Dear Shareholder,

The Directors have pleasure in presenting the Twenty Third Annual Report together with the Audited statements of accounts for the year ended 31^st March, 2018.

Consolidated financial statements of accounts for the year ended 31^st March, 2018.

Rs. in Lakhs

Performance on a Consolidated Basis

The Company’s performance on a consolidated basis have shown a significant improvement over the previous year. The revenues have increased by 17%, whereas profits have increased by 30%. Higher sales of the company’s products coupled with a tight rein on expenses have resulted in the sharp increase in profitability. The company is endeavoring to continue this trend in the next fewyears as well.

The Company hopes to achieve higher growth in the current year as it has made serious inroads into the Automotive OEM market. The company now counts leading OEMs such as Nissan Motors, PSA Peugeot Citroen, Lexus etc. among its clients. The Company is also the largest provider of Automotive Images to the Car Rental industry having Hertz, Enterprise, AVIS, and Europcar as its clients.

The Data Analytics division is expected to contribute to the revenues as well in FY18-19 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. FY 18-19should see the first private sector manufacturing facility for small and medium caliber ammunition commencing production in Goa. This will be an Export Oriented Unit under the subsidiary Hughes Precision Pvt. Ltd. The 2nd projectfor manufacture of assault rifles is expected to go online in FY 19-20.

Stand Alone Financials statements of accounts for the year ended 31^st March, 2018.

Rs. in Lakhs

Performance

The Company’s sales on a standalone basis has shown nearly a 5% increase overthe previous year.

The other income has shown a sharp rise primarily on account of gain on redemption of short term investments during the year.

Analysis of Expenses

Employee benefit expenses have shown a sharp increase over the previous year. This is primarily due to an increase in the employee count in India due to the expansion of the CGI and VR development divisions.

Depreciation has shown a sharp decrease due to lower capital expenditure incurred during the year. Profitability

The company’s 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, Europe, and India.

Dividend

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

Business Overview

Business is changing. And izmo is showing the way

Plentiful bandwidth. Inexpensive Cloud Storage. Sophisticated Smartphones. Together, they are creating perpetually connected communities and seamless experiences, and izmo is shaping innovative marketing paradigms that enable businesses to navigate the new normal and win more customers.

Take PartsGorilla, for instance. It’s your 800-pound gorilla driving accessories sales at dealerships. Nothing ever comes anywhere close to it as it pushes accessories to delighted customers, which is why dealerships are selling more accessories than ever, with stratospheric profit margins.

PartsGorilla is perfect at making accessories selection seamless and delightful, but connected communities demand much more from car dealers. Prospective car buyers now begin their journey months before they ever make contact with a dealership, and they expect dealerships to be active partners all the way.

To succeed, dealers now need to know the priorities and concerns of their prospects, as they start researching their vehicle, and be visible to them at every stage. Dealers need to streamline their operations and make the entire dealership client-facing. Dealers also need 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 for automotive retail.

FrogData. Bringing Data Driven Decision-making to Dealerships

FrogData helps dealers in taking decisions that drive dealerships in an insightful way, backed by actionable information constantly garnered from deep data analytics.

In other words, we connect the dots that open newsales opportunities, bring more revenue, drive up profits, and create more customer connections fordealers.

Deploying FrogData results in more deals, higher margins, improved employee and equipment utilization, high inventory turnover, higher lifetime customer loyalty, and much more.

FrogData is built on a state-of-the-art open architecture platform that can easily accommodate virtually any type of data. With the explosion of new technologies and the dwindling of old database platforms, it is steadily becoming difficult to get such varied systems to “talk” to each other. FrogData solves this particular problem with its ability to accept any form of data from any type of system, new or old, and collating it in a centralized, easily usable database.

What’s more, FrogData offers the flexibility to commence data analytics deployment at a scale and scope which is comfortable to dealers. They can start with just a few departments or the entire dealership in one shot.

Partnerships with DealerTrak, CDK, and Hunter Engineering make. FrogData even easier to adapt, for dealers.

izmoFx: Virtual Reality (VR) Experiences and CGI

If big data analytics brings business clarity across multiple layers and complex dimensions to dealerships, Virtual Reality (VR) is the great industry disruptor that can take the dealership experience to where the customers are.

By creating an immersive, hands-on experience for car shoppers that simulates reality, izmoVR has the potential to convert prospective customers into buyers than any other tool available. izmoVR utilizes advanced CGI technology within izmocars¹ proprietary VR Solution Platform to create a spectacular user experience at affordable costs. The izmoVR showroom solution, which can include dealer branding, is delivered using the lightweight, 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 on their website. Each interaction will invoke user interest and generate leads.

Users experience vehicles in a completely immersive manner and get information about features that are not usually possible in a traditional demo. For example, airbags are an unseen but important safety feature that consumers never see in the buying process. izmoVR can literally bring this to life within the VR presentation, wowing the user and helping them understand its impact better.

By creating a powerful, immersive, hands-on experience for car shoppers that simulates reality, izmoVR has the potential to move buyers down the sales funnel considerably faster than any other visual marketing tool available.

izmoFxCGI

Computer generated imagery (CGI) can not only deliver greater cost savings but also faster speed- to-market and unlimited scope of reuse for automotive retail clients, from OEMs to dealers. Precisely because of this reason, the amount of regular photography of actual vehicles is steadily going down. Automotive OEMs have largely moved on to CGI and all related auto business websites are following suit.

The ability to place a vehicle in any location, any backdrop, any lighting, and any camera angle, which were previously unavailable with traditional photo-shoots, is too big an advantage to ignore. Changes that previously required a new photo-shoot, like a trim change or a different angle, are quite easy to accomplish with CGI, which makes vehicle photography obsolete.

In addition, CGI opens up possibilities for animated vehicle narrations, videos, as well as licensing for other markets like film, games, and other applications, all from the same CGI data.

CGI is a technically sophisticated three-step process that starts with vehicle scanning, 3D Build, and Render. The izmo CGI solution can also directly process manufacturer 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-setting market innovations from izmo, starting from the izmoflix ver.1 which delivered 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 world’s leading automotive retailers and portals from North America to Europe to Asia. SalesVelocity, the izmo CRM suite, is also gaining traction with auto dealerships.

North America USA

After an initial projection of 16.7 million vehicles, major market watchers have increased their sales estimate for 2018 to 16.9 million vehicles, down from the 17.25 million vehicles sold last year. The market is continuing with a downward trend after the record-breaking sales of 17.6 million vehicles in 2016.

A significant market development is a shift in consumer tastes to SUVs, crossovers, and pickup trucks, which command highertransaction prices, and more profitsforthe automotive industry.

Even as we continue to acquire and engage top-tier clients like Microsoft, Mitsubishi Motors, Toyota, Ford Enterprise, Chevrolet Enterprise, Morpace, Jato Dynamics, and Avis in the photography and visual marketing space, we keepexpanding into new possibilities, newterritories, and newverticals.

With the combined market push of new products like FrogData, Online and Social Marketing products like FranchiseNow and izmoLeads, izmoAuto websites, and new avatars of existing market-leading products like izmoflix, we expect to see steady progress in the US market.

Mexico

Auto sales in Mexico dropped 8.4%, with 680,699 vehicles sold in the first half of the year. 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 in Mexico, serving Ford, Nissan, Honda, Infinity, Toyota, Acura, Porsche, Audi, Hyundai, Renault, Mazda, Suzuki, and Kia dealers, with OEM relations with global brands like Ford and Nissan. The company is also a strong presence in the 2-wheelersegment, with KTM and BMW websites.

The izmo client portfolio in Mexico features all prominent auto groups in the country.

European Union

In the European Union (EU) and EFTA countries, new car sales contracted by 5% during the first quarter of 2018. Germany, the largest car market in Europe, expanded by 4%. Car sales 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 contracted slightly.

France

izmo continues to be the leading auto dealer website and marketing solutions provider to the French automotive Industry, serving prominent groups like PGA, HESS, Volkswagen Retail, Metin, Lamirault, Goupe Schumacher, Riester, and others.

The dealer portfolio of your company in France includes all prominent auto brands - the French Brands Peugeot, Citroen, and Renault, as well as Audi, Alfa Romeo, Abarth, BMW, Chrysler, Chevrolet, Dacia, Dodge, Fiat, Fiat Professional, Hyundai, Jeep, Jaguar, Land Rover, Kia, Lancia, Lexus, Mini, Mercedes Benz, Nissan, Opel, Porsche, Saab, Seat, Skoda, Subaru, Suzuki, Toyota, Volkswagen, and Volvo as well as automotive portals.

Spain

Your company has a significant presence in Spain, serving Audi, Honda, Seat, Skoda, VW, and Nissan dealers.

Portugal

The Portuguese operations of izmo include the popular auto service portal Ancra, with hundreds of dealers signing up forthe service.

Your company is also a prominent presence in the body shop segment, with generic body shop websites as well as websites for Citroen, Ford, Seat, Iveco, Morgan, and Renault brands.

Italy

In Italy, izmo serves Citroen, Jeep, Kia, Peugeot, Skoda, and Volvo dealers with state-of-the-art auto dealer websites and services.

Belgium

Dealers of Audi, Honda, Nissan, Seat, Skoda, and VW vehicles continue to be izmo customers in Belgium, where yourcompany serves prominent groups like PGA.

ASIA

India

2018 is promising to be a good yearfor India in the automotive retail segment. July sales are pegged at 2.90 lakh vehicles, a little less than the 2.99 lakh units sold last year.

Maruti Suzuki continues to lead the market, with 1.5 lakh vehicles sold. Tata Motors and Honda posted double-digit growth driven by new launches. Hyundai gained 1.1%, while Mahindra & Mahindra, Toyota Kirloskar, and Ford India sales declined. In the two-wheelersegment, TVS Motors, BajajAuto, and Suzuki Motorcycle registered double-digit growth, supported by strong rural buying and new launches. However, Royal Enfield registered a growth drop of 6%.

With 109 online showrooms, izmocars India continues to be the preferred car dealer website provider in India. The izmocars website portfolio includes Maruti Suzuki, Maruti Suzuki NEXA, Chevrolet, Fiat, Jeep, Honda, Hyundai, Isuzu, Mahindra & Mahindra, Ssangyong, Nissan & Datsun, Renault, Skoda, Tata Motors, and Volkswagen in the auto dealer segment, Yamaha, Hero, Bajaj, TVS, KTM, and Suzuki in the bike segment, and Bharat Benz in the heavy vehicles segment.

The World’s Largest Provider of automotive imagery, video, VR, and visual marketing solutions

Presently, izmocars is the world’s leading provider of automotive imagery, video, VR, CGI, and visual marketing solutions. With state-of-the-art automotive studios located in close proximity to global automotive nerve centers, in Long Beach, USA, and Brussels, Europe, and sophisticated image processing facilities in Bangalore, izmo consolidated its position as the world’s largest producer of automotive images and animation morethan a decade back.

The full-spectrum izmo visual product portfolio includes a Virtual Reality (VR) and CGI platform, automotive imagery, animations, videos, and visual marketing solutions.

Presently, izmomedia is serving:

- The world’s top corporations

- Automotive OEMs

- Prominent Portals

- Companies in automotive related businesses like leasing, etc.

- Media

- Ad Agencies and creative studios

- Retail clients

Our client list includes Microsoft, Ford, Alphabet, EUROPCAR, JATO, JDPA, Hertz, Avis, Lease Plan, Orange Wheels,Zenith, Mobile, Auction123, Auto Point, MEINAUTO, AutoTrader, and ARVAL.

The izmomedia division operates in 16 countries, with clients in the USA, Mexico, Colombia, Belgium, Brazil, China, France, Germany, Italy, Netherlands, Portugal, Russia, Spain, 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. The izmoweb “Responsive” web platform which hosts all izmo websites is the most advanced automotive web platform in the world. Your company also offers a world-class automotive CRM with marketing automation, accessories selling solutions, and data analytics for auto dealers.

With significant investments in technology, infrastructure, and talent, we hope to make great progress in the automotive business segment this fiscal.

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.

Enterprise Products: Strategizing New Breakthroughs

With the near-total domination of the market segment, izmo’s enterprise product division achieved 50% business growth over the last year.

In the last fiscal, the division added Calcutta Electric Supply Corporation (CESC), Cap Gemini Corporation, and SQS India BFSI Ltd. to its existing customer base consisting of corporate majors like 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. and more.

With the Industry focus shifting to hacker-proof security, the Enterprise products division of your company is poised to grow exponentially.

Instant Business Websites in just 3 steps

A couple of years back, izmo entered the generic website space with izmoweb - “My Website, My Identity”. The results are encouraging.

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 reinventing this business around the franchise website model which brings in dozens of websites with one order.

New Opportunities: Defence Manufacturing Make in India, Make for the World

Defence & Aerospace is one of the 10 Champion Sectors identified under the Make in India version 2.0 of the Government of India, due to their “potential to become global champions, drive double-digit growth in manufacturing and generate significant employment opportunities.” Capitalizing on this “Make in India” initiative, izmo is entering the defence manufacturing sectorthrough its subsidiary, Hughes Precision Pvt. Ltd., with two major projects-manufacturing of ammunition and assault rifles.

The Opportunity

The global demand for reliable, high-quality arms, ammunition, and spares continues to be as high as ever, with The Stockholm International Peace Research Institute (SIPRI) data on the international arms trade showing a continuing growth trend in major conventional weapons, with the volume of transfers from 20132017 being 10% higherthan it was over 2008-2012.

The five largest importers in 2013-17 were India, Saudi Arabia, Egypt, the UAE and China, receiving 35% of all arms imports. Countries like Vietnam, with close ties with India, increased their arms imports to become the world’s 11^th largest arms importer.

The Global Arms Import-Export Gap: While India is the Largest Importer of Arms, the country 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 of the global arms imports. India’s arms imports increased 24% between 2008-12 and 2013-17, with Russia accounting for62%. In the same period, arms imports from the USA increased by 557%, making it India’s second largest arms supplier.

India also owns the world’s third largest armed forces, and recently overtook the UK as the 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 Strategic Studies (IISS). Presently, about 60% of defence related requirements of the Indian Armed Forces are met by imports, which offers a huge opportunity for eventual import substitution.

The “Make in India, Make for the World” initiative by izmo is aimed at capitalizing on India’s huge arms trade deficit by manufacturing several categories of high-quality arms, spares, and ammunition which adhere to NATO certification with DODIC numbers.

As of now, izmo has entered into extensive partnerships with Global defence OEMs, to set up the first of the proposed defence manufacturing plants, namely ammunition manufacturing and assault rifles manufacturing.

Manufacturing Friendly Government Policies

In addition to the “Make in India’ initiatives, the 2011 Defence Production Policy of the Government of India encourages indigenous manufacturing of defence equipment, and defence Procurement Procedure (DPP) has been amended in 2016 to encourage indigenous design, development, and manufacture of arms, as well as the transfer of technology.

The Government of India licensing norms has also been liberalized to encourage private participation in defence manufacturing. The initial validity period of industrial licenses has been increased from 3 to 15 years, with a provision to grant an extension for a period of 3 years.

Global Arms, Ammunition, Equipment, and Spares Hub

Apart from strengthening India’s armament sourcing capabilities, the new izmo initiative will help the company to develop its defence manufacturing division into a global hub for arms and equipment procurement.

The first project envisaged primarily for export is the production of military caliber ammunition. The license is expected shortly and commercial production expected to commence in March 2019 in Goa.

Hughes Precision Manufacturing Pvt. Ltd. is collaborating with JSC Concern Kalashnikov, makers of the AK 47 rifle, for a world-class assembly facility for the AK 100 Series rifles/ Carbines and its various modifications under the “Make In India” initiative. JSC Concern Kalashnikov will provide all the relevant technical assistance and advice toset up the facility. A Letter of Intent has been issued on the 20th of February 2018.

PartsGorilla is the next generation car visualizer and Accessories Visualization Platform 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, or inventory tools, and offers advanced reporting, customer insights, predictive decision analytics, and much more, helping companies to improve profitability, salesperson efficiency, and cost of operations.

izmofx takes automotive marketing beyond the realm of the ordinary, with CGI graphics and Virtual Reality. With our virtual automotive technology & CGI expertise, the only limit to visual marketing is your own imagination. If you can dream it, we will deliver it.

- 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 workwell on any device, 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 developed exclusively for the automotive retail industry by online marketing experts.

izmoRainmaker Offers:

- Creative Services

- Social Media Marketing - Facebook, Twitter, Linkedin, etc.

- Interactive Marketing Campaigns

- OrganicSearch Engine Optimization

- Website Optimization

- Online Brand Marketing

- Research & Data Analysis

SalesVelocity is an enterprise class Customer Relationship Management solution industry. SalesVelocity is delivered as a service, is cloud-based and contains the following core functionalities:

- Sales Force Automation

- Finance & Insurance

- Campaign Management

- Service Management

- Business Development Center (BDC)

SalesVelocity is certified by Ford, Jaguar, Lincoln, Volvo, Land Rover, Mercury, GM brands including Buick, GMC, Pontiac, Cadillac, Hummer, Saturn, Honda, Acura, Nissan, Infiniti, Mercedes Benz, Chrysler, Subaru, Saab, and Mazda.

The izmotion Video Platform offers auto retailers powerful video sales pitches delivered in just 100 seconds, video, email and ad banners on video.

The video demos include:

- Vehicle introduction

- Feature highlights

- Interiors

- Dash

- Boot space

- Engine & performance

- Seating and colors

All izmotion videos include a full-length sales pitch voiceover, with a selection ofsales personalities.

izmomedia is the world leader in Digital Imagery and Interactive Media Solutions for the Automotive vertical, since 2002. izmomedia produces High Quality Photographic images, video, and Digital Animations for the North American and EU markets, covering all major makes and models.

Large Automotive Photography Studios strategically located in Long Beach, USA, and Brussels, Belgium, combined with state-of-the-art post-production facilities in Bangalore, enable izmomedia to quickly produce large volumes of work, covering about 500 automotive models.

Presently, the izmomedia client list includes leading portals like Yahoo!, AOL, AutoUSA, and Jato Dynamics, as well as OEMs like GM, Ford, and Mitsubishi Motors.

izmostock is the world’s leading automotive stock photography provider, with dedicated vehicle photography studios in the USAand Europe.

izmostock produces high volume automotive stock photography for over 800 vehicles per year. In addition to our consistent quality standard picture sets of car stock photos we also produce the video with voiceover, CGI enhanced imagery, high resolution (HDRI) interactive interior panoramas, 360° exterior animations, and several other high res stop-frame animations of every car in the U.S.A. and Europe.

The automotive images library at izmostock is the largest and most comprehensive car stock photography collection of its kind, with hundreds of thousands of images available for download, since 2002.

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 the Audit Committee.

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 2018, 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 affairs of the Company at the end of the financial year as at 31st 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 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 effectively;

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 effectively.

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, 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 requisite information for determining qualifications, positive attributes, independence of a Director and other matters provided under Section 178 (3) is enclosed with this Report as Annexure B.

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

The statutory Auditor’s 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.39 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. 46 of Notes to the Standalone financial statement. Full particulars of investments made are stated in Note No.8 & 12 to the standalone financial statement.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on an arm’s 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.39 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 Company’s 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 entered in material transaction with one of its wholly owned subsidiary Company 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 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 financial year ended 31st March, 2018.

DIVIDEND

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

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

There are no Material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year on 31st March, 2018 to which 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 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 2,109.17 Lakhs (PY Rs 2,015.33 Lakhs)

Outgo - Rs 96.37 Lakhs (PY Rs 135.74 Lakhs)

RISK MANAGEMENT

A detailed report on Risk Management is included in Management Discussion and Analysis which forms part of this Report. The report clearly states development and implementation of a risk management policy for the Company including identification therein of elements of 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 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 Board’s effectiveness 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

During the financial year ended 31st March, 2018 under review, it has been observed that there is no any changes have occurred in the Board of Directors as well as Key Managerial Personnel.

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-a-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 Company’s 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 D 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 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 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 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 Company’s 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

The Company has Familiarization programme and the details have been uploaded on the website 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 in this 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 (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.

The aforesaid appointment of the Statutory Auditor was required to be ratified at every Annual General Meeting. However, pursuant to the amendment in the proviso to Section 139 which has been made effective on May 07, 2018, the requirement of ratification of appointment of Statutory Auditors at every Annual General Meeting has been omitted. In view of such omission of proviso, agenda item relating to ratification of Statutory Auditor is not included in the Notice of Annual General Meeting.

Pursuant to the same, Mr. Guru Prakash V, Chartered Accountant (Membership Number 228938) continues to hold the office of Statutory Auditors for the FY 2018-19. The Statutory Auditors’ Report for the FY 2017-18 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. 2017-18.The report of the Secretarial Audit in Form MR-3 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. 2017-18 and He has completed the internal audit as per scope given by the Audit Committee for the financial year 2017-18.

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 Auditor’s 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, 2018 regarding Employee Stock Option Plan 2013 in terms of Companies (Share Capital and Debenture) Rules, 2014 are as below:

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/P0LICYCELL/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, 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 off during the year under review:

Number of complaints received and disposed off - Nil

PREFERENTIAL ISSUE

The company has issued 600,000 equity shares to EARC TRUST-SC38 on preferential basis during 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, approved for the issuance of 10,00,000 Convertible Warrants to the Promoters on preferential basis & further the Board has also approved for obtaining enabling approvals of shareholders for issue of shares to Qualified institutional Buyer upto Rs. 40 Crores, subject to approval of the Members and such other authorities, as may be necessary.

Further board has given its approval for modifications made in issue of convertible share warrants in the board meeting held on 13th August, 2018.

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: Bengaluru By order of the Board

Date: 13th August 2018 for IZMO Limited

Sd/- Sd/-

Sanjay Soni Shashi Soni

Managing Director Chairperson and Whole time Director

DIN:00609097 DIN:00609217

Address: Flat No. 9, Prestige Address: Flat No. 9, Prestige Casablanca

Casablanca Apartments, 12/1, Apartments, 12/1, Airport Road,

Airport Road, Bengaluru-560017 Bengaluru-560017