Auditor Report of Value Industries Ltd.

Mar 31, 2024

Value Industries Limited (CIN: L99999MH1988PLC046445)

Updated Report on the Audit of the Standalone Financial Results of Audit report issued on Dated 08-08-2024 vide UDIN No. 24510915BKDDJI4092.

Reason for Update

Pursuant to the communication received by the company from the NSE via email dated September 5, 2024, regarding the format used by us in accordance with SEBI Circular No. CIR/CFD/CMD1/44/2019 dated March 29, 2019, we hereby clarify that this circular was subsequently amended by SEBI, with an updated format being made applicable. To comply with the requirements of the LODR, we are issuing an updated Audit Report in updated format.

We further confirm that this updated Audit Report is based entirely on the standard audit practices applied during the preparation of our previous Audit Report. No new audit procedures, assurances, or additional reviews were conducted in preparing this updated report.

Disclaimer of opinion

We have audited the accompanying Standalone Quarterly and year to date Financial results of Value Industries Limited (“the company”) for the quarter ended 31^st March 2024 and the .year to date results for the period from 01^sl April,2023 to 31^sl March, 2024 attached herewith, being submitted by the company pursuant to the requirement of ..Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulati?Fn^201 5_; as amended (“Listing Regulations”).

Because of the significance of the matters described in Basis for Disclaimer of Opinion Paragraph below, we are unable to form an opinion whether financial results:

(i) are presented in accordance with the requirements of Regulation 33 of the listing regulation in this regard; and

(ii) Give a true and fair view'' in conformity with the recognition and measurement principles laid down in the applicable accounting standards and other-accounting principles generally accepted in India of the net profit/loss and other comprehensive income and other financial information for the quarter ended March 31, 2024 as well as the year-to-date year ended March 31, 2024.

Basis for Disclaimer of Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013 (the Act). Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Results section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit ot the financial results under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe the audit evidence we have obtained are not sufficient and appropriate to provide a basis for our opinion along with the matters mentioned below;

For the paragraphs mentioned below (A-N), we are unable to comment on the elements of Financial Results which may require necessary disclosures/ documentation/ explanation/and or adjustments and impact of the same on the Financial Results. We were unable to obtain sufficient and appropriate audit evidence on the matters mentioned below, which may have a material and pervasive impact on the financial position of the Company for year quarter and year ended on March 31, 2024.

A) Vide Note No-12 of the Financial Results, RP has disclaimed his liability on account of signing the Financial Results and further stated that RP is not making any representations regarding the accuracy, veracity or completeness of the data, or information in the Financial Results.

Further, the Group Resources and the RP (including his team) have relied on the balances reflected in available accounts / ledgers/ trial balance as on 31st March, 2019, without going into the merits of such balances outstanding, and without making any adjustments to such accounts / balances except for giving effect to the transactions entered, subsequently ujler 1^st- April, 2019. Further , most of the requisite pre-CIRP records are not available with the Company at present. In view of the same, the company has not adequately followed Provision of section 123 of Companies Act, consequential cumulative effects on the Financial Results are

B) Certain expenses have been accounted by the Company at the end of year (i.e. in the current quarter), instead of recording / making provisions towards such expenses at respective quarter end dates during the year.

C) The Company has not provided Fixed Assets Register and other relevant documents/ records as prescribed in accordance with Ind AS 16 “Property Plant & Equipment”. We have been provided certain available records/details however, we are unable to confirm the completeness and. exhaustiveness of the said records/details shared, including status of title/ possession of all Properly Plant & Equipment. It may however be noted that, the RP has already filed applications before NCLT under section 19 of IBC for the handing over of complete and accurate details/ records with regards to the fixed assets of the Company. Also, as mentioned in Note No-7 of the Financial Results, no revaluation or impairment assessment has been carried out on such assets. Neither any report pertaining to physical verification of such assets was made available to us. Accordingly, we are unable to confit m the valuation (including impact of any impairment, obsoleteness, damage, etc.) and ownership of such assets along with the depreciation charged in statement of profit and loss account. Due to insufficiency of data/ records, we are unable to obtain sufficient appropriate audit evidence whether any adjustments are necessary in respect of property, plant and equipment as at March 31, 2024.

D) As per the information and explanations given to us with respect to Investments, the Company has carrying value of investments in group affiliated company amounting to INR 60.72 million, and has trade receivables ofINR 200.27 million, (aggregating to INR 260.99 million), in group/affiliate companies which have been referred to National Company Law Tribunal and consequently admitted to CIRP under the Insolvency and Bankruptcy Code, 2016. As such, we are unable to express an opinion on the extent of realizability of aforesaid investments and trade receivables from group / affiliate companies till the completion of resolution process of group/ affiliate entities.

Also, as mentioned in Note No-7 of the Financial Results, the Company has neither revalued nor measured investments according to lnd AS-13 “Fair value

measurements” nor complied with the requirements of Ind AS-36 Impairment of assets. Further, some of the share certificates are not available with the company nor do they have any record/ document available at this stage to ascertain the ownership of such investments shown in the books of accounts. It may however be noted that, the RP has already filed applications before NCLT under section 19 of IBC for the handing over of complete and accurate details/records with regards to the Investments of the Company. Due to insufficiency of data/ records, we are unable to ascertain the consequential cumulative effects thereof on loss (including other comprehensive income for the year), assets and other equity. As such, we are unable to determine whether any additional adjustments / disclosures are required on investments and trade receivables repotted as at March 31, 2024.

E) We have not been provided with, any physical verification reports of inventories at the beginning and end of the year. Hence, we are unable to comment / confirm on the quantity and valuation of Inventories held as at quarter and year ended March 31, 2024 which are stated in the Statement of Assets and Liabilities at INR 236.64 million (2023: INR 243.98 million). As such, we are unable to determine whether any adjustments in accordance with Ind AS-2 “Inventories” are necessary in respect of reoj/^^ffififinrecorded) inventories and further cannot comment on the items which off^moletc jcidmaged and their proper reflection in the Financials Results.

Further, in the absence of physical verification, revaluation and fair valuation of inventories, we are unable to comment or confirm on the correctness of the amount charged towards Cost of material Consumed during the year as disclosed in the Financial Results.

F) The Company had carrying value of loan and advances aggregating to INR 2691.80 million (2023; INR 2691.79 million). Due to non-availability of relevant supporting documents/ records, we are unable to assess the genuineness and recoverability of such loans and advances which were issued by the Company prior to 1st April, 2019.

G) The company has not made any adjustment to Deferred Tax Asset/Liability for the year under consideration. Accordingly, Ind AS-12 “Income ''lax has not been followed by the Company. Resultant impact, if any, on the Financials Results is not ascertainable at this stage.

H) We have been informed that the valuation towards employee benefit expenses is based on actuarial valuation report. Since the company is into CTRP, the assumptions considered and the resultant outcomes may change basis the outcome of CIRP. As such, we are unable to comment on impact, if any, on the Financial Results.

I) As mentioned in Note No-8 to the Financial Results, pursuant to commencement of CIRP of the Company under Insolvency and Bankruptcy Code, 2016, there are various claims submitted by the financial creditors, operational creditors, employees and other creditors to the RP. The overall obligations and liabilities including interest on loans and the principal amount of loans shall be determined during the CIRP. However, we have not been provided any document/records regarding total claim submitted, accepted and rejected. Outcom e of the CIRP process is still pending thus no accounting impact in the books of accounts has been made in respect of excess, short, or non-receipts of claims for financial creditors, operational creditors, employees and other creditor. Flence, consequential impact, if any, is currently not ascertainable and we are unable to comment on possible financial impacts of the same.

Further, the Company is contingently liable in respect of the borrowings of other Obligors/ Borrowers to the extent of outstanding balance of Rupee Term Loans as on quarter and year ended March 31, 2024 of INR 210,123.87 million (As at March 31, 2023 INR 210,123.87 million). As such, consequential impact if any is currently unascertainable and we are unable on possible financial impact of the same.

Further, as mentioned in Note No-18, the company has shown INR 30.30 million trade payable in financial statements to Trend Electronics Ltd (“TREND") and the entity under CIRP, the liquidation process is undergoing as per the order of NCLT on dated 10.02.2021. However, no consequential effect has been taken in the financial statements. So, we are unable to comment upon the cumulative impact on the financial statement.

Further, since the commencement of CIRP, there is a Moratorium in leans of section 14 of the. Code towards repayment of existing de.hts and interest thereon. However, pending the completion / final outcome of CIRP, the Company has continued to provide for the interest for full financial year, including the moratorium period. Payment Towards such in terest expenses are subject to the provisions of the Code and outcome of CIRP. We have not received supporting documents for such borrowings, including relevant sanction letters and other relevant, documents. As such, we are unable to confirm whether the Borrowings of INR 14,654.52 million (20fiSTTNUf4,654.52 million) as reported in the Statement of Assets and Liabilities E^pid^-i^Cjwciirate status and. whether the basis for interest charged in the (financial Rrjldllts is in accordance with Ind AS 23 “Borrowing Cost".

I * / r\p» mi I jk ¦ I

We are also unable to comment on the completeness / exhaustiveness of the contingent liabilities considered by the Company and any impact that may be necessary on the Financial Results at this stage.

J) The company has not produced any documents/ information/ relating to Grant form ozone Project (having a carrying value oj INR 0.69 million as at 31st March, 2024).

As such, we are unable to ascertain impact of the same in financial statements at

this stage.

K) During the conduct of audit, we have also been informed that the balance confirmations and relevant documents are not available in respect of the balances of loans and advances, trade receivables, trade payables, and other recewables and payables. As such, we are unable to ascertain impact on the Financial Results. However, in case of balance with banks, (INR 4.88 million), we have been provided most of the copies of bank statements (subject to their reconciliations). Further as per Note No-11, the company has shown INR 32.30 million loan given to KAIL Ltd and the entity under CIRP, the resolution plan of said company has been approved by COC and has been taken over by Successful Resolution Applicant SRA however, no consequential effect has been taken in the financial statements. So we are unable to comment upon the cumulative impact on the financial statement

L) According to the details made available to us and on the basis of filings made on the GST portal, the company has defaulted / made delayed filings pertaining to the annual compliances of Goods and Service Tax (GST) along with the compliances of Income Tax Act, as applicable during the year. As such, we are unable to comment upon the future liability and/or any other financial impact that may arise on. the Company.

M) We also draw your attention to Note No-4 to the Financial Results. The Resolution Professional has filed applications with Hon’ble NCLT under section 19 oj the Lode seeking co-operation from promoters and erstwhile management of the company, for providing various data, primarily pertaining to pre-CIRPperiod and certain additional data, that is required for preparing the financial statements of the Company and data requested by various investigating agencies. In the absence of relevant data, these Financial Results have been prepared on the basis of available data on best effort basis.

We also draw your attention to Note no 5 and 6 of the Financial Results, wherein it is mentioned that an independent Transaction Review Audit was conducted as required under section 43-66 of IBC for identification of Preferential, Undervalued, Extortionate, and Fraudulent transactions as defined and explained under IBC. The resultant observations from the Audit had indicated that there may be certain questionable accounting entries and/or transactions entered into before commencement of CIRP. And further, there are ongoing investigations against Videocon Group Entities by different government agencies, including SFIO and Directorate of Enforcement. In this regard, we have not been provided any copy of notice/ report/information/documents on such Transaction Review Audit and ongoing investigations. Hence, we are unable to comment on necessary changes that, may be required in the Financial Results at this stage.

N) The Company has mentioned in. Note 9 oj the Financial Results that, considering the Company is required to be run. as a going concern under CIRP, the Financial Results have been prepared ongoing concern basis. However, wejuund Material, uncertainly relatm^fiXf-Qoiny Concern assumption applied to the Financial Statements. The Cnmnte/P^fi&s''been referred to National Company Law Tribunal under the Insolvency ctm/Ban Ixrupthg Code, 2016, there is considerable decline in level of operations of the

Company, and net worth of the Company reported at INR (16,825.72) Million as on the reporting date is negative and it continues to incur losses. The Company is a coobligor and has received demand notices in respect of borroivings of other co-obligors/ borrowers. Thus, there exists a material uncertainty about the ability of the Company to continue as a “Going Concern”. The same is dependent upon the resolution plan to be approved by NCLT. The appropriateness of the preparation of financial statements on going concern basis is critically dependent upon C1RP as specified in the Code. Necessary adjustments required on the carrying amount of assets and liabilities are not ascertainable.

On the basis of above at para. (A) to (N) Above, we are unable to determine the adjustments that are necessary in respect of Company’s assets, liabilities as on the quarter and year end date, income and expenses for the year, cash flow statement and related presentation and disclosures in Financial Results. So, we disclaim to form any opinion on the Financial Results.

Management’s Responsibilities for the Standalone Financial Results

Preparation of the Quarterly and year to date Financial Results is the responsibility of the Company''s Management as prescribed under Section 133 of the Act read with relevant rules issued thereunder and other accounting principles generally accepted in India and in compliance with Regulation 33 of the Listing Regulations and has been signed by the Resolution Professional of the Company basis the confirmations provided by Group Resources. The Statement has been compiled from the related annual Ind AS Standalone Financial Results.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial results that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Quarterly and year to date Financial Results, the management are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The manjjgeigent are also responsible for overseeing the Company’s financial reporting

Auditor’s Responsibilities for the Audit of the Standalone Financial Results

Our objectives are to obtain reasonable assurance about whether the standalone financial results as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guar antee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial results.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone financial results, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the (Resolution Professional and Team).

• Conclude on the appropriateness of the (Resolution Professional and Team) use of the going concern basis of accounting and. based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial results or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the standalone financial results, including the disclosures, and whether the financial results represent the underlying transactions and events in a manner that achieves fair presentation.

However, we draw your attention ihat above Auditor’s responsibilities for the audit of standalone financial results are subject to the matter described in disclaimer of opinion and basis for disclaimer of opinion paragraphs of the report.

We communicate with those charged with governance (Resolution Professional and Teamhrjsgm^ling, among other matters, the planned scope and timing of the audit and sifindings, including any significant deficiencies in internal control that wipamtify during our audit.

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We also provide those charged with governance (Resolution Professional and Team) with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

This Audit Report Should be read along with Material Background of the Audit Report as per Annexure ‘A’.

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Mar 31, 2016

INDEPENDENT AUDITORS’ REPORT

To,

The Members of,

VALUE INDUSTRIES LIMITED 1. Report on the Financial Statements

We have audited the accompanying financial statements of VALUE INDUSTRIES LIMITED (“the Company”), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the 15 months period ended on that date, and a summary of significant accounting policies and other explanatory information.

2. Management’s Responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

4. Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016, and its loss and its cash flows for the period ended on that date.

5. Report on Other Legal and Regulatory Requirements

A. As required by the Companies (Auditor’s Report) Order, 2015 (“the Order”) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

B. As required by section 143(3) of the Act, we report that:

a) W have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e) On the basis of the written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164(2) of the Act;

f) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note No. 34 to the financial statements.

ii) The Company did not have any long term contracts including derivatives contracts for which there were any material foreseeable losses.

iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the period ended 31st March, 2016.

(Referred to in paragraph 5A of Independent Auditors’ Report of even date to the Members of VALUE INDUSTRIES LIMITED (“the Company”) on the Financial Statements as of and for the 15 months period ended 31st March, 2016)

(i) (a) The Company has maintained proper records showing full particular including quantitative details and situation of fixed assets.

(b) As per the information and explanations given to us, the physical verification of fixed assets, has been carried out by the management at reasonable intervals in terms of the phased programme of verification adopted by the Company and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable, having regard to the size of the Company and the nature of its business.

(ii) (a) As per the information and explanation given to us, the inventories

have been physically verified during the period by the management at reasonable intervals. In our opinion, having regard to the nature and location of stocks, the frequency of the physical verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventories. As per the information and explanations given to us, the discrepancies noticed on physical verification of stocks were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

(iii) As per the information and explanation given to us, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 189 of the Act.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas.

(v) In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public. Therefore, paragraph 3(v) of the Order is not applicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been specified under sub-section (1) of section 148 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations given to us and the records examined by us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees’ State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty, Value added tax, Cess and other statutory dues applicable to it. According to the information and explanations given to us, no undisputed arrears of statutory dues were outstanding as at 31st March,2016 for a period of more than six months from the date they became payable.

(b) According to the records of the Company examined by us and information and explanations given to us, the particulars of dues of Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty, Value added tax, Cess which have not been deposited on account of any disputes, are given below:

Name of Statute	Nature of the	Amount	Forum where dispute is
	Dues	('' In Millions)	pending
1. Customs Act, 1962	Custom Duty	2.54	CESTAT
	(including	4.37	Commissioner
	Penalty)	5.46	Deputy Commissioner
2. Central Excise Act,	Excise Duty	1.00	CESTAT
1944	(including	66.06	Commissioner
	Penalty)	2.81	Addl. Commissioner
		0.50	Asst. Commissioner
3. Finance Act,	Serene Tax	1.00	Asst. Commissioner
1994 (Service tax
Provisions)
4. Sales Tax Act of	Sales Tax	0.54	Commissioner
various States		3.58	Dy. Commissioner (Appeal)
		0.12	Joint Commissioner
		49.27	Deputy Commissioner
		2.36	High-Court
5. Income Tax Act,	Income Tax	66.82	CIT Appeal
1961

(c) In our opinion and according to the information and explanations given to us, the amounts required to be transferred to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under has been transferred to such fund within time.

(viii) There are accumulated losses of '' 1,250.82 Million as on 31st March, 2016 which are not more than fifty percent of its net worth. The Company has not incurred cash losses during the financial period and the immediately preceding financial year.

(ix) Based on our audit procedures and the information and explanations given to us, it is observed that, the Company has defaulted in repayment of dues to financial institutions or banks or debenture holders which are summarized below:

Particulars	Principal Amount ('' in Millions)	Interest Amount ('' in Millions)	Delay in Days - Range
Amount paid before the period end	32.32	184.51	1 to 13 Days
Amount outstanding as at 31st March, 2016 and subsequently paid	6.00	13.87	1 to 30 Days

(x) According to the information and explanations given to us, the terms and conditions of guarantees / securities given by the Company for loans taken by others from banks or financial institutions are prima facie not prejudicial to the interest of the Company.

(xi) According to the information and explanations given to us, the term loans raised during the period were applied, on an overall basis, for the purposes for which the loans were obtained.

(xii) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the period.

For KHANDELWAL JAIN & CO. For KADAM & CO.

Chartered Accountants Chartered Accountants

(Firm Registration No. 105049W) (Firm Registration No. 104524W)

BHUPENDRA Y. KARKHANIS U. S. KADAM

Partner Partner

Membership No.:108336 Membership No.:31055

Place : Mumbai

Date : 30th May, 2016

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Dec 31, 2013

We have audited the accompanying financial statements of Value Industries Limited ("the Company"), which comprise the Balance Sheet as at 31st December, 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

2. Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s Internal Control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

4. Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st December, 2013;

b) in the case of the Statement of Profit and Loss, of the loss for the year ended on that date; and

c) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

5. Report on Other Legal and Regulatory Requirements

A. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of Sub-Section (4A) of Section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

B. As required by Section 227(3) of the Act, we report that:

a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c) the Balance Sheet, Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d) in our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards referred to in Sub- Section (3C) of Section 211 of the Act, read with the General Circular 15/2013 dated 13th September, 2013, of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

e) on the basis of written representations received from the directors as on 31st December, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st December, 2013, from being appointed as a director in terms of Clause (g) of Sub-Section (1) of Section 274 of the Act.

Statement referred to in paragraph 5 of the Independent Auditors'' Report of even date to the Members of Value Industries Limited ("the Company") on the financial statements for the year ended 31st December, 2013.

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situations of fixed assets.

(b) As per the information and explanations given to us, physical verification of fixed assets has been carried out in terms of the phased programme of verification adopted by the Company and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable, having regard to the size of the Company and nature of its business.

(c) During the year the Company has not disposed off any substantial part of fixed assets.

(ii) (a) As per the information and explanation given to us, the inventories have been physically verified during the year by the management. In our opinion, having regard to the nature and location of stocks, the frequency of the physical verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. As per information and explanation given to us, the discrepancies noticed on physical verification of stocks were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

(iii) (a) As per the information and explanation given to us, the Company has not granted or taken any loans, secured or unsecured, to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) As the Company has not granted or taken any loans, secured or unsecured, to/ from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956, Sub-Clauses (b), (c), (d), (f) and (g) of Clause (iii) of paragraph 4 of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control systems.

(v) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the transactions that need to be entered in the register maintained under Section 301 of the Companies Act, 1956, have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rupees Five Lacs, in respect of any party during the year, have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public within the meaning of the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and rules framed there under.

(vii) In our opinion, the Company has an internal audit system commensurate with the size of the Company and the nature of its business.

(viii) The Central Government has prescribed maintenance of the cost records under Section 209(1)(d) of the Companies Act, 1956, in respect to the Company''s products. We have broadly reviewed the books of accounts and records maintained by the Company in this connection and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.

(ix) (a) According to the information and explanations given to us and the records examined by us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth-tax, Service tax, Custom duty, Excise-duty, Cess and other statutory dues wherever applicable. According to the information and explanations given to us, no undisputed arrears of statutory dues were outstanding as at 31st December, 2013, for a period of more than six months from the date they became payable.

(b) According to the records of the Company examined by us and information and explanations given to us, the particulars of dues of Income-tax, Sales-tax, Wealth-tax, Service tax, Custom duty, Excise-duty, Cess which have not been deposited on account of any dispute, are given below:

Name of the Statute Nature of the Rs. in Forum where dispute is Dues Million pending

1. Customs Act, Custom Duty 4.31 CESTAT 1962 (including 4.37 Commissioner Penalty) 5.46 Dy. Commissioner

2. Central Excise Excise Duty 2.47 CESTAT Act, 1944 (including Penalty 45.01 Commissioner and Interest) 2.81 Addl. Commissioner 0.81 Asst. Commissioner

3. Finance Act, Service Tax 1.00 Asst. Commissioner 1994 (Service Tax Provisions)

4. Sales Tax Act of Sales Tax 3.39 CTO various States 3.58 Dy. Commissioner (Appeal) 48.04 Asst. Commissioner 0.12 STO



(x) There are accumulated losses of Rs. 479.08 Million as on 31st December, 2013, which are not more than Fifty percent of its net worth. The Company has incurred cash losses during the financial year covered by our audit but there was no cash loss incurred during the immediately preceding financial year.

(xi) Based on our audit procedures and the information and explanations given to us, we observed that, the Company has defaulted in repayment of dues to banks. The delay have been summarised below indicating the principal amount, interest amount and period.

Particulars X in Million Delay in Days - Range

Principal Repayment 415.62 31 to 88 days

Interest 109.23 1 to 89 days

(xii) Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a Chit fund Company or nidhi /mutual benefit fund/ society. Therefore, the Clause (xiii) of paragraph 4 of the Order is not applicable to the Company.

(xiv) The Company has maintained proper records of transactions and contracts in respect of dealing and trading in shares, securities, debentures and other investment and that timely entries have generally been made therein. All shares, debentures and other securities have been held by the Company in its own name except to the extent to the exemption granted under Section 49 of the Companies Act, 1956.

(xv) According to the information and explanations given to us, the terms and conditions of guarantees given by the Company for loans taken by others from banks or financial institutions are, prima facie, not prejudicial to the interest of the Company.

(xvi) According to the information and explanations given to us, the term loans raised during the year were applied, on an overall basis, for the purpose for which the loans were obtained.

(xvii) On the basis of overall examination of the Balance Sheet of the Company, we observed that, the Company has not used funds raised on short term basis for long term investments.

(xviii) According to the information and explanation given to us, the Company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) The Company has not issued any debentures during the year.

(xx) The Company has not raised any money by way of public issues during the year.

(xxi) According to the information and explanations furnished by the management, there were no frauds on or by the Company noticed or reported during the course of our audit except a case of fraud on the Company involving theft and misappropriation of materials by employees estimated atRs. 45.06 Million detected by the management. The Company has filled FIR against the said Employees and investigation is in progress and the said Employees have been suspended. The Company is adequately covered by the insurance cover. However, till the date of audit no claim is lodged with the insurance company for want of final investigation report. The Company has accounted for the said loss due to the theft during the year under audit and the management has taken appropriate steps to strengthen controls.



For KHANDELWAL JAIN & CO. For KADAM & CO.

Chartered Accountants Chartered Accountants

Firm Registration No.: 105049W Firm Registration No.: 104524W



BHUPENDRA Y. KARKHANIS U. S. KADAM

Partner Partner

Membership No.:108336 Membership No.:31055



Place : Mumbai

Date : 28th February, 2014

---

Dec 31, 2012

1. We have audited the attached Balance Sheet of VALUE INDUSTRIES LIMITED (''"the Company"), as at 31st December, 2012, the Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company''s management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with Auditing Standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor''s Report) Order, 2003 issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, and on the basis of such checks as considered appropriate and according to the information and explanations given to us during the course of the audit,we give in the Annexure hereto a statement on the matters specified in Paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by the report comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

e) On the basis of written representations received from the directors of the Company as on 31st December, 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st December, 2012 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956;

f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements, read with the notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :

(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st December, 2012; (ii) In the case of the Statement of Profit and Loss, of the loss for the year ended on that date; and (iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS'' REPORT

Statement referred to in paragraph 3 of the Auditors'' Report of even date to the Members of VALUE INDUSTRIES LIMITED (''"the Company") on the financial statements for the year ended 31st December, 2012.

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situations of fixed assets.

(b) As per the information and explanations given to us, physical verification of fixed assets has been carried out in terms of the phased programme of verification adopted by the Company and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable, having regard to the size of the Company and nature of its business.

(c) During the year the Company has not disposed off any substantial part of fixed assets.

(ii) (a) As per the information and explanation given to us, the inventories have been physically verified during the year by the management. In our opinion, having regard to the nature and location of stocks, the frequency of the physical verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. As per information and explanation given to us, the discrepancies noticed on physical verification of stocks were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

(iii) (a) As per the information and explanation given to us, the Company has not granted or taken any loans, secured or unsecured, to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. (b) As the Company has not granted or taken any loans, secured or unsecured, to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956, Sub-clauses (b), (c), (d), (f) and (g) of Clause (iii) of paragraph 4 of the Order are not applicable. (iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control systems. (v) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the transactions that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rupees Five Lacs, in respect of any party during the year, have been made at prices which are reasonable having regard to prevailing market prices at the relevant time. (vi) The Company has not accepted any deposits from the public within the meaning of the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and rules framed thereunder. (vii) In our opinion, the Company has an internal audit system commensurate with the size of the Company and the nature of its business. (viii) The Central Government has prescribed maintenance of the cost records under section 209(1)(d) of the Companies Act, 1956 in respect of the Company''s products. We have broadly reviewed the books of accounts and records maintained by the Company in this connection and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have however, not made a detailed examination of the records with a view to determining whether they are accurate or complete. (ix) (a) According to the information and explanations given to us and the records examined by us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, the Investor Education and Protection Fund, Employees'' State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty, Cess and other statutory dues wherever applicable. According to the information and explanations given to us, no undisputed arrears of statutory dues were outstanding as at 31st December, 2012 for a period of more than six months from the date they became payable. (b) According to the records of the Company examined by us and information and explanations given to us, the particulars of dues of Sales tax, Income tax, Custom duty, Wealth tax, Service tax, Excise duty, Cess which have not been deposited on account of any dispute, are given below:

Name of the Statute Nature of the Dues Amount Forum where dispute is pending (in Million)

1. Customs Act, 1962 Custom Duty 0.88 Commissioner (Including Penalty and Interest) 0.38 Asst. Commissioner

5.46 Commissioner (Appeal)

5.49 CESTAT

4.37 Tribunal

2. Central Excise Act, 1944 Excise Duty ( Including Penalty) 3.30 Asst. Commissioner

1.29 CESTAT

3. Finance Act, 1994 Service Tax 35.61 Commissioner (Service Tax Provisions)

1.00 Asst. Commissioner

4. Sales Tax Act of various States Sales Tax 0.20 Asst. Commissioner

58.23 DCST (Appeal)

0.95 High Court

0.70 Tribunal

(x) There are no accumulated losses as on 31st December, 2012. The Company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year. (xi) Based on our audit procedures and the information and explanations given to us, we observed that, the Company has defaulted in repayment of dues to banks. The delays have been summarized below indicating the principal amount, interest amount and period.

(xii) Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a Chit fund Company or nidhi/mutual benefit fund/society. Therefore, the Clause

(xiii) of paragraph 4 of the Order is not applicable to the Company.

(xiv) The Company has maintained proper records of transactions and contracts in respect of dealing and trading in shares, securities, debentures and other investment and that timely entries have generally been made therein. All shares, debentures and other securities have been held by the Company in its own name except to the extent to the exemption granted under section 49 of the Companies Act, 1956.

(xv) According to the information and explanations given to us, the terms and conditions of guarantees given by the Company for loans taken by others from banks or financial institutions are, prima facie, not prejudicial to the interest of the Company.

(xvi) According to the information and explanations given to us, the term loans raised were applied, on an overall basis, for the purpose for which the loans were obtained.

(xvii) According to the information and explanation given to us and on overall examination of the Balance Sheet of the Company, we report that, the Company has not used funds raised on short term basis for long term investments. (xviii)The Company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) The Company has not issued any debentures during the year.

(xx) The Company has not raised any money by way of public issues during the year.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For KHANDELWAL JAIN & CO. For KADAM & CO.

Chartered Accountants Chartered Accountants

(Firm Registration No. 105049W) (Firm Registration No. 104524W)

SHIVRATAN AGARWAL U. S. KADAM

Partner Partner

Membership No.: 104180 Membership No.: 31055

Place : Mumbai

Date : 28th February, 2013

---

Dec 31, 2011

1. We have audited the attached Balance Sheet of VALUE INDUSTRIES LIMITED, as at 31st December, 2011, Profit and Loss Account and also the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, and on the basis of such checks as considered appropriate and according to the information and explanations given to us during the course of the audit, we give in the Annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in above paragraph, we report that:

a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit;

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

c) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956;

e) According to the information and explanations given to us and on the basis of written representations received from the directors of the Company and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st December, 2011 from being appointed as a director in terms of Section 274(1 )(g) of the Companies Act, 1956;

f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements, read together with the significant accounting policies and notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31 st December, 2011;

(ii) In the case of the Profit and Loss Account, of the profit for the year ended on that date; and

(iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT

Statement referred to in paragraph 3 of the Auditors' Report of even date to the Members of VALUE INDUSTRIES LIMITED on the financial statements for the year ended 31st December, 2011.

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situations of fixed assets.

(b) As per the information and explanations given to us, physical verification of fixed assets has been carried out in terms of the phased programme of verification adopted by the Company and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable, having regard to the size of the Company and the nature of its business.

(c) During the year, the Company has not disposed off any substantial/major part of its fixed assets.

(ii) (a) As per the information furnished, the inventories have been physically verified during the year by the management. In our opinion, having regard to the nature and location of stocks, the frequency of the physical verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. As per the information and explanations given to us, the discrepancies noticed on physical verification of stocks were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

(iii) (a) As per the information and explanation given to us, the Company has not granted or taken any loans, secured or unsecured, to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) As the Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956, Sub-clauses (b), (c), (d), (f) and (g) of Clause (iii) of paragraph 4 of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in the internal control systems.

(v) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956, have been entered in the register required to be maintained under that Section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rupees Five Lakhs, in respect of any party during the year, have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public within the meaning of the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and rules made there under.

(vii) In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

(viii) The Central Government has prescribed maintenance of the cost records under Section 209(1 )(d) of the Companies Act, 1956, in respect of the Company's products. As per the information and explanations provided to us, we are of the opinion that prima facie, the prescribed records have been made and maintained. We have however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) (a) According to the information and explanations given to us and the records examined by us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, the Investor Education and Protection Fund, Employees' State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty, Cess and other statutory dues wherever applicable. According to the information and explanations given to us, no undisputed arrears of statutory dues were outstanding as at 31 st December, 2011, for a period of more than six months from the date they became payable.

(b) According to the records of the Company examined by us and information and explanations given to us, the particulars of dues of Sales tax, Income tax, Custom duty, Wealth tax, Service tax, Excise duty, Cess which have not been deposited on account of disputes, are given below:

Nature of the Statute Nature of Dues Amount Forum where dispute is pending (Rs. in Million)

1. Customs Act, 1962 Customs Duty 2.32 Commissioner

3.26 CESTAT

Penalty 2.93 Commissioner

2.17 CESTAT

2. Central Excise Act, 1944 Excise Duty 0.89 CESTAT

Penalty 2.81 Asst. Commissioner

0.40 CESTAT

3. Finance Act, 1994 (Service Tax Provisions) Service Tax demand 18.18 Asst. Commissioner

4. Sales Tax Act of various States Sales Tax demand 56.65 DCST (Appeal)

0.70 Tribunal

0.69 Joint Commissioner

0.21 Asst. Commissioner

(x) There are no accumulated losses as on 31 st December, 2011. The Company has not incurred any cash losses during the financial year covered by our audit and the immediately preceding financial period.

(xi) Based on our audit procedures and the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

(xii) Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a Chit fund Company or nidhi/mutual benefit fund/society. Therefore, the Clause (xiii) of paragraph 4 of the Order is not applicable to the Company.

(xiv) The Company has maintained proper records of transactions and contracts in respect of dealing and trading in shares, securities, debentures and other investments and that timely entries have generally been made therein. All shares, debentures and other securities have been held by the Company in its own name except to the extent of the exemption granted under Section 49 of the Companies Act, 1956.

(xv) According to the information and explanations given to us, the terms and conditions of guarantees given by the Company for loans taken by others from banks or financial institutions are, prima facie, not prejudicial to the interest of the Company.

(xvi) According to the information and explanations given to us, the term loans raised during the year were applied, on an overall basis, for the purpose for which the loans were obtained.

(xvii) On the basis of overall examination of the Balance Sheet of the Company, we observed that, the Company has not used funds raised on short term basis for long term investments.

(xviii) According to the information and explanation given to us, the Company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956. -

(xix) The Company has not issued any debentures during the year. The Company has created security in respect of debentures issued in earlier years.

(xx) The Company has not raised any money by public issues during the year.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.



For KHANDELWAL JAIN & CO. For KADAM & CO.

Chartered Accountants Chartered Accountants

(Firm Registration No. 105049W) (Firm Registration No. 104524W)

SHIVRATAN AGARWAL U. S. KADAM

Partner Partner

Membership No. 104180 Membership No. 31055

Place: Mumbai

Date - 15th Mav 2012

---

Dec 31, 2010

1. We have audited the attached Balance Sheet of VALUE INDUSTRIES LIMITED, as at 31st December, 2010, the Profit and Loss Account and also the Cash Flow Statement of the Company for the period ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, and on the basis of such checks as considered appropriate and according to the information and explanations given to us during the course of the audit, we give in the Annexure hereto a statement on the matters specified in Paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in above paragraph, we report that:

a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit;

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

c) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by the report comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

e) According to the information and explanations given to us and on the basis of written representations received from the directors of the Company and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st December, 2010 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956;

f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements, read together with the significant accounting policies and notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st December, 2010;

(ii) In the case of the Profit and Loss Account, of the profit for the period ended on that date; and

(iii) In the case of the Cash Flow Statement, of the cash flows for the period ended on that date.

ANNEXURE TO THE AUDITORS REPORT Statement referred to in paragraph 3 of the Auditors Report of even date to the Members of VALUE INDUSTRIES LIMITED on the accounts for the period ended 31st December, 2010.

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situations of fixed assets.

(b) As per the information and explanations given to us, physical verification of fixed assets has been carried out in terms of the phased programme of verification adopted by the Company and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable, having regard to the size of the Company and nature of its business.

(c) During the period, the Company has not disposed off any substantial/major part of fixed assets.

(ii) (a) As per the information furnished, the inventories have been physically verified during the period by the management. In our opinion and having regard to the nature and location of stocks, the frequency of the physical verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. As per information and explanation given to us, discrepancies noticed on physical verification of stocks were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

(iii) (a) As per the information and explanations given to us, the Company has not granted or taken any loans, secured or unsecured, to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) As the Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956, sub-clauses (b), (c), (d), (f) and (g) of Clause (iii) of paragraph 4 of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in the internal control systems.

(v) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the transactions that need to be entered in the register maintained under Section 301 of the Companies Act, 1956, have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rupees Five Lakhs, in respect of any party during the period, have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public within the meaning of the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and rules framed there under.

(vii) In our opinion, the Company has an internal audit system commensurate with the size of the Company and the nature of its business.

(viii) The Central Government has prescribed maintenance of the cost records under Section 209(1)(d) of the Companies Act, 1956, in respect of the Companys products. We have broadly reviewed the books of account and records maintained by the Company in this connection and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) (a) According to the information and explanations given to us and the records examined by us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty, Cess and other statutory dues wherever applicable. According to the information and explanations given to us, no undisputed arrears of statutory dues were outstanding as at 31st December, 2010 for a period of more than six months from the date they became payable.

(b) According to the records of the Company examined by us and information and explanation given to us, the particulars of dues of Sales tax, Income tax, Custom duty, Wealth tax, Service tax, Excise duty, Cess which have not been deposited on account of disputes, are given below:

Nature of the Statute Nature of the Dues (Rs. Million) Forum where dispute is pending

1. Customs Act, 1962 Custom Duty 1.43 Commissioner

3.26 CESTAT

Penalty 2.93 Commissioner 2.17 CESTAT

2. Central Excise Act, 1944 Excise Duty 0.89 CESTAT

Penalty 0.40 CESTAT

3. Finance Act, 1994 Service Tax Demand 1.00 Asst. Commissioner

4. Sales Tax Act of various Sales Tax Demand 57.55 DCST (Appeals)

States 0.70 Tribunal

(x) There are no accumulated losses as on 31st December, 2010. The Company has not incurred any cash losses during the financial period covered by our audit and the immediately preceding financial year.

(xi) Based on our audit procedures and the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

(xii) Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund Company or nidhi/ mutual benefit fund/society. Therefore, the Clause (xiii) of the Order is not applicable to the Company.

(xiv) The Company has maintained proper records of transactions and contracts in respect of dealing and trading in shares, securities, debentures and other investments and that timely entries have generally been made therein. All shares, debentures and other securities have been held by the Company in its own name except to the extent of the exemption granted under Section 49 of the Companies Act, 1956.

(xv) According to the information and explanations given to us, the terms and conditions of guarantees given by the Company for loans taken by others from banks or financial institutions are, prima facie, not prejudicial to the interest of the Company.

(xvi) According to the information and explanations given to us, the term loans raised during the period were applied, on an overall basis, for the purpose for which the loans were obtained.

(xvii) On the basis of overall examination of the Balance Sheet of the Company, we observed that, the Company has not used funds raised on short term basis for long term investments.

(xviii) According to the information and explanation given to us, the Company has not made any preferential allotment of shares during the period to parties and companies covered in the register maintained under Section 301 of the Companies Act,1956.

(xix) The Company has not issued any debentures during the period. The Company has created security in respect of debentures issued in earlier years.

(xx) The Company has not raised any money by public issues during the period.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the period.



For KHANDELWAL JAIN & CO. For KADAM & CO. Chartered Accountants Chartered Accountants Firm Registration No. 105049W Firm Registration No. 104524W

SHIVRATAN AGARWAL U. S. KADAM Partner Partner Membership No. 104180 Membership No. 31055

Place : Mumbai Date : 26th May, 2011

---

Sep 30, 2009

1. We have audited the attached Balance Sheet of VALUE INDUSTRIES LTD., as at 30th September, 2009, the Profit and Loss Account and also the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, and on the basis of such checks as considered appropriate and according to the information and explanations given to us during the course of the audit, we give in the Annexure hereto a statement on the matters specified in Paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in above paragraph, we report that:

a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit;

b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by the report comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

e) According to the information and explanations given to us and on the basis of written representations received from the directors of the Company and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 30th September, 2009 from being appointed as a director in terms of Section 274(1 )(g) of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements, read together with the significant accounting policies and notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 30th September, 2009;

(ii) In the case of the Profit and Loss Account, of the profit for the year ended on that date; and

(iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT

Statement referred to in paragraph 3 of the Auditors Report of even date to the Members of VALUE INDUSTRIES LIMITED on the accounts for the year ended 30th September, 2009.

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situations of fixed assets.

(b) As per the information and explanations given to us, physical verification of fixed assets has been carried out in terms of the phased programme of verification adopted by the Company and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable, having regard to the size of the Company and nature of its business.

(c) During the year the Company has not disposed off any substantial/major part of fixed assets.

(ii) (a) As per the information furnished, the inventories have been physically verified during the year by the management. In our opinion, having regard to the nature and location of stocks, the frequency of the physical verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. As per information and explanations given to us discrepancies noticed on physical verification of stocks were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

(iii) (a) As per the information and explanations given to us, the Company has not granted or taken any loans, secured or unsecured, to/ from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) As the Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956, sub-clauses (b),(c),(d),(f) and (g) of Clause (iii) of paragraph 4 of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in the internal control systems.

(v) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the transactions that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rupees Five Lakhs, in respect of any party during the year, have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public within the meaning of the provisions of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and rules framed there under.

(vii) In our opinion, the Company has an internal audit system commensurate with the size of the Company and the nature of its business.

(viii) The Central Government has prescribed maintenance of the cost records under Section 209( 1 )(d) of the Companies Act, 1956 in respect of the Companys products. We have broadly reviewed the books of account and records maintained by the Company in this connection and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) (a) According to the information and explanations given to us and the records examined by us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth-tax, Service tax, Custom-duty, Excise-duty, Cess and other statutory dues wherever applicable. According to the information and explanations given to us, no undisputed arrears of statutory dues were outstanding as at 30th September, 2009 for a period of more than six months from the date they became payable.

(b) According to the records of the Company examined by us and information and explanation given to us, the particulars of dues of Sales-tax, Income-tax, Custom-duty, Wealth-tax, Service-tax, Excise-duty, Cess which have not been deposited on account of disputes, are given below:

Nature of the Statute Nature of the Dues (Rupees Forum where in Million) dispute is pending

1. Customs Act Customs Duty 1.50 CESTAT 1.47 CESTAT Penalty 2.93 CESTAT

2. Central Excise Act Excise Duty 1.12 Joint Commissioner

0.29 Tribunal Penalty 1.00 CESTAT

3. Service Tax Act Service Tax Demand 1.00 Joint Commissioner

4. Sales Tax Act Sales Tax Demand 5.04 Asst. Commissioner 89.45 DCST(Appeal)

(x) There are no accumulated losses of the Company as on 30th September, 2009. The Company has not incurred any cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xi) Based on our audit procedures and the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(xii) Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) tn our opinion, the Company is not a Chit fund Company or nidhi/ mutual benefit fund/society. Therefore, the Clause (xiii) of the Order is not applicable to the Company.

(xiv) The Company has maintained proper records of transactions and contracts in respect of dealing and trading in shares, securities, debentures and other investments and that timely entries have generally been made therein. All shares, debentures and other securities have been held by the Company in its own name except to the extent of the exemption granted under Section 49 of the Companies Act, 1956.

(xv) According to the information and explanations given to us, the terms and conditions of guarantees given by the Company for loans taken by others from banks or financial institutions are, prima facie, not prejudicial to the interest of the Company.

(xvi) According to the information and explanations given to us, the term loans raised during the year were applied, on an overall basis, for the purpose for which the loans were obtained.

(xvii) On the basis of overall examination of the Balance Sheet of the Company, we observed that, the Company has not used funds raised on short term basis for long term investments.

(xviii) According to the information and explanations given to us, the Company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under Section 301 of the Companies Act,1956.

(xix) The Company has not issued any debentures during the year. The Company has created security in respect of debentures issued in earlier years.

(xx) The Company has not raised any money by public issues during the year.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For KHANDELWAL JAIN & CO. For KADAM & CO. Chartered Accountants Chartered Accountants

SHIVRATAN AGARWAL U. S. KADAM Partner Partner

Membership No. 104180 Membership No. 31055

Firm Registration No. 105049W Firm Registration No. 104524W

Place: Mumbai Date : 19th February, 2010