Directors Report of IZMO Ltd.

Mar 31, 2018

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

Particulars	2017-18	2016-17
Revenue from Operations	6,298.66	5,428.07
Other Income	507.48	424.73
Total Revenue	6,806.14	5,852.80
Direct cost of operations	71.62	70.22
lncrease/(Decrease) in Stocks/WIP	0.55	0.87
Employee Benefit Expenses	2,961.30	2,213.23
Financial Expenses	118.67	118.37
Depreciation	1,225.61	1,192.52
Other Expenses	1,533.37	1,866.49
Total Expenses	5,911.12	5,461.70
Profit/ (Loss) before Tax & Exceptional Item	895.02	391.09
Exceptional or Extraordinary Items	191.22	—
Profit/ (Loss) before Tax	703.79	391.09
Provision for Taxation	(34.54)	(21.77)
Deferred Tax	(64.11)	95.97
Profit / (Loss) after Tax	605.15	465.29
Other Comprehensive Income	23.07	8.00
Total Comprehensive Income for the year	627.23	473.29

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

Particulars	2016-17	2015-16
Revenue from Operations	2,260.00	1,163.90
Other Income	463.38	344.80
Total Revenue	2,723.38	2,508.70
Direct cost of operations	70.21	70.22
lncrease/(Decrease) in Stocks/WIP	0.55	0.87
Employee Benefit Expenses	1,665.94	1,157.34
Financial Expenses	118.67	118.10
Depreciation	121.16	586.95
Other Expenses	597.28	574.66
Total Expenses	2,575.22	2,508.14
Profit/ (Loss) before Tax & Exceptional Item	148.15	0.56
Exceptional or Extraordinary Items	—	—
Profit/ (Loss) before Tax	148.15	0.56
Provision for Taxation	(34.53)	(21.77)
Deferred Tax	(64.10)	61.45
Profit / (Loss) after Tax	49.50	74.77
Total Other Comprehensive Income	23.08	8.00
Total Comprehensive Income for the period	72.58	82.77

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:

Particulars	Employee Stock Option Plan 2013
	(F.Y 2017 -2018)	(F.Y 2016 -2017)
Option granted	6,86,000	NIL
Option vested	86,100	86,100
Option exercised	59,400	63,600
The total no. of shares arising as a result of exercise of option	59,400	63,600
Options lapsed/cancelled uring the year	26,700	22,500
The exercise price	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.
Money realized by exercise of options	Rs.5,94,000	Rs.6,36,000
Total no. of options in force	8,00,800	2,00,900
Employee wise details of options granted to :
Key Managerial Personnel( KMP)	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	Name of the employee: Mr. Akula Satya Kiran No. of option granted: 20000
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

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

---

Mar 31, 2016

Dear Shareholder,

The Directors have pleasure in presenting the Twenty first Annual Report together with the Audited statements of accounts for the year ended 31st March, 2016.

Consolidated financial statements of accounts for the year ended 31st March, 2016.

Rs. in Lakhs

Particulars	2015-16	2014-15
Revenue from Operations	4,288.59	3,347.74
Other Income	831.60	809.79
Total Revenue	5,120.19	4,157.53
Direct cost of Operations	65.29	119.85
Increase/(Decrease) in Stocks/WIP	(0.57)	2.53
Employee Benefit Expenses	1,954.82	1,805.29
Financial Expenses	186.44	236.23
Depreciation	1,219.39	1,320.31
Other Expenses	328.15	343.83
Total Expenses	5,018.25	4,563.97
Profit/ (Loss) before Tax & Exceptional Item	101.94	(406.44)
Exceptional or Extraordinary Items	--	--
Profit/ (Loss) before Tax	101.94	(406.44)
Provision for Taxation	--	(20.71)
Deferred Tax	61.45	43.31
Profit / (Loss) after Tax	163.39	(383.84)

Performance on a Consolidated Basis

The Company''s performance on a consolidated basis has shown a significant improvement over the previous year.

The revenues have increased by nearly 30% and more significantly the company has shown a healthy profit vis-a-vis a loss incurred in the previous year. The company has managed to achieve this by increasing revenues substantially whilst simultaneously keeping its expenses under a very tight leash.

The increase in Other Expenses is mainly due to higher marketing spend incurred in promoting the company''s products in the European market. This strategy has reaped good dividends with significant business growth being seen in France and Belgium.

The Company is confident of maintaining its growth trajectory in the current year as well as the order book is quite healthy and pipeline very strong.

Particulars	2015-16	2014-15
Revenue from Operations	1,850.72	1,843.05
Other Income	257.87	187.75
Total Revenue	2,108.58	2,030.80
Direct cost of Operations	65.29	119.85
Increase/(Decrease) in Stocks/WIP	(0.57)	2.53
Employee Benefit Expenses	829.43	807.64
Financial Expenses	186.44	187.98
Depreciation	570.28	580.76
Other Expenses	625.35	328.15
Total Expenses	2,276.21	2,026.91
Profit/ (Loss) before Tax & Exceptional Item	(167.63)	3.89
Exceptional or Extraordinary Items	--	--
Profit/ (Loss) before Tax	(167.63)	3.89
Provision for Taxation	--	(20.71)
Deferred Tax	61.45	43.31
Profit / (Loss) after Tax	(106.18)	26.49

Performance

The Company''s sales on a standalone basis has been quite stable and at a similar level to that achieved in the previous year.

The other income has shown a sharp rise primarily on account of the INR declining quite significantly against the US Dollar.

Analysis of Expenses

The direct cost of operations during the year are much lower than that incurred in the previous year. This is due to fall in sales of Enterprise Connectivity software products as a result of sluggishness in the domestic economy.

Other expenses have shown a sharp increase over the previous year. This is primarily due to one-time customer related product development costs being written off during the year. This is a non-recurring item and would not appear in subsequent years.

Depreciation has seen a slight decrease due to lower capital expenditure incurred during the year.

Profitability

The company has declared a loss at the net level as compared to the previous year. This is primarily a result of the sharp increase in other expenses.

However, the company has made a cash profit during the year.

The company expects to return to 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.

Business Overview Driving Change

Think Cloud, Mobile, Social, Video, CGI, Virtual Reality, Big Data Analytics...

The world over, business IT is in the midst of seismic shifts in technology and user experience, from server farms to the cloud, from big screens to mobile, from silos to social, from largely static experiences to video, CGI and virtual reality, and from informed guesswork to real-time business insights, driven by big data analytics. In the midst of change, gizmo is right at the cutting edge, helping businesses shape the twists and turns of technology into competitive advantage.

15 Minutes is all it takes

Online clinics, restaurants, law firms, yoga studios - you name it.

From beauty salons to barbeques, technology is driving businesses large and small online.

Businesses who have successfully adopted a website into their corporate identity are reaping disproportionately big dividends - in marketing, PR, customer engagement, employee relationships, and more. According to a global study, up to 83% of businesses with a successful online presence are recommending it to others in the industry.

There are about 125 million such micro, small and medium enterprises around the world. At izmo, it is our goal to become the definitive first choice of these businesses as they increasingly choose to go online.

Last year, izmo introduced the new avatar of izmoweb — “Meri Website, Meri Pehchan”, or “My Website, My Identity”, in the U.S and India, targeted at a wide range of businesses and professionals. In the current year we further refined the offering into a ready-to-go package which any business or professional can buy online and deploy in just 15 minutes.

With an astonishing 55% of all small and medium enterprises (SMEs) going without a website in the U.S. alone and only 6% having a mobile friendly website as of 2013, this is a momentous window of opportunity for izmo, because izmo is the only provider to address the #1 reason why SMEs don''t have websites, in spite of the obvious business advantages- lack of effective, well-crafted website content.

Content Ready, Mobile Ready, Ready to Go

izmoweb is truly a one-of-a-kind website product. Everything that businesses or professionals need to drive their businesses or practices online is pre-built into these websites. This includes the website design, detailed content authored by experts, cloud hosting, SEO, online marketing best practices, and even website URLs.

Earlier, businesses had to figure out from whom to buy a domain name, who will design the website, who will write the content, who will do the hosting, who will provide search engine optimization (SEO) and online marketing, who will create business email ids, and so on. A hundred hurdles needed to be crossed before they can have an effective, performing website.

Even businesses who could afford the large budget did not have the expertise to tie all of these together into a viable project and take the website live. As a result, most businesses were stuck with basic, “business card” websites. Many of them lost faith in web marketing altogether, continuing with expensive newspaper or TV advertising for the lack of a better web alternative.

With izmoweb, all that is history. Just 15 minutes is all it takes now to get a fully configured, content driven, mobile-ready business website that shows up high on Google and delivers results.

From Project to Product

To make it easier for customers, izmo virtually reinvented the business website development lifecycle, making it a buy-and-use product like a car or a laptop. The project-to-product transition will now bring hundreds of thousands of businesses who were earlier left out, into the online business space.

Scope of Business

Out of the one billion plus websites currently online, it is estimated that more than 800 million are either dysfunctional or ineffective, and can be replaced with izmoweb. Many of these websites are older generation hard-coded websites that require expert help for even simple content updates, and they do not work well on mobile screens.

In addition, the world wide web is adding one website every second, on average. Up to 95% of these websites have an unresolved bottleneck - timely content updates. izmoweb is also the ideal choice for most of these websites.

INDIA

With 300 plus websites live and a robust sales pipeline, izmoweb is proving to be one of the fastest growing website providers in the business and professional segments, including medical specialties, lawyers, restaurants, beauty salons, makeup artists, physiotherapy, yoga, medical diagnostics, playschools, and more.

With India fast emerging the SME capital of the world, the 48.8 million small and medium enterprises in the country require effective web solutions to reach customers. Over 1.5 million of these SMEs export their products and services, and for all of them a sophisticated mobile-friendly business website is a prerequisite. 95% of the Indian SMEs are also micro enterprises who are unlikely to have a dedicated web marketing team, and would require user friendly business websites to reach their consumers.

The SME sector, which is India''s largest employer, employing 81. 16 million people, is likely to take off at an even faster pace with the “Make in India” initiative of the Central Government.

NORTH AMERICA

USA

Small and medium-sized enterprises (SMEs) are the mainstay of the U.S. economy. They make up 99% of all U.S enterprises. 98% of U.S. exporters are SMEs and they generate 34% of U.S. export revenue. The 25.16 million SMEs in the U.S. also employ half of U.S workforce - over 56.1 million people.

With 88.7% of U.S. Citizens on the Internet, mostly on their mobiles, U S enterprises have really no option but to be where their customers are. However, most SMEs face the perpetual problem of suitable business ready content for their websites, reducing many of these websites to little more than web business cards.

Your company has now launched izmoweb in the U.S. market, and is quickly gaining traction in several verticals.

Mexico

Out of the 4 million plus business enterprises in Mexico, 99.8% are SMEs or “Py MEs” as they are locally known. About 52% of the Mexican GDP is generated by SMEs, who also contribute 72% of employment.

izmo has significant presence in Mexico, where it is the largest provider of automotive dealer websites. We are hopeful of a successful nationwide rollout of izmoweb services in the country, building on our nationwide base in automotive retail.

EUROPE France

With a fast growing client-base in the automotive vertical and an outstanding market reputation as the countries'' largest automotive web provider, izmo is hopeful of a successful rollout of izmoweb in the country. As a first step your company has started providing social marketing services in France.

With an SME sector in excess of 2.4 million businesses, France is an ideal market for the izmoweb brand. 99% of French companies are SMEs, and many of them are currently transitioning from local marketing to web marketing.

OTHER EU NATIONS Belgium, Italy, Spain, Portugal, And Germany

Belgium, Italy, Spain, Portugal, and Germany have vibrant SME sectors which make up to 99% of their business enterprises. Your company is hopeful of leveraging its existing presence in these countries to roll out izmoweb expeditiously.

AUTOMOTIVE VERTICAL

izmo has continually invested in its global market leadership in the automotive retail space. izmo dealer websites now run on the cloud, are responsive, and come with cutting edge features that make them the first choice of the world''s leading automotive retailers and portals from North America to Europe to Asia.

New products introduced in the automotive retail space include the izmotion video brochure and video platform, izmofx CGI and Virtual Reality Narrations, and Frogdata big data analytics platform.

USA

After a record breaking high of 17,470,659 automobiles sold in 2015, U S auto sales is all set to top out in the region of 17 million vehicles sold this year.

Riding on this sustained market upswing and industry push for new online sales avenues, the multi-media division of izmo was able to make considerable progress in the market with the launch of two new products - izmotion video brochures and video sales platform, and izmofx CGI and Virtual Reality narrations.

Even as we continue to acquire and engage top-tier clients like GM, Microsoft, Toyota Motor Sales, Mitsubishi, USA123, ADS, AOL, Autonation, Autopoint, Autotrader, Dataone, Hendricks, DEP, DME, Dominion, Evolio, Gomoto, HGM, Jato, JDPA, Jetpack, Kukui, NEWS, SIM, Stickout, and Vincentric in the imagery and data categories, we continue to retain clients such as Kuhio Auto Group in the online solutions space.

In the online marketing space, izmo is now testing a new online marketing suite called the “Escape the Bear” package, as well as introducing new high-performance social marketing concepts. Frogdata, the industry-first big data analytics program of izmo was also introduced in the market this year.

With the combined market push of new products and new avatars of existing market-leading products, we expect to see ground breaking progress in the USA in the coming years.

Mexico

izmo continues to be the largest dealer website service provider in Mexico, and the only retail website provider for Nissan Mexico, the largest Automotive OEM in the country with a 24.8% market share.

Mexico''s auto market expanded 20% in 2015, and the

country is all set to repeat it''s automotive sales performance in 2016 too.

izmo continues to be the largest dealer website service provider in Mexico, and the only retail website provider for Nissan Mexico, the largest Automotive OEM in the country with a 24.8% market share.

izmo dealer websites and portals also drive the sales of Honda, Infinity, Renault, Chrysler, and Suzuki vehicles, as well as used cars.

The izmo client portfolio in Mexico now includes 45 prominent retail groups including Autocom, Andanac, Autosur, and GA3.

European Union

Even Brexit failed to dent the progress in the Western European car market, with the sales graph rising in all five key markets except the U K. Sales rose 8.3% in Germany, 0.8 % in France despite terror strikes, 12% in Italy, and 11% in Spain. In the U K, however sales contracted marginally by 0.8%.

izmo is the only solutions provider in the E.U. offering a complete “one-stop” web marketing solution required by dealers to capitalize on the sustained market upswing.

The izmo solution suite for EU auto dealers including responsive mobile-friendly websites, online marketing and social media, automotive CRM and ILM, and image processing services made considerable headway in European markets.

At the same time, the European division of izmostudio made impressive gains in the automotive visual media segment, with a client list including MSN, Hertz, Stickout, Leaseplan, JDPAAMTT (Global Clients), ASV, AutoICI, AutoReduc, AVIS, Bernard, Car Trawler, Elite, Eucon, Europ Car, EuroTax, Meinauto, Mobile DE, Multilease, Orange Wheels, Terberg Leasing, and Tusker.

France

Your company continues to be the #1 auto dealer website provider in France, a milestone achieved with the addition of PGA last year.

izmo continues to serve PGA, HESS, the Lamerault Group, and the Metin Group. The dealer portfolio of your company in France now includes 32 auto brands - the French Brands Peugeot, Citroen, and Renault, as well as Audi, Alfa Romeo, Abarth, 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 made significant inroads in the Spanish automotive market after adding Audi and Volkswagen websites for the Vilamobil group, and has added 18 websites to the Spanish portfolio, including Augusta Car Group, and Grupo Nicolas.

Portugal

izmo was able to make an important breakthrough in the service segment in Portugal, with hundreds of dealers signing up for an innovative service solution for Ancra. Presently izmo has 16 websites serving dealers in Portugal.

Italy

izmo has made significant inroads into the Italian market, with the addition 12 auto dealer websites for Linea Blu, Biella Auto, Central Car Spa.

Solution Map

ASIA India

2016 promises to be a year of growth for Indian automotive majors, with the year taking off on a positive note and several new models lined up for launch. While the market leader Maruti Suzuki is looking at a 7% increase in sales, Hyundai notched up a sales uptake in the region of 10%. Renault India recorded a mind bogging 211% increase in sales, and Ford India grew by 32%.

Increasingly, automotive dealers are now switching their marketing strategies, making their website the center of their marketing activities. As a result, Carazoo, the only Automotive solutions provider in the Indian market to provide 360° auto retail solutions, is experiencing fast-paced growth. The Carazoo suite of solutions also include online marketing, CRM, and Lead Management solutions.

With 150 online showrooms, Carazoo is the#1 car dealer website provider in India. The Carazoo website portfolio includes Maruti Suzuki, Volkswagen, Hyundai, Honda, Mahindra, FIAT, Chevrolet, Ford, Renault, Tata Motors, Nissan, ISUZU, and Skoda, besides Bajaj, Hero, Suzuki, and Honda websites in the 2-wheeler segment, group websites, and Trucks & Tractors websites.

Our Indian clientele include NBS Mahendra, Landmark Group, Sai Service Group, Sagar Auto, Mody Auto Group, For point Automotive, Trident Automotive Group, and Platinum Motors.

On a strategic evaluation, Cap Gemini named Carazoo as one of the 7 Global entities that will influence Auto Retailing along with Yahoo, EBay, Wal-Mart, and Edumunds.com.

With 150 online showrooms, Carazoo is the#1 car dealer website provider in India. The Carazoo website portfolio includes Maruti Suzuki, Volkswagen, Hyundai, Honda, Mahindra, FIAT, Chevrolet, Ford, Renault, Tata Motors, Nissan, ISUZU, and Skoda, besides Bajaj, Hero, Suzuki, and Honda websites in the 2-wheeler segment, group websites, and Trucks & Tractors websites.

Enterprise Product Division

Building on earlier successes in the Enterprise category, the Enterprise Software division of izmo was able to add high-value customers like BARC, RADRP ( Power Grid Corporation of India), Airbus Projects, The Hindu, and more, to the existing client list of GE, Jet Airways, Infosys, Rambus Chip Technologies, Airtel, Kotak Mahindra Bank, Axis Cades Technologies, and more.

Presently the Enterprise Product Division is gearing up with new products for wider growth.

Market Opportunity and Growth Strategy

With the web becoming the new yellow pages of businesses and professionals worldwide, the website segment for SMEs represent an opportunity of at least 10 million websites annually. With more than a decade of experience in the hotly contested automotive web segment, izmo has now entered the global website market for businesses and professionals with the launch of izmoweb.com in the U S and izmoweb.in in India.

Advantage izmo: 5 winning reasons

- True one stop-solution, ready to go live in just 15 minutes.

- The only provider who offers ready-to-go professional content for all major business segments.

- Advanced appointments system built in: almost any business requires an appointment system

- More than a website, a web ecosystem: izmo websites are not merely a standalone website offering, but a complete system that tracks and drives customers to the business right from day one.

- No other provider in the world offers all of these at our price. With our India advantage global market presence, the entry barrier is quite high for others to offer any significant competition

izmostock stock photography

The world''s Top Provider of automotive imagery and visual marketing solutions

With state-of-the-art studios in close proximity to the global nerve centers of the automotive world, namely 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 years back.

We are now expanding the izmo visual product portfolio to include a video marketing platform, video brochures, automotive CGI, and Virtual Reality narratives.

Presently, izmostudio is serving:

Automotive OEMs Prominent Portals

- Companies in automotive related businesses like leasing, etc.

- Media

^- Ad Agencies and creative studios

^- Retail clients

In the -next fiscal, we are hopeful of further consolidating our position in all of these categories, aggressively marketing the enhance d visual marketing capabilities of izmo.

#1 Automotive web solutions provider in France, Mexico, and India

Your company is also in the process of consolidating the auto dealer solutions business in North America, Europe, and Asia. We are already the #1 auto dealer website provider in France, Mexico, and India. With the launch of the new generation “Responsive” web platform, arguably the most advanced web platform in the world, the new generation appointments system, and the new version of izmoCRM with marketing automation, we hope to make great progress in our automotive business segment in all of our markets.

Fully developed, mobile-ready responsive websites for any business.

- Ready to go, no development required - Just add your name, logo and address

- Comes with pre-built content

- The most advanced web platform in the world

- Latest responsive website technology - your website will work well on 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 for Search Engines. See your profile grow online

- No hassle deployment. We buy your domain, setup your website and do everything

www.izmoweb.com

izmorain maker is a comprehensive, interactive, Internet marketing solution developed exclusively for the automotive retail industry by online marketing experts.

Izmorain maker Offers:

- Creative Services

- Social Media Marketing - Facebook, Twitter, LinkedIn...

- Interactive Marketing Campaigns

- Organic Search Engine Optimization

- Website Optimization

- Online Brand Marketing

- Research & Data Analysis izmo studio is the world leader in Digital Imagery and Interactive Media Solutions for the Automotive vertical, since 2002. Izmo studio 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 izmo studio to quickly produce large volumes of work, covering about 500 automotive models.

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

Izmo studio has more than a decade of experience in working with ad agencies specialized in producing creative for automotive clients. Over the years izmo studio photographers have worked with art directors from DDB, Y&R, Traffic, Digitas, Organic, and Campbell-Ewald.

Izmo stock is the world''s leading automotive stock photography provider, with dedicated vehicle photography studios in USA and Europe.

Izmo stock 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 video with voice over, CGI enhanced imagery. high resolution (HDRI) interactive interior panoramas, 360⁰ exterior animations, and several other high res stop frame animations of every car in the U.S.A. and Europe.

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

iCRM is an enterprise class Customer Relationship Management solution industry.

iCRM 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)

iCRM 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.

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, Sales Person Efficiency and Cost of Operations.

CGI and Virtual Reality

izmofx takes automotive marketing beyond the realm of the ordinary, with CGI graphics and Virtual Reality.

With our automotive technology and expertise, the only limit to visual marketing is your own imagination. If you can dream it, we will deliver it.

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 of sales personalities.

01. EXTRACT OF ANNUAL RETURN:

The extract of Annual Return of the Company is given in this Annual Report -Annexure A

02. NUMBER OF MEETINGS OF THE BOARD:

During the Financial Year 5 Board Meetings were held on 30.05.2015, 07.08.2015, 03.09.2015, 27.10.2015, and 13.02.2016.

03. BOARD COMMITTEES:

Detailed composition of the Board committees namely Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee number of meetings & meeting of independent Directors'' held during the year under review and other related details are set out in the Corporate Governance Report which forms a part of this Report. There have been no situations where the Board has not accepted any recommendation of the Audit Committee.

04. DIRECTORS'' RESPONSIBILITY STATEMENT:

The Directors have fulfilled their responsibility in preparation of the accompanying financial statements by taking all reasonable steps to ensure that:

(i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii) 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 and of the profit or loss of the company for the financial year ended 31st March 2016;

(iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(iv) directors have prepared the annual accounts on a going concern basis.

(v) directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(vi) 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.

05. STATEMENT ON DECLARATION OF INDEPENDENCE GIVEN BY INDEPENDENT DIRECTORS:

All Independent Directors have given declarations that they meet the criteria of independence as laid down u/s 149 (6) and (7) of the Companies Act, 2013.

06. 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, along with criteria 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.

07. NOMINATION AND REMUNERATION POLICY:

This Nomination and Remuneration Policy is being formulated in compliance with Section 178 of the Companies Act, 2013 read with the applicable rules thereto and Regulation 19 of the SEBI (Listing Obligation & Disclosure Requirements) Regulations, 2015, as amended from time to time. This policy on nomination and remuneration of Directors, Key Managerial Personnel and Senior Management has been formulated by the Nomination and Remuneration Committee (“the Committee”) and has been approved by the Board of Directors.

Details of policy on director''s Appointment, remuneration criteria etc is given in Annexure- B

08. EXPLANATION OR COMMENTS BY THE BOARD ON EVERY QUALIFICATION/ RESERVATION/ADVERSE REMARK / DISCLAIMER BY THE STATUTORY AUDITOR IN HIS REPORT :

As regards the comments of the Auditors in their Report dated 30th May 2016 relevant notes to accounts are self explanatory.

1. Director''s replies to the qualifications/observations of the Auditors are as follows:

Sl. No.	Auditors Qualifications	Director’s Reply
1	According to the information and explanations given to me and the basis of examination of books of accounts. I observe that the company had defaulted in repayment of term loan installments amounting to Rs. 2.33 Crores payable from September 2012 to March 2016 and Rs. 11.64 Crore towards other credit facilities payable from September 2011.	The Loan has been transferred d by State Bank of Mysore to Edelweiss ARC in 2014. Company has already made a down payment and submitted a proposal for restructuring the loan to Edelweiss ARC. This is currently under processing by Edelweiss ARC.

2. As regards the comments of the Secretarial Auditors in their Report dated 26th July, 2016, the Board''s reply to the qualifications/observations of the Secretarial Auditors are as follows:

-i s. SN	Secretarial Auditors Qualifications	Directors’ Reply
1	During the period under review, the	Due to some unavoidable
	Company has complied with the	circumstances, including
	provisions of the Acts Rules,	resignation o f Company
	Regulations, Guidelines, etc.	Secretary, the company was unable to remit the Unpaid / Unclaimed Interim dividend
	mentioned above except for the
	following:	declared in 2008 to the Investor Education & Protection Fund
	(a) remittance of Unpaid/Unclaimed Interim	within the due date.
	dividend declared in 2008 to the	Subsequently remittance to the
	Investor Education &	fund was made. However Form
	Protection Fund beyond the	1 INV for the same could not be
	period specified in Rule 3 of the	filed, as it was withdrawn by
	Investor Education and	the MCA from its portal. Form
	Protection Fund (awareness	5 INV was also withdrawn from
	and protection of investors)	the MCA Portal. Once the
	Rules, 2001 and non- filing of	required forms are made
	Form 1 INV relating thereto	available in the MCA portal , the
	and (b) non - filing of Form 5 INV under Rule 3 of the Investor Education and Protection fund (uploading of information r e g and in g u n paid a n d unclaimed amounts lying with companies) Rules, 2012.	c o m p a n y w i l l d o t h e needful at the earliest.

3. There is no qualifications or adverse remarks from the Internal Auditors. 09.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS :

The particulars of the loans granted are mentioned in the Note No.24.15 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 by Izmo Limited are stated in Note No. 24.30 of Notes to the Standalone financial statement. Full particulars of investments made are stated in Note No. 10 and 12 to the Standalone financial statement.

10. RELATED PARTYTRANSACTIONS AND ITS POLICY :

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. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are repetitive in nature. The actual transactions entered into pursuant to the omnibus approval so granted are placed at quarterly meetings of the Audit Committee. The Company has formulated a policy on related party transactions. This policy as approved by the Board is uploaded on the Company''s website, www.izmoltd.com.

Your directors draw attention of the members to Note No. 24.15 of notes to the financial statement which sets out related party disclosures.

11. 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, 2016 to which the financial statements relate and the date of this report.

12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, 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 operational methods.

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 1758.32 Lakhs (PY Rs 1,656.90 Lakhs)

Outgo - Rs 152.61 Lakhs (PY Rs 172.60 Lakhs)

13. 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 a risk mitigation plan.

A copy of Risk Management Policy is available in the Company''s Website (www.izmoltd.com).

14. 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.

15. BOARD PRESENTLY IS CONSTITUTED AS FOLLOWS:

1. Mrs. Shashi Soni - Chairperson

2. Mr. Sanjay Soni - Managing Director

3. Mr. Vijay Gupta - Non Executive and Independent Director

4. Mr. Perur Phaneendra - Non Executive and Independent Director

5. Mr. Ramanujam Krishnamurthy Non Executive and Independent Director

Details of directors & KMP appointed/ceased during the year:

Name	Appointment/ Resignation	Date of event	Designation
Mr. Suraj Kumar Sahu	Appointment	13.02.2016	Company Secretary & Compliance Officer
Ms. Chitra. M.A	Resignation	21.08.2015	Company Secretary & Compliance Officer

16. COMMITTEES OF THE BOARD OF DIRECTORS:

Following Committees of the Board as required to be constituted under the provisions of Companies Act, 2013 and SEBI (Listing Obligation & Disclosure Requirements) Regulations, 2015 has been constituted by the Company:

a. Audit Committee

b. Nomination and Remuneration Committee

c. Stakeholders Relationship Committee

d. Risk Management Committee (discontinued)

The three Independent Directors of the Company Viz., Mr. Perur Phaneendra, Mr. Ramanujam Krishnamurthy, and Mr. Vijay Gupta constitutes all the aforesaid Committees of the Board.

17. 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 read with earlier Clause 49 of the Listing Agreement and has uploaded the same on company''s website www.izmoltd.com.

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

18. DEPOSITS :

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

19. 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.

20. CHANGE IN THE NATURE OF BUSINESS :

During the year under review, there is no change in the nature of the business.

21. 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.

22. VIGIL MECHANISM/ WHISTLE BLOWER POLICY :

The Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behaviour. Towards this end, the Company has adopted the Code of Conduct, which lays down the principles and standards that should govern the actions of the Company and its employees. Any actual or potential violation of the Code, howsoever insignificant or perceived as such, would be a matter of serious concern for the Company.

Therefore the Company has established Vigil Mechanism/ Whistle Blower Policy for directors and employees to report concerns of unethical behavior, actual or suspected, fraud or violation of the Company''s code of conduct or ethics policy. The policy of the Company on Vigil Mechanism / Whistle Blower has been uploaded in the Company''s Website (www.izmoltd.com).

No complaints have been received during the year Financial Year 2015-16.

23. FORMAL ANNUAL EVALUATION OF BOARD ON ITS OWN PERFORMANCE AND THAT OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS:

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. Performance of executive directors has been evaluated by Independent directors and that of independent directors has been evaluated by Executive directors. Evaluation report shows that performances of all the directors are satisfactory.

24.FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS:

The Independent Directors are provided with a detailed report on the Company for past 5 years internal policies, a write up on powers delegated by the Board to various Officers of the Company, Bio data of Key Managerial Personnel, Service Rules applicable to the employees of the Company, Organization Chart, Proceeding of General Meetings of the Company for the past 5 years to enable them to familiarize with the Company''s policies and practices.

25. MANAGEMENT DISCUSSION & ANALYSIS REPORT:

Pursuant to the provisions of Regulation 34 of the SEBI (Listing Obligation & Disclosure Requirements), 2015, Management Discussion & Analysis Report is annexed as part of this report separately as Annexure D.

26. AUDITORS : Statutory Auditor

Mr. R Vijayan and, Chartered Accountant (Membership Number 202118) as Statutory Auditor of the company to hold office from the conclusion of 19th Annual General Meeting up to the conclusion of the 22nd Annual General Meeting of the Company, Subject to ratification in every ensuing Annual General Meeting. He has confirmed his eligibility under Section 141 of the Companies Act, 2013 and the Rules framed there under for appointment as Statutory Auditor of the Company.

Secretarial Auditors

As per the Section 204 of the Companies Act 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Company has appointed Mr. V. Sreedharan, Practicing Company Secretary, Founder and Senior Partner of V Sreedharan & Associates, Company Secretaries, for conducting the secretarial audit of the Company for the financial year 2015-16. The said audit covers the Companies Act and the Rules made there under, Listing Agreement/ SEBI (LODR)-2015 and other related laws including sector specific laws which are applicable to the Company.

A copy of Secretarial Audit Report has been given in Annexure-E Internal Auditors

The Board has appointed Mr. M. Venkatesha, Charted Accountant, having Membership No.: 232131 as Internal Auditor of the Company pursuant to Section 138 of the Companies Act, 2013 for the F.Y. 2015-16 and He has completed the internal audit as per scope given by the Audit Committee for the financial year 2015-16.

27. REPORT ON CORPORATE GOVERNANCE :

Your Company continues to benchmark itself with the best-of-the-breed practices as far as corporate governance standards are concerned. Your Company has complied with regulations provided in Clause 49 of the Listing Agreement (''Listing Agreement'') with the stock exchanges for the period 1st April, 2015 to 30th November, 2015 and as per relevant provisions of Chapter IV of Securities and Exchange Board of India (Listing Obligations and Disclosures requirements) Regulations, 2015 (''Listing Regulations'') for the period 1st December, 2015 to 31st March, 2016,it has entered into with the stock exchanges. The compliance report on the various requirements under the said clause along with the Auditors certificate thereof is provided in the corporate governance section of this report at “Annexure F”.

28. ESOP :

The Company was given ''in principal approval'' by both the stock exchanges for listing of ESOP shares under the ''Employee Stock Option Plan 2013”. The Board on recommendation of Nomination and Remuneration Committee noted the list of eligible employees in its meeting dated 30.05.2015. First vesting of shares which will be 30 % of total options granted to the eligible employees has fallen due in the month of June 2016.

29. HUMAN RESOURCES :

As on March 31, 2016 the employee strength was 233 employees.

30. RATIO OF MANAGERIAL REMUNERATION :

Details of employees as required under Section 197 of the Companies Act, 2013, is as given in the Annexure-G

31. LISTING AGREEMENT :

The Securities and Exchange Board of India (SEBI) has issued SEBI (Listing Agreement and Disclosure Requirements) Regulations, 2015 (Regulations) with effect from December 1, 2015. As per the Regulations, Company had entered in to Listing Agreement with National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE) during the year.

32. COMPLIANCE OF CODE OF CONDUCT BY DIRECTORS :

This Code envisages that the Board of Directors of the Company and Senior Management Personnel must act within the boundary of the authority conferred upon them and with a duty to comply with the requirements of applicable law. The purpose of this Code is to enhance ethics & transparency in the governance of the Company, and thereby reinforce the trust and confidence reposed in the Officers by the shareholders of the Company.

A copy of the Code has been posted in the Company''s Website (www.izmoltd.com) and a declaration signed by Managing Director is published in this Report.

33. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT THE WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 :

The Company has adopted an Anti-Sexual Harassment Policy 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 company has not received any complaint of sexual harassment during the financial year 2015-16.

34. EMPLOYEE STOCK OPTION PLAN 2016.

The Company is going to launch “IZMO Limited - Employee stock option plan 2016 subject to approval of members in the coming AGM.

ACKNOWLEDGMENT:

Your Directors place on record their deep appreciation for the support extended by the business associates, customers and vendors. Your Directors place on record their gratitude of the significant contribution made by employees at all levels who have been instrumental in enabling your Company to make rapid progress during the year. Your Directors also thank Bankers, Government and Quasi Government Agencies, STPI Authorities, Capital market, media, shareholders fraternity and all other stakeholders towards their support during the year.

By order of the Board For IZMO Limited

Place: Bangalore Sd/- Sd/-

Date: 11^th August 2016 Sanjay Soni Shashi Soni

Managing Director Chairperson and

DIN: 00609097 Whole time Director

Address: Flat No. 9, DIN: 00609217

Prestige Casablanca Apartments, Address: Flat No. 9,

12/1, Airport Road, Prestige Casablanca Apartments,

Bangalore-560017 12/1, Airport Road, Bangalore-560017

---

Mar 31, 2014

Dear Shareholder,

The Directors have pleasure in presenting the Nineteenth Annual Report together with the Audited statements of accounts for the year ended 31st March, 2014.

MANAGEMENT DISCUSSION AND ANALYSIS :

Financial Highlights: (Rs. in Lakhs)

Particulars 2013-14 2012-13

Revenue from Operations 1,605.41 1,693.55

Other Income 243.84 457.71

Total Revenue 1,849.25 2,151.26

Direct cost of Operations 122.72 156.26

Increase/(Decrease) in Stocks/WIP (0.96) (1.63)

Employee Benefit Expenses 611.20 730.28

Financial Expenses 184.60 148.29

Depreciation 550.56 62.67

Other Expenses 343.83 313.90

Total Expenses 1,627.35 1,409.77

Profit before Tax & Exceptional Item 37.30 741.49

MAT Credit Adjustment (9.71) -

Reversal of Interest Receivable as Doubtful - (230.04)

Rebate on Export - (398.97)

Profit before Tax 27.59 121.47

Profit after Tax 19.68 74.30

Perfomance

The Company''s sales have shown a slight drop as compared to the previous year. This is mainly on account of the slowdown in the domestic market due to which sales of Enterprise Connectivity products have fallen as compared to the previous year. Most companies have cut back on their capital expansion programs due to tight liquidity situation in the domestic economy. As a result of this, domestic sales have been affected.

The other income has shown a sharp fall primarily on account of the INR remaining quite stable against the US Dollar.

Analysis of Expenses

The direct cost of operations in FY 13-14 are significantly lower than FY 12-13. This is primarily on account of the lower sales of Enterprise Connectivity product.

The company has reduced its employee headcount substantially in FY 13-14 as compared to the previous year. This has resulted in the sharply lower employee costs for the company. The company is continuing to reduce its employee strength by increasing productivity within the company.

Financial costs have increased slightly as compared to the previous year. This is on account of an increase in interest rates charged by the bank on the company''s working capital limits. However, this should reduce substantially in the current year.

Other expenses have shown a slight increase over the previous year. This is due to inflationary cost increases in areas such as rent, electricity charges and other overheads. The company is trying its best to control costs in every area to the maximum extent possible.

Profitability

The overall profitability of the company has reduced as compared to the previous year. This is mainly on account of the significant increase in depreciation charges. The company has purchased substantial IP assets which are essential for future new product development and current product enhancements. The company had been deferring this purchase for the last 2-3 years due to the tight liquidity situation. Since that has considerably eased out in the current year, the company has been able to purchase these critical software IPs.

The company expects the profitability to further improve in the current year as a result of its European operations becoming profitable for the 1st time since inception. The turnover of the European operations in the 1st quarter of the current year has already crossed last full year''s turnover.

The company''s focus on growing its content sales business is also paying off. The Company has the world''s largest database of automobile pictures and animations covering car models from USA, Mexico, Continental Europe and India. The Company is adding Brazil and China automobile models to its content database.

The company is the only supplier of images to the world''s leading portals like Yahoo, AOL and MSN. It is the only company in the world having such extensive model coverage.

Business Overview North America USA

Its show-time again at the world''s largest automotive market.

The U.S automotive industry shifted into top gear in 2013, generating $730 billion in business revenue and employing more than 1 million people in their local communities.

In 2013, U. S automotive dealerships sold or leased more than 15.5 million new cars and light trucks, up 7.5 % from the year before, along with 3,51,737 new medium and heavy-duty trucks, up 1.7%. Total dealership revenue crossed $730 billion, an 8.8% increase from the previous year. For the average dealership, new-car sales were up 10.5% and used-car sales, up 7.3%.

With a stronger housing market, improved job prospects and continued low interest rates to bolster auto sales further, NADA expects new car and light-truck sales to reach 16.4 million in 2014.

However, the gross margin on new-vehicle sales continued downward, falling to 3.8 % in 2013 from 4.2 % the previous year. Revenue from F&I, service contracts and other products accounted for 38.8% of gross profit, up from 36.9 % the previous year, nudging dealers towards web marketing, CRM and Service management solutions that help optimize resources as well as tap into other sources of revenue.

Even as izmo continues to serve US dealers with Automotive Websites, SEO and Social Marketing, CRM, Service Management and Email Marketing Services the time is now ideal to re-launch the izmo suite of products in the U S markets and negotiations are at an advanced stage with prospective channel partners.

Being the first mover in Mexico has paid rich dividends for izmo. Our company continues to be the only retail website provider for Nissan Mexico, the largest Automotive OEM in the country with a 24.8% market share. Izmo dealer websites and portals also drive the sales of Renault, Volkswagen, Chrysler Ram Dodge Jeep and Suzuki vehicles as well as used cars.

Directors'' Report

European Union

The downward trend in EU car sales during 2013, with sales dropping to 11.80 million new cars, about 200,000 fewer than in 2012, proved to be a powerful catalyst driving dealers in large numbers to adopt online marketing solutions that not only reduce costs but deliver measurable results. As a result, your company was able to make important breakthroughs in several European countries, including France, Belgium, Spain, Portugal and Italy.

The izmo solution suite for EU auto dealers include "Virtual Showroom" Websites, Online Marketing and Social Media, Automotive CRM and ILM, Accessories, Service Management and Dealership Performance Consulting, as well as image processing services.

In order to address culturally diverse national markets, izmo has identified and engaged with well established channel partners in France, Spain, Portugal and Italy.

During the same period, the European division of izmoStudio made impressive gains in the automotive visual media segment, adding MSN in France, Germany, UK, Spain, Italy and Netherlands as part of a global agreement, as well as ISUZU, Avis, Multilease, VPN, Cartrawler, Individual Cars and Stickout. The izmoStudio client list in Europe also includes MeinAuto, Elite, Hertz, Terberg Leasing, Mobile DE, ASV and Europcar.

France

An unprecedented downturn in French car sales during 2013, with sales dropping to its lowest levels in 15 years, helped izmo make important breakthroughs in the market.

We were able to add HESS, the largest Automotive Dealer Group in France to our French portfolio. The dealer portfolio of your company in France now includes the French Brands Peugeot, Citroen and Renault, as well as Audi, Alfa Romeo, Abarth, Chrysler, Chevrolet, Dacia, Dodge, Fiat, Fiat Professional, Hyundai, Jeep, Jaguar, Land rover, Kia, Lancia, Lexus, Nissan, Opel, Saab, Seat, Skoda, Subaru, Suzuki, Toyota, Volkswagen and Volvo.

Izmo also launched 3 prominent automotive portals in France for HESS.

Other prominent clients in the French market include the Lamirault Group, Metin Group and Kayser Group.

Sales finally picked up during the second half of the year, with a 9.4 % increase in December 2013. The market has been steadily recovering ever since, and is expected to close 2014 with single digit sales gains.

Spain

Your company made inroads in the Spanish automotive market by adding new Audi and Volkswagen websites for the Vilamobil group. Significant sales negotiations are now in the pipeline.

Portugal

Izmo was able to make an important breakthrough in the service segment in Portugal, with hundreds of dealers signing up for an innovative service solution which is to be launched shortly.

ASIA

India

For the first time in 12 years, the domestic sale of Indian private vehicles dropped 6% in 2013. Car sales stood at 17,86,899 vehicles, down 4.65%, while SUV/ utility sales were down to 5,25,942 vehicles, a 5.01% decline.

Maruti Suzuki led the market selling 10,53,689 cars, a 0.25% improvement over last year. Hyundai retained their number 2 position but declined 0.88% with a sales of 3,80,253 vehicles, with improvement in sales of Hyundai''s smaller cars compensating for the decline in Verna sales.

The silver lining in an otherwise bleak market was Honda, the biggest gainer of the year with 1,34,339 vehicles sold, a staggering 82% improvement, led by Brio and Amaze sales which accounted for 97,205 units. Fiat India increased sales by 86%, selling 11,980 units. Ford India sales increased by 9.38% to 84,469 vehicles, with strong demand for the EcoSport compensating for a sharp fall in Figo sales. Renault also managed to increase sales by 9.35%, selling 57,368 vehicles with the Duster alone accounting 46,786 units. Nissan also bucked the trend with a 3.28% improvement in sales.

Indian SUV exports had an impressive year with a 298% increase. During the period, Indian OEMs exported 41,550 vehicles.

Tata Motors was hit with a 36.78% drop in sales and Toyota sales declined 22.17% to 1,28,811 vehicles. Skoda sales dipped 31.33% to 19,959 cars. Mahindra & Mahindra sales was down 18.14% to 2,54,344 vehicles and Volkswagen had a disappointing year with sales at 52,528 units, a 19.77% drop. GM sales fell 8.24% to 80,890 vehicles.

Sales is finally picking up in the first months of 2014, but dealers are still coping with diminishing profits from new vehicle sales. As a result, they are increasing turning towards web based initiatives to generate revenue from multiple resources, with the used vehicles, accessories, service, finance and insurance departments increasingly getting attention.

Carazoo, the only Automotive solutions provider in the Indian market to provide 360° auto retail solutions, from the motortrend.in Auto Portal to Virtual Dealer Showrooms complete with virtual vehicle walk-arounds and interiors, is now experiencing fast-paced growth. The Carazoo suite of solutions also include online marketing, Accessories Sales and CRM and Lead Management solutions.

On average, U S dealerships spent 33% of their advertising dollars on the Internet in 2013, up from 26.5% last year. The change was primarily driven by the cost-efficiency of websites and online marketing, the high cost of traditional advertising, as well as OEM initiatives to take dealerships online.

In the same period, dealers spent only 15.5% on newspaper advertisements, a drop of 30%. Radio advertising fell to 14.5%, from 15.9% and television advertising increased marginally to 20.8%, from 20.2%.(Source: NADA Statistics)

As a result of web centric advertising and marketing, average ad expense per new-vehicle sold fell to $616, down 0.8%. The increased efficiency of web based advertising resulted in dealers spending even more on advertising and dealership advertising increased 6.1% to $7.6 billion.

As of 2013, the online advertising business is a market opportunity worth 2.5 billion dollars.

Your company is presently offering the entire suite of online solutions including dealer websites, mobile websites, online marketing and social media, email marketing, CRM, service management to U S dealers.

The time is now opportune to re-launch the izmo web platform and products in the U.S. market. Discussions with prominent channel partners are at an advanced stage.

European Union

European car sales rose 4.3% in May, the ninth consecutive monthly gain, as a recovery in consumer confidence encouraged purchases of new models.

After a six-year market slump, registrations increased to 1.13 million vehicles from 1.09 million a year earlier, according to European Automobile Manufacturers'' Association (ACEA). Five-month sales gained 6.6% to 5.62 million cars.

Among the top 10 OEMs in Europe, Renault sold the most vehicles in May, gaining 18%. Market leader Volkswagen gained 9.5% and second placed PSA Peugeot Citroen 4.2%.

With the region well on its way to recovery, izmo''s early entry in Europe is now paying off and your company and its channel partners are gaining traction in France, Spain, Belgium, Italy and Portugal.

India

Carazoo, a 51% - 49% joint-venture between Motortrend, a leading global automotive portal and publications group and Logix Microsystems, has achieved impressive growth in the last fiscal. The motortrend.in portal clocked 1.2 million page views as of July 2014, up from 4,10,604 page views in June 2013. The Motortrend Google Plus page views have crossed 1 million and youtube views are nearing the half-million mark.

Motortrend.in is India''s only Car portal that provides a multi-brand Online Showroom experience to prospective car buyers. Visitors can request to test drive any car and also get car dealers to chase their business.

izmoWeb is your interactive online dealership designed to differentiate your unique brand from the competition and help you increase sales.

izmoWeb uses visually rich interactive tools, making the visitor experience engaging, informa- tive and fun.

izmoWeb''s interactive animations encourage your prospects to easily connect with the "right car". A prospect using an izmoWeb site will "fall in love" with the car!

The result is increased time spent on your website, which in turn results in a higher percentage of leads and increased conversions.

izmoMobi is a mobile website solution, bringing automotive websites into the hands of millions of consumers worldwide through their mobile phones. izmoMobi provides advanced function- ality, allowing viewers to search for vehicles and contact the dealer with a single-click.

izmoMobi incorporates a complete website delivery and flexible management system, allowing you to work the way you want.

izmoMobi helps dealers get access to the largest growing consumer base in the world. Dealers can now stay in touch with prospects even when they are on the road and Increase website coverage to include more consumers.

Direct lead generation with mobile phone contact information is another unique advantage of izmoMobi.

izmoRainmaker is a comprehensive, interactive, Internet marketing solution developed exclu- sively for the automotive retail industry by online marketing experts. Every izmocars customer works with a dedicated Rainmaker team, whose job is to increase your traffic, market your brand online through Search Engine Marketing (SEM) for car dealers, Social Media Marketing (SMM) and Search Engine Optimization (SEO).

izmoRainmaker Offers:

- Creative Services

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

- Interactive Marketing Campaigns

- Organic Search Engine Optimization

- Website Optimization

- Online Brand Marketing

- Research & Data Analysis

iCRM is an enterprise class Customer Relation- ship Management solution for the Automotive industry.

iCRM is delivered as a service, is completely Web- based and contains the following core functionalities:

- Sales Force Automation

- Finance & Insurance

- Campaign Management

- Service Management

- Business Development Center (BDC)

iCRM 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.

iService is the automotive Industry''s first compre- hensive online vehicle service management solution for auto dealers. This innovative service manage- ment solution allows service customers to schedule their service appointments online and dealer service departments to efficiently manage service appoint- ments and optimize shop loading, resulting in better revenue and loyal customers.

iService Helps dealers achieve:

- Better Service Management

- Higher Profitability

- Increased CSI Scores

- Higher Service Department Productivity

- Reduced Loaner Expenses

www.izmostudio.com

izmoStudio is world leader in Digital Imagery and Interactive Media Solutions for the Automotive vertical, since 2002. izmoStudio produces High Quality Photographic images and Digital Anima- tions 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, enables izmoStudio to quickly produce large volumes of work, covering about 500 automotive models.

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

Carazoo was the first to introduce the concept of Online Showrooms for Car Dealers in India. Carazoo is also offering Online Marketing Solutions to Auto Dealers. Google acknowledged the online advertising prowess of Carazoo in a case- study.

On a strategic evaluation, Cap Gemini named Carazoo as one of the 7 Global entities that will influence Auto Retailing along with Yahoo, EBay, Wal-Mart and Edumunds.com.

With 149 online showrooms currently live and several in various stages of production, Carazoo is the dominant player in the car dealer website space. The Carazoo website portfolio includes Maruti Suzuki, Volkswagen, Hyundai, Honda, Mahindra, FIAT, Chevrolet, Ford, Renault, Tata Motors, Nissan, ISUZU and Skoda, besides Bajaj, Hero, Suzuki and Honda websites in the 2-wheeler segment, group websites and Trucks & Tractors websites.

Some of these Carazoo-powered online showrooms are: Bimal Auto, NBS Mahendra, Landmark Group, PPS Group, Sai Service Group, Sagar Auto, Mody Auto Group, Kataria Automobiles, Fortpoint Automotive, Trident Automotive Group and Shaman Auto Group.

Growth Paths

Izmo''s early entry into new markets are now creating positive results for your company. We are now the market leader in Mexico, and the front runner in France. Major initiatives are underway in Italy, Portugal and Spain, and we expect to make positive announcements soon.

Growth Strategies

Izmocars is uniquely positioned as the innovation leader globally in automotive retail, providing end-to-end solutions ranging from a web platform to mobile websites, online marketing & Social Media, Email Marketing, CRM, Lead Management and Service Management, apart from market-leading interactive selling tools and automotive photography. izmocars aims to consolidate market position and thought leadership as the only end-to-end Automotive e-Solutions Provider globally.

The company is also consolidating its market leadership in the OEM space for high-end imaging, automotive animation and web solutions. A major addition to the image portfolio is MSN global, covering USA, Canada, UK, France, Germany, Russia, Spain, Italy, Netherlands, Mexico, Brazil, Australia, China and Japan. Izmo is also expanding its OEM portfolio of GM, Ford, Toyota, Lexus, Mitsubishi, Nissan, Renault, ISUZU and Hyundai.

Other prominent companies in the visual solutions portfolio include: AOL, YAHOO, AutoTrader, DATAONE, Jato , DME, AmFam, ImageSpan, SIM, MeinAuto, Elite, Hertz, Terberg Leasing, Mobile DE, ASV, Europcar, Dominion, Avis, Multilease, VP , Cartrawler, Individual Cars , Dealer E Process and Stickout.

Negotiations are at an advanced stage with several OEMs and prominent dealer groups.

Subsidiaries:

As required under Section 212 of the Companies Act, 1956 the audited statements of accounts along with the Directors'' Reports thereon of the Company''s subsidiaries for the year ended March 31, 2014 are to be annexed with this Report as Annexure A. However as per Ministry of Corporate Affairs'' General Circular no. 2/2011 dated 8th February, 2011 the Ministry has granted general exemption from attaching the audited account of subsidiaries to Holding Company''s Annual Report to all the Companies subject to certain disclosures to be made in the Annual Report of the Holding Company. The same disclosures have been made in the prescribed format and forms part of this Report.

Change in Name:

During the year, the Company''s name has been changed from Logix Microsystems Limited to ''IZMO Limited'' and necessary approvals were taken from the authorities concerned.

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.

Fixed Deposits:

Your Company has not accepted any deposits.

Human Resources:

As on March 31, 2014 the employee strength was 131. This includes staff in India and in overseas offices.

Directors:

In accordance with the provisions of the Companies Act, 1956 and the Company''s Articles of Association, Mr. Sanjay Soni, Director of the Company retires by rotation and is eligible for re-appointment.

Mr. RN Chawhan, Non Executive and Independent Director on the Board of the Company resigned with effect from 30th May 2014.

With the resignation of the Mr. RN Chawhan, the Board presently is constituted as follows:

a. Mrs. Shashi Soni - Chairperson

b. Mr. Sanjay Soni - Managing Director

c. Mr. Vijay Kumar D Gupta - Non Executive and Independent Director

Pursuant to provisions of Sections 149, 152, 160 and other applicable provisions, if any, of the Companies Act, 2013 and rules made thereunder, your Board recommends the appointment of the following suitable individuals as Independent Directors of the Company for five consecutive years for a term upto September 30, 2019

a. Mr. Ramanujam Krishnamurthy

b. Mr. P. Phaneendra

c. Mr. Vijay Kumar D Gupta

Details of the proposals are provided in the explanatory statement u/s 102 of the Companies Act, 2013 of the Notice of the Nineteenth Annual General Meeting.

With the appointment of the aforesaid three Independent Directors, majority of the Board would be Independent Directors.

Committees of the Board of Director:

Following Committees of the Board as required to be constituted under the provisions of Companies Act, 2013 and the Clause 49 of the Listing Agreement to be effective from October 1, 2014:

a. Audit Committee

b. Nomination and Remuneration Committee

c. Stakeholders Relationship Committee

d. Risk Management Committee

With the appointment of the three Independent Directors by the shareholders at the Nineteenth Annual General Meeting of the Company, all the aforesaid Committees of the Board would be duly constituted.

Auditors:

Mr. R Vijayananda, Chartered Accountant, the Statutory Auditor of the Company, hold office till the conclusion of the Nineteenth Annual General Meeting and is eligible for re-appointment. Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the rules framed thereunder, it is proposed to appoint Mr. R Vijayananda, Chartered Accountant as Statutory Auditor of the Company from the conclusion of the Nineteenth Annual General Meeting till the conclusion of the Twenty Second Annual General Meeting to be held in the year 2017, subject to ratification of his appointment at every Annual General Meeting.

As regards the comments of the Auditors in their Report dated 30 th May 2014 relevant notes on accounts are self explanatory.

Director''s replies to the qualifications/observations of the Auditors are as follows:

Auditors Qualifications :

1.Attention is drawn to Note No 23.13(b) as regards remuneration paid to the managing director is in excess of limits prescribed under the Companies Act, 1956. The Company had applied for the requisite approval from the Central Government which had not been granted.

Directors Reply :

1.The Company had applied for the requisite approval from the Central Government which had not been granted, but the management is confident of obtaining the approval and is in the process of filing revised application for the same. Pending outcome of the same, these amounts continue to be considered as an expense.

Auditors Qualifications :

2.Short Term Loans and advances as at 31st March 2014 includes a sum of Rs. 51.42 lacs of accrued interest on Inter-Corporate Deposits (ICD), which is long overdue and pending confirmation. Management is of the opinion that the same would be recovered in full and accordingly no provision towards possible non- recovery has been made in respect of the same. In the absence of confirmation for the same, I am unable to comment on the recoverability of the aforesaid amounts.

Directors Reply :

2.During the financial year 1999-2000, the company had acquired 100,000 equity shares of Singapore Dollars 1 each in Midrange Software Pte. Limited (formerly Logix Microsystems (S) Pte.Ltd.,) Singapore. The remittance towards the same has not been made pending requisite approval.

During the financial year 2013-14, the Company received the allotment of50,000 equity shares on 15th April 2013 from its subsidiary Logix Americas Inc., which is the holding company for the US subsidiaries against Share Application Money pending allotment as on that date. The investment in Logix Americas Inc., has in-turn been invested by way of equity and loans in Homestar Systems Inc., Homestar LLC, the step- down subsidiaries of Logix Americas Inc.

Auditors Qualifications :

3.Attention is drawn to Note No 23.18 as regards Investment in Subsidiaries including Share Application Money pending allotment, Long term investments as at the Balance Sheet date include Rs.160.30 crores in wholly owned subsidiaries, including share application pending allotment from Izmo Europe BVBA, Rs.8.89 Crores, which are carried at cost. In the absence of independently reviewed / audited financial statements in respect of these subsidiaries (including their step down subsidiaries), I am unable to carry out necessary procedures to reliably examine if there has been any decline in the carrying value of the stated investments. I am therefore unable to comment on the impact, if any, on the Profit & Loss account as at the Balance Sheet date.

Directors Reply :

3.The Company has invested in Midrange Software Pte Ltd, Singapore. Midrange has incurred losses during recent years. However, based on the management''s perception of the growth prospects and the performance of Midrange, in the opinion of the management there is no permanent diminution in value of the investment.

The Company has invested in its subsidiary Logix Americas Inc, which is the holding company of Homestar Systems Inc. The management had obtained an independent valuation of its operating enterprises in the US. Based on the same and further based on the management''s view on the prospects in the region, the management does not envisage any decline in the value of the investments and consider it appropriate to have the carrying value at par in respect of its investments in Logix America Inc as well.

The Company has invested in its subsidiary Izmo Europe BVBA Belgium. Izmo Europe BVBA has incurred losses during the recent years. However, based on the management''s perception of the growth prospects and the performance of Izmo Europe, in the opinion of the management there is no permanent diminution in value of the investment.

Auditors Qualifications :

4.The Company has granted loans to a party covered under Section 301 of the Act and since the terms and conditions of such a loan are not stipulated, I am unable to comment as to whether the rate of interest or other terms and conditions are prejudicial to the interest of the Company.

Directors Reply :

4.The Company is confident of recovering the loans granted to the related parties, hence the same is not prejudicial to the interest of the Company.

Auditors Qualifications :

5.In respect of loans granted, the terms of repayment of the principal amount and the payment of the interest have not been stipulated and hence I am unable to comment as to whether receipt of the principal amount and the interest is regular.

Directors Reply :

5.The Company is confident of recovering the loans granted by the Company.

Auditors Qualifications :

6.Where overdue amount in respect of a loan granted is more than one lakh, reasonable steps have not been taken by the Company for recovery of the principal amount and interest.

Directors Reply :

6.The management took note of the same and have formulated scheme of recovery for realizing over dues.

Auditors Qualifications :

7.Undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales-tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues, as applicable, have not been regularly deposited with the appropriate authorities and there have been significant delays in a large number of cases.

Directors Reply :

7.The Management of the Company took note of the same and have taken appropriate steps to prevent the same in forthcoming years.

Auditors Qualifications :

8.As regards provision for current year taxation the company is in the process of makingpayment towards TDS on Non-Resident dues of Rs. 16,05,745/- under the provisions of Income Tax Act,1961 and provident fund dues of Rs. 58,60,750/- under the provisions of Provident Fund Act,1952.

Directors Reply :

8.Management is of the opinion that Dues with respect to withholding taxes and Provident fund dues shall be paid in full before the due date of filing of Income tax returns and accordingly no disallowance under the provisions of Income Tax Act,1961 shall be attracted in respect of the same.

Auditors Qualifications :

9.The Company during the year has not made remittance towards Withholding tax dues with respect to Non residents under the provisions of Income tax Act,1961. Further provisions for interest on account of the above dues have not been provided for in the books of account.

Directors Reply :

9.The management took note of the same and have taken steps to include the same in forthcoming financial years.

Auditors Qualifications :

10.We did not audit the financial statements of the subsidiaries. Financial statements of the subsidiaries are as furnished and certified by the management reflecting total net worth of Rs 177.19 crores as at 31st March, 2014 and total revenue from operations of Rs.29.07 crores for the year ended are unaudited and have been certified by the management.

Directors Reply :

10.The Management has provided true and fair financial statements of the subsidiaries to the Auditors.

Auditors Qualifications :

11.The financial statements of subsidiary of Logix Americas Inc i.e. Get Logix L.L.C., USA, has not been considered for the purpose of this consolidated financial statements.

Directors Reply :

11.The financials of the subsidiary is under the process of finalization and were unavailable for consolidation.

Auditors Qualifications :

12.Attention is drawn to Note No.23.2, in respect of non-uniformity of accounting policies adopted; and Note No. 23.1 (g) in respect of the revenue items being translated at average rates as at the year end instead of average rates during the year; changes arising from re- statement of opening balances of subsidiaries, Note No 23.13 regarding non-reconciliation of inter-company balances; the effect of which on the consolidated financial statements has not been quantified.

Directors Reply:

12.The financial statements of the Indian company are prepared in accordance with the Accounting Standards followed in India. The financial statements of the subsidiary in Singapore are prepared in accordance with the Singapore Statement of Accounting Standards. The financial statements of the US subsidiaries are prepared in accordance with the accounting practices in the US. The financial statements of the subsidiary in Belgium are prepared in accordance with the accounting practices in Belgium. The Management has taken note of the same and have taken steps to implement Global Accounting Practices to meet the requirements in future.

Auditors Qualifications :

13.The impact of minority interest on net income and also on net assets of subsidiaries has not been identified. Accordingly, related adjustments and disclosures required to the consolidated financial statements have not been carried out.

Directors Reply :

13.The Management has taken note of the same and has taken steps to resolve the same.

Auditors Qualifications :

14.The Consolidated Cash Flow statement has not been compiled.

Directors Reply :

14.The Management has taken note of the same and has taken steps to resolve the same.

Auditors Qualifications :

15.Attention is drawn to Note No 23.5 (b) as regards remuneration paid to the managing director is in excess of limits prescribed under the Companies Act.

Directors Reply :

15.The Company had applied for the requisite approval from the Central Government which had not been granted, but the management is confident of obtaining the approval and is in the process of filing revised application for the same. Pending outcome of the same, these amounts continue to be considered as an expense.

Particulars of Employees:

Details of employees as required under Section 217(2A) of the Companies Act, 1956, is as follows:

Directors'' Responsibility Statement:

The Directors have fulfilled their responsibility in preparation of the accompanying financial statements by taking all reasonable steps to ensure that:

(I) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii that 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 and of the profit or loss of the company for the financial year ended 31st March, 2014;

(iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(iv) that the Directors had prepared the annual accounts on a going concern basis.

Management Discussion & Analysis Report:

Pursuant to the provisions of Clause 49 of the Listing Agreement, Management Discussion & Analysis Report is annexed as part of this report separately as Annexure B.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo:

The particulars as prescribed under Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars of Board ofDirectors) Rules, 1988 are as follows:

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 operational methods.

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 1,425.56 (PY - Rs.1,451.87 Lakhs)

Outgo - Rs 135.29 (PY - Rs.536.07 Lakhs)

Corporate Governance:

The report on Corporate Governance together with the Auditor''s Certificate regarding the Compliance of conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement is annexed and forms part of this Annual Report as Annexure C.

Acknowledgment:

Your Directors place on record their deep appreciation for the support extended by the business associates, customers and vendors. Your Directors place on record their gratitude of the significant contribution made by employees at all levels who have been instrumental in enabling your Company to make rapid progress during the year. Your Directors also thank Bankers, Government and Quasi Government Agencies, STPI Authorities, Capital market, media and the shareholders fraternity for their support during the year.

By order of the Board For IZMO Limited

Place: Bangalore Sd/- Sd/- Date: 3rd September, 2014 Sanjay Soni Shashi Soni Managing Director Chairperson and DIN: 00609097 Wholetime Director Address: Flat No. 9, DIN: 00609217 Prestige Casablanca Address: Flat No. 9, 12/1, Old Airport Apartments,Prestige Road Bangalore-560017 Casablanca Apartments, 12/1, Old Airport Road, Bangalore-560017

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Mar 31, 2013

The Directors have pleasure in presenting the Eighteenth Annual Report together with the Audited Statements of accounts for the year ended 31st March, 2013.

MANAGEMENT DISCUSSION AND ANALYSIS:

Financial Highlights: Rs. in Lakhs

PARTICULARS 2012-2013 2011 -2012

Revenue from Operations 1,693.55 1,786.62

Other Income 457.71 340.08

Total Revenue 2,151.26 2,127.70

Direct Cost of operations 156.26 283.06

Increase/(Decrease) in Stocks/WIP (1.63) 2.24

Employee Benefit Expenses 730.28 871.73

Financial Expenses 148.29 283.06

Depreciation 62.67 82.78

Other Expenses 313.90 356.84

Total Expenses 1,409.77 1,879.72

Profit before Tax 8cExceptional Item 741.49 247.97

Reversal of Vested Stock Option 238.63

Reversal of Interest receivable as Doubtful (230.04)

Rebate on Export (398.97) (399.40)

Profit before Tax 121.47 87.40

Profit After Tax 74.30 40.65

Performance:

The Company''s sales have shown a slight drop as compared to the previous year. This is mainly on account of the slowdown in the domestic market due to which sales of Enterprise Connectivity Products have fallen as compared to the previous year. Most companies have cut back on their capital expansion programs due to tight liquidity situation in the domestic economy. As a result of this, domestic sales have been affected.

The other income has shown an increase primarily on account of the foreign exchange gains accruing on account of the fall in INR. Since 90% of the company''s income is derived from exports, the continued depreciation in the INR is positive for the company.

Analysis of Expenses:

The direct cost of operations in FY 12-13 are significantly lower than FY 11-12. This is primarily on account of the lower sales of Enterprise Connectivity Products.

The company has reduced its employee headcount substantially in FY 12-13 as compared to the previous year. This has resulted in the sharply lower employee costs for the company. The company is continuing to reduce its employee strength by increasing productivity within the company.

Financial costs have nearly halved as compared to the previous year. This is on account of better working capital management and improvement in the receivables cycle. This should reduce further in the current year. Other expenses have also fallen by 10% over the previous year. This is a healthy trend and as the company keeps the focus on cost reduction, this will continue to show a declining trend.

Profitability:

The company''s Profit Before Tax and exceptional items has recorded an increase of more than 200% over the previous year. The Company has written back unrecovered interest of Rs. 2.30 crores as a matter of abundant caution. A one-time rebate on exports has been given to the company''s US subsidiary due to the precarious state of the economy in the US and EU regions.

The Company''s Profit After-tax has increased by more than 160% over the previous year. This has been achieved despite the company''s major markets US and Europe facing severe headwinds on the economic front. The company hopes to improve the performance further in the current year.

Business Overview:

A ComScore report on the online performance of Mexican Automotive brands says it all. Among the top five most visited automotive brands, Nissan came first with a growth of 150%, which is about 10 times more than the other top 5 brands in the list.

What the ComScore report did not mention was the fact that Nissan''s online growth was driven entirely by izmocars, which powers 155 Nissan dealer websites in Mexico. With 206 automotive dealer websites in various production stages, izmocars is the leader in the Mexican market.

Back in the United States, Add On Auto, the virtual Accessories Company of izmocars and the #1 accessories sales solution in the country, was signed up by 3M and BESTBUY, both Fortune 500 companies, to provide virtual selling solutions, marking izmo''s entry into the big ticket aftermarket accessories space. The company has already tied up with Nissan and Toyota to provide interactive accessories marketing, as well as directly providing dealers the AOA virtual accessories sales solution that helps sell millions of dollars worth of accessories every year.

In the Automotive imagery and interactive marketing space, izmocars continued serving AOL, Yahoo, Microsoft, GM, Toyota, and Mitsubishi Motors, as well as US News, JATO, Data One, DME, Evolio, Auto 123, Auction 123, Automations, HighGear Media, ADS, Dealer process, Vincentia, Go Moto, Auto Bytel, Source Interlink, CostCo, American Family, JDPA, Image span, SnapSort, Mojo, AutoNet, KUKUI, Car qualifier (Autobid), Media One Utah, and App Soft Development.

v* In France, izmoEurope went live with 30 automotive websites for the Lamerault Group, 19 websites for the Metin Group, and 4 websites for the Kayser Group. With more than a 100 websites in the making for another prominent European auto dealer chain, izmoEurope is the fastest growing Online Solution Provider in the French market, with a brand portfolio including Audi, Citroen, Dacia, FIAT, KIA, Nissan, Peugeot, Renault, Skoda, Suzuki, Toyota, and Volkswagen.

With North American markets well on their way to pre-2007 sales levels and Western European markets showing clear signs of recovery, izmocars is well positioned to capitalize on the emerging opportunities in both continents.

USA:

Leaving a torturous half-decade of depressed sales and struggling dealerships behind, US Automotive retail has finally arrived, and is all set to close the year in the vicinity of 16 million vehicle sales. The industry''s sales pace for July is on track for its best year since 2007, when 16.1 million vehicles were sold. An encouraging trend about the recovery is that it rides on true innovation, and not incentives, according to J.D. Power and Associates. During the first six months of the year, prices on new vehicles rose 3%, as a result of new and exciting vehicles entering the market. True to the trend, OEMs are now disinclined to offer lavish incentives that hurt resale values.

In July alone, the US automotive industry sold 6,57,404 cars, an increase of 12.6% over the same month last year. GM deliveries rose 16% in July, with all four of its brands advancing. Honda sales increased 21% and Toyota sales by 17%, overtaking Ford Motor Co. for the third place in vehicle sales. Light vehicle sales for Ford, Chrysler, and Nissan gained 11%.

Light-duty truck sales, including SUVs and Crossovers, stood at 6,57,790, an increase of 15.4% over July 2012. SUV sales rose to 1,23,719 units, an increase of 17.1%, and Crossover sales touched 283,130 units, an increase of 15.3%. American pick up sales is also increasing by leaps and bounds. Sales of Ford''s F-Series trucks climbed 23 % to 60,449. GM''s Chevy Silverado truck sales surged 45% to 42,080 units, and Chrysler''s Ram pickup sales increased 31 % to 31,314 units.

Traditionally, Trucks and SUVs are the most accessorized vehicles in the US and the sales surge in these categories is expected to drive demand for Add On Auto, the market leader in interactive accessories sales.

Results Driven Growth at Dealerships:

The sustained growth of automotive sales was reflected in dealerships as well. There was a net increase of 95 dealerships in 2012, bringing the total to 17,635 dealerships, according to NADA State of the Industry Report 2013. On Average, dollar sales increased 9.5%, and 2 employees were added to the workforce at dealerships.

With the automotive industry driving in top gear and taking the lead in pulling USA out of recession, the present growth in the number of dealerships is expected to go up significantly by the end of the year.

Again, new vehicle net profit rose to $111 from $23 in 2011. For the average dealer, dealership revenue grew by 9.20% and new-vehicle revenue by 12.80% in 2012. The new-vehicle department profitability as a percentage of gross profit increased to 30.40% from 28.80% in 2011 and the used-vehicle department profitability as a percentage of gross profit rose to 25.60 % from 25.40 % in 2011. The share of gross profit held by the service and parts department fell to 44 % from 45.80 % in 2011, but the share held by F&I and service contracts rose to 36.90 % from 33.80 % in 2011.

Dealers are now keeping a tight leash on expenses, spending money only in areas that deliver measurable results and pruning down drastically in areas where returns are sluggish or cannot be effectively measured. Dealer advertising is a case-in-point.

* New-vehicle dealers spent nearly $7.2 billion on advertising in 2012, up from $6.4 billion in 2011. However, the average ad expense per new vehicle sold fell to $621, down 1.10% from 2011. Dealer budgets for newspapers dropped by nearly 30 percentage points over the last decade, with the average dealership spent 26.50% of advertising dollars on Internet ads, up from 24.80% in 2011. Radio had a 15.90% share, which is the same as 2011, while television increased slightly to 20.20% from 20.10%.

The shift in industry outlook from "sales at any cost" to revenue and profit focused operations have opened up tremendous opportunities for online solution providers like izmocars, to lead with innovative solutions that will drive workforce productivity, customer centric dealer operations increasingly driven by online customer interactions, and revenue diversification focused on optimizing profit per car sale, by adding value in terms of accessories, service, parts and insurance, and customer references.

Take profit diversification, for instance. Dealerships across the country are prioritizing on adding value to new car sales, since new car margins are wafer thin.

Enter accessories, which is a huge profit multiplier in dealerships which are equipped and trained to sell accessories. The 150 dealerships across the country who participated in the Add On Auto Trend Report 2013 study sold $56 million in accessories in 2012. Using the AOA Virtual Accessories Con fugarator, these dealers sold more than 50% of the customers who were presented with accessories. Profits were astounding: with gross profits averaging 48.40%.

Increasingly, a larger share of revenues and profit are also coming from service, body shop, long term customer relationship cycles, and referrals.

Customer Centric Business Innovation:

Connected and empowered customers continued to drive US auto retail, with more than 85% of prospective buyers researching cars on the Internet and more than 80% going on Facebook before stepping into a dealership. As a result, dealerships are now focused on building long-term relationships with customers and prospects that create value for both. The new revenue opportunities in these dealerships are mainly in accessories, service, and customer relationship management.

Your company is ideally positioned to leverage these business opportunities. AOA (AddOnAuto), the Accessories sales solution of izmocars, the wholly owned subsidiary of your company, is the Industry leader in the accessories market. izmoWeb, the izmocars dealer website platform, as well as iCRM and iLM, the izmocars automotive Customer Relationship Management and Lead Management Solutions, are ideally positioned to gain from the market consolidation, since izmo solutions have enterprise management capabilities built in - something which is critical in a multi-brand, multi-dealer, multiple-geographical environment.

izmocars is the only solutions provider in the US who can provide the entire suite of solutions required by dealers to profit from the new impetus. The izmo solution suite for auto dealers include "Virtual Showroom" Websites, Online Marketing and Social Media, Automotive CRM and ILM, Accessories Sales, Service Management, and Dealership Performance Consulting.

Toyota and Nissan had already opted for AOA, and the company made a recent breakthrough by converting 3M and BESTBUY, both Fortune 500 companies. Automotive manufacturers are increasingly evincing strong interest in izmo solutions. Negotiations are on with several automotive OEMs.

AOA is a Virtual In-Dealership Accessories Store, incorporating a high-quality Visual Configurator with a Virtual Inventory System, enabling dealers to sell accessories efficiently.

Visual Accessories Configurator

- Using AOA''s advanced CGI technology, customers can virtually add or remove accessories, instantly viewing them on their vehicle of choice, and make their decision in minutes.

Virtual Inventory

- AOA gives clients access to their own Virtual Inventory system of accessories, enabling them to sell them without the need to hold a physical inventory.

- It connects clients directly to a large vendor database, which is constantly updated, giving them sales power without the expense.

- Web is your interactive online dealership designed to differentiate your unique brand from the competition and help you increase sales.

izmoWeb uses visually rich interactive tools, making the visitor experience engaging, informative, and fun.

izmoWeb''s interactive animations encourage your prospects to easily connect with the "right car". A prospect using an izmoWeb site will "fall in love" with the car!

The result is increased time spent on your website, which in turn results in a higher percentage of leads and increased conversions.

izmoMobi is a mobile website solution, bringing automotive websites into the hands of millions of consumers worldwide through their mobile phones. izmoMobi provides advanced functionality, allowing viewers to search for vehicles and , contact the dealer with a single-click.

izmoMobi incorporates a complete website delivery and flexible management system, allowing you to work the way you want.

izmoMobi helps dealers get access to the largest growing consumer base in the world. Dealers can now stay in touch with prospects even when they are on the road and Increase website coverage to include more consumers.

Direct lead generation with mobile phone contact information is another unique advantage of izmoMobi.

izmoRainmaker is a comprehensive, interactive, Internet marketing solution developed exclusively for the automotive retail industry by online marketing experts. Every izmocars customer works with a dedicated Rainmaker team, whose job is to increase your traffic, market your brand online through Search Engine Marketing (SEM) for car dealers, Social Media Marketing (SMM), and Search Engine Optimization (SEO).

izmoRainmaker Offers:

- Creative Services

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

- Interactive Marketing Campaigns

- Organic Search Engine Optimization

- Website Optimization

- Online Brand Marketing

- Research & Data Analysis

www.izmocars.com/solutions/izmorainmaker.html

iCRM is an enterprise class Customer Relationship Management solution for the Automotive industry.

iCRM is delivered as a service, is completely Web- based and contains the following core functionalities:

- Sales Force Automation

- Finance & Insurance

- Campaign Management

- Service Management

- Business Development Center (BDC)

iCRM 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.

www.izmocars.com/solutions/icrm. html

iService is the automotive Industry''s first comprehensive online vehicle service management solution for auto dealers. This innovative service management solution allows service customers to schedule their service appointments online, and dealer service departments to efficiently manage service appointments and optimize shop loading, resulting in better revenue, and loyal customers.

iService Helps dealers achieve:

- Better Service Management

- Higher Profitability

- Increased CSI Scores

- Higher Service Department Productivity

- Reduced Loaner Expenses

izmoStudio is world leader in Digital Imagery and Interactive Media Solutions for the Automotive vertical, since 2002. izmoStudio produces High Quality Photographic images 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, enables izmoStudio to quickly produce large volumes of work, covering about 500 automotive models.

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

Europe - On the Path to Recovery:

The European car market grew 5% in July, supporting a recovery in the second half of 2013. Registrations of new cars in Europe rose 4.80 % compared to the same month a year ago to 1.02 million vehicles, according to data published by that German Auto Industry Association VDA. Passenger car registrations increased in Germany, UK, France and Spain lar month.

Sales in Germany, the region''s biggest economy, were up 2%.

UK registrations increased by 13% and industry association SMMT raised its forecast for the full year, predicting growth of 8% to 2.22 million vehicles instead of the 3% increase foreseen earlier. UK sales have risen by 10% in the first seven month'', helped by 0% financing and price discounts. Demand in the UK continued to expand because of improvements in both private and fleet sales in July.

French car sales rose 1 %, the first increase in almost two years, as new models and dealer discounts attracted customers. G)r sales in Spain rose 15%, supported by a government-backed scrappage program. On the other hand, Italian car sales fell by 2%, which is the smallest contraction in almost two years.

The sustained downtrend in the market has resulted in web focused business restructuring in dealerships across Western Europe, with traditional marketing practices giving way to a more efficient web-centric, customer-focused sales and business retention strategy.

As a result, izmoEurope, the European subsidiary of your company, was able to achieve a breakthrough in France. Lamirault, a prominent dealer group in France is now powered by izmoEurope, with 30 websites currently live. Izmo is serving the Metin group with 19 websites, and the Kayser Group with 4 websites. More than a 100 dealer websites are now in various . stages of design and production for another prominent automotive group in France. izmoEurope is already powering a premium Aston Martin dealership in Belgium, and negotiations are in advanced stages with several OEMs.

The izmo interactive visual marketing division in conjunction with the izmo automotive studio located in Brussels is currently serving JDPA, EUCON, EUROPCAR, EUROTAX (Global), HERTZ (France, UK, Italy, Spain and German'' , Orange Wheels, Tusker Direct (UK), MEINAUTO (Germany), ELLITE, ACHETER SA VOITURE, AUTOREDUC Lamerault, Metin, Kayser (France), CAREVILLE, Click Your Car (Belgium) andTerberg Leasing (Netherlands).

Indian Automotive Industry at the crossroads:

For the first time in the last 12 years, the Indian auto industry registered a domestic sales slide of 8% in July, and the twowheeler market remained more or less flat. Fluctuating fuel prices and high interest rates remain huge impediments to fast-paced growth in retail auto sales.

Market leader Maruti Suzuki managed to sell 83,299 vehicles in July, registering a growth of 1.3% over July 2012. I ivundai Motor India Limited, the country''s second largest car manufacturer and the largest passenger car exporter :;old 48,704 vehicles in the same month, a marginal decrease over the 52,845 vehicles sold during the same month last year. Mahindra &Mahindra registered a sales volume of37,096 vehicles, a drop of over 21.17%.

With 14,470 vehicles sold during July,Toyota Kirloskar Motor reported a 10% decrease in sales, against 16,062 vehicles sold in the same month last year. Tata Motors has reported sales of 87,566 vehicles, less than 14% over the same month last year.

To cope with the downturn and fierce competition, car dealers are now increasingly turning to web-based technology solutions. Carazoo, the only Automotive solutions provider in the Indian market to provide 360 degree auto retail solutions, from the motor trend. in Auto Portal to Virtual Dealer Showrooms complete with virtual vehicle walk-abounds and interiors, is now experiencing fast-paced growth. The Carazoo suite of solutions also include online marketing, Accessories Sales, CRM and Lead Management Solutions.

Market Opportunity and Growth Strategy:

USA ''

The Total dollar sales at US new-car dealerships increased by 9.20% in 2012, the third full year of post-recession growth. New car sales showed a 12.80% increase in revenue, while used car sales registered a 7.10% increase in revenue, a 1.60% increase in transaction prices, and a 12% gross margin on retail used-car selling prices.

Online, Connected and Networked:

The average dealer in the US is now enthusiastic about online sales and dealer operations, thanks largely to the high cost of traditional advertising as well as OEM initiatives to take dealerships online. New-vehicle dealers spent nearly $7.2 billion on advertising in 2012, up from $6.4 billion in 2011. In 2012, the average dealership spent 26.50% of advertising budgets on online advertising and promotions, up from 24.80% in 2011.

As a result of restructured advertising expenses, the average ad expense per new vehicle sold fell to $621, down 1.10%

1 from 2011. It is not a coincidence that in the past 10 years, dealer budgets for newspapers have dropped by 30%.

Even as dealers are scrambling to drive revenue and profits from multiple sources, solutions like AOA, the izmocars accessories sales solution, is seeing exponential growth, and we expect this trend to further gain steam, with dealer consolidation demanding enterprise capabilities, something which our competitors lack to a great extent.

With an average internet advertising spend to the tune of $90,106 per dealer, this represents an annual market opportunity of approximately US $ 1,589,019,310 in recurring high margin revenue.

4 European Union:

By 2013, izmocars Europe BVBA has been able to expand its client-base to include JDPA, EUCON, EUROPCAR, EUROTAX (Global) HERTZ (France, UK, Italy, Spain and Germany) Orange Wheels, Tusker Direct (UK), MEINAUTO (Germany), Lamerault, ELLITE, ACHETER SA VOITURE, AUTOREDUC, Metin, Kayser (France), CAREVILLE, Click Your Car (Belgium) and Terberg Leasing (Netherlands). Services now being offered i nclude studio services, custom photography, interactive virtual dealership websites, retouched used car image portfolio, lead management, and accessories sales.

Carazoo:

Carazoo, now a 51%-49% Joint Venture between Motortrend, a leading global automotive portal and publications group and Logix Microsystems Limited, has achieved impressive growth in the last fiscal. Inside just 3 months of launch, the rebranded motor trend. in portal clocked 554,317 page views in July 2013, up from 410,604 page views in June motor trend. in is India''s only Car Portal that provides a multi-brand Online Showroom experience to prospective car buyers. Visitors can request to test drive any car and also get car dealers to chase their business.

Carazoo was the first to introduce the concept of Online Showrooms for Car Dealers in India. Carazoo is also offering Online Marketing Solutions to Auto Dealers. Google acknowledged the online advertising prowess of Carazoo in a case-study.

On a strategic evaluation, Cap Gemini named Carazoo as one of the 7 Global entities that will influence Auto Retailing along with Yahoo, eBay, Wal-Mart, and Edumunds.com.

With 117 online showrooms currently live and several in various stages of production, Carazoo is the dominant player in the car dealer website space. The Carazoo website portfolio includes 37 Maruti Suzuki dealer websites, 16 Volkswagen dealer websites, 11 Hyundai dealer websites, 9 Honda websites, 9 Mahindra websites, 7 Chevrolet websites, 5 Ford websites, 4 Renault websites, 3 Tata Motors websites, 3 Nissan websites, 2 Skoda websites, and a Jaguar and Landrover website, besides Bajaj, Hero and Honda websites in the 2-wheeler segment, group websites, and Trucks & Tractors websites. Some of these Carazoo-powered online showrooms are: Mody Group, WC Mahindra (Hyderabad),, Kun Group (Chennai), Bimal Auto, KHT Group (Bangalore), Premier Group (Kolkata) and Asset Group (Pune).

Growth Paths:

The increase in US consumer demand for new cars resulted in enhanced spends on innovative marketing solutions and platforms where results were attractive and measurable. Consequently, izmocars saw rapid growth in segments like accessories sales.

Forays into other high-potential markets like Europe and Asia have started producing results for izmocars, since all of izmocars solutions can be adopted across geographies.

The India advantage of high-end support services at a relatively modest cost is a strategic advantage that greatlv supports the organic growth of the company. Unlike other players, the India component is not merely another cost-cutting measure for izmocars - it is integral to the very corporate structure of the company, built into its corporate DNA.

Growth Strategies:

* Izmocars is uniquely positioned as the innovation leader in US automotive retail, providing solutions like AddOnAuto, an accessories sales solution which is now the market leader in the US; apart from market-leading interactive selling tools and automotive photography, izmocars aims to consolidate market position and thought leadership as the only end-to-end Automotive e-Solutions Provider in the US automotive retail, capable of providing the entire range of digital services now required to run a profitable dealership, ranging from dealer websites, mobile websites and portals to online marketing, social media, social media connected CRM and ILM systems, accessories sales, service management, integrated telephony and dealer performance consulting.

The Company is also consolidating its market leadership in the OEM space for high-end imaging, automotive animation and web solutions by expanding its OEM portfolio of GM, Ford, Toyota, Mitsubishi, Nissan, Aston Marti i, Renault and Hyundai. Negotiations are at an advanced stage with several OEMs and dealer groups in Western Europe and Latin America.

SUBSIDIARIES:

As required under Section 212 of the Companies Act, 1956, the audited statements of accounts along with the Directors'' Reports thereon of the Company''s subsidiaries for the year ended March 31,2013, are to be annexed with this Report. However, as per Ministry of Corporate Affairs'' General Circular no. 2/2011 dated 8th February, 2011 the Ministry has granted general exemption from attaching the audited account of subsidiaries to Holding Company''s Annual Report to all the Companies subject to certain disclosures to be made in the Annual Report of the Holding Company. The same disclosures have been made in the prescribed format and forms part of this Report.

DIVIDEND:

I n 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.

MXED DEPOSITS:

our Company has not accepted any deposits.

IIUMAN RESOURCES:

As on March 31,2013 the employee strength was 167.This includes staff in India and in overseas offices.

DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 and the Company''s Articles of Association, Mr. R N Chawhan, Director of the Company retires by rotation and is eligible for reappointment.

Mr. Sanjay Soni was appointed as Managing Director of the Company for a period of three years with effect from 1st April 2010 to 31st March 2013. The Board at its meeting held on 6th February 2013 reappointed him as Managing Director for a further period of three years commencing forms April 2013 till 31st March 2016 subject to the approval not the members of the Company and the Central Government (since his remuneration exceeds the limits prescribed in the Schedule XIII).

The term of Chairperson as Whole time Director of the Company expires on 30th September 2013. It is recommended to appoint her as Whole time Director for three years with effect from 1st October 2013.

AUDIT COMMITTEE:

Audit Committee constituted by the Board of Directors with requisite composition to fall in line with the prevailing laws continued to discharge its functions during the year under report.

AUDITORS:

Mr. R Vijayanand, Chartered Accountant, the retiring Auditors of the Company hold office until the conclusion of the forthcoming Annual General Meeting and is eligible for reappointment. The Company has received a certificate from him that his reappointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956

AUDITORS''REPORT:

As regards the comments of the Auditors in their Report dated 2nd September, 2013, relevant notes on accounts are self explanatory.

PARTICULARS OF EMPLOYEES:

Details of employees as required under Section 217(2A) of the Companies Act, 1956,is as follows:

Age Designation & Remuneration

Name Qualification (Yrs) Nature of Duties Per annum

Sanjay Soni 45 Managing Rs.60,00,000/-* MBAfrom years Director



Name Experiance Date of Joining Details of last

Sanjay soni 19 years 18-09-1995 Business

''includes all allowance and perquisites

DIRECTORS'' RESPONSIBILITY STATEMENT:

The Directors have fulfilled their responsibility for the preparation of the accompanying financial statements by taking all reasonable steps to ensure that:

a. These statements have been prepared in conformity with generally accepted accounting principles and appropriate accounting standards.

b. Judgments and estimates that are reasonable and prudent have been made where necessary.

c. The accounting policies selected and applied consistently give a true and fair view of the financial statements.

d. The Company has implemented internal controls to provide reasonable assurance of the reliability of its financial records, proper safeguarding and use of its assets and detection of frauds and irregularities. Such controls are based on established policies and procedures, and are implemented by trained, skilled, and qualified personnel with an appropriate segregation of duties.

e . The Company''s Statutory Auditors, Mr. R Vijayanand, Chartered Accountant, have audited the financial statements in accordance with generally accepted auditing standards and practices as indicated in his report.

GOING CONCERN:

In view of the initiative taken in development of diversified products, which promise potential business, the Directors consider it appropriate to adopt the financial statements on a going concern basis.

C. Foreign Exchange Earnings & Outgo:

During the year, the details of Foreign Exchange transactions were:

Earnings - Rs.l451.87Lakh(PYRs.l,377.97Lakh)

Outgo - Rs.536.07 Lakh (PYRs.508.77 Lakh)

ACKNOWLEDGMENT:

Your Directors place on record their deep appreciation for the support extended by the business associates, customers and vendors. Your Directors place on record their gratitude of the significant contribution made by employees at all levels who have been instrumental in enabling your Company to make rapid progress during the year. Your Directors also thank Bankers, Government and Quasi Government Agencies, STPI Authorities, Capital market, Media and the Shareholders fraternity for their support during the year.

By order of the Board

for Logix Microsystems Limited

Place: Bangalore Shashi Soni

Date: 2nd September, 2013 Chairperson

---

Mar 31, 2012

Dear Shareholder,

The Directors have pleasure in presenting the Seventeenth Annual Report together with the Audited statements of accounts for the year ended 31st March, 2012.

Financial Highlights:

Amount in Lakhs Rs.

Year ended Year ended

Particulars March 31, 2012 March 31, 2011 (Audited) (Audited) Stand-alone Stand-alone

Net Sales/Income from Software Services 1,787.62 4,058.61

Other Income 340.08 219.54

Total Revenue 2,127.70 4,278.16

Expenditure

A)Direct costs 283.06 2,166.19

B)Decrease/(Increase) in Work in Process 2.24 195.15

C)Employee Benefit Expenses 871.74 1,134.20

D)Financial Costs 283.06 58.36

E)Depreciation/Amortisation Expenses 82.78 116.29

F)Other Expenses 356.84 451.13

Profit Before Tax & Exceptional Item 247.98 156.83

Provision for diminution in the value of Investment - 4.23

ESOP balance written off 238.83 -

Rebate on Export (399.41) -

Profit Before Tax 87.40 152.61

Profit from continuing operation before tax 61.70 140.83

Tax Expenses

Current Tax (11.34) (32.11)

Less: MAT Credit Adjustment (13.03) 30.00

Deferred Tax 3.31 0.21

Profit/(Loss) for the year from Continuing Operations (A) 40.65 138.93

Profit/(Loss) for the year from discontinuing Operations (B) 25.70 11.77

Total Expenses for discontinuing operations (C) (4.90) (2.34)

Profit/(Loss) for the year from discontinuing operations after tax (D) 20.80 9.42

Net Profit 61.45 148.36

PERFORMANCE

The performance for the year has shown a de-growth as compared to the previous year in terms of total revenues of the Company. This is primarily due to the slowdown in the Indian economy as a result of the high interest rates and complete standstill on the governmental front. As a result, the total income has decreased by more than half over 2010-11. The main reason for the reduction in revenues is the drop in sales of Enterprise Connectivity Solutions, which exhibited a sharp reduction from Rs. 232 million in FY 2010-11 to Rs. 41 million in FY 11-12, International sales of Izmocars products recorded a drop of approx. 20% as compared to FY 2010-11. Other income has shown a substantial increase as compared to the previous year. This is mainly on account of income from rental and foreign exchange fluctuation gains.

SUBSIDIARIES

The Ministry of Corporate affairs, Government of India has issued a circular no. 2/2011 dated 8th February 2011 granting general exemption to Companies under Section 212 (8) from attaching documents referred to in section 212(1) pertaining to it is subsidiaries, subject to approval by the Board of Directors of the Company and furnishing of certain financial information in the annual report.

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.

FIXED DEPOSITS

Your Company has not accepted any deposits.

HUMAN RESOURCES

As on March 31, 2012 the employee strength was 203. This includes staff in India and in overseas offices.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956, and the Company's Articles of Association, Mr. Vijay Kumar D Gupta, Director of the Company retires by rotation and is eligible for re-appointment.

Your Director regret to report that Dr. Devindra Kumar Bhatia, senior Economist who had an enviable track record and a renowned Economics, breathed is last on 13 th October, 2011 and hence ceased to be Director. Your Directors whilst placing on record deep appreciation for the services rendered by Dr. Bhatia during the tenure of his office, also convey condolences to the family. Your Board will indicate suitable person in place of Dr. Bhatia as a Director.

AUDIT COMMITTEE

Audit Committee constituted by the Board of Directors with requisite composition to fall in line with the prevailing laws continued to discharge its functions during the year under report.

AUDITORS

Messrs Vasan & Sampath, Chartered Accountants, Auditors of the Company retire at the end of forthcoming Annual General Meeting and have intimated their intention not to seek re-appointment. Based on the recommendation of the Audit Committee and in line with the provisions of the Companies Act, 1956, the Board recommends the appointment of Messrs R. Vijayananda & Co., Chartered Accountants, Bangalore as Auditors to hold office up to the date of the next Annual General Meeting.

AUDITORS' REPORT

As regards the comments of the Auditors in their Report dated September 4th 2012 relevant notes on accounts are self explanatory.

PARTICULARS OF EMPLOYEES

A Statement of particulars of employees as required under Section 217(2A) of the Companies Act, 1956, is annexed and forms part of this Report.

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors have fulfilled their responsibility for the preparation of the accompanying financial statements by taking all reasonable steps to ensure that:

These statements have been prepared in conformity with generally accepted accounting principles and appropriate accounting standards. Judgments and estimates that are reasonable and prudent have been made where necessary.

The accounting policies selected and applied consistently give a true and fair view of the financial statements.

The Company has implemented internal controls to provide reasonable assurance of the reliability of its financial records, proper safeguarding and use of its assets and detection of frauds and irregularities. Such controls are based on established policies and procedures, and are implemented by trained, skilled, and qualified personnel with an appropriate segregation of duties.

The Company's Statutory Auditors, Messrs Vasan & Sampath, Chartered Accountants, have audited the financial statements in accordance with generally accepted auditing standards and practices as indicated in their report.

GOING CONCERN

In view of the initiative taken in development of diversified products, which promise potential business, the Directors consider it appropriate to adopt the financial statements on a going concern basis.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars of Board of Directors) Rules, 1988, are as follows:

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 operational methods.

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 upgradation and development related fields.

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

ACKNOWLEDGMENT

Your Directors place on record their deep appreciation for the support extended by the business associates, customers and vendors. Your Directors place on record their gratitude of the significant contribution made by employees at all levels who have been instrumental in enabling your Company to make rapid progress during the year. Your Directors also thank Bankers, Government and Quasi Government Agencies, STPI Authorities, Capital market, media and the shareholders fraternity for their support during the year.

Place : Bangalore By Order of the Board

Date : 4th September, 2012 For Logix Microsystems Limited

Shashi Soni

Chairperson

---

Mar 31, 2010

The Directors have pleasure in presenting the Fifteenth Annual Report together with the Audited statements of accounts for the year ended 31 st March 2010.

MANAGEMENT DISCUSSION & ANALYSIS Financial Highlights:

Amount in Lakhs Rs.

Year ended Year ended

Particulars March 31,2010 March 31,2009 (Audited) (Audited)

Stand-alone Stand-alone

Net Sales/Income from Software Services 2,579.22 2,543.34

Other Income 601.55 656.38

Total Income 3,180.77 3,199.71

Expenditure

A. Decrease/(Increase) in Work-in-Progress 444.71 (46.74)

B. Direct Costs 156.65 217.01

C. Staff Cost 1,333.66 1,274.32

D. Other Expenditure 779.21 974.96

Interest 57.90 62.21

Gross Profit/(Loss) after Interest but before

Depreciation, Tax and write-offs 406.23 717.%

Depreciation 149.26 163.13

Profit before Provision and Write-offs 256.97 554.83

Provision against Investments 75.98 325.67

Profit before Taxation 180.99 229.16

Provision for Taxation . 30.66 (2.65)

Prior Period Expenses 7.42 0

Net Profit 142.91 231.81

PERFORMANCE

The performance for the year has been greatly impacted by the recession in the United States, the Companys major market.

While sales of Enterprise Connectivity Solutions exhibited a 5% increase over FY 2008-09, international sales of izmocars products recorded a drop of approximately 2.28% as compared to FY 2008-09. Income from the Indian portal Carazoo showed an impressive jump of 59% in 2009-10 as compared to the previous year.

Sales in Europe was 45,676 Euros in FY 2009-10. The European studio was commissioned in April 2009 and the creation of the European catalogue has taken nearly a year. We could begin monetization of the European catalogue only by November, 2009.

Your Company faced very challenging headwinds in FY 2009-10 due to its largest market falling deeper into recession. The US Automotive market had its worst year since 1997, selling only 10.70 million cars in 2009. The number of car dealerships also saw a sharp fall from 24,000 + in 2008 to around 18,000 by the end of 2009. This sharp drop in the number of auto dealerships is unprecedented in US history.

As a result of the above, FY 2009-10 saw the Companys customer base shrinking further to 600 customers by March 2010. Your Company had 1,100 customers at the end of December 2007. This translates into an erosion of nearly 40% in its customer base.

The US economy is recovering, albeit very slowly. Your Directors expect GDP growth to be approximately 2.5% in 2010. However, the sales of automobiles has picked up in the United States. Most of the large automotive manufacturers are reporting profits as they have reduced costs significantly and sales have picked up. Therefore, the current FY 2010-11 should see a significant improvement in the companys customer base.

Analysis of Expenses

Operating expenses (other than provision for bad debts) have risen by 5-80% over last year. This has been led by an increase of 4.66% in employee costs over the previous year.

There has been a 28.29% increase in administrative expenses. Compensating this to some extent has been a reduction in selling expenses over the previous year by nearly 45%. Financial expenses have fallen by 6.93% over the last year.

The Company has made a provision of Rs. 75.97 lakhs towards reduction in value of investments. This figure is much lower than the previous year. This indicates that the valuation of the companys investments has increased substantially in FY 2009-10.

Profitability

The profitability of the Company has been significantly impacted in FY 2009-10. The drop in top line could not be compensated by a corresponding decrease in total expenses. As a result, the profit before tax has fallen by nearly 20% as compared to the previous year. Your company has made a tax provision of approximately Rs. 30 lakhs. This has caused the profit after tax to be around 35% less than the previous year.

Your company expects the declining trend to reverse in the current year. Costs have been reduced in India, the US and even Europe to a large extent, the impact of which would be felt in the current year. Sales are also on an uptrend and we expect to close this year with atleast a 30-40% increase over FY 2009-10.

BUSINESS OVERVIEW of the US Automotive Industry

In U.S. automotive retail, the silver lining is now turning into the daylight of opportunity. The "Detroit Big 3" - GM, Ford, and Chrysler - are reporting increased sales, and the JD Power forecast is presently pegging sales for the current year to reach 11.6 million vehicles, up from 10.4 million vehicles sold in 2009.

For GM, last July was the 10th straight month of rising sales. Sales of Chevrolet, Buick, GMC and Cadillac have risen 31%. The 1.3 billion dollar second quarter profit of the company was its best in the last 6 years, and GM has repaid its $6.7 billion loan to the U.S. government five years ahead of schedule. Prospects are looking so good that within less than a year after emerging from chapter-11 protection, GM is all set to go public again with the biggest IPO in U.S. automotive history.

At Ford, July sales totaled 170,411 units, up 22.6% against the same month last year. So far in 2010, Fords sales are up by a robust 22.6%. Demand for the Ford Mustang in the performance segment rose by 43%, while Ford Taurus sales rose by 187%. The company also reported that its retail market share increased for the 21st time in the last 22 months.

Chrysler marked the fourth consecutive month of year-over-year sales increases, moving 93,313 vehicles, an increase of 5%. 13 Chrysler Group vehicle lines showed improved sales. The company produced an operating profit in the first quarter of 2010, for the first time since the economic crisis.

Nissan North America reported July sales of 82,337, up 14.6%, with the Nissan division rising 12.1% and Infiniti soaring 37.6%. Toyota sold 169,224 vehicles and Honda 112,437 vehicles in July, both reporting decline in sales.

Not Business as Usual

Overall, the recovery of the U.S. automotive sector has been faster than expected, but everyone, from the OEM leadership to dealers to investors, agree that business is not going to be the same again.

Intense competition and cost-optimization is now forcing dealers to diversify revenue channels. Dealers are no longer looking at traditional sales avenues alone to shore up bottom-lines. As a result, accessories and service are now top- priorities for automotive dealers.

The fact that AddOnAuto (AOA), the Accessories Sales Solution of izmocars, added 50 dealerships in less than 90 days speaks volumes about the importance that dealers now attach to profit diversification.

The new diversification strategy is paying rich dividends to the early adopters. Before implementing AOA, Rick Case Honda was selling about $40,000 worth of accessories every month. In July, the dealership sold $159,117 worth of accessories, earning $646.82 on average from every vehicle sold. Morans Acton Toyota sold $125,000 worth of accessories within 2 months of implementing the solution, and is now sustaining the sales trend for over a year.

Car dealers are also exploring multi-brand vehicle service as a lucrative profit channel and customer acquisition strategy. With sophisticated service and diagnostic tools cutting down service time to less than half or less, most dealers have the extra capacity to accommodate other brands. Since 70% of service time is consumed by basic maintenance of tires, brakes, batteries and hoses, multi-brand service does not pose insurmountable technology challenges to most dealers, izmocars is also poised for an entry in this lucrative segment with iService, the only comprehensive service management tool available in the U.S.

Dealers, often motivated and subsidized by OEMs, are also investing in technology and training to acquire, retain, and leverage customers. Most dealerships are implementing Customer Relationship Management Solutions or Lead Manage- ment Solutions.

The U.S Energy department alternate energy initiative and funding to the tune of $8 billion to automotive manufacturers and suppliers to build electric and hybrid vehicle batteries is expected to impact the automotive industry in the near future, further fueling the technology orientation at the retail end, as well as in Manufacturer — Dealer linkages.

Logix: The Innovation Edge

For your Company, the time is now truly ripe to leverage the business and technology capabilities acquired over eight years of trail blazing leadership as the only end-to-end automotive retail solutions provider in the U.S. izmocars, the wholly owned U.S. subsidiary of your company is now the only solutions provider in the U.S. who can provide the entire suite of solutions required by dealers to profit from the economic recovery. The izmo solution suite for auto dealers now include "Virtual Showroom" Websites, Online Marketing, Automotive CRM and ILM, Data Mining, Accessories Sales, Service Management, and Dealership Performance Consulting.

As a result, manufacturers are increasingly evincing strong interest in the izmo solutions suite, and negotiations are at an advanced stage with several automotive OEMs.

izmocars Solutions

izmo Big Winner Web Package

The izmocars Big Winner Web Package comprises of:

izmoWeb : Automotive Online Store for Auto Dealers

izmoMobi : Mobile Website

izmoRainmaker : Online Marketing Solution

AddOnAuto : In-store Accessories Sales

izmoTele Trak : Call Management & Tracking

izmo Profit Maximizer

The izmocars Profit Maximizer Package comprises of:

iCRM : Automotive Customer Relationship Management

iEquity : Database Sales Solution

izmoTeleTrak : Call Management & Tracking

izmo Service Booster

The izmocars Service Booster Package comprises of:

AddOnAuto : In-store Accessories Sales

iService : Online Service Booking and Management

izmoTeleTrak : Call Management & Tracking

izmo Money Machine

The izmocars Money Machine Package comprises of:

izmoWeb : Automotive Online Store for Auto Dealers

AddOnAuto : In-store Accessories Sales

iConsult : Sales Performance Coaching

izmo Sales Success

The izmocars Sales Success Package comprises of:

izmoWeb : Automotive Online Store for Auto Dealers

iConsult : Sales Performance Coaching

izmoMail : Monthly Email Marketing Templates

AOA is a Virtual In-Dealership Accessories Store, incorporating a high-quality Visual Configurator with a Virtual Inventory System, enabling dealers to sell accessories efficiently.

Visual Accessories Configurator

. Using AOAs advanced CGI technology, customers can virtually add or remove accessories, instantly viewing them on their vehicle of choice, and make their decision in minutes.

Virtual Inventory

. AOA gives clients access to their own Virtual Inventory system of accessories, enabling them to sell accessories without the need to hold a physical inventory.

. It connects clients directly to a large vendor database, which is constantly updated, giving them sales power without the expense.

www.izmocars.com/solutions/aoa.html

izmoWeb is your interactive online dealership designed to differentiate your unique brand from the competition and help you increase sales.

izmoWeb uses visually rich interactive tools, making the visitor experience engaging, informa- tive, and fun.

izmoWebs interactive animations encourage your prospects to easily connect with the "right car". A prospect using an izmoWeb site will "fall in love" with the car!

The result is increased time spent on your website, which in turn results in a higher percentage of leads and increased conversions.

www.izmocars.com/solutions/izmoweb.htrnl

izmoMobi is a mobile website solution, bringing automotive websites into the hands of millions of consumers worldwide through their mobile phones. izmoMobi provides advanced function- ality, allowing viewers to search for vehicles and contact the dealer with a single-click.

izmoMobi incorporates a complete website delivery and flexible management system, allowing you to work the way you want.

izmoMobi helps dealers get access to the largest growing consumer base in the world. Dealers can now stay in touch with prospects even when they are on the road and increase website coverage to include more consumers.

Direct lead generation with mobile phone contact information is another unique advantage ofizmoMobi.

www.izmocars.com/solutions/izmomobi.htmi

izmoRainmaker is a powerful combination of a dedicated marketing team, creativity, technology, and izmos Internet tools, working to help you grow your dealerships revenue while increasing your ROI.

izmoRainmaker is a complete interactive marketing solution built exclusively for the auto industry by online marketing experts. The izmoRainmaker solution gives your business online marketing expertise with:

. Creative Services

. Interactive Marketing Campaigns

. Organic Search Engine Optimization

. Social Media Marketing

. Website Optimization

. Online Brand Marketing

. Research & Data Analysis

www.izmocars.com/solutions/izmorainmaker.html

iCRM is an enterprise class Customer Relation- ship Management solution for the Automotive industry.

iCRM is delivered as a service, is completely Web- based and contains the following core functionalities:

. Sales Force Automation

. Finance & Insurance

. Campaign Management

. Service Management

. Business Development Center (BDC)

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

www.izmocars.com/solutions/icrm.html

iService is a comprehensive Automotive Service Management System which enables dealerships to build their own Service Profit Center. iService captures the methodologies and processes used by the best service advisors in the industry and delivers it in a software solution that can be used by anyone.

. iService provides dealerships with a complete system for managing their fixed operations and generating profits from their service departments.

. The System is comprised of a technology platform that incorporates the best practices required for successful service management, and a process training program designed to enable service staff to successfully manage a service department.

. The iService Customer Web Appointment Interface makes it simple for customers to schedule and manage online Service appointments.

www.izmocars.com/solutions/iservice.html

tizmoStudio is the Leading provider of Digital Imagery and Interactive Media Solutions for the Automotive vertical, since 2002. izmoStudio produces High Quality Photographic Images and Digital Animations for the North American and EU markets, covering all major makes and models.

Large Automotive Photography Studios strategi- cally located in Long Beach, USA and Brussels, Belgium, combined with state-of-the-art post- production facilities in Bangalore, enables izmoStudio to quickly produce large volumes of work, covering about 500 automotive models. Presently, the izmoStudio client list includes leading portals like Yahoo!, AOL, AutoUSA, and Jato Dynamics, as well as OEMs like GM, Ford, and Mitsubishi Motors.

www.izmostudio.com

Some of our Online Showrooms

Carazoo.com have designed many "Online Showroom" web portals for various clients in India and Europe including the Prestige Group (Realty), Arababul (Turkish Car Portal), Sagar Automobiles, Bimal Automobiles, the Kataria Group, FortPoint Automotive, NBS Mahindra, Balaji Cars, etc., to name a few.

Vision 2012: $50 million in the year 2012 Market Opportunity and Growth Strategy

U.S.A

The 18, 460 new-car dealerships doing business in the U.S generated $487 billion in annual sales last year, selling $10.4 million new vehicles; nearly $ 15 million used vehicles, and generating $76 billion in parts and service, states the NADA State-of-the Industry Report 2010. Car dealerships remain one of the biggest employment avenues in the U.S., with nearly a million people in their payrolls.

The economic downturn triggered a shift in the advertising and marketing spend of dealers, valued at $5.4 billion in 2009. Dealers now spend more than 22 percent of advertising dollars on the Web. The early adopters among dealers are now moving into the social media space, triggering demand for social media centric online marketing solutions and CRM systems that can tap into social media audiences.

With reduced margins on new car sales eating into bottom-line profits, dealers are increasingly turning to cost- optimization, customer retention, and alternate revenue sources like accessories and online service management to stay profitable.

The complexity of the online portfolio of the typical U.S. car dealer presents a unique market opportunity for izmocars, which is the only online solutions provider who can equip dealers with the entire range of services required to run a profitable dealership. These services include high-converting, instantly editable interactive websites, social media friendly online marketing, dealer CRM and ILM systems with data mining capabilities and social media plug-ins, virtual accesso- ries systems that add six figure monthly incomes to dealer bottom-lines, online vehicle service scheduling and manage- ment systems that encourage customer self-service and at the same time, optimize shop-floor loading and manpower scheduling to get more done with less, and a dealer performance consulting system that ties it all together to create a highly profitable, customer-retaining, future-friendly dealership.

This vision of izmocars — the full service digital dealership, is now finally a reality whose time has come. Even now, solutions like AOA, the izmocars accessories sales solution, is seeing exponential growth, and we expect this trend to pick up, with dealers increasingly breaking free from disparate providers of stand-alone services.

With an average monthly spend for digital services to the tune of $30,000 per dealer, this represents an annual market opportunity of approximately US $ 553.8 million in recurring high margin revenue.

In addition to new car dealerships, there are approximately 40,000 used car dealerships in the U.S. with potential applica- tions for the Companys offering. Combined, this represents a total annual market opportunity in excess of US$1 billion.

European Union

Your directors are proud to report that within an year of commencing operations with a state-of-the art photography studio in Brussels, izmocars Europe BVBA has been able to expand its client-base to include Aston Martin, Toyota, Mitsubishi, Renault, Huyndai, and Chevrolet Europe in the OEM segment, as well as Euro RSCG and Rabitt/Striker, Mantree, 1 lho9, Dieteren, Lites, And Mein auto. Services now being offered include studio services, custom photogra- phy, automotive websites, and izmoToolkit.

The studio is the first stage of our expansion into Europe, and the full izmocars solutions suite will be launched shortly in the European market, which is a lucrative market for Online Automotive Sales Solutions.

The European Automobile Manufacturers Association (ACEA) pegs new car registrations in June 2010 at 1,341,092 vehicles. January to June, 7,285,487 new cars were registered, or 0.2% more than over the same period a year ago. Among the main markets, the UK (+19.90%), Italy (+2.90%), France (+5.40%), and Spain (+39.50%) posted growth.

Dealer adoption of online selling is still at a nascent stage in the EU, and we are confident of pioneering the online retail drive in the market.

Carazoo

Carazoo, the Indian portal and Automotive Solutions Provider of Logix Microsystems Limited, has achieved impressive growth in the last fiscal and is one of the most popular automobile portals in India. Visitors have crossed the 4,00,000 per month mark, a jump of over 200 % over the last year. Leads generated per month have increased to around 21,000 which is a jump of 50 %. The Carazoo portal completed 3 years in August 2010.

Tie-ups with HDFC Bank for loans and other vendors for used cars have enabled Carazoo to offer value-added services to its visitors.

Carazoo.com is Indias only Car portal that provides a multi-brand online showroom experience to prospective car buyers. Visitors can request to test drive any car and also get car dealers to chase their business. Carazoo was the first to introduce the concept of online showrooms for car dealers in India. Continuing its success with the initial car dealer online show- rooms, it has now designed and developed more online showrooms for leading dealers, and had recently crossed the 50 store mark. Some of these Carazoo-powered online showrooms are: Bimal Auto, Sagar Auto, Kataria Automobiles, Fortpoint Automotive, Trident Automotive Group, and Shaman Auto Group.

Carazoo is also offering online marketing solutions to auto dealers. Google recently acknowledged the online advertising prowess of Carazoo in a case-study.

Carazoo also developed www.arababul.com, Turkeys first car portal with interactive animations for a client in Istanbul, Turkey.

Growth Paths

With the U.S. consumer demand for new cars steadily increasing in the second-half of 2009 and into the current year, dealer profitability is up by more than 43.7 percent, resulting in more spend on innovative marketing solutions and platforms. Consequently, izmocars saw rapid growth in segments like accessories sales.

As discussed earlier in this report, the complexity of the digital portfolio of a typical dealer now makes it imperative for dealers to move from disparate providers of various stand alone services to integrated service offerings. Izmocars expects rapid growth as a full-service provider of the entire digital portfolio of dealers, once the trend to move towards integrated solutions pick up pace.

Lateral growth into other high- potential markets like Europe and Asia would also fuel exponential growth for izmocars, since all of izmocars solutions can be adopted across geographies.

The India advantage of high-end support services at a relatively modest cost is another factor that greatly supports the organic growth of the company. Unlike other players, the India component is not merely another cost-cutting factor for izmocars — it is integral to the very corporate structure of the company, built into its corporate DNA.

Growth Strategies

In the near term, izmocars aims to consolidate market position and thought leadership as the only end-to-end Automotive e-Solutions Provider in US automotive retail, capable of providing the entire range of digital services now required to run a profitable dealership, ranging from dealer websites, mobile websites and portals to online marketing, social media connected CRM and ILM systems, accessories sales, service management, integrated telephony, and dealer performance consulting.

Izmocars is also well-positioned as the innovation leader of the Industry, providing solutions like AddOnAuto, an accesso- ries sales solution which is now being rapidly adopted by dealers.

The company is also consolidating its market leadership in the OEM space for high-end imaging, automotive animation, and web solutions by expanding its OEM portfolio to include the full izmo solutions suite, and adding more OEMs to the current list of GM, Ford, Toyota, Mitsubishi, Aston Martin, Renault, and Hyundai.

Recent Developments

New Products

izmoIndY

Logix Microsystems has launched the IndY Platform, a revolutionary project that enables auto dealers to manage all of their digital needs with one login, and is in the process of migrating all of the izmo solutions suite to the new platform. IndY is an integral part of the Vision 2012 growth strategy of the company.

izmoreader

izmoreader is a device-independent eReader app and digital publishing and advertising platform which enables users to access the digital version of books and magazines, newspapers, and journals, etc. from their PCs or laptops, iPads, iPhones, or any other compatible device, in a format which is easy to read, manage, and archive.

Awards and Recognition

A Deloitte Technology Fast 500 Company, Three Times in a Row Logix Microsystems Limited is now featured in the prestigious Deloitte Technology Fast 500 Asia Pacific Ranking and CEO Survey 2009, the List of top 500 technology companies in the Asia Pacific compiled by Deloitte, one of the largest professional services firms in the world. The ranking acknowledges and profiles the top 500 technology companies in Asia Pacific, according to their revenue performance over the last three years. Your company has now been profiled in the Deloitte Technology Fast 500 Asia Pacific Ranking and CEO Survey three times in a row.

AddOnAuto Featured in Wards Dealer Business, Automotive News, and Dealer Marketing Magazine AddOnAuto, the In-Store Accessories Sales Solution of izmocars was featured in Wards Dealer Business, Automotive News, Dealer Marketing Magazine, and OEM newsletters.

SUBSIDIARIES

The Ministry of Corporate Affairs has exempted the Company from publishing the financial of the subsidiary companies vide there approval communication no. 47/438/2010- CL-III dated 17th August 2010 in terms of the provisions of section 212 of the Companies Act, 1956. However, the particulars as stipulated therein have been furnished in the Annexure A to this Report.

DIVIDEND

The performance for the year has been greatly impacted by the recession in United States, the Companys major market. Inspite of this your company made a small surplus in the Profit & Loss Account. However , the Board have thought it prudent to conserve resources and therefore decided not to declare any dividend in respect of the past year.

FIXED DEPOSITS

Your Company has not accepted any deposits.

HUMAN RESOURCES

As on March 31, 2010 the employee strength was 380. This includes staff in India and in overseas offices.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Companys Articles of Association, Mr. Vijay Kumar D Gupta, and Dr. Devindra Kumar Bhatia, Directors of the Company retire by rotation and are eligible for re- appointment.

During the year under review, Dr. Angus Friday resigned from the Board. Your Board of Directors inducted Mr. R N Chawhan as Director to continue with the optimized. His knowledge and experience will be of significant value to the Company. His name has been proposed by a member to the Office of Director and the Board recommends his appointment as Director.

Audit Committee

Audit Committee constituted by the Board of Directors with requisite composition to fall in line with the prevailing laws continued to discharge its functions during the year under report.

Auditors

Messrs Vasan & Sampath, Chartered Accountants, the retiring Auditors of the Company hold office until the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment. The Company has received a certificate from them that their re-appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956.

Auditors Report

As regards the comments of the Auditors in their Report dated September 04th, 2010 relevant notes on accounts are self explanatory.

Particulars of Employees

A Statement of particulars of employees as required under Section 217(2A) of the Companies Act, 1956 is annexed and forms part of this Report.

Directors Responsibility Statement

Your Directors have fulfilled their responsibility for the preparation of the accompanying financial statements by taking all reasonable steps to ensure that:

These statements have been prepared in conformity with generally accepted accounting principles and appropriate accounting standards. Judgments and estimates that are reasonable and prudent have been made where necessary.

The accounting policies selected and applied consistently give a true and fair view of the financial statements.

Your Company has implemented internal controls to provide reasonable assurance of the reliability of its financial records, proper safeguarding and use of its assets and detection of frauds and irregularities. Such controls are based on established policies and procedures, and are implemented by trained, skilled, and qualified personnel with an appropriate segregation of duties.

Your Companys Statutory Auditors, Messrs Vasan & Sampath, Chartered Accountants, have audited the financial statements in accordance with generally accepted auditing standards and practices as indicated in their report.

Going Concern

In view of the initiative taken in development of diversified products, which promise potential business, the Directors consider it appropriate to adopt the financial statements on a going concern basis.

Conservation Of Energy, Technology Absorption, Foreign Exchange Earnings And Outgo

The particulars as prescribed under Section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars of Board of Directors) Rules, 1988, are as follows:

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 operational methods.

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.

Research and Development continues to be given very high priority in Software Technology in the area of automotive retail.

C. Foreign Exchange Earnings & Outgo

During the year, the details of Foreign Exchange transactions were: Earnings - Rs 2,283.62 Lakhs Outgo -Rs 191.47 Lakhs

Acknowledgment

Your Directors place on record their deep appreciation for the support extended by the business associates, customers and vendors. Your Directors place on record their gratitude of the significant contribution made by employees at all levels who have been instrumental in enabling your Company to make rapid progress during the year. Your Directors also thank Bankers, Government and Quasi Government Agencies, STPI Authorities, Capital market, Media and the shareholders fraternity for their support during the year.

for Logix Microsystems Limited

Place: Bangalore Shashi Soni

Date: September 4th ,2010 Chairperson