Street Smart Enquiry Dealer Enquiry Product Enquiry Service Enquiry Purchase Street Smart

Investor Relations

Chairman's Message

Mr. Monohar Bidaye

Chairman

Dear Shareholders,

India’s GDP in financial year 2018-19 is estimated to have grown by around 7 percent. While this is good achievement in the global context, it falls marginally short of expectations due to various macroeconomic factors.These include volatility of crude prices,unpredictable currency fluctuations,etc. International Monetary Fund (IMF) and Asian Development Bank (ADB) had cut India’s growth forecast citing global and domestic headwinds. According to IMF latest projection, the Indian Economy is estimated to grow @ 7 percent in 2019 and 7.2 percent in 2020. ADB had also lowered India’s GDP growth forecast to 7 percent for the current year on the back of fiscal shortfall concerns. The private sector is recovering from adverse impact of demonetisation and implementation of GST. The economy also had to grapple with funding crunch for NBFC’s, deceleration in the agriculture and widening of fiscal and current account deficit. The country is facing the biggest threat of rising unemployment. However the current situation is different from 1991 when the country faced severe economic crisis on the external front. The current slowdown in the Indian Economy is cyclical and growth will pick up in 1-2 years. The Government has announced many reforms and the success whereof depends on its implementation.

On the positive side the uncertainty thrown up by the polls now behind us with decisive mandate in general election and the country is refocusing on its primary goal of building new future for all its citizens. We at Zicom, are still saddened with legacy issues caused by geo-political situation in the Middle East, acute scarcity of resources to rebuild business back to normal, mismatch of expectations between lenders of the group and various investors introduced by the Company. Currently the business operations of Middle East & India except Zicom SaaS are moving to standstill zone. The business environment of Parent Company has substantially undergone change over the last 2 years due to implementation of Make in India initiative of the Government. Many Chinese manufacturers have directly established themselves by setting up large manufacturing facility to drive the growth in the Indian market. On one hand, market for the security equipment’s is expanding rapidly; the margin is falling down due to stiff competition and price sensitive nature of channel partners. The Company is negotiating with Chinese manufacturers to set up manufacturing base using Company’s brand awareness, market reach and relationship with Channel partners. The legacy business of project which was sold to Schneider in 2010 has also undergone change with size of the project growing bigger and bigger. Although the Company receives many enquiries, it is handicapped due to non-availability of working capital to execute such large projects. Therefore it’s time to look at the business model which works on fewer resources without hassle of inventory. Today technology is undergoing lot of changes and traditional business model will soon get outdated. We are therefore focussing on building capabilities around data analytics, cloud, machine learning and artificial intelligence.

Phoenix International, Doha, Qatar, subsidiary of Zicom has stopped executing its projects due to severe economic crisis caused by embargo on Qatar initiated by UAE & Kingdom of SaudiArabia. Most of the projects in Qatar are standstill as there is no road connectivity due to geo-political situation.Almost 90% of the employees have been expatriated with settlements and the Company is working with local partners and bankers to bail out the Company.

Zicom SaaS continues to support the Company with positive cash flow and the interest of Investors are still alive in this business model. During the year under review, Zicom SaaS succeeded in renewing its major contracts with the customers. The Company succeeded in retaining its position in the market by holding on to its major customers. The Company is negotiating with bankers to explore the possibility of divestment of Zicom SaaS to prospective Investors and settlement of debts of both Parent Company and its subsidiaries Zicom SaaS in India. We are quite hopeful that bankers will come to terms by realising the current challenges before business to arrive at amicable One Time Settlement.

Phoenix International WLL, Doha, Qatar, subsidiary of Zicom has stopped executing its projects due to severe economic crisis caused by embargo on Qatar initiated by UAE & Kingdom of Saudi Arabia. Most of the projects in Qatar are standstill as there is no road connectivity due to geo-political situation. Almost 90% of the employees have been expatriated with settlements and the Company is working with local partners and bankers to bail out the company.

Unisafe Fire Protection Specialists L.L.C., Dubai another large subsidiary of Zicom has also been impacted adversely due to non-revival of UAE economy since last 4 years. Unisafe has put in place all contingency plans to reduce its employee strength substantially and its infrastructure in small Emirates. The company has filed various legal cases for recovery of its dues.

To infuse resources in the Group for its revival, the management is working relentlessly with interested investors to work out various model of investments.

Team Zicom is working passionately together in this difficult circumstances to keep the business and its value intact.

On behalf of the entire Zicom team, I’m sincerely thankful to all stakeholders and well-wishers for sticking with us through a challenging year. With your support, we are confident of scaling new heights in the coming years.

Manohar Bidaye

Chairman