MIC Electronics Ltd Directors Report.

Dear Members,

Your directors have pleasure in presenting before you the 33 rd Boards Report on the Companys business and operations, together with the audited financial statements for the financial year ended March 31, 2021.

Update on Implementation of the Resolution Plan

In accordance with the applicable provisions of the Insolvency and Bankruptcy Code 2016 ("IBC/Code"), the Corporate Insolvency Resolution Process ("CIRP Process") of MIC Electronics Limited ("Company") was initiated by the Financial Creditors of the Company. The Financial Creditors petition to initiate the CIRP Process was admitted by the National Company Law Tribunal ("NCLT") Hyderabad Bench on March 13, 2018 ("Insolvency Commencement Date"). Mr. Prabhakar Nandiraju was appointed as the Interim Resolution Professional ("IRP") to manage the affairs of the Company. Subsequently, Mr. Prabhakar Nandiraju was confirmed as the Resolution Professional ("RP") by the committee of creditors ("CoC") at their meeting held on June 01, 2018, On appointment of the IRP/RP, the powers of the Board of Directors of the Company were suspended.

The RP invited expressions of interest and submission of a resolution plan in accordance with the provisions of the Code. Out of various resolution plans submitted by Resolution Applicants, the CoC approved the resolution plan submitted by Cosyn Limited consortium (Cosyn Limited, RRK Enterprise Pvt Ltd and Mr Siva Lakshmana Rao Kakarala). The RP submitted the CoC approved resolution plan to the NCLT on December 10, 2018 for its approval and the NCLT, Hyderabad Bench approved the resolution plan submitted by Cosyn Limited consortium on July 31, 2019 ("IBC/NCLT Order"). Pursuant to the NCLT order, Cosyn Limited consortium is under process of implementation of Resolution Plan. A new Board was constituted on August 07, 2019 ("Reconstituted Board" or "Board") and a new management was put in place. In accordance with the provisions of the Code and the NCLT order, the approved resolution plan is binding on the Company and its employees, members, creditors, guarantors and other stakeholders involved.

The entire payments contemplated under the resolution plan were paid to the financial creditors and upon the completion of entire payment, the IA No. 166/2021 in CP(IB) No. 24/7/HDB/2018 was disposed of by the Honble NCLT, Hyderabad bench vide Order dated July 22, 2021.

Members are requested to read this report in light of the fact that the new Board and the new management is currently implementing the resolution plan.

Financial performance

In compliance with the provisions of the Companies Act, 2013 (Act), and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) the Company has prepared its financial statements as per Indian Accounting Standards (Ind AS) for the FY 2020-21. The financial highlights of the Companys operations are as follows:

Particulars 2020-21 2019-20
Total Income 4,23,23,523 2,85,35,129
Total Expenditure 9,64,55,959 26,78,92,177
Profit before Tax (5,41,32,436) (23,93,57,048)
Provision for Tax -- --
Profit after Tax (5,41,32,436) (23,93,57,048)
Transfer to General Reserve -- --
Profit available for appropriation -- --
Provision for Proposed Dividend -- --
Provision for Corporate Tax -- --

Performance

a) Operations

The total revenue of the Company for the financial year ended March 31, 2021 was Rs. 4,23,23,523/- as compared to the previous years total revenue of Rs. 2,85,35,129/-. During this financial year the Company has incurred a net loss of Rs (5,41,32,436)/- as against the previous years net loss of Rs. (23,93,57,048)/-.

b) Prospects

During the year under review, your company executed regular Annual Maintenance Contracts (AMC) of Indian Railways and executed certain lighting and display order of private parties. The Company received the Oxygen Concentrators (OCs) supply order from the Oil and Natural Gas Commission (ONGC) in the Month of June, 2021 for the quantity of 5000 OCs and the order value is Rs. 30 Crores. The new management of the Company is studying the business lines of the Company in order to identify and focus on the profit generating lines apart from the regular AMCs of Indian Railways and other private parties.

Change in the nature of business

There was no change in nature of the business of the Company during the financial year ended on March 31, 2021.

COVID-19

These are unprecedented times, as our country and the entire world struggle to contain and combat the COVID-19 pandemic. Amidst such rampant uncertainties, we have abided by every safety and social distancing norms and have been consistently communicating the same to both our employees and customers. We stand in solidarity with the Government of India and all our citizens, and our efforts towards the betterment of one and all will continue, unabated. The Company closed its operational activities from March 21, 2020 to August 31, 2020 and re-commenced from September 01,2020 onwards.

Share Capital

During the F.Y. 2020-21, the authorised share capital of the Company is Rs 54,00,00,000 (Rupees Fifty Four Crores) divided into 27,00,00,000 equity shares of Rs 02/- each and the paid-up share capital of the Company is Rs. 44,05,08,638/- divided into 22,02,54,319 equity shares of Rs 02/- each.

As per the resolution plan, the erstwhile paid up equity share capital of the Company of Rs. 44,05,08,638/- divided into 22,02,54,319 equity shares of Rs 02/- each was reduced to Rs. 11,01,28,000/- divided into 5,50,64,000 equity shares of Rs. 02/- each at Board of Directors meeting held on June 30, 2021.

Transfer to reserves

For the financial year ended March 31, 2021, the Company has not transferred any amount to General Reserves and Surplus Account. Dividend

Company has not declared any dividend during the year.

Buy Back of shares and disinvestment

The Company has not bought back any of its securities and there were no disinvestment during the Financial Year ended March 31, 2021. Indian Accounting Standards (Ind AS)

The Company has adopted Indian Accounting Standards (Ind AS) with effect from April 1, 2017 pursuant to Ministry of Corporate Affairs notification of the Companies (Indian Accounting Standards) Rules, 2015. The standalone and consolidated financial statements of the Company, forming part of the Annual Report, have been prepared and presented in accordance with all the material aspects of the Indian Accounting Standards (Ind AS) as notified under section 133 of the Companies Act 2013 read with the Companies (Indian Accounting Standards) Rules 2015 (by Ministry of Corporate Affairs (MCA)) and relevant amendment rules issued thereafter and guidelines issued by the Securities Exchange Board of India ("SEBI").

Transfer of unclaimed Dividend(s)/ Shares to Investor Education and Protection Fund

During the FY 2020-21, there was no unpaid/ unclaimed dividend pertaining to FY 2012-13 to be transferred to the Investors Education and Protection Fund ( I EPF) Account established by the Central Government.

Pursuant to the provisions of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended, the shares on which dividend remains unpaid / unclaimed for seven consecutive years or more shall be transferred to the Investors Education and Protection Fund (IEPF) after giving due notices to the concerned shareholders, which is not applicable to the Company during the year.

Unclaimed securities demat suspense account

There were no unclaimed securities to be kept in the demat suspense account.

Deposits

The Company has not accepted any deposits from public in terms of Section 73 of the Companies Act, 2013 and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet for the FY 2020-21.

Significant and material orders passed by the regulators

During the FY 2020-21, there were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Companys operations in future.

Material changes and commitments

There were no material changes and commitments, affecting the financial position of the Company between the end of the financial year March 31, 2021 to which the financial statements relates and the date of signing of this report.

Board of Directors

During the FY 2020-21, the following are the Board of Directors of the Company

Sl.No. Name of the Director DIN Designation
1 Mr Vishnu Ravis 01144902 Executive Director
2 Mr Siva Lakshmana Rao Kakarala 03641564 Non-executive Director
3 Mr Srinivas Medasani 00827476 Independent Director
4 Ms Karuna Gayathri Upadhyayula 07901195 Independent Director

Mr Vishnu Ravi resigned as Director of the Company on June 30, 2021 and Mr Srinivas Medasani resigned as Director of the Company on July 05, 2021. The board places vote of appreciation for their services during their tenure.

The Board of Directors in its meeting held on July 06, 2021 had appointed Mr Kaushik Yalamanchili holding DIN: 07334243 as Additional Director in the promoter category and Mr Manideep Katepalli holding DIN: 07840019 as Additional Director in the Independent Director category.

Upon recommendations of the Nomination and Remuneration Committee in its meeting held on September 16, 2021, the Board of Directors in its meeting held on September 16, 2021, appointed Mr Kaushik Yalamanchili as Managing Director of the Company for a period of three years subject to the approval of members at the ensuing AGM of the Company and accordingly the board recommends his appointment for members approval at the 33rd AGM.

The Board of Directors in its meeting held on November 12, 2021, recommends for the approval of members at the ensuing 33rd AGM, the appointment of Mr Kaushik Yalamanchili and Mr Manideep Katepalli as Directors of the Company.

Currently the board of directors consists of the following directors:

Sl.No. Name of the Director DIN Designation
1 Mr Kaushik Yalamanchili 07334243 Managing Director
2 Mr Siva Lakshmana Rao Kakarala 03641564 Non-executive Director
3 Mr Manideep Katepalli 07840019 Independent Director
4 Ms Karuna Gayathri Upadhyayula 07901195 Independent Director

Key Managerial Personnel

During the FY 2020-21, the Company is having the following KMPs

1. *Mr Vishnu Ravi - Managing Director

2. Mr Muralikrishnan Sadasivan Madurai - Company Secretary *Mr Vishnu Ravi resigned as Director on June 30, 2021.

The Company has not appointed the Chief Financial Officer of the Company during the FY 2020-21.

Currently the Company is having the following KMPs

1. *Mr Kaushik Yalamanchili - Managing Director

2. **Mr Muralikrishnan Sadasivan Madurai - Chief Financial Officer

3. ***Mr Srikanth Reddy Kolli - Company Secretary

* Mr Kaushik Yalamanchili was appointed as Managing Director w.e.f. September 16, 2021.

** Mr Muralikrishnan Sadasivan Madurai resigned as Company Secretary w.e.f. September 30, 2021 and was appointed Chief Financial Officer of the Company w.e.f. October 01,2021.

*** Mr Srikanth Reddy Kolli was appointed as Company Secretary w.e.f. October 01,2021.

Declaration by the Independent Directors

The Company has received declarations from all Independent directors of the Company confirming that they continue to meet the criteria of independence, as prescribed under Section 149 of the Companies Act, 2013, rules made there under and SEBI LODR Regulations. The Independent Directors have also confirmed that they have complied with the Companys code of conduct.

Policy on Directors appointment and remuneration and other details

The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors and Senior Management personnel and fix their remuneration. The detailed policy is available on the Companys website at www.mic. co.in.

Annual Board Evaluation

The board of directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 ("SEBI Listing Regulations").

The performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of the criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The board and the nomination and remuneration committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the chairman was also evaluated on the key aspects of his role.

In a separate meeting of independent directors, performance of non-independent directors, performance of the board as a whole and performance of the chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent directors, at which the performance of the board, its committees and individual directors was also discussed. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.

Criteria for Performance Evaluation:

1. Ability of the candidates to devote sufficient time and attention to his professional obligations as Independent Director for informed and balanced decision making.

2. Adherence to the Code of Conduct in letter and in spirit by the Independent Directors.

3. Bringing objectivity and independence of view to the Boards discussions in relation to the Companys strategy, performance, and risk management

4. Statutory Compliance and ensuring high standards of financial probity and Corporate Governance

5. Responsibility towards requirements under the Companies Act, 2013, Responsibilities of the Board and accountability under the Directors Responsibility Statement.

Familiarisation Programme

A handbook covering the role, functions, duties and responsibilities and the details of the compliance requirements expected from the Directors under the Act, and relevant Regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 were given and explained to the new Directors.

The newly appointed Directors are given induction and orientation with respect to Companys Vision, Core purpose, Core Values and Business operations. In addition, detailed presentations are made by Senior Management Personnel on business environment, performance of the Company at every Board Meeting.

The above initiatives help the Directors to understand the Company, its business and the regulatory framework in which the Company operates and enables the Directors to fulfill their role/responsibility.

Details of Familiarization Programme for the Independent Directors are uploaded on the website of the Company at www.mic.co.in.

Particulars in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo

The information on Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and outgo required to be disclosed under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014 are provided in the Annexure-I forming part of this Report.

Subsidiary, Associate and Joint Venture Companies

As on March 31, 2021, your Company has the following Subsidiary. Further there has been no material change in the nature of business of the Subsidiary.

MIC Electronics Inc. is a subsidiary of the Company. The said subsidiary has no operations during the financial year ended March 31, 2021.

As per the provisions of Section 129(3) of the Companies Act, 2013 (the Act) read with Companies (Accounts) Rules, 2014, a statement containing the salient features of the financial statements of the Subsidiary in Form AOC-1 is enclosed as Annexure - II to this Report.

Performance and financial position of each of the subsidiaries, associates and joint ventures:

As per Rule 8 of Companies (Accounts) Rules, 2014, a Report on the performance and financial position of each of the subsidiaries, associates and joint venture companies of the Company is enclosed as Annexure - II to this Report.

Related Party Transactions

All transactions entered with Related Parties for the year under review were on arms length basis and in the ordinary course of business. There were no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee and also the Board for approval, where ever required. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseeable and repetitive nature. A statement giving details of all related party transactions entered into pursuant to the omnibus approval so granted are placed before the Audit Committee and the Board of Directors on a quarterly basis. The Company has developed a Policy on Related Party Transactions for the purpose of identification and monitoring of such transactions. The policy on Related Party Transactions as approved by the Board is uploaded on the Companys website www.mic.co.in.

The particulars of contracts or arrangements with related parties referred to in sub-section (1) of section 188 is prepared in Form AOC-2 pursuant to clause (h) of the Companies (Accounts) Rules, 2014 and the same is annexed herewith as Annexure-III to this Report.

Statement of Particulars of Appointment and Remuneration of Managerial Personnel/ employees:

Information required pursuant to Section 197 (12) of the Companies Act, 2013 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided along with a statement containing, inter alia, names of employees employed throughout the

financial year and in receipt of remuneration of Rs. 102 lakhs or more, employees employed for part of the year and in receipt of Rs. 80.50 lakhs or more per month, pursuant to Rule 5(2) the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided as Annexure-IV to this report.

Statutory Auditors

M/s. Pavuluri & Co., Chartered Accountants (Firm Registration No. 012194S) were appointed second term as Statutory Auditors of the Company at the 29th AGM held on September 29, 2017 for a term of 4 (Four) consecutive years to conduct the audit of F.Y. 2017 to 2021. Their second term will expire at the conclusion of this 33rd AGM.

Based on the experience and competency of the Auditors, requirement of the Company and other relevant aspects and on the recommendation of Audit Committee, Board of Directors (the Board) at their meeting held on November 12, 2021 recommend the appointment of M/s. Bhavani & Co. (FRN.: 012139S), Chartered Accountants as a Statutory Auditor of the Company for a term of 5 (Five) consecutive years commencing from F.Y. 2021-22 to 2025-26, for the approval of shareholders at ensuing Annual General Meeting in place of retiring auditors M/s. Pavuluri & Co., Chartered Accountants . The Auditors have confirmed that they are eligible for appointment and their appointment, if made, would be within the prescribed limits and shall be in accordance with the conditions and criteria as prescribed under section 139, 141 and other applicable provisions of the Act and Rules made thereunder and board confirmed their eligibility under the relevant provisions of Chapter X of the Companies Act, 2013 and rules made thereunder.

The proposed fee for the said appointment will be Rs.5,00,000/- (Rupees Five Lakhs) (exclusive of taxes and reimbursement of out of pocket expenses at actuals) which is in line with the industry standards and is not materially different from the fee paid to the erstwhile auditors. The Audit Committee has taken into account the experience and expertise of the auditors and recommended their appointment.

The Board has accordingly recommending to the shareholders for their appointment for a term of 5 (Five) consecutive years who shall hold the office till the conclusion of 38th Annual General Meeting of the Company to be held in the year 2026.

Pursuant to notification from the MCA dated 07.05.2018, ratification of appointment of statutory auditors at every Annual General Meeting has been omitted.

Auditors Report

(a) Statutory Auditors Report

The board of directors in its meeting held on June 30, 2021 duly reviewed the Statutory Auditors Report on the Accounts for the year ended March 31, 2021 and has noted the following qualifications/ emphasis of the matter together with the management replies:

Statutory Auditors Qualifications on Standalone Financial Statements Management Replies
Note 2.25 to the standalone financial statements in connection with write off of assets/expenses/write back off liability/provision has been carried out in the books of accounts of the company and the balancing figure has been adjusted in the capital reserve as per the NCLT order dated 31st July 2019 approving the resolution plan. In this regard, we are of the opinion that the company should make these adjustments by crediting the balancing figure of Rs.138.53 crores to the profit and loss account in conformity with the Indian Accounting Standards. Had the company credited this amount to the profit and loss account the profit would have been increased by the said amount and capital reserve would have been decreased by the said amount. The net amount of write off assets/expenses/ write back off liability/ provision are transferred to Capital Reserve in compliance with the approved Resolution Plan by Honble NCLT, Hyderabad vide its Order dated 31st July, 2019 with respect to accounting treatment of such write off assets/ expenses/ write back off liability/ provision transfer to Capital Reserve and shall be deemed to be in compliance with the applicable accounting standards.
Note 2.42 to the standalone financial statements in connection with trade receivables, security deposits, loans and advances, other financial and current assets aggregating to Rs. 7.43 crores. There is existence of material uncertainties over the realisability of these amounts due to various factors such as disputes, age of these assets etc. There is also non-availability of confirmation of various trade receivables etc. In absence of alternative corroborative evidence, we are unable to comment on the extent to which such balances are recoverable. The management is confident of recovery of trade receivables, security deposits, loans and advances, other financial and current assets which represent the balance amounts after realization / making provisions in the books. Hence, further provisions are not made.
We draw attention to Note No.2.44 as regards to the management evaluation of COVID-19 impact on the future performance of the company. Our opinion is not modified in respect of this matter. Management have taken all the precautions and safety measures to tackle COVID-19 impact on the future performance of the Company.
Section 203 of the Companies Act, read with rule 8A of the companies (Appointment and remuneration of Managerial Personnel) Amendment rules, 2014, In respect of appointment of CFO, as per the said provisions the Board should fill the vacancy of CFO within 6 months from the date of such vacancy. However, in the present case such six months have already been elapsed from the date of such vacancy. Chief Financial Officer will be appointed w.e.f. October 01, 2021.
Note 2.26 to the consolidated financial statements in connection with write off of assets/expenses/write back off liability/provision has been carried out in the books of accounts of the group and the balancing figure has been adjusted in the capital reserve as per the NCLT order dated 31st July 2019 approving the resolution plan. In this regard, we are of the opinion that the group should make these adjustments by crediting the balancing figure of Rs.138.53 crores to the profit and loss account in conformity with the Indian Accounting Standards. Had the group credited this amount to the profit and loss account the profit would have been increased by the said amount and capital reserve would have been decreased by the said amount. The net amount of write off assets/expenses/ write back off liability/ provision are transferred to Capital Reserve in compliance with the approved Resolution Plan by Honble NCLT, Hyderabad vide its Order dated 31st July, 2019 with respect to accounting treatment of such write off assets/ expenses/ write back off liability/ provision transfer to Capital Reserve and shall be deemed to be in compliance with the applicable accounting standards.
Note 2.40 to the consolidated financial statements in connection with trade receivables, security deposits, loans and advances, other financial and current assets aggregating to Rs. 15.63 crores. There is existence of material uncertainties over the realisability of these amounts due to various factors such as disputes, age of these assets etc. There is also non-availability of confirmation of various trade receivables etc. In absence of alternative corroborative evidence, we are unable to comment on the extent to which such balances are recoverable. The management is confident of recovery of trade receivables, security deposits, loans and advances, other financial and current assets which represent the balance amounts after realization / making provisions in the books. Hence, further provisions are not made.
We draw attention to Note No.2.42 as regards to the management evaluation of COVID-19 impact on the future performance of the group. Our opinion is not modified in respect of this matter Management have taken all the precautions and safety measures to tackle COVID-19 impact on the future performance of the Company.
Section 203 of the Companies Act, read with rule 8A of the companies (Appointment and remuneration of Managerial Personnel) Amendment rules, 2014, In respect of appointment of CFO, as per the said provisions the Board should fill the vacancy of CFO within 6 months from the date of such vacancy. However, in the present case such six months have already been elapsed from the date of such vacancy. Chief Financial Officer will be appointed w.e.f. October 01, 2021.
We did not audit the financial statements of the subsidiary company M/s. MIC Electronics Inc. as at 31st March 2021. These financial statements have not been audited by any other auditor but prepared and furnished to us by the management and our opinion on the consolidated financial statements in so far as it relates to the amounts and disclosures included in respect of the subsidiary and our report in terms of sub section 3 of section 143 of the act. MIC Electronics Inc, a US based subsidiary was not operational and no staff to attend our requests of audited financials and hence based on the available data, the Company submitted to the Auditors, the provisional financial statements of MIC Electronics Inc for the purpose of consolidation.

(b) Internal Auditors

During the year under review, the Company has not appointed the internal auditors to review internal controls and operating systems and procedures as per the scope of audit and is in the process of identifying the suitable person for conducting the internal audit.

The Board of Directors, on recommendation of the Audit Committee appoints/re-appoints the Internal Auditors of your Company every year in compliance with Section 138 of the Act read with the Companies (Accounts) Rules, 2014.

(c) Cost Auditors

Pursuant to the rules made by the Central Government under sub-section (1) of Section 148 of the Act, the maintenance of cost records is not applicable for the company for the year under review.

(d) Cost Audit Records

Appointment of Cost Auditors is not applicable as the turnover is less than applicable limit and hence maintenance of cost records was not applicable to the Company.

(e) Secretarial Auditors and Report

Mr Srinivasa Rao Vattikuti who was appointed as the Secretarial Auditor of the Company for the FY 2020-21 was deceased due to Covid-19 in the month of May 2021 and the Board expressed sincere condolences to Mr Srinivasa Rao Vattikuti family. In order to fill the casual vacancy caused due to the death of previous Secretarial Auditor, the Board in its meeting held on September 16, 2021 appointed M/s. RPR & Associates as the Secretarial Auditors of the Company for the FY 2020-21 and 2021-22 who had given their consent and eligibility to act as the Secretarial Auditor of the Company.

The Secretarial Audit for the financial year ended March 31, 2021, was carried out by M/s. RPR & Associates, Practicing Company Secretaries. The Report given by the Secretarial Auditors in Form MR-3 is annexed as Annexure-V and forms integral part of this Report.

The board of directors in its meeting held on November 12, 2021 duly reviewed the Secretarial Auditors Report for the year ended March 31, 2021 and has noted the following qualifications/ observations/ deviations together with the management replies:

Secretarial Auditors Qualifications in the Secretarial Audit Report Management Replies
Non-compliance of Regulation 33(3)(a) of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 with respect to the first quarter (submission of financial results) of FY 2020-21 Delay was caused due to adoption of audited financial results and statements for the FY 2019-20 on October 07, 2020 due the Covid-19 and the transition process from Resolution Professional (RP) to the new management as per the Resolution Plan approved by the Honble NCLT, Hyderabad bench. The first quarter results for the FY 2020-21 were approved on October 22, 2021.
Non-compliance or delay in compliance with various regulations of SEBI LODR like Regulation 7, 13, 23(9), 31,46 etc The Company complied with the requirement of said regulations with delay due to Covid-19 and the transition process from Resolution Professional (RP) to the new management as per the Resolution Plan approved by the Honble NCLT, Hyderabad bench.
Non-compliance of Section 21A of Securities Contracts (Regulation) Act, 1956 read with Rule 21 of Securities Contracts (Regulation) Rules, 1957 and SEBI (Regulatory fees on Stock Exchanges) Regulations, 2006. The Annual Fee dues were regularized in the current financial year 2021-22 which are payable for the year 2020-21.
Non submission of Annual Secretarial Compliance Report for the FY 2019-20 as required by the SEBI Circular dated February 08, 2019. The then secretarial auditor of the Company who was supposed to give this report was demised in the Month of May 2021.
Non-compliance of Section 203(1) of the Companies Act, 2013 with respect to appointment of Chief Financial Officer during the FY 2020-21. The Company appointed the Chief Financial Officer w.e.f. October 01, 2021.
Non-compliance of Section 138, read with rule 13 of Companies Accounts Rules, 2014 with respect to Appointment of Internal auditor. The Company is in the process of identifying the suitable person for the appointment as Internal Auditor.
Non-compliance of Section 6(3) and 47 of the Foreign Exchange Management Act, 1999, read with Regulation No15 of Notification No. FEMA.120/RB-2004 dated July 7, 2004, (GSR 757 (E) dated November 19, 2004) as amended, with respect to filing of Annual Performance Report and A.P. (DIR Series) Circular No.145 dated June 18, 2014 Filing of Annual Performance Report is held up for certain clarifications sought and will be addressed and filed in the current financial year 2021-22.
During the year, Annual return on Foreign Liabilities and Assets (FLA) was not submitted for the F.Y. 2020-21 with the RBI. The ODI in the MIC Electronics Inc, Subsidiary was written off in full due to implementation of resolution plan for the MIC Electronics Limited and filing of FLA will no longer arise.
During the year, the Stock Exchanges levied Fines/ penalties on the Company for non-compliance or delay compliance with SEBI LODR Regulations/ non-submission or delay in submission of various disclosures/ certificates required to be submitted under SEBI LODR Regulations. The Company applied for waiver of SOP fines with the stock exchanges based on the immunity provided under the Resolution Plan approved by the Honble NCLT, Hyderabad bench and they were under process.

In terms of the amended SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015, the Company had obtained the Secretarial Compliance certificate for the FY 2020-21 from M/s. RPR & Associates, Practicing Company Secretaries which is annexed as Annexure-V(A) and forms integral part of this Report and the same was also intimated to the Stock Exchanges where the shares of the Company are listed.

Pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 Company has obtained a certificate on non-disqualification of directors from Mr Y Ravi Prasada Reddy, (Membership No.: FCS 5783), Proprietor of M/s. RPR & Associates, Practicing Company Secretaries (PCS Registration No. 5360) which is annexed as Annexure-V(B) and forms integral of this Report.

Corporate Social Responsibility (CSR)

Since the Company did not have profits (average net profits for the last three financial years), it was not obligated to contribute towards CSR activities during FY 2020-21. However, the Company is committed to build its CSR capabilities on a sustainable basis and undertake CSR activities as and when the opportunity arises.

The Annual Report on Corporate Social Responsibility u/s 135 of the Companies Act, 2013 is not required to be given as the Company was not required to contribute towards CSR activities during FY 2020-21.

Management Discussion and Analysis Report

In terms of the provisions of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 as amended from time to time, the Managements Discussion and Analysis for the year ended march 31,2021 is annexed hereto as Annexure-VI and forms integral of this Report.

Corporate Governance

Corporate governance is an ethically driven business process that is committed to values aimed at enhancing an organizations brand and reputation. This is ensured by taking ethical business decisions and conducting business with a firm commitment to values, while meeting stakeholders expectations. It is imperative that your companys affairs are managed in a fair and transparent manner. This is vital to gain and retain the trust of the stakeholders.

The Report on corporate governance for the year ended March 31, 2021, pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed hereto as Annexure-VII and forms integral of this Report.

Auditors certificate on Corporate Governance

As required by SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the auditors certificate on corporate governance regarding the compliance of conditions forms integral of this Report.

Statement containing additional information as required under Schedule V of the Companies Act, 2013

A statement containing additional information as required under Clause IV of Section II of Part II of Schedule V of the Companies Act, 2013 is provided in the Report on Corporate Governance, which forms part of this Annual Report.

Risk Management

During the year, the risk assessment parameters were reviewed. The audit committee reviewed the element of risks and the steps taken to mitigate the risks. In the opinion of the Board, there are no major elements of risk which have the potential of threatening the existence of the Company.

The audit committee provides the framework of Risk Management by describing mechanisms for the proactive identification and prioritization of risks based on the scanning of the external environment and continuous monitoring of internal risk factors.

Analysis of the risks identified is carried out by way of focused discussion at the meetings of the Board. The robust governance structure has also helped in the integration of the Enterprise Risk Management process with the Companys strategy and planning processes where emerging risks are used as inputs in the strategy and planning process. Identified risks are used as one of the key inputs in the strategy and business plan.

Internal Financial Control Systems and their adequacy

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations.

Various Audit Systems in the Company monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies of the Company. Based on the audit reports, Company undertakes corrective actions in respective areas and strengthens the control. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board periodically.

The Board of Directors of the Company have adopted various policies like Related Party Transactions policy, Whistle Blower Policy and such other procedures for ensuring the orderly and efficient conduct of its business for safeguarding its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. The details in respect of internal financial control and their adequacy are included in the management discussion & analysis, which forms part of this report.

Consolidated Financial Statements

The Consolidated Financial Statements of the Company and its subsidiaries for FY 2020-21, are prepared in compliance with the applicable provisions of the Act and as stipulated under Regulation 33 of the Listing Regulations as well as in accordance with the Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015. The Audited Consolidated Financial Statements together with the Auditors Report thereon forms part of this Annual Report.

Pursuant to the provisions of Section 136 of the Act, the Financial Statements of the Company, Consolidated Financial Statements along with relevant documents and separate annual accounts in respect of subsidiaries are available on the website of the Company. The annual accounts of the subsidiaries and related detailed information will be made available to investors seeking information till the date of the AGM.

Material changes and commitments affecting the financial position of the company between the end of the financial year and the date of the report. There are no material changes and commitments affecting financial position of the company, which occurred after the end of the financial year i.e., March 31, 2021.

Listing of Companys Equity Shares

The Companys Equity shares were listed with M/s. BSE Limited and M/s. National Stock Exchange of India Limited (Stock Exchanges). Due to capital reduction from Rs. 44,05,08,638/- to Rs. 11,01,28,000/- approved by the Board of Directors in its meeting held on June 30, 2021 as required by the Resolution Plan approved by the Honble NCLT, Hyderabad bench the trading in shares of the Company suspended by the stock exchanges from June 24, 2021 onwards.

The Company applied for re-listing of reduced capital of Rs. 11,01,28,000/- divided in to 5,50,64,000 equity shares of Rs. 2/- each with the stock exchanges and obtained Listing approvals. Corporate Actions submitted to depositories which are under process.

The Company has paid the Annual Listing Fees to the said Stock Exchange for the Financial Year 2021-22.

Whistle blower Policy

The Company has adopted a Whistle-blower Policy to provide a formal mechanism to the Directors, Employees and its Stakeholders to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Companys Code of Conduct. Protected disclosures can be made by a whistle-blower through several channels.

The Policy provides for adequate safeguards against victimisation of employees who avail of the mechanism and also provides for direct access to the Chairperson of the Audit Committee. No personnel of the Company have been denied access to the Audit Committee.

The Whistle-blower Policy also facilitates all employees of the Company to report any instance of leak of Unpublished Price Sensitive Information. The Policy is also posted on the website of the Company at www.mic.co.in.

Reporting of Fraud

During the year under review, the Statutory Auditors, Cost Auditors and Secretarial Auditors have not reported any instances of frauds committed in the Company by its Officers or Employees, to the Audit Committee under Section 143(12) of the Act, details of which need to be mentioned in this Report.

Declaration as per Section 134(3) of the Companies Act, 2013

During the year, the statutory auditors and secretarial auditor have not reported any instances of frauds committed by or against the Company by its Directors/ Officers/ Employees to the Audit Committee or Board under section 143(12) of the Companies Act, 2013 and rules made thereof. Therefore, no detail is required to be disclosed under Section 134 (3) (ca) of the Act.

Annual Return

As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014 (as amended), a copy of the Annual Return of the Company for the FY 2020-21 shall be placed on the Website of the Company at www. mic.co.in.

Prevention of Sexual Harassment of Women at Workplace

The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplace in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The internal complaints committee was duly constituted as required. During the financial year ended March 31,2021, the Company has not received any Complaints pertaining to Sexual Harassment.

Particulars of Loans, Guarantees or Securities or Investments

The Company has not given loans / guarantees or made any investments during the year under review.

Managing Director (MD) & Chief Financial Officer (CFO) Certification

Only the Managing Director of the Company have given annual certification on financial reporting and internal controls to the Board in terms of Regulation 17(8) of the SEBI (Listing Obligation & Disclosure Requirements) Regulation, 2015 since there was no CFO during the FY 2020-21.

Managing Director also give quarterly certification on financial results while placing the financial results before the Board in terms of Regulation 33(2)(a) of the SEBI (Listing Obligation & Disclosure Requirements) Regulation, 2015.

The annual certificate given by the Managing Director forms integral part of this report.

Meetings of the Board of Directors and its Committees during the Financial Year 2020-21

During the year, Board convened five meetings. The dates of the five meetings are October 07, 2020, October 22, 2020, November 13, 2020, December 04, 2020 and February 12, 2021.

The details were disclosed in the report on Corporate Governance which forms part of this Annual Report. The intervening gap between any two meetings was within the prescribed period.

All the recommendations made by committees of the Board including the Audit Committee were accepted by the Board. A detailed update on the Board, its composition, detailed charter including terms and reference of various Board Committees, number of Board and Committee meetings held during FY 2020-21 and attendance of the Directors at each meeting is provided in the Report on Corporate Governance, which forms part of this Report.

Committees of the Board

The Composition of Audit Committee, Nomination & Remuneration Committee and Stakeholders Relationship Committee are mentioned in the Report on Corporate Governance.

Nomination and remuneration policy

The Board has on the recommendation of the Nomination & Remuneration Committee framed a policy which lays down a framework in relation to selection, appointment and remuneration to Directors, Key Managerial Personnel and Senior Management of the Company. The details of Nomination and Remuneration Committee and Policy are stated in the Corporate Governance Report.

Human Resources

The management believes that competent and committed human resources are vitally important to attain success in the organisation. In line with this philosophy, utmost care is being exercised to attract quality resources and suitable training is imparted on various skillsets and behavior. Various initiatives were undertaken to enhance the competitive spirit and encourage bonding teamwork among the employees even during the COVID pandemic outbreak, which resulted to uninterrupted operations of the Company and could achieve the targeted growth in the performance of the Company.

Insurance

All properties and insurable interests of the Company including buildings, plant and machinery and stocks have been fully insured.

Revision of Financial Statements

There was no revision of the financial statements for the year under review Compliance with SEBI (LODR) regulations, 2015

In compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company has signed uniform listing agreement with BSE Limited and National Stock Exchange of India Limited and framed the required policies which are available on Companys website i.e. www.mic.co.in

• Board Diversity Policy

• Policy on preservation of Documents

• Risk Management Policy

• Whistle Blower Policy

• Familiarisation programme for Non-executive directors

• Sexual Harassment Policy

• Policy on related party transactions

• Code of Conduct and Ethics

• Nomination and Remuneration Policy

• Policy to determine materiality

• Code for prohibition of insider trading

• Code of fair disclosure

• EOHS Policy

Non-Executive Directors Compensation and disclosures

None of the Independent / Non-Executive Directors has any pecuniary relationship or transactions with the Company which in the Judgment of the Board may affect the independence of the Directors. The details of sitting fee paid were given in the Report on corporate governance.

Industry Based Disclosure

The Company is not a NBFC, Housing Companies etc., and hence Industry based disclosures is not required.

Event Based Disclosure

During the year under review, the Company has not taken up any of the following activities:

1. Issue of sweat equity share: The Company has not issued any sweat equity shares during the year under review and hence no information as per provisions of Section 54(1)(d) of the Act read with Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014.

2. Issue of shares with differential rights: The Company has not issued any shares with differential rights and hence no information as per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014.

3. Issue of shares under employees stock option scheme: The Company has not issued any equity shares under Employees Stock Option Scheme during the year under review and hence no information as per provisions of Section 62(1)(b) of the Act is required to be given.

4. Disclosure on purchase by company or giving of loans by it for purchase of its shares: The Company did not purchase or give any loans for purchase of its shares.

5. Preferential Allotment of Shares: The Company did not allot any shares on preferential basis during the period under review. Employees Stock Options

No employee was issued Stock Option, during the year equal to or exceeding 1% of the issued capital of the Company at the time of grant. Directors Responsibility Statement

Pursuant to the requirement under Section 134 of the Companies Act, 2013 with respect to the Directors Responsibility Statement, the Board of Directors of the Company hereby confirms:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. Such accounting policies as mentioned in the notes to the financial statements have been selected and applied consistently and judgments and estimates that are reasonable and prudent made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 2020-21 and of the statement of profit of the Company for that period;

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The annual accounts for the year 2020-21 have been prepared on a going concern basis.

v. Those proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

vi. That system to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

Appreciation

The board wish to place on record their appreciation to employees at all levels for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to stream line all the pending compliances and thereby to have a fresh start for the Company.

Cautionary Statement

Statements in this Report, particularly those which relate to Management Discussion and Analysis as explained in the Corporate Governance Report, describing the Companys objectives, projections, estimates and expectations may constitute forward looking statements within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied in the statement depending on the circumstances.

Acknowledgement

The board take this opportunity to place on record their sincere thanks to the suppliers, customers, strategic partners, Banks and Financial Institutions, Insurance Companies, Central and State Government, Indian Railways, Material suppliers, customers and the shareholders for their support and co-operation extended to the Company from time to time. The board is pleased to record their appreciation of the sincere and dedicated services of the employees and workmen at all levels.

By order of the Board
For MIC Electronics Limited
Mr Kaushik Yalamanchili Mr Manideep Katepalli
Managing Director Director
DIN: 07334243 DIN: 07840019

Date: November 12, 2021

Place: Hyderabad