value industries ltd share price Directors report

Dear Shareholders,

The Honble National Company Law Tribunal, Mumbai Bench, (NCLT), had vide its order dated September 05, 2018 admitted the application for the initiation of the corporate insolvency resolution process (CIRP) of Value Industries Limited (Company) (Admission Order) in terms of the Insolvency and Bankruptcy Code, 2016 read with the rules and regulations framed thereunder, as amended from time to time (Code). Subsequently, the Honble NCLT vide its order dated August 08, 2019 (Consolidation Order) has ordered the consolidation of the CIRP of the 13 Videocon group entities, including the Company, (Videocon Group Entities). Further, the NCLT vide an order dated September 25, 2019 has appointed Mr. Abhijit Guhathakurta as the resolution professional for the consolidated CIRP of the Videocon Group Entities including the Company (Resolution Professional) (Appointment Order). The Appointment Order was published on September 27, 2019, on which date the Resolution Professional has taken over the management and affairs of the Videocon Group Entities. Pursuant to the publication of the Appointment Order and in accordance with the provisions of the Code, the powers of the board of directors of the Company (Board of Directors) stand suspended and the same have been vested with and are being exercised by the Resolution Professional.

Your Directors take pleasure in presenting the Thirty-First Annual Report together with the Audited Accounts and Auditors Report for the financial year ended on March 31,2019.

PERFORMANCE REVIEW

The financial performance of the Company, for the financial year ended on March 31,2019 is summarized below:

(Rs in Million)

Financial Year Ended March 31,2019

Financial Year Ended March 31,2018

Particulars
Net Revenue from Operations	186.51	2,525.17
Other Income	27.64	50.57
Total Income	214.15	2,575.74
Profit/(Loss) Before Finance Costs, Depreciation and Tax	(782.63)	(5,020.14)
Finance Costs	1,234.79	1,018.18
Depreciation and Amortization	790.02	842.74
Profit /(Loss) Before Tax	(2,807.44)	(6,881.06)
Tax Expenses (Deferred Tax)	(49.07)	(566.27)
Profit /(Loss) for the Period	(2,758.37)	(6,314.79)

The revenue from operations for the year ended 31st March, 2019 stood at Rs 186.51 Million as compared to Rs 2,525.17 Million for the previous year ending 31st March, 2018.

The Loss before Tax for the year ended 31st March, 2019 stood at Rs 2,807.44 Million as compared to loss of Rs 6,881.06 Million for the previous year ending 31st March, 2018. The Loss after Tax stood at Rs 2758.37 Million for the year ending 31st March, 2019 as compared to loss of Rs 6,314.79 Million for the previous year.

The Management Discussion and Analysis Report annexed herewith provides full details of the operational performance and business analysis of the Company.

INDIAN ACCOUNTING STANDARDS

The Ministry of Corporate Affairs (MCA), vide its notification in the Official Gazette dated February 16, 2015 has issued Companies (Indian Accounting Standards) Rules, 2015. Accordingly, in compliance with the said Rules, the Financial Statements of the Company for the Financial Year 2018-19 have been prepared as per Indian Accounting Standards.

CHANGE IN THE NATURE OF BUSINESS

There was no change in the nature of business of the Company during the year under review.

CORPORATE GOVERNANCE

The Company has substantially complied with the corporate governance requirements under the Companies Act, 2013, and as stipulated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI (LODR)). A separate section on Corporate Governance under SEBI (LODR) along with a certificate from the Practicing Company Secretary confirming the compliance is marked as ‘Annexure- 1 and forms part of this Directors Report.

DIVIDEND

In view of the loss incurred by the Company, the Directors do not recommend any dividend for the financial period ended March 31,2019.

TRANSFER TO RESERVES

The Company do not propose to transfer any amount to the General Reserves.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

As required under the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (IEPF Rules), the Company was required to transfer the unclaimed dividend pertaining to the financial year 2009-10 of Rs 20,71,574/-. However, in absence of clarity consequent to commencement of CIRP, the Company couldnt transfer the unclaimed dividend to the Investor Education and Protection Fund (IEPF). The Company is in the process of transferring the said amount to IEPF.

The Company is in the process of transferring the shares in respect of which dividend is unclaimed or unpaid for 7 consecutive years and which were due for transfer to IEPF under the provisions of Section 124 of the Companies Act, 2013 read with Rule 6 of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016.

ISSUES/ALLOTMENT

During the year under review, the Company has not issued/ allotted any Equity Shares.

DEPOSITS

Your Company has not accepted any Fixed Deposit within the meaning of Chapter V of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 and as such, no amount of principal or interest was outstanding as on the Balance Sheet date.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY, OCCURED AFTER THE BALANCE SHEET DATE AND AS AT THE DATE OF SIGNING THIS REPORT

Except for the consolidation of the CIRP of the 13 Videocon Group Entities, there are no material changes and commitments affecting the financial position of the Company occurred after the Balance Sheet Date and as at the date of signing of this report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Pursuant to Section 134(3)(g) read with Section 186 of the Companies Act, 2013 and Schedule V of the SEBI (LODR), disclosures relating to particulars of loans, guarantees given and investments made during the period is marked as ‘Annexure- 2 and forms part of this Directors Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS AS PER SECTION 188(1):

Pursuant to the provisions of Section 188 of the Companies Act, 2013 read with the rules made there under and SEBI (LODR), all the related party transactions in the Company have been entered on arms length basis, in the ordinary course of business and are in compliance with the applicable provisions. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key

Managerial Personnel or other designated persons, etc., which may have potential conflict with the interest of the Company at large or which warrants the approval of the shareholders. The details of the transactions with Related Party are provided in the Companys financial statements in accordance with the Indian Accounting Standards (Ind AS). However, in terms of Section 134(3)(h) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, the Company is making disclosure of Related Party Transaction in Form AOC-2 which is marked as ‘Annexure- 3 and forms part of this Directors Report.

The Policy on Related Party Transactions has been approved by the Board and the same has been uploaded on the website of the Company at the following URL-http://www.valueind.in/image/value/Value%20 Related%20Party%20Transaction%20Policy.pdf

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any subsidiary, joint venture or associate.

COMPANYS POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Company has framed policies that were duly approved by the Board on the recommendations of the Nomination and Remuneration Committee prior to commencement of CIRP relating to directors appointment and remuneration including the criteria for determining qualifications, positive attributes and independence of directors. Such policies form part of the charter documents of the Company. The other details form part of the Corporate Governance Report.

EMPLOYEES REMUNERATION

Information required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is marked as ‘Annexure- 4A and forms part of this Directors Report.

A statement containing, inter alia, the names of top ten employees in terms of remuneration drawn and every employee employed throughout the financial year and in receipt of remuneration of Rs 102 lakhs or more and, employees employed for part of the year and in receipt of remuneration of Rs 8.50 lakhs or more per month, pursuant to Rule 5(2) the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is marked as ‘Annexure- 4B and forms part of this Directors Report.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars of Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo required under Section 134(3) (m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts)Rules, 2014, for the year ended March 31,2019 is marked as ‘Annexure- 5 and forms part of this Directors Report.

RISK MANAGEMENT POLICY OF THE COMPANY

The Company has put in place a mechanism to identify, assess, monitor and mitigate various risks associated with the business. In line with the regulatory requirements, the Company has in place the Risk Management Policy to identify the risk elements and manage, monitor and report on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. The Company has proper confidentialities and privacy policies to control risk elements. The Company has wherever required, taken insurance policies to protect the property, assets etc.

The Company has formed Risk Management Committee. The scope and composition of the Committee forms part of the Corporate Governance Report. Further, the members of the Risk Management Committee and the senior management personnel review the Risk Management Policy periodically and discuss and mitigate the identified risks from time to time.

Major risks identified were discussed at the meeting of the Board of Directors of the Company prior to commencement of CIRP.

CORPORATE SOCIAL RESPONSIBILITY POLICY

Corporate Social Responsibility (CSR) has been a commitment at the Company and forms an integral part of our activities.

The Company has formed a CSR committee in terms of the provisions of Section 135 of the Companies Act, 2013 and Rules made there-under read along with Schedule VII of the Act. The scope and composition of the committee forms part of the Corporate Governance Report.

Further, the Company was not required to make any CSR expenditure during the Financial Year 2018-19 since the average net profit for the three immediately preceding financial years was negative.

HEALTH & SAFETY

The management of your Company believes that the employees are the heart and soul of the organization and hence, considers health and safety of its employees as its prime responsibility.

The Company continues to adopt the following health and safety initiatives:

• Accessibility of health and medical services to all employees through well-equipped health centers at all manufacturing facilities.

• Medical camps, at regular intervals, to ensure fitness of its employees.

• Availability of ambulance, in case of emergency.

• On-the-job and off-the-job training programs at regular intervals for up-gradation of employees on awareness front.

• Display of evacuation plans at various locations to reach assembly point.

• Display of cautionary boards, notice boards and information boards at work stations for information and awareness of the employees.

• Close monitoring of health and safety activities to ensure maintenance of adequate standards.

ENVIRONMENTAL PROTECTION

Your Company has adopted various green initiatives from time to time in adherence to spirit enunciated under various policies and regulatory requirements for environmental protection. Your Company aims to carry out eco-friendly activities and strives to restrain the activities that result into the degradation of the environment.

The following are some of the initiatives which were adopted by the Company in the past and remain under implementation during the year under review:

• Promoting the use of alternative fuels and materials.

• Re-engineering the processes and products to reduce energy consumption.

• Tree-plantation campaigns.

• Awareness programs for employees at all levels.

The Company adopt clean technologies and processes that combine both economic progress and sustainable environment.

Your Company is in compliance of e-waste rules and guidelines and has a tie up with authorized recycler for collection and disposal of e-waste products.

INFORMATION TECHNOLOGY

Your Company is fully focused on leveraging complete advantage of SAP system. We are using IT to the optimum benefits of our MIS users and decision makers. Your Company understands the significance and impact of the digital revolution and has significantly progressed in this direction.

DISCLOSURE AS REQUIRED UNDER SECTION 22 OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

As per provisions of Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, your Company respects and values diversity reflected in various backgrounds, experiences, and ideas and is committed towards providing a healthy environment. Keeping in view the same, the Company does not tolerate any discrimination and/or harassment in any form. The Company has in place an Internal Complaints Committee to inter-alia:

1) Prevent sexual harassment at the workplace; and

2) Redress the complaints in this regard.

The Company ensures that the process ensures complete anonymity and confidentiality of information to report any sexual harassment cases at workplace.

During the year under review, there were no complaints / cases filed / pending with the Company during the year.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

Your Company provides an orientation and business overview to its Independent Directors to enable them to gain deeper understanding of your Company, its operations, business, senior management, policies, industry perspective, etc. The Directors are updated on a continual basis on any significant change and important developments in the Company. The detail of the familiarization programme for independent directors can be accessed at the website of the Company at http://www.valueind.in/ Documents/FamiMarisation%20Program%20for%20independent%20 directors.pdf.

DETAILS OF DIRECTORS/KEY MANAGERIAL PERSONNEL APPOINTED/RESIGNED DURING THE PERIOD

During the year under review, Mr. Deepak A. Pednekar (DIN: 07639771), was appointed as a Director (Independent Non-Executive), for a period of 5 years at the previous Annual General Meeting held on 28th December, 2018, pursuant to the provisions of second proviso to Section 149(1) of the Companies Act, 2013 and the Rules made thereunder and in terms of the Articles of Association of the Company.

Mr. Naveen B. Mandhana (DIN:01222013), was appointed/confirmed as a Director (Independent Non-Executive), for a period of 5 years from 14th August, 2014 at the 27th Annual General Meeting held on 30th June, 2015. Being eligible he has offered himself for reappointment. In terms of the provision of Section 149(10), 152 of the Companies Act, 2013, he can be reappointed as Director for a further period of 5 Years by passing a Special Resolution.

A brief profile of Mr. Naveen B. Mandhana, seeking appointment at the ensuing Annual General Meeting under Secretarial Standard on General Meetings (SS-2) issued by the Institute of Company Secretaries of India, is appended to the Notice. The Directors proposes his reappointment as Director (Independent Non-Executive) for a further period of 5 years from 14th August, 2019, not liable to retire by rotation.

Since all the Directors of the Company are Independent Non-Executive there are no Directors liable to retire by rotation.

Details of Key Managerial Personnel:

The Board on the recommendation of the Nomination and Remuneration Committee and as approved by the erstwhile Resolution professional Mr. Dushyant Dave (IP Registration No. IIBBI/IPA-003/IP-P00061/2017- 18/10502) appointed Ms. Samridhi Kumari, as the Company Secretary of the Company w.e.f. 5th December, 2018. Subsequently, she had resigned from the Company w.e.f. 31st March 2019.

Consequently, pursuant to the powers exercised by the erstwhile Resolution professional Mr. Dushyant Dave (IP Registration No. IIBBI/ IPA-003/IP-P00061/2017-18/10502) under Section 28 of IBC Code and subsequent approval of the Committee of Creditors, appointed Mr. Mayank Bhargava, as the Company Secretary of the Company w.e.f. 5th June, 2019.

DECLARATION GIVEN BY INDEPENDENT DIRECTORS

The Company has received necessary declaration from each Independent Director of the Company under Section 149 of the Companies Act, 2013 and the provisions of SEBI (LODR) stating that they meet the criteria of independence as provided therein.

NUMBER OF MEETINGS OF THE BOARD HELD DURING THE PERIOD

During the financial period under review, the Directors met 3 times. The details regarding the attendance and the date of Meetings of Directors are provided in the Corporate Governance Report.

COMMITTEES OF THE BOARD

Pursuant to the provisions of the Companies Act, 2013 and provisions of the Listing Regulations, the Company has constituted the following committees to deal with specific areas / activities as a part of good governance practice:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders Relationship Committee (Administrative and Shareholders / Investors Grievance Committee)

4. Corporate Social Responsibility Committee

5. Risk Management Committee

6. Finance and General Affairs Committee

The composition, scope and powers of the aforementioned committees together with details of meetings held during the period under review, forms part of Corporate Governance Report.

The Company is under CIRP under the Code and therefore, the powers of board of directors stand suspended and are being exercised by the Resolution Professional in accordance with Sections 17 and 23 of the Code from the aforesaid date. Thus, no meetings of the committees were held after the commencement of CIRP w.e.f. September 5, 2018.

PERFORMANCE ANNUAL EVALUATION

In pursuance to Section 134 of the Companies Act, 2013, Rule 8 of the Companies (Accounts) Rules, 2014, and SEBI (LODR), the Nomination and Remuneration Committee adopted a formal mechanism for evaluating the performance of the Directors as well as that of its committees and individual Directors, including Chairman, Key Managerial Personnel/ Senior Management etc.

In the past, the exercise was carried out based on various parameters such as the composition of the Board, experience, competencies, contribution towards accurate financial reporting, strategic guidance, risk mitigation, internal controls, governance, leadership and talent development, managing external stakeholders, governance issues, etc.

Consequent to admission of the Company into CIRP, the performance annual evaluation was not carried out during the year.

WHISTLE BLOWER POLICY / VIGIL MECHANISM

In line with requirement under Section 177(9) and (10) of the Companies Act, 2013 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has established a Whistle Blower Policy, where in the Employees / Directors / Stakeholders of the Company are free to report any unethical or improper activity, actual or suspected fraud or violation of the Companys Code of Conduct. The policy provides for a mechanism to report such concerns to the Audit Committee through specified channels. This mechanism provides safeguards against victimisation of Employees, who report under the said mechanism.

During the year under review, the Company has not received any complaints under the said mechanism. The Whistle Blower Policy of the Company has been displayed on the Companys website at the link:http:// www.valueind.in/image/value/value%vigil%20mechanism%.pdf

LISTING

The equity shares of your Company are listed on the BSE Limited (Formerly: The Bombay Stock Exchange Limited) and The National Stock Exchange of India Limited (NSE).

Due to Non-compliance with certain provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Standard Operating Procedure for suspension and revocation of trading of specified securities, the Shares of the Company are suspended from Trading on National Stock Exchange of India Limited & BSE Limited w.e.f 28th March, 2018 and 8th October, 2018 respectively.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report for the year under review as stipulated under Regulation 34(2)(e) of the SEBI (LODR) is marked as ‘Annexure- 6 and forms part of this Directors Report which provides full details of the operational performance and business analysis of the Company.

CASH FLOW STATEMENT

The Cash Flow Statement for the year ended March 31, 2019, in conformity with the provisions of the Companies Act, 2013 and SEBI (LODR) is annexed hereto.

AUDITORS AND THEIR REPORTS

1. STATUTORY AUDITORS AND AUDIT REPORT:

M/s S. Z. Deshmukh & Co., Chartered Accountants, Mumbai (Firm Registration No. 102380W) were appointed as the Statutory Auditors of the Company to hold office for a term of 5 years from the conclusion of the 29th Annual General Meeting (AGM) held

on September 29, 2017 until the conclusion of the 34th Annual General Meeting of the Company.

S. Z. Deshmukh & Co., Chartered Accountants, have confirmed their eligibility in terms of the provisions of Section 141 of the Companies Act, 2013 and Rule 4 of Companies (Audit and Auditors) Rules, 2014.

AUDIT REPORT:

The audit report is prepared on basis of disclaimer. Auditors stated that they are unable to comment on necessary adjustments/disclosures in these financial statements in relation to items listed in their reports in view of the non-availability of necessary information /documentation/ satisfactory explanation relevant to audit of the current year.

The management hereby confirm that they have provided all the documents/information/explanation which in the opinion of management is sufficient for auditors to comment on True and Fair view. However, auditors were not satisfied with the explanation of management and, accordingly, continued with their stand insufficient information/documents/ explanations despite all documents having been furnished to them.

The explanation of the management is as under:

a) (i) The Company has made investments, given advances

and has trade receivables naggregating to Rs 181.44 Crore in group/affiliate companies, namely Videocon Industries Limited, Applicomp (India) Limited, Millennium Appliances India Limited, KAIL Limited, Sky Appliances Limited and Techno Electronics Limited, which have been referred to National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016 by their lenders and subsequently admitted to Corporate Insolvency Resolution Process (CIRP). The actual amount of loss on these investments, advances and trade receivables are not ascertainable till the completion of resolution process of these group entities.

(ii) The Company has not assessed or reviewed the fixed assets for impairment, non-ascertainment of net realisable value of inventory, and non-ascertainment of the realisable value of investments. Prior to commencement of CIRP, the Company has appointed valuers for valuation of assets including inventory and investments and the Company is in process of ascertaining the impairment loss, if any, on its fixed assets, inventories and investments. The requisite accounting effect, if any, will be given upon such ascertainment / determination.

(iii) The confirmations and reconciliation of balances of certain secured and unsecured loans, balances with banks, trade receivables, trade and other payables and loans and advances are pending. The management is in the process of obtaining confirmations and reconciliation of balances and ascertaining the impact of which is not ascertainable at present.

(iv) 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. Pending final outcome of the CIRP, no accounting impact in the books of accounts has been made in respect of excess, short, or non-receipts of claims for operational and financial creditors.

b) The Company has been referred to National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016, and there is considerable decline in level of operations of the Company and net worth of the Company as on the reporting date is negative and it continues to incur losses. The Company is a co-obligor and has received demand notices in respect of borrowings of other obligors/ borrowers. It has also received invocation notices of personal guarantees extended by promoters. Since Corporate Insolvency Resolution Process (CIRP) is currently in progress, as per the Code, it is required that the Company be managed as going concern during CIRP. Accordingly, the financial statements are continued to be prepared on going concern basis. However, 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 CIRP as specified in the Code.

Necessary adjustments required on the carrying amount of assets and liabilities are not ascertainable at this stage.

c) The Company has not submitted its financial results for the quarter/ period ended March 31,3018, and subsequent periods till date as required under regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The non compliance of the said provisions were primarily on account of technical difficulties, voluminous activities under CIRP, lack of resources inter-alia including qualified staff having resigned pre-post CIRP.

d) The confirmations and reconciliation of balances of certain secured and unsecured loans, balances with banks, trade receivables, trade and other payables and loans and advances are pending. The management is in the process of obtaining confirmations and reconciliation of balances and ascertaining the impact of which is not ascertainable at present.

2. COST AUDITOR AND COST AUDIT REPORT:

In accordance with the provisions of Section 148 of the Companies Act, 2013 read with Rule 14 of the Companies (Audit & Auditors) Rules, 2014 and amendments made thereto; from time to time, the Resolution Professional has accorded approval for appointment of M/s. B R Chandak & Co. Cost Accountants (Membership No. 21959), as the Cost Auditors of the Company, to conduct audit of Cost Accounting Records maintained by the Company for the financial year from April 1,2019 to March 31,2020 in respect of the products covered under ‘Machinery and Mechanical Appliances.

In compliance with the provisions, the remuneration payable to the Cost Auditor has to be ratified by the members of the Company at general body meeting. Accordingly, consent of the Members is sought by way of an Ordinary Resolution for ratification of the remuneration amounting to Rs 75,000/- (Rupees Seventy Five Thousand Only) plus applicable tax and out of pocket expenses payable to the Cost Auditor for the financial year from April 1,2019 to March 31,2020.

The Cost Audit Report for the financial year ended on March 31, 2019 is under preparation and expected to be completed soon.

In compliance with provisions of the Companies (Cost Records and Audit) Rules, 2014 and amendments made thereto; from time to time and General Circulars thereof, we hereby submit that the Company is in process of filing the Cost Audit Report for the financial year ended on March 31, 2018. The delay in filing is on account of technical difficulties.

The Board of Directors of the Company on 31st August, 2018, on the recommendation of the Audit Committee approved appointment of M/s. B R Chandak & Co.; Cost Accountants (Membership No. 21959), as the Cost Auditors of the Company to conduct the audit of the cost accounting records of the Company for the financial year from April 1, 2018 to March 31, 2019 at a remuneration of Rs 75,000/- (Rupees Seventy Five Thousand Only) excluding tax, reimbursement of travelling and other out of pocket expenses at actual incurred by them in connection with the aforesaid audit of the Company. The said appointment was subject to finalisation of fees with M/s. B R Chandak & Co. However, the fees couldnt be finalised till the date of previous Annual General Meeting. Therefore, the remuneration paid to M/s. B R Chandak & Co. as Cost Auditor for the financial year 2018-19, could not be confirmed by shareholders at the previous Annual General Meeting held on 28th December, 2018.

In compliance with the provisions, the remuneration payable to the Cost Auditor has to be ratified by the members of the Company at general body meeting. Accordingly, consent of the Members is sought by way of an Ordinary Resolution for ratification of the remuneration amounting to Rs 75,000/- (Rupees Seventy Five Thousand Only) plus applicable tax and out of pocket expenses payable to the Cost Auditor for the financial year from April 1,2018 to March 31,2019.

3. SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT:

Section 204 of the Companies Act, 2013 inter-alia requires every listed company to annex to its Boards Report, a secretarial audit report given by a Company Secretary in practice, in the prescribed form.

The Resolution Professional based on the recommendation of the Company Secretary of the Company, in compliance with Section 204 of the Act, appointed Mrs. Gayathri R Girish, Company Secretary in Whole- time Practice, (CP No.: 9255) to carry out the Secretarial Audit for the financial period ended on March 31,2019. The Report of the Secretarial Audit in Form MR-3 for the financial year ended March 31,2019 is marked as ‘Annexure- 7 and forms part of this Directors Report and consists of the observations stated by the Secretarial Auditor.

In respect of observations raised by the Secretarial Auditor, the explanation of the management is as under:

• The non-filing of e-forms MGT 14, CRA 2, CRA 4, AOC-4 XBRL and others were on account of technical issues.

• The appointment of Cost Auditor was subject to finalisation of fees with M/s. B R Chandak & Co. However, the said fees was not finalised till the date of previous Annual General Meeting. Therefore, the remuneration paid to M/s. B R Chandak & Co. as Cost Auditor for the financial year 2018-19, could not be confirmed by shareholders at the previous Annual General Meeting.

• The Company couldnt transfer (i) the unpaid/unclaimed dividend to IEPF, declared at the 23^rd Annual General Meeting held on 29th June, 2011; (ii) the shares in respect of which dividend is unclaimed or unpaid for more than 7 years and which were due for transfer to IEPF due to lack of clarity consequent to commencement of CIRP.

• The non-filing of statement of unpaid and unclaimed amount to IEPF Authority was on account of non-receipt of information from the Registrar & Transfer Agent (RTA) due to non-payment.

• The delay in filing of E Form MGT-15 and MGT 7 was on account of technical difficulty and procedural issues.

• The Company is in process of identifying the suitable candidate for the post of KMPs viz. Chief Executive Officer and Chief Financial Officer. There was delay in appointment and intimation of appointment and Resignation of Company Secretary and Compliance officer due to technical issues.

• The delay in compliance and/or non-compliance of the provisions of Regulations 13(3), 33(3), 47(3), 31, 29, 14, 34(1), 27(2), 7(3), 40(9) and giving prior intimation and outcome in respect of certain meetings of Committee of Creditors, submission of Reconciliation of Share Capital Audit, intimation of commencement of CIRP under the SEBI (LODR) were on account of technical difficulties, voluminous activities under CIRP, lack of resources inter-alia including qualified staff having resigned pre-post CIRP.

• The Non-Compliance of Regulation 46 of SEBI (LODR), the Company does not have functional website is due to technical issues.

• Non filings of returns under FEMA were on account of technical issues and accidental omissions.

• The other observations or adverse remarks are selfexplanatory.

DETAILS OF FRAUDS REPORTED BY AUDITORS (OTHER THAN REPORTABLE TO CENTRAL GOVERNMENT)

There is no fraud/misconduct detected at the time of statutory audit by Auditors of the Company for the financial year ended on March 31,2019.

INTERNAL FINANCIAL CONTROLS, INTERNAL AUDIT AND OTHER INITIATIVES

The Company has adequate systems of internal financial controls in place with reference to financial statements, which is commensurate with its size and the nature of its operations. The Independent Auditor have identified certain material weaknesses in the operating effectiveness of Companys financial controls.

The Company is strengthening internal controls. The Company has, in compliance with the provisions of Section 138 of the Companies Act, 2013 read with Rule 13 of Companies (Accounts) Rule 2014, has in place

in-house internal audit team led by in house internal auditor to carry out the periodic audits of internal records based on the plan approved by the audit committee and brought out any deviations to internal control procedures maintained by the Company.

ANNUAL RETURN

The copy of the Annual Return in e-Form MGT 7 pursuant to the provisions of Section 92(3) of the Companies Act, 2013, and the Rules made thereunderhas been displayed on the Companys website at the link: http://www.valueind.in/relationservice.aspx?Sel=Others

ORDERS PASSED BY REGULATORS/COURTS/ TRIBUNALS

Except for commencement of CIRP under the Code, no material orders were passed by Regulators/ Courts / Tribunals during the period impacting the going concern status and Companys operations in future.

DIRECTOR RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility Statement:—

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

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

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

COMPLIANCE WITH THE SECRETARIAL STANDARDS

Your Directors confirm that the Secretarial Standards issued by the Institute of Companies Secretaries of India, as applicable to the Company, have been duly complied with.

ACKNOWLEDGMENT

Your Directors take this opportunity to express its sincere appreciation and gratitude to the Customers, Vendors, Investors, Financial Institutions, Bankers, Business Partners and Government Authorities for their consistent support and encouragement to the Company. We also appreciate the contribution made by the employees at all levels for their hard work, dedication, co-operation, commitment and support for the growth of the Company.

The Directors would also like to thank all stakeholders for the continued confidence and trust placed by them with the Company.

	For and on Behalf of the Directors of VALUE INDUSTRIES LIMITED
DEEPAK A. PEDNEKAR	BHUJANG S. KAKADE
DIRECTOR	DIRECTOR
DIN: 07639771	DIN:06383819
Place: Mumbai
Date: 3rd January, 2020