MIC Electronics Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Mar 2020
Auditor and Management Disclosures and Notes for the annual results dated 31 Mar 2020
1. Corporate insolvency Resolution Process (CIRP) has been initiated in respect of MIC Electronics Limited ("company") under the provisions of the insolvency and Bankruptcy Code, 2016 ('Code') by an order of the National Company Law Tribunal (NCLT), Hyderabad with effect from 13th March 2018. As per Section 17 of the Code, appointed Mr.N.Prabhakar as the interim Resolution Professional (IRP) in terms of IBC. Mr.N.Prabhakar was subsequently confirmed by the committee of creditors (CoC) as the Resolution Professional (RP).
Thereafter Honorable NCLT, Hyderabad bench has passed on order dated 31st July 2019 approving the Resolution Plan submitted by the resolution applicant. Consequently new board or directors have been appointed by the company. The above results have been reviewed by the Audit Committee at its meeting held on 07th October 2020 and approved by the Board of Directors of the Company at its meeting held on 07th October 2020.
2. The statutory auditors have expressed disclaimer of opinion for the year ended 31st March 2020 in respect of the following matters.
a. During the year, the company has incurred a net loss or Rs.23.94 Crores resulting into accumulated losses of Rs.179.40 Crores as at 31st March 2020 and erosion or of its networth. The company has obligations towards fund based borrowings aggregating to Rs. 170.00 Crores. In the opinion of the management, resolution and revival of the company is possible in foreseeable future. Accordingly, in view of the ongoing CIRP, above results have been prepared on the basis that the company is a going concern,
b. The company has certain trade receivables, security deposits, loans and advances, other financial and current assets aggregating to Rs.24.82 Crores. The management of the company is confident or recovery or me aforesaid dues. Confirmation of balances could not be obtained as at 31st March 2020 for various trade receivables, trade payables. The management has already made provision for doubtful receivables / advances and believes that no material adjustments would be required in cooks or accounts upon receipt or these confirmations.
c. Since, the company is under CIRP. Due to the shortage or resources & lock down of the company due to COVID-19, physical verification of inventories and its valuation could not be done as on 31st March 2020 aggregating to Rs.49.53 crores. However, as part of CIRP. Physical verification of inventors 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 2019-20 due to lower level of operations of the company. Hence, the company has not made any provision to me valuation of inventories as on 31st March 2020.
d. Since, me company is under CIRP, due to the shortage of resources & lock down of the company due to COVID-19. Physical verification of fixed assets aggregating to Rs.76.44 crores (WDV as on 31st March 2020) has not been carried out by the management.
3. Money received against share warrants amounting to Rs. 18.76 crores has been forfeited during me financial year.
4. The consolidated financial results include the unaudited financial results of the wholly owned subsidiary. M/s.MIC Electronics inc.
5. Management reviewed the deferred tax assets / liabilities on temporary differences between the tax base of assets and liabilities and their carrying amounts for the financial reporting purpose at reporting date. However, as the company is under CIRP, there is virtual uncertainty of taxable profits in near future and availability of deferred tax assets to be set off. Accordingly, the deferred tax (net assets) for the reporting period i.e. April 1, 2019 to March 31, 2020 have not been considered.
6. The outbreak of Coronavirus (COVID-19) pandemic globally and in India is causing significant disturbance and slow down of economic activity. As on the date of these results, the Company based on the internal and external information available and the current indicators, believes that there is no material impact of the pandemic on its overall performance, except as mentioned hereinbefore. However, given the uncertainties associated with the nature and duration of COVID-19, the Company continues to monitor the situation closely and shall take appropriate actions based on material changes (if any).
7. The Company has only one segment i.e. LED Products.
8. The statement includes results for the quarter ended 31st March 2020 and 31st March 2019 being the balancing figure between the audited figures in respect of the financial year and previous financial year and the published figures upto 3rd quarter of the current financial year and previous financial year respectively.
9. Figures have been regrouped or rearranged wherever necessary.