mic electronics ltd Management discussions

Industry Structure and Developments

In the context of the changed scenario in terms of Technological Developments, Business Environment and the catastrophic situation the entire world is going through in the wake of COVID-19 pandemic, Your Companys core strength is Technology and Product innovation in the domain of LEDs, communications and Embedded Electronics. The company would strive to leverage on its long-standing experience in the field of LED Display and mini / micro-LED TV products by bringing out contemporary high-end display systems that will find applications in several areas that are of relevance in both urban and rural parts of India and elsewhere in the world. During the year under review, your Company entered in to new business verticals i.e., manufacturing/ assembling/ trading of oxygen concentrators (medical equipment) and electric two wheelers & its batteries which are the emerging markets for business.

Business analysts have projected huge global demand for Display products of various types (flat panel, flexible panel and transparent panel), of various technologies (OLED, Quantum Dot, LED, LCD, e-Paper and others), various applications (Smart phones, tablets, Smart wearables, television, Digital Signage, PC, laptop, vehicle display and others), various industry verticals (Health care, Consumer Electronics, Retail, BFSI, Defence, Automotive etc) and various geographical domains (North America, Europe, Asia Pacific and LAMEA (Latin America, Middle East, Africa) countries. Annual demand for these products is projected as around US $ 200 Billion by the year 2025. The major chunk of demand is projected for North America (66 billion). Average CAGR is projected as 7.4% while for North America it is 4.7% and for Asia Pacific the estimated CAGR is 11.4%. These estimates have to be taken as indicative and suitable corrections have to be incorporated considering the COVID situation.

Your company needs to make a careful choice in respect of Display types & technologies, products, applications and targeted market regions while drawing up its Business Plans. The new management of the Company is studying the business lines of the Company to identify profit generating segments and to revive the Company, to a robust profit-making enterprise.

Opportunities and Threats

Your company is essentially an R&D driven company and has several firsts to its credit in terms of product innovations. However, historically its weaknesses have been in terms of marketing, revenue generation, HR management, cash-flow management, risk analysis, customer support management, intellectual property protection and structured planning in an overall sense. This new management team has focused on abovementioned weaknesses and is working to establish and implement the standard operating practices by observing leaders in respective filed.

Segment-wise or product-wise performance

Your Company is operating in multiple segments i.e., LED based products, medical equipment (oxygen concentrators), electric two wheelers & its batteries. During the year under review, sales from LED lightings including Solar LED Street lights and sales from LED display boards were to the tune of ? 14.00 Lakhs. The revenue generated from AMC contracts of Indian Railways and other private agencies was ? 105.60 Lakhs. The revenue generated from the oxygen concentrators was ? 2987.38 Lakhs.

Outlook

The Pandemic COVID has not only proved to be a fatal health hazard but also led to substantial changes in the habits and practices of people in the areas of entertainment, sports and education. These changes essentially mean avoidance of mass gatherings and the trend is expected to continue for quite some time not only in India but the world over. This changed scenario will be a design parameter for your company new display products with a target application like: Railway and other transportation applications, Bezel free Video walls, Conference rooms, Video Conferencing applications etc. During the year under review, the Company had successfully completed the Order received from the ONGC for supply of 5000 units of Oxygen Concentrators and the order value is Rs. 34 Crores inclusive of taxes and is expecting similar kind of orders in the near future. The new management of the Company is focusing on identifying the profit generating business lines of the Company apart from continuing the AMCs in order to strengthen the Company. The Company has also entered the business of electric two wheelers & its batteries and is expecting potential upward growth in this line of business in the years to come.

Risks and concerns.

The weak-link of your company historically has been the Marketing and Revenue generation despite the fact that the company has cutting-edge technology and better than contemporary products. This gap needs to be bridged forthwith as the top most priority and marketing strategies have to be efficiently and effectively tuned.

Concerned agencies, identified as responsible for promoting the products and generating revenues will be taken into confidence before / during the product conceptualisation and introduction whenever and wherever necessary, help of market research teams of proven reputation will be sought before embarking on product development.

With respect to customized application products, suitable incentive schemes will be devised for the teams responsible for successfully executing the projects.

While your company has been endeavouring to safeguard its intellectual property by applying for patents, copyrights and trademarks, it has not succeeded in taking effective actions against agencies which are infringing on its patent rights. Effective steps will be taken by hiring the services of experienced legal teams to tackle the situations.

HR management is a discipline which needs to be strengthened in a large measure to effectively manage the faculties of discipline, compensation, reward / redressal schemes and career progressions in your company.

Also, the main goal of the organization will be to meet its financial obligations in terms of profitability and healthy cash flows. All the activities of your company will work to fall in line to meet this core objective.

Internal Financial Control Systems and their Adequacy

The Company has adequate internal financial control systems and procedures in all operational areas and at all levels equipments procurement, finance, administration, marketing and personnel departments. The Audit committee reviews the adequacy of internal controls from time to time.

Financial review

The Highlights of Financial Operational Performance are given below: (Rs. In Lakhs)

Particulars	2021-22	2020-21	2019-20
Total Income	3233.57	423.24	285.35
Total Expenditure	2952.48	964.56	2678.92
Profit before Tax	281.09	(541.32)	(2393.57)
Provision for Tax	--	--	--
Profit after Tax	281.09	(541.32)	(2393.57)
Transfer to General Reserve	--	--	--
Profit available for appropriation	--	--	--
Provision for Proposed Dividend	--	--	--
Provision for Corporate Tax	--	--	--

The total revenue of the Company for the financial year ended March 31, 2022 is f 3233.57 lakhs as compared to the previous years total revenue of f 423.24 lakhs. During this financial year the Company has earned a net profit of f 281.09 lakhs as against the previous years net loss of f 541.32 lakhs.

Human Resources Development and Industrial Relations

The Company believes that the quality of its employees is the key to its success in the long run and is committed to provide necessary human resource development.

Industrial relations during the year are cordial and the Company is committed to maintain the same in future.

	By order of the Board
	For MIC Electronics Limited
Date: July 20, 2022	Mr Kaushik Yalamanchili	Mr Manideep Katepalli
Place: Hyderabad	Managing Director	Director
	DIN: 07334243	DIN: 07840019