotive OEMs Prominent Portals

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

Media

Video Game Developers

Ad Agencies and creative studios Retail clients

If the first part of izmo s business automotive imagery, video, CGI, vehicle and Accessories Visualizer, and Virtual Reality - offers automotive OEMs, retailers, and service organizations powerful visual marketing solutions, the second part produces websites, class-leading automotive marketing, and data analytics to drive data-driven decision-making.

Even a decade earlier, customers used to visit car showrooms before deciding which vehicle to buy. Not anymore. Now they visit showrooms after deciding which car to buy, and at what price. Left to themselves, dealers have no way of influencing these decisions at the showroom level.

To reach out to customers when they are yet to decide, dealers need auto dealer websites, powerful online and social marketing, and paid promotions, plus data analytics to 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 addition to automotive OEMs, your company has added two prominent Motorbike OEMs to the retail customer list.

France

Apart from delivering retail websites to dealers belonging to 30 prominent automotive OEMs, izmo is now directly working with an automotive OEM to produce an automotive portal for new cars.

In addition, izmo is also rolling out a portal for a prominent tractor manufacturer, targeting customers in France, Luxembourg, and Switzerland.

Your company is presently serving all seven prominent retail groups in the country.

Mexico

In Mexico, izmo added two more automotive OEMs to the existing list of 13 OEMs for retail websites. Your company also added 2 more Motorbike OEMs to the existing list of two OEMs.

Columbia

Your company opened its account in Columbia with websites for dealers belonging to 5 major 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 the most advanced automotive web platform globally, with unmatched enterprise level functionality 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 in the automotive retail space. From search marketing and social conversations to paid promotions, izmoRainmaker connects all the dots in the digital marketing roadmap to deliver a comprehensive solution that brings everyone onboard and delivers measurable results.

Every izmoRainmaker customer is serviced by a dedicated team comprising of a Project Manager backed by content specialists, digital marketing experts, social influencers, graphic designers, and programmers.

Our advanced web analytics and customer insights ensure that customers are always on top of the game.

FranchiseNow and izmoLeads

Your company is also o3ering lead-generation services to Franchise companies, with over 60 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 initial stage, the data analytics platform of your company is poised to enter the market in a big way.

The decision-making part of car buying now happens even before customers step into car showrooms. FrogData helps dealers take informed decisions backed by actionable information, constantly garnered from deep data analytics.

FrogData is built on a state-of-the-art open architecture platform that can easily accommodate virtually any type of data from any system, new or old, and collate it in a centralized, easily usable database.

FrogData also o3ers dealers the flexibility to commence data analytics deployment at a scale and scope comfortable to them. They can start with just a few departments or the entire dealership in one shot.

Partnerships with major players in the automotive vertical makes FrogData even easier to adapt.

Automotive Parts Management

DistrigoBoost/ Parts Velocity/ Parts Gorilla

The parts management solution of your company is fast gaining significant traction in Europe, with hundreds of users spanning seven countries including France, Netherlands, Italy, Belgium, Germany, Spain, and Portugal.

The parts management sector has significant order bookings and should see significant breakthroughs in the coming years.

Industry structure and developments

Americas

USA

After the slowest start to a year since 2014, U.S. auto sales is now pegged at 16.6 vehicles for 2019. Light trucks are expected to account for more than 70% of all new vehicles sold.

The average new-vehicle transaction price in June was $36,642, up 3.3% compared to last year and the average used-vehicle transaction price in April was $20,979, up 3.8%.

Mexico

Mexicos Institito Nacional de Estadistica y Geografia (INEGI) reported sales of 105,699 light vehicles in July, representing a 7.9% decrease from the 114,811 sales in July 2018, continuing the trend right from April this year. As with the US market, market volatility is usually favorable for izmo.

Your company continues to be the favorite auto dealer website service provider in Mexico, serving dealers belonging to15 OEMs.

European Union

New car sales in the European Union (EU) contracted by 3.1% during the first half of 2019, with registrations declining 7.8% in June. Car sales declined 1.8% in France during the first half of the year.

France

Your company continues to be the top auto dealer website and marketing solutions provider to the French automotive Industry, serving dealers and groups belonging to 30 prominent OEMs. In addition, izmo is working with an automotive OEM to provide an automotive portal for new cars as well as a prominent tractor manufacturer, to deliver a portal targeting customers in France, Luxembourg and Switzerland.

Spain

Your company has a significant presence in Spain, serving dealers belonging to 6 OEMs.

Portugal

The Portuguese operations of izmo includes the popular auto service portal Ancra, with hundreds of dealers signing up for the service. Your company is also a prominent presence in the body shop segment, with generic body shop websites as well as websites for 6 OEM brands.

Italy

In Italy, izmo serves dealers belonging to 6

OEM brands, with state-of-the-art auto dealer websites and services.

Belgium

Dealers of 6 automotive OEMs continue to be izmo customers in Belgium, where your company serves prominent dealer groups.

ASIA

India

Indian auto sales fell for the 9th consecutive month, with Maruti Suzuki sales down 35.52%, and Hyundai Motor down 10.28%.

In the two-wheeler segment, Suzuki Motorcycle India was the only two-wheeler maker to report positive growth.

With 87 online showrooms, izmocars India continues to be a leading car dealer website provider in India.

Enterprise Products: Strategizing New Breakthroughs

In the last fiscal, the division added ZF India PVT LTD, GE India PVT LTD, and Merrill Technology Services India PVT LTD to the existing client list of Mercedes Benz, IBM, Kotak Mahindra Bank, HCL Technologies, Rambus Chip Technologies, Textron India Pvt. Ltd., Schneider Electric System, Infosys, Tech Mahindra, Bharti Airtel, Synopsys India, Vedanta, 3DPLM, Maruti Suzuki India Ltd., Calcutta Electric Supply Corporation (CESC), Cap Gemini Corporation, SQS India BFSI Ltd., and more.

With the Industry focus shifting to hacker-proof zero-tolerance cyber security, the Enterprise 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 finding traction in markets as diverse as the U S. and India.

Your company is now in the process of reinventing this business around the franchise website 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 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, izmo dealer websites 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 at a relatively modest cost 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

On the one hand, izmo is a blue ocean company which consistently creates value out of breakthrough innovation and not price-competition. On the other, your company owns deep domain expertise in all its areas of operations.

Between these two, the entry barriers to any new competition is quite formidable, and potential competitors in areas like CGI, VR, Imagery, Parts and Accessories Visualizer, 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 data analytics and CGI/ VR, which is innovation driven. 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 constantly explores new opportunities.

Outlook

Having reported one of the best years in its entire history in terms of business, revenue, 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.S market.

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 currency fluctuations 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 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, as also 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 is having 263 employees as on March 31, 2019. 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 during these di3cult periods.

Financial Performance with respect to Operational Performance

Financial performance with respect to operational performance is discussed in detail in the beginning pages of the Boards Report of this Annual Report.

Key Financial Ratios

As per Listing Regulations, the Company is required to give details of significant changes (Change of 25% or more as compared to the immediately previous Financial Year) in key sector - sepecific financial ratio.

Particulars FY

2018-19

FY

2017-18

%

Change

Detailed Explanation for change

(Where the change is 25% or more as

compared to the immediately previous

financial year)

1 Revenue (Rs. In Lakhs) 2,582.21 2,260.00 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 financial year ended 31st March, 2019.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to Section 124 of Companies Act, 2013 and IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the Company has transferred the 64,860 number of shares to 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 annexed herewith as Annexure A.

NUMBER OF MEETINGS OF THE BOARD

During the year under review 4 (Four) meetings of the Board of Directors were held, details of which are set out in the Corporate Governance Report which forms part of this Report.

BOARD COMMITTEES

Detailed composition of the Board committees namely Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee, number of meetings held during the year under review and other related details are set out in the Corporate Governance Report which forms part of this Report.

There have been no instances where the Board has not accepted any recommendation of any of the Committees of the Board.

DIRECTORS RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134 OF THE COMPANIES ACT, 2013

The Directors confirm that – a) in the preparation of the annual accounts for the financial year ended 31st March 2019, the applicable accounting standards had been followed and there were no material departures;

b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of a3airs of the Company at the end of the financial year as at 31st March 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 adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the directors had prepared the annual accounts on a going concern basis;

e) the directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating e3ectively.

f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating e3ectively.

STATEMENT ON DECLARATION OF INDEPENDENT DIRECTORS

The Board of Directors of the Company comprises of optimum number of Independent Directors. Based on the confirmation / disclosures received from the Directors, the following Non-Executive Directors are Independent in terms of the Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (LODR) Regulations, 2015 as on 31st March, 2019:

1. Mr. Perur Phaneendra

2. Mr. Ramanujam Krishnamurthy

3. Mr. Vijay Gupta

The Company has received Certificate of Independence from the Independent Directors inter- alia, pursuant to Section 149 of the Companies Act, 2013, and under Listing Regulations confirming and certifying that they have complied with all the requirements of being an Independent Director of the Company, as on the date. The said Certificate(s) were taken 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 and remuneration of Directors, Key Managerial Personnel ("KMP"), Senior Management Personnel (SMP) and other employees, in terms of provisions of the Companies Act, 2013 and Listing 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 for appointment of a Director (Executive/Non-Executive/ Independent) and recommendation to the Board 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 the amended listing Regulations. The said Policy is available on the website of Company at

https://s3-ap-southeast-1.amazonaws.com/assetsin.izmocars.com/userfiles/103042/2018-19%20share/izmo_Nomination_and Remuneration_Policy.pdf

EXPLANATION AND COMMENTS BY THE BOARD ON EVERY QUALIFICATION/RESERVATION/ADVERSE REMARK/DISCLAIMER BY THE AUDITORS IN THEIR REPORTS

The statutory Auditors Report does not contain any qualification, disclaimer, reservation or adverse remark.

Further, the Secretarial Audit Report does not contain any qualification, disclaimer, reservation 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 the Standalone financial statement pursuant to Section 186 (4) read with Companies (Meetings of Board and its Powers) Rules, 2014. The details of guarantee given and security provided by 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 financial statement.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on an arms length basis and were in the ordinary course of business.

All Related Party Transactions are placed before the Audit Committee. Requisite approval of the Audit Committee is obtained on periodic basis for the transactions which are repetitive in nature or otherwise. The actual transactions entered into pursuant to the 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 financial statement which sets out related party disclosures.

The Company has formulated a Policy on related party transactions. This policy approved by the Board is uploaded on the Companys website on the below link:

http://www.izmoltd.com/policies-and-code-of-conduct-en-in.htm

MATERIAL TRANSACTIONS WITH RELATED PARTIES

The Company has not entered any material transaction with related parties during the year under review which requires reporting in Form AOC 2 in terms of Companies Act, 2013 read with Companies (Accounts) Rules, 2014. However, the requisite disclosures in this regard is given in this report as Annexure B.

MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no Material changes and commitments, a3ecting the financial position of the Company which have occurred between the end of the financial year on 31st March, 2019 to which 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 been taken to conserve and optimize the use of energy through improved operations methods.

The provisions relating to disclosure of details regarding energy consumption, both total and per unit of production are not applicable as the Company is engaged in the services 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 overall performance. The Company has a dedicated team of technically competent personnel who relentlessly work on technology up gradation and development related fields.

Research and Development continues to be given very high priority in Software Technology in the area of telecommunications, and hardware technology in the area of embedded systems.

C. FOREIGN EXCHANGE EARNINGS & OUTGO

During the year, the details of Foreign Exchange transactions were: Earnings – Rs 2,420.48 Lakhs (PY Rs 2,109.17 Lakhs) Outgo – Rs 105.01 Lakhs (PY Rs 96.37 Lakhs)

RISK MANAGEMENT

A detailed report on Risk Management is included in Management Discussion and Analysis which forms part of this Report.

CORPORATE SOCIAL RESPONSIBILITY

It is not mandatory for your company to constitute a CSR Committee as it does not fall under 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 out by the Company. Evaluating Boards e3ectiveness by assessing performance of the Board as a whole, performance of individual director and committees of the Board namely Audit Committee, 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 been observed that there is following changes have occurred in the Board of Directors as well as Key Managerial Personnel.

A. Directors

Appointment:

The Nomination and Remuneration Committee, based on a propos business expertise, qualifications and the performance evaluation of Mr. Ramanujam Krishnamurthy, Mr. Perur Phaneendra and Mr. Vijay Gupta, recommended to the Board, their reappointment for the second term of 5 (five) consecutive years e3ective from September 30, 2019 up to September 30,2024. The Board at its meeting held on May 30, 2019 has recommended the same for approval of the Members.

B. Key Managerial Personnel

i) Appointment:

The Nomination and Remuneration Committee recommended to the Board for reappointment of Mr. Sanjay Soni as Managing Director for a term of 3 years with e3ect from 1st April, 2019 to 31st March, 2022. The Board at its meeting held on 06th February, 2019 has recommended the same for approval of the Members.

The Nomination and Remuneration Committee recommended to the Board for reappointment of Mrs. Shashi Soni as Chairperson and Whole time Director for 3 years with e3ect from 1st October, 2019 to 30th September 2022. The Board at its meeting held on 06th May, 2019 has recommended the same for approval of the Members.

ii) Resignation

Mr. Suraj Kumar Sahu tendered his resignation & which is accepted by Board as on 07th August, 2019. His tenure will end w.e.f. 12th September, 2019

DEPOSITS

The Company has not accepted Deposits under Chapter V of the Companies Act, 2013.

PECUNIARY RELATIONSHIP OR TRANSACTIONS OF THE NON-EXECUTIVE DIRECTORS AND DISCLOSURES ON THE REMUNERATION OF THE DIRECTORS

All pecuniary relationship or transactions of the non-executive Directors vis--vis the Company, containing requisite information for such payments and disclosures on the remuneration of the Directors along with their shareholding are disclosed in Corporate Governance Report and Form MGT 9 which forms part of this Report.

SECRETARIAL STANDARDS

The Company complies with all the applicable Secretarial Standards.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS

There are no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Companys operations in future.

INTERNAL FINANCIAL CONTROL

Details in respect of adequacy of internal financial controls with reference to the Financial Statements are stated in Management Discussion and Analysis which forms part of this Report.

SUBSIDIARY COMPANIES

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 to Rule 8 (1) and Form AOC 1 read with Rule 5 of Companies (Accounts) Rules, 2014 is annexed as Annexure C and forms a part of this Report. The Company has framed policy for determining material subsidiaries as per requirement of explanation to Regulation 16 (1) (c) in SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 has uploaded the same on companys website: http://www.izmoltd.com/policies-and-code-of-conduct-en-in.htm

Stand-alone Financial Statements and Consolidated Financial Statements of your Company along with its subsidiaries, prepared in accordance with the relevant Accounting Standards issued by The Institute of Chartered Accountants of India, forms a part of this Annual Report.

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 this report as Annexure D the statement showing the names of the top ten employees in terms of remuneration drawn for the year ended March 31, 2019 pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as annexed with this report as Annexure E.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has established a vigil mechanism to report genuine concerns. The Policy provides for Directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of Companys Code of Governance and Ethics. The policy is uploaded 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 conducted Familiarisation programmes and/or sessions for the Independent Directors and Board as a whole during the FY 2018-19. Details of the same are available on the website of the Company at https://s3-ap-southeast-1.amazonaws.com/assetsin.izmocars.com/userfiles/103042/1-6-2018/izmoltd_FAMILIARISATION%20 PROGRAMME%20FOR%20INDEPENDENT%20DIRECTORS%20_%202018_19.pdf

AUDITORS

Statutory Auditor:

Pursuant to the provisions of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, Mr. Guru Prakash V, Chartered Accountant (Membership Number 228938) has been appointed as the Statutory Auditors of the Company to conduct the audit of 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 Number 228938) continues to hold the o3ce of Statutory Auditors for the FY 2019-20.3The Statutory Auditors Report for the FY 2018-19 does not contain any qualifications, reservations, adverse remarks or disclaimer and no frauds were reported by the Auditors to the Company under sub-section (12) of Section 143 of the Act.

Secretarial Auditor:

As per the Section 204 of the Companies Act 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Board had appointed M/s V. Sreedharan & Associates, Company Secretaries, Bengaluru to conduct the Secretarial Audit of the company for F.Y. 2018-19.The report of the Secretarial Audit in Form MR-3 is annexed herewith as Annexure F & SEBI Compliance Report Izmo Limited 2018-19 is annexed herewith as Annexure G.

Internal Auditors

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 Act, 2013 for the F.Y. 2019-20 and He has completed the internal audit as per scope given by the Audit Committee for the financial year 2018-19.

CORPORATE GOVERNANCE

The Company continues to benchmark itself with the best-of-the-class practices as far as corporate governance standards are concerned. The Company has complied with the requirements provided in Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The compliance report on the various requirements under the said clause along with the Statutory Auditors certification thereof 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 ‘Employee Stock 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 approval from the shareholders of the company by passing the special resolution on the AGM held on 10th September, 2016 and further course of action and approval from the various regulatory will be obtained with due course of time with the direction/approval from the Board of director/committee. Hence, further disclosure with regards Section 62 read with Rule 12 of the Companies (Share Capital and Debenture) Rules, 2014 & other disclosure with regard to clause 14 of SEBI (Share Based Employee Benefits) Regulation, 2014 does not arise as on this report date.

2. Employee Stock Option Plan 2013

Disclosures for the financial year ended 31st March, 2019 regarding Employee Stock Option Plan 2013 in terms of Companies (Share Capital and Debenture) Rules, 2014 are as below:

Employee Stock Option Plan 2013
Particulars
(F.Y 2018-19) (F.Y 2017 -2018) (F.Y 2016
-2017)
Option granted NIL 6,86,000 NIL
Option vested 320,600 86,100 86,100
Option exercised 245,500 59,400 63,600
The total no. of shares arising as a result 245,500 59,400 63,600
of exercise of option
Options lapsed/cancelled during the 75,100 26,700 22,500
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. 24,55,000 Rs.5,94,000 Rs.6,36,000
Total no. of options in force 4,80,200 8,00,800 2,00,900

l

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. as required under Employee Benefits Regulations read with SEBI circular no. CIR/CFD/POLICYCELL/2/2015 dated June 16, 2015 are available on the Companys website: http://www. izmoltd.com/policies-and-code-of-conduct-en-in.htm

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti-Sexual Harassment Policy, inter-alia, in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Internal Complaints Committee has been set up to redress complaints. The following is the summary of complaints received and disposed o3 during the year under review:

Number of complaints received and disposed o3 - Nil

ACKNOWLEDGEMENTS

The Board places on record its appreciation of the contribution of Associates at all levels, customers, business and technology partners, vendors, investors, Government Authorities and all other stakeholders towards the performance of the Company during the year 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