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Zicom Electronic Security Systems Ltd.

BSE: 531404 Sector: Engineering
NSE: ZICOM ISIN Code: INE871B01014
BSE 00:00 | 17 Apr 2020 Zicom Electronic Security Systems Ltd
NSE 05:30 | 01 Jan 1970 Zicom Electronic Security Systems Ltd

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OPEN 0.83
PREVIOUS CLOSE 0.83
VOLUME 800
52-Week high 4.13
52-Week low 0.83
P/E
Mkt Cap.(Rs cr) 3
Buy Price 0.83
Buy Qty 150.00
Sell Price 0.85
Sell Qty 293.00
OPEN 0.83
CLOSE 0.83
VOLUME 800
52-Week high 4.13
52-Week low 0.83
P/E
Mkt Cap.(Rs cr) 3
Buy Price 0.83
Buy Qty 150.00
Sell Price 0.85
Sell Qty 293.00

Zicom Electronic Security Systems Ltd. (ZICOM) - Chairman Speech


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Company chairman speech

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 ofexpectations due to various macro economic factors. These include volatility of crudeprices unpredictable currency fluctuations etc. International Monetary Fund (IMF) andAsian Development Bank (ADB) had cut India's growth forecast citing global and domesticheadwinds. According to IMF latest projection the Indian Economy is estimated to grow @ 7percent in 2019 and 7.2 percent in 2020. ADB had also lowered India's GDP growth forecastto 7 percent for the current year on the back of fiscal shortfall concerns. The privatesector is recovering from adverse impact of demonetisation and implementation of GST. Theeconomy also had to grapple with funding crunch for NBFC's deceleration in theagriculture and widening of fiscal and current account deficit. The country is facing thebiggest threat of rising unemployment. However the current situation is different from1991 when the country faced severe economic crisis on the external front. The currentslowdown in the Indian Economy is cyclical and growth will pick up in 1-2 years. TheGovernment has announced many reforms and the success whereof depends on itsimplementation.

On the positive side the uncertainty thrown up by the polls now behind us with decisivemandate in general election and the country is refocusing on its primary goal of buildingnew future for all its citizens. We at Zicom are still saddened with legacy issues causedby geo-political situation in the Middle East acute scarcity of resources to rebuildbusiness back to normal mismatch of expectations between lenders of the group and variousinvestors introduced by the Company. Currently the business operations of Middle East& India except Zicom SaaS are moving to standstill zone. The business environment ofParent Company has substantially undergone change over the last 2 years due toimplementation of Make in India initiative of the Government. Many Chinese manufacturershave directly established themselves by setting up large manufacturing facility to drivethe growth in the Indian market. On one hand market for the security equipment's isexpanding rapidly; the margin is falling down due to stiff competition and price sensitivenature of channel partners. The Company is negotiating with Chinese manufacturers to setup manufacturing base using Company's brand awareness market reach and relationship withChannel partners. The legacy business of project which was sold to Schneider in 2010 hasalso undergone change with size of the project growing bigger and bigger. Although theCompany receives many enquiries it is handicapped due to non-availability of workingcapital to execute such large projects. Therefore it's time to look at the business modelwhich works on fewer resources without hassle of inventory. Today technology is undergoinglot of changes and traditional business model will soon get outdated. We are thereforefocussing on building capabilities around data analytics cloud machine learning andartificial intelligence.

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

Phoenix International WLL Doha Qatar subsidiary of Zicom has stopped executing itsprojects 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 roadconnectivity due to geo-political situation. Almost 90% of the employees have beenexpatriated with settlements and the Company is working with local partners and bankers tobail out the company.

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

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

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

On behalf of the entire Zicom team I'm sincerely thankful to all stakeholders andwell-wishers for sticking with us through a challenging year. With your support we areconfident of scaling new heights in the coming years.

Manohar Bidaye

Chairman


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