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MIC Electronics Ltd.

BSE: 532850 Sector: Engineering
NSE: MIC ISIN Code: INE287C01029
BSE 00:00 | 24 Apr 2020 MIC Electronics Ltd
NSE 05:30 | 01 Jan 1970 MIC Electronics Ltd

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OPEN 0.58
PREVIOUS CLOSE 0.58
VOLUME 7
52-Week high 1.08
52-Week low 0.46
P/E
Mkt Cap.(Rs cr) 13
Buy Price 0.58
Buy Qty 6093.00
Sell Price 0.50
Sell Qty 4250.00
OPEN 0.58
CLOSE 0.58
VOLUME 7
52-Week high 1.08
52-Week low 0.46
P/E
Mkt Cap.(Rs cr) 13
Buy Price 0.58
Buy Qty 6093.00
Sell Price 0.50
Sell Qty 4250.00

MIC Electronics Ltd. (MIC) - Director Report


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Company director report

To

The Members

MIC Electronics Limited

In accordance with the applicable provisions of the Insolvency and Bankruptcy Code 2016("IBC/Code") the Corporate Insolvency Resolution Process ("CIRPProcess") of MIC Electronics Limited ("Company") was initiated by theFinancial Creditors of the Company. The Financial Creditors petition to initiate the CIRPProcess was admitted by the National Company Law Tribunal ("NCLT") HyderabadBench on 13th March 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 confirmedas the Resolution Professional ("RP") by the committee of creditors("CoC") at their meeting held on 1st June 2018 On appointment of theIRP/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 inaccordance with the provisions of the Code. Out of various resolution plans submitted byResolution Applicants the CoC approved the resolution plan submitted by Cosyn Limitedconsortium. The RP submitted the CoC approved resolution plan to the NCLT on 10thDecember 2018 for its approval and the NCLT Hyderabad Bench approved the resolution plansubmitted by Cosyn Limited consortium on 31st July 2018 ("IBC/NCLTOrder"). Pursuant to the NCLT order Cosyn Limited consortium is under process ofimplementing the Resolution Plan. A new Board was constituted in the current financialyear i.e. on 7th August 2019 ("Reconstituted Board" or"Board") and a new management has come into being place. In accordance with theprovisions of the Code and the NCLT order the approved resolution plan is binding on theCompany and its employees members creditors guarantors and other stakeholders involved.

Members may kindly note that the Directors of the Reconstituted Board("Directors") were not in office for the period to which this report primarilypertains. During the CIRP Process (i.e. between 13th March 2018 to 31stJuly 2019) the RP was entrusted with the management of the affairs of the Company. Priorto the Insolvency Commencement Date the erstwhile Board of Directors had the oversight onthe management of the affairs of the Company. The Reconstituted Board is submitting thisreport in compliance with the provisions of the Companies Act 2013 the rules andregulations framed there under ("Act") and the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations"). The Reconstituted Board is not to be considered responsible todischarge fiduciary duties with respect to the oversight on financial and operationalhealth of the Company and performance of the management for the period prior to theReconstruction of Board.

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

During the period 1st April 2018 to 6th August 2019:

(a) the management of the affairs of the company were looked into by the ResolutionProfessional.

(b) the powers of the Board of Directors company were suspended and exercised by theResolution Professional.

(c) be responsible for complying with the requirements under any law for the time beingin force.

New Board reconstituted on 7th August 2019 with the following new directors:

1. Mr. Vishnu Ravi

2. Mr. Siva Lakshmanarao Kakarala

3. Mr. Medasani Srinivas

Financial summary or highlights/Performance of the Company:

The financial performance of the Company for the financial year ended 31st March 2019is summarized below: (Standalone)

(Rs. in Crores)

Particulars Financial Year ended 31st March 2019 Financial Year ended 31st March 2018
Revenue From Operations 4.84 164.17
Other income 0.66 1.17
Total income 5.50 165.34
Profit before Interest

Depreciation Exceptional Item & Tax

(19.48) (3.10)
Less: Depreciation 7.66 7.74
Interest 0.06 24.42
Profit before exceptional items and Tax (27.20) (35.27)
Exceptional Items 0.28 96.19
Profit / (Loss) before Tax (27.48) (131.46)
Tax: MAT credit Entitlement - -
Deferred Tax (Liability)/Asset - (59.85)
Profit / (Loss) after Tax (27.48) (191.31)
Other Comprehensive Income - 0.56
Total Comprehensive Income (27.48) (190.75)
EPS - Basic (In Rs.) (1.25) (8.66)
Diluted (In Rs.) (1.10) (7.62)

State of Company's Affairs

During the year under review your company executed regular Annual MaintenanceContracts of Indian Railways and executed certain display orders of private parties.

The exceptional item is an account of Rs.0.28 crores towards depletion in the value ofinventories which have become obsolete and not in usable conditions.

Dividend

As your company is under Corporate Insolvency Resolution Process (CIRP) and incurredlosses. Company is not in a position to pay any dividend for the financial year 2018-19.

Transfer to Reserves

The Company has during the period under review has not transferred any amount to itsGeneral Reserves.

Changes in Share Capital

There is no change in the share capital of the Company during the year under review.

Deposits:

The Company has not invited/ accepted any deposits from the public during the yearended March 31st 2019. There were no unclaimed or unpaid deposits as on March31st 2019.

Change in the Nature of Business if any

During the year under review there is no change in nature of business of the companyand no material changes and commitments have occurred after the close of the year till thedate of this Report which affect the financial position of the Company

Management Discussion and Analysis Report

Management's discussion and analysis report for the year under review as stipulatedunder Clause 27(2) of SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 is presented in a separate section forming part of the Annual Report.

Employees Stock Options Plan 2006 (MIC ESOP 2006)

The Company had established MIC Electronics Limited Employees Welfare Trust in 2005 tocreate Employee Stock Option Plan.

On 12th August 2006 the Shareholders approved that ESOP to issue 4500000(Face Value Rs.2/-) stock options of the Company to its employees through the trust.

Pursuant to the provisions of Guideline 12 of the Securities and Exchange Board ofIndia (Employee Stock Option Scheme and Employee stock purchase Scheme) Guidelines 1999the details of stock options as on 30th November 2010 under the MIC Electronics LtdEmployees Stock Options Plan 2006 are as under:

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

Particulars of Employees

The details pursuant to Section 197 (12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014enclosed as Annexure - I.

Further during the year under review none of the employees are receiving remunerationas set out in Rule (5) (2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.

Subsidiaries and Associates

During the year the Board has reviewed the affairs of the Subsidiaries. In accordancewith Section 129(3) of the Companies Act 2013 we have prepared consolidated financialstatements of the Company and all its subsidiaries which form part of the Annual Report.Further a statement containing the salient features of the financial statement of oursubsidiaries in the prescribed format AOC-1 is appended as Annexure-II to the Board'sReport. The statement also provides the details of performance financial positions ofeach of the subsidiaries.

In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany and accounts of each of its subsidiaries are available on our website www.mic.co.in. These documents will also be available for inspection during business hours atour registered office in Hyderabad.

As on 31st March 2019 the following are the subsidiaries:

1. MIC Electronics Inc.USA

2. MIC Green Solutions Private Limited (under the process of Strike-off)

Consolidated Financial Statements

The audited standalone and Consolidated Financial Statements of the Company which formpart of the Annual Report have been prepared in accordance with the provisions of theCompanies Act 2013 the SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 the Accounting Standards (AS-21) on consolidated Financial Statementsand the Accounting Standard (AS-23) on Accounting for Investment in Associates.

Directors' Responsibility Statement

Pursuant to the requirement under Section 134 of the Companies Act 2013 with respectto the Directors' Responsibility Statement the Board of Directors of the Company herebyconfirms:

(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(b) The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the company for that period;

(c) The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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 have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively and

(f) The Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

Statement on Declaration given by Independent Directors

The Company has received necessary declaration from each Independent Director underSection 149(7) of the Companies Act 2013 that he/she meets the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and Clause 27(2) of SEBI (ListingObligations & Disclosure Requirements) Regulations 2015.

Particulars of Contracts or Arrangements with related parties:

Company has transactions with related parties which were continuing from previousfinancial years. However all those transactions are entered under ordinary course ofbusiness and are at arm's length. Therefore consent of the shareholders under Section 188is not required. The particulars of contracts or arrangements with related partiesreferred to in subsection (1) of Section 188 is prepared in Form No. AOC-2 pursuant toclause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies(Accounts) Rules 2014 and the same is enclosed as Annexure - III to this Report.

Corporate Social Responsibility (CSR)

The Company is not required to constitute a Corporate Social Responsibility Committeeas it does not fall within purview of Section 135(1) of the Companies Act 2013 and henceit is not required to formulate policy on corporate social responsibility.

Risk Management Policy

The Company has policy for identifying risk and established controls to effectivelymanage the risk. Further the Company has laid down various steps to mitigate theidentified risk.

Internal Financial Controls

The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weakness in the design or operation was observed.

Corporate Governance

The Company is committed to maintain the standards of corporate governance and adhereto the corporate governance requirements set out by SEBI. The report on CorporateGovernance as stipulated under the SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 forms an integral part of this Report. The requisitecertificate from the Practicing Company Secretary confirming compliance with theconditions of corporate governance is attached to the report on Corporate Governance.

1. Board Meetings

The Board has been suspended during the period under review. As per the authorizationgiven by Mr. Prabhakar Nandiraju Resolution Professional Board meetings were held duringthe period for approval of Un-audited and Audited Financial Results.

2. Subsequently two Directors were appointed by the Resolution Applicants on 07thAugust 2019 and one Independent director on the same date.

Number of Meetings of the Board of Directors

The Board met five times during the financial year on 12-Apr-2018 11-Jul-201814-Aug-2018 29-Nov-2018 and 13-Feb- 2019.

The powers of the Board of Directors have been suspended w.e.f. 13.03.2018 pursuant tothe orders dated 13.03.2018 of Hon'ble National Company Law Tribunal (NCLT) initiatingCorporate Insolvency Resolution Process (CIRP). Thereafter meetings were conducted by theBoard of Directors till 31st July 2019 as per the authorization given by the Mr. PrabhakarNandiraju Resolution Professional.

Directors

After initiation of CIRP proceedings the Powers of the Board of Directors of theCompany have been suspended w.e.f. 13.03.2018 pursuant to the orders dated 13.03.2018 ofHon'ble National Company Law Tribunal (NCLT) initiating Corporate Insolvency ResolutionProcess.

Induction to the Board

Mr. Vishnu Ravi (DIN: 01144902) Mr. Siva Lakshmanarao Kakarala (DIN: 03641564) and Mr.Medasani Srinivas (DIN: 00827476) appointed as Members of the Board effective from 7thAugust 2019.

Cessation of Directorship

• Shri Atluti Venkata Ram Resigned as Director with effect from 10thMay 2018.

• Smt. Venkata Ramani Vedula Resigned as Director with effect from 10thMay 2018.

• Shri Bharatiraju Vegiraju Resigned as Director of the company with effect from25th August 2018.

• Shri Veera Venkata Satya Surya Chandra Bhima Sekhar Babu Alla (00692448)resigned as Director of the company with effect from 1st January 2019.

• Dr. Venkata Ramana Rao Maganti Resigned as Director of the company with effectfrom 15th March 2019.

• Shri L N Malleswara Rao Resigned as Member of the Board with effect from 15thAugust 2019.

Post closure of financial year 2018-19 and pursuant to the Resolution Plan the Boardof Directors of the Company was reconstituted.

Committees of the Board

Currently the Board has three Committees reconstituted:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders Relationship Committee

The powers of the various committees mentioned above have also been suspended due toInsolvency process. Statutory Auditors

The Statutory Auditors of the Company M/s. Pavuluri & Co. were appointed at the29th Annual General Meeting till the conclusion of the 33rd Annual General Meeting (AGM)of the Company.

Replies to the observations made in Secretarial Auditor's Report:

Sl.No Reference in Auditors' Report Disclaimer of Opinion Management's replies
1 Paragraph (a) Note 2.42 to the statement in respect of preparation of financial statements of the Company on going concern basis. During the year the Company has incurred a Net Loss of Rs.27.48 crores resulting into accumulated losses of Rs.155.46 crores and erosion of its Net worth as at 31st March 2019. The Company has obligations towards fund based borrowings aggregating to Rs. 182.14 crores. Even though the resolution plan submitted for the company is approved by Committee of Creditors the matter is still pending before Honorable NCLT Hyderabad bench. The ultimate outcome of these matters at present is uncertain. We are unable to obtain audit evidence in relation to going concern. The management is of the opinion that the resolution and revival of the Company is possible in foreseeable future and accordingly in view of the ongoing CIRP process and hence results have been prepared on the basis that the company is a going concern.
2 Paragraph b (b) Note 2.43 to the statement in connection with trade receivables security deposits loans and advances other financial and current assets aggregating to Rs.34.59 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 trade payables etc. In absence of alternative corroborative evidence we are unable to comment on the extent to which such balances are recoverable/payable The management of the Company is confident of recovery of the aforesaid dues. Confirmation of balances could not be obtained as at 31st March 2019 for various trade receivables trade payables though the management has requested for confirmation of balances. The management has already made provision for doubtful receivables / advances and believes that no material adjustments would be required in books of accounts upon receipt of these confirmations.
3 Paragraph (c) Note 2.44 the Company has neither counted the physical inventories nor stated the inventories at the lower of cost and net realizable value as on 31st March 2019 which constitute departure from the accounting standards prescribed under section 133 of the Companies Act 2013. We were unable to satisfy ourselves by alternative means concerning the inventory quantities held at March 31 2019 which are stated in the balance sheet at Rs 49.88 crores. Since the Company is under CIRP due to the shortage of resources physical verification of inventories and its valuation could not be done as on 31st March 2019 aggregating to Rs.49.88 crores. However as part of CIRP physical verification of inventories and its valuation has been done during the financial year 2017-18 by external valuers and no material movements to the inventories have taken place during the financial year 2018-19 due to lower level of operations of the Company. Hence the Company is of the opinion that there will be no material changes to the valuation of inventories as on 31st March 2019.
4 Paragraph (d) Note 2.45 According to the information and explanation given to us the Fixed Assets have been physically verified by the management in a phased manner designed to cover all the items over a period of three years. However the management is still in the process of reconciliation of quantities as per verification reports with the fixed assets records. Pending such reconciliation and physical verification we are unable to comment on the reasonableness of the physical verification programme and discrepancies that may arise on such reconciliation and physical verification of fixed assets as well as requirement of any provision for impairment of fixed assets. We were unable to satisfy ourselves by alternative means concerning the fixed assets held at March 312019 which are stated in the balance sheet at Rs 83.96 crores. Physical verification of fixed assets aggregating to Rs.83.96 crores (WDV as on 31 March 2019) has been carried out by the management. However due to the ongoing CIRP and the constraint of resources the Company is still in the process of reconciliation of properties as per verification reports with fixed assets records.
5 Paragraph (e) The Company has received communication from State Bank of India to conduct a forensic audit and appointed an audit firm to conduct the forensic audit and as on the date of the report the forensic audit is still under progress. The Company is of the view that material adjustments or disclosures if any arising out of the forensic audit would be considered after conclusion of the forensic audit and the Management has not estimated the impact of any adjustment that may arise to the amounts and disclosures in the financial statements. The Forensic Audit is in progress and upon conclusions any material adjustments or disclosures will be considered.

Internal Auditor

The Company has an in-house internal audit team which monitors the effectiveness of theinternal control systems. It reports to the Audit Committee about the adequacy andeffectiveness of the internal control system of your Company.

The recommendations of the internal audit team on improvements in the operatingprocedures and control systems are also presented to the Audit Committee and the businessto use these as tools for strengthening the operating procedures.

Cost Auditor

As per the provisions of Section 148 of the Act read with Rules made thereunder theCompany appointed M/s. BZR & Co. Practicing Cost Accountants as Cost Auditor for thepurpose of auditing the Cost accounting records maintained by the Company for thefinancial year 2018-19.

Secretarial Auditor

The Board has appointed S R Vattikuti & Associates Company Secretaries to conductSecretarial Audit for the financial year 2018-19. The Secretarial Audit Report for thefinancial year ended March 312019 is annexed herewith marked as Annexure-IV to thisReport.

Replies to the observations made in Auditor's Report:

Secretarial Audit Qualification (each audit qualification separately): For Audit Qualification(s) where the impact is quantified by the auditor Management's Views:
a. Non-Compliance of Regulation 33 of the SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015 a. Due to initiation of insolvency process on 13.03.2018 there were delays in preparation of financials.
b. 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. b. The Annual Fee dues were regularized in the current financial year 2019-20.
c. Non-Compliance of Regulation 29(2) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011 relating to Non-disclosure of disposal of shares by the promoter group. c. The current promoters will ensure to disclose with respect to any disposal of shareholdings.
d. Non-Compliance of Section 138 read with rule 13 of Companies Accounts Rules 2014 with respect to Appointment of Internal auditor. d. The same will be complied with in the current financial year 2019-20.
e. Non-filing of periodical forms including annual filings from financial year 2015-16 to 2017-18 with Registrar of Companies. e. Filing of Annual Performance Report is held up for certain clarifications sought and the same will be complied with in the current financial year 2019-20.
f. 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. f. Filing of Annual Performance Report is held up for certain clarifications sought and will be addressed and filed in the current financial year 2019-20.

Extract of the Annual Return

The Extracts of Annual Return is prepared in Form MGT-9 as per the provisions of theCompanies Act 2013 and Rule 12 of Companies (Management and Administration) Rules 2014and the same has been placed in www.mic.in .

Material changes and commitments if any affecting the financial position of theCompany

"During the year under review" to be removed and start with An applicationwas made by M/s SREI Equipment Finance Limited one of the Financial Secured Creditor toNational Company Law Tribunal (NCLT) for default in repayment of term loan installments.NCLT admitted the application on 13.03.2018 and passed orders for initiation of CorporateInsolvency Resolution Process (CIRP). Mr. Prabhakar Nandiraju was appointed by NCLT asInterim Resolution Professional. His appointment as Resolution Professional was made bythe Committee of Creditors (CoC) in their meeting held on 01.06.2018.

Against Expression of Interest invited by the Resolution Professional 9 Resolutionapplicants expressed their interest to participate in submission of Resolution Plan. Outof 9 applicants 8 applicants got qualified and out of 8 applicants 3

Resolution Applicants namely M/s Cosyn Consortium M/s Corpus Consortium and M/sAlchemist Asset Reconstruction Co Ltd submitted their Resolution Plans. CoC in theirmeeting held on 12th November 2018 considered the Resolution Plan submitted by M/s CosynConsortium. After series of negotiations with the Resolution Applicant by the CoC thefinal Resolution Plan submitted by M/s Cosyn Consortium on 05.12.2018 was approved on06.12.2018 by the members of CoC present physically by casting their votes in favor of theResolution Plan submitted by M/s Cosyn Consortium and voting percentage worked to 69%. Onthe same day electronic voting lines were opened for the rest of the CoC members to casttheir votes electronically by 7th December 2018.

Committee of Creditors approved Resolution Plan submitted by Cosyn Limited consortiumat their meeting held on 6th December 2018 and the same was filed with NCLT Hyderabadwhich approved the Plan on 31.07.2019.

Details of Significant and Material Orders passed by the Regulators or Courts orTribunals impacting the going concern status and Company's operations in future

Corporate Insolvency Resolution Process (CIRP) has been initiated under the provisionsof the Insolvency and Bankruptcy Code 2016 ("the Code") vide order dated 13thMarch 2018 passed by Hon'ble National Company Law Tribunal (NCLT) Hyderabad.

Resolution Plan submitted by Cosyn Limited consortium was approved by CoC in theirmeeting held on 6th December 2018 and the same filed with NCLT Hyderabad was approved on31.07.2019.

No other Significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.

Conservation of Energy Technology Absorption and Foreign Exchange Earnings and outgo

Information with respect to conservation of energy technology absorption foreignexchange earnings and outgo pursuant to Section 134(3)(m) of the Act read with Companies(Accounts) Rules 2014 is prepared and the same is enclosed as Annexure - V to thisReport.

Particulars of Loans Guarantees or Investments under section 186

Loans Guarantees Investments given during the Financial Year ended on 31st March2019 which attracts the provisions of Section 186 of the Companies Act 2013 read withCompanies (Meetings of Board and its Powers) Rules 2014 form part of the notes to thefinancial statements provided in this Annual Report.

Declaration with the compliance with the code of conduct by Members of the Board andSenior Management personnel

The Company has complied with the requirements about code of conduct for Board Membersand Senior Management Personnel.

The said policy is available on the website of the Company.

Vigil Mechanism/Whistle Blower Policy

The Vigil Mechanism of the Company which also incorporates a whistle blower policy interms of the Listing Agreement includes an Ethics & Compliance Task Force comprisingsenior executives of the Company. Protected disclosures can be made by a whistle blowerthrough an e-mail or dedicated telephone line or a letter to the Task Force or to theChairman of the Audit Committee. The Policy on vigil mechanism and whistle blower policymay be accessed on the Company's website.

Mechanism for Board Evaluation

Clause 27(2) of SEBI (Listing Obligations & Disclosure Requirements) Regulations2015 states that the board shall monitor and review the board evaluation framework. TheCompanies Act 2013 states that a formal annual evaluation needs to be made by the Boardof its own performance and that of its committees and Independent Directors.

Schedule IV of the Companies Act 2013 states that the performance evaluation of theIndependent Directors shall be done by the entire Board of Directors excluding theDirector being evaluated.

The Directors evaluation was broadly based on the parameters such as understanding ofthe Company's vision and objective skills knowledge and experience participation andattendance in Board/Committee meetings; governance and contribution to strategy;interpersonal skills etc.

The Board has carried out the annual performance evaluation of its own performance theDirectors individually as well as evaluation of the working of its Board Committees. Astructured questionnaire was prepared covering various aspects of the Board's functioningsuch as adequacy of the composition of the Board and its Committees Board Cultureexecution and performance of specific duties obligations and governance.

A meeting of the Independent Directors was also held which reviewed the performance ofNon-Independent Directors Chairman and the quality quantity and timelines of flow ofinformation between the Company management and Board.

Disclosure pertaining to sexual harassment of women at workplace

The Company as required under the provisions of "The Sexual Harassment of Women atWorkplace (prohibition Prevention and Redressal) Act 2013" has framed a Policy onProhibition Prevention and Redressal of Sexual Harassment of Woman at Workplace andmatters connected therewith of incidental thereto. Internal Complaints Committee has beenset up to redress complaints received regarding sexual harassment

During the Financial year ended 31st March 2019 the Company has neither received anycomplaints nor there are any pending complaints pertaining to sexual harassment.

Remuneration Policy

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Key Managerial PersonnelSenior Management and fixing their remuneration. The Remuneration Policy is placed at thewebsite www.mic.in .

Reduction of Share Capital as per the Approved Resolution Plan

The resolution plan submitted by the Cosyn Limited consortium has been approved byHonorable NCLT Hyderabad on 31st July 2019 as per plan the existingshareholding will be reduced to 25% i.e 220254319 equity shares to 55064000 equityshares.

Acknowledgements

The Directors would also like to place on record their appreciation for the support andservices of various Government and Quasi Government organizations like Department ofInformation Technology and Communications Department of Commercial Taxes Customs andCentral Excise Income Tax etc. The Directors also thank the officials of the Bankers.

The Directors would also like to thank the esteemed shareholders for their constantsupport guidance and advice.

By the Order of the Board
For MIC Electronics Limited
Sd/-
(Vishnu Ravi)
Date : 28.11.2019 Executive Director
Place : Hyderabad DIN : 01144902

Annexure - I

PARTICULARS OF EMPLOYEES

Information as per Rule 5(1) of Chapter XIII Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014

Ratio of Remuneration to

Name of Director Designation Remuneration FY 18-19 (12 Months) Remuneration FY 17-18 (12 Months) % of Increase in Remune ration Ratio of Remuneration to MRE Revenues FY-18-19 Net Profit FY 18-19
Prabhakar Nandiraju Resolution Professional 3600000 - - 15.91 6.55% --
M.V. Ramana Rao Managing Director 1200000 2400000 50% Decrease 5.30 2.18% --
L.N. Malleswara Rao Executive Director & CFO 600000 1500000 60% Decrease 2.65 1.09% --
Key Managerial Personnel
M S Murali Krishnan Company Secretary 1058400 998400 6% Increase 4.68 1.93% --

Remuneration paid to Independent Directors (Sitting Fee)

During the insolvency process sitting fee paid to Independent Directors - NIL

1. The Median Remuneration of the employees of the Company during the financial yearwas Rs. 226308/- PA.

2. In the financial year there was an increase of 18.69% in the median remuneration ofemployees compared to previous year.

3. The number of permanent employees on the rolls of the Company as of March 312019and March 312018 was 104 and 157 respectively.

4. Variations in the market capitalization of the Company:

a. The Market Capitalization as on 31st March 2019 is Rs. 231267035/- and as on 31stMarch 2018 is Rs. 1090258879/- .

b. Price earnings ratio of the Company as on 31st March 2019 is not applicable due tocompany incurring losses.

c. Percentage increase over decrease in the market quotations of the shares of theCompany in comparison to the last public offer. The closing price of the Company's equityshares on NSE as on 31st March 2019 was Rs.1.05 as against the Face value of Rs.2/- eachrepresenting a 96.50% decrease over the IPO price held in 2007. At the time of IPO theissue price was Rs.150/- per share against a Face value of Rs.10/- per share. Sub-divisionof shares held during the year 2008 face value of Rs.10/- each was made as Rs. 2/- pershare.

5. The key parameters for the variable component of remuneration availed by thedirectors are considered by the Mr. Prabhakar Nandiraju Resolution Professional.

6. The ratio of the remuneration of the highest paid Director to that of the employeeswho are not Directors but receive remuneration in excess of the highest paid Directorduring the year was 1.38 ratio and it is hereby confirmed that the remuneration is as perthe remuneration policy of the Company.

By the Order of the Board
For MIC Electronics Limited
Sd/-
(Vishnu Ravi)
Date : 28.11.2019 Executive Director
Place : Hyderabad DIN : 01144902

Annexure II

Statement containing the salient features of the financial statements of subsidiaries[Pursuant to first provision to Sub-section (3) of Section 129 of the Companies Act 2013 read with Rule 5 of the Companies (Accounts) Rules 2014 - AOC-I ]

(Amount in Rs.)

Name of the Subsidiary Financial Period ended Exchange Rate Share Capital Reserves & Surplus Total assets Total Liabilities (excluding share capital and reserves & surplus) Investments Turnover Profit/ (Loss) before Taxation Provision for taxation Profit/ (Loss) after Taxation % of share holding
MIC Electronics Inc. USA 31.03.19 1 USD =69.28135 4539450 4865595 77995952 68590907 71221226 0 -122909 " -122909 100%
*MIC Green Energy Solutions Private Limited 31.03.19 INR 100000 1158839 1058839 100%

* Yet to commence operations of the business

By the Order of the Board
For MIC Electronics Limited
Sd/-
(Vishnu Ravi)
Date : 28.1 1.2019 Executive Director
Place : Hyderabad DIN : 01144902

Annexure III

Disclosure of Particulars of Contracts/Arrangements entered into by the Company

Form No. AOC-2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014)

Disclosure of particulars of contracts/arrangements entered into by the Company withrelated parties referred to in subsection (1) of section 188 of the Companies Act 2013including certain arms length transactions under third proviso thereto.

1. There are no contracts/arrangements entered into by the Company with related partiesreferred to in sub-section (1) of section 188 of the Companies Act 2013 which are not atarm's-length basis

2. Contracts/arrangements entered into by the Company with related parties referred toin sub-section (1) of section 188 of the Companies Act 2013 which are at arm's-lengthbasis:

Sl Name(s) of the related party Nature of relationship Duration of contracts/ arrangements/ transactions Salient terms of the contracts or arrangements or transactions including the value if any: Amount paid as advances if any (INR)
Advances to Subsidiary Companies
1 MIC Green Energy Solutions Pvt. Ltd Subsidiary Ongoing since Incorporation of the Company. (i.e 11/03/2009) MIC Green Energy Solutions Pvt. Ltd. is a 100% subsidiary of MIC Electronics Limited.
2 MIC Electronics Inc. USA Subsidiary Ongoing since Incorporation of the Company. (i.e 10/01/2007) MIC Electronics Inc. USA is a 100% subsidiary of MIC Electronics Limited.
Outstanding balances receivable from Subsidiaries
1. MIC Electronics Inc. USA Subsidiary Ongoing Supply of materials
Sl Name(s) of the related party Nature of relationship Duration of contracts/ arrangements/ transactions Salient terms of the contracts or arrangements or transactions including the value if any: Amount paid as advances if any (INR)
Outstanding balances payable to Managerial Personnel
Remuneration
1. M.V. Ramana Rao Managing Director NA Remuneration of Rs. 1202986/- NIL
2. L.N. Malleswara Rao Executive NA Remuneration of NIL
Director Rs. 3258442/-
Loan of Rs. 2200000/-
Sitting Fee -
1. A V S S C B Shekar Babu Independent Director NA Fee for attending Board Meeting of Rs. 270000/- NIL
2. V Venkata Ramani Independent Director NA Fee for attending Board Meeting of Rs. 140400/- NIL
3. Bharatiraju Vegiraju Independent Director NA Fee for attending Board Meeting of Rs. 97200/- NIL

Note : During the period of insolvency Sitting Fee was not paid to the Members ofCommittees. Dues are related to period(s) prior to 13th March 2018.

By the Order of the Board
For MIC Electronics Limited
Sd/-
(Vishnu Ravi)
Date : 28.11.2019 Executive Director
Place : Hyderabad DIN : 01144902


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