Videocon Industries Ltd Auditor Reports

To

The Members of

VALUE INDUSTRIES LIMITED

(Company under Corporate Insolvency Resolution Process “CIRP”)

Report on the Audit of the Financial Statements for Financial Year 2023-2024 Material Background for this Audit Report

Pursuant to an application filed before the Honble National Company Law Tribunal, Mumbai (“NCLT” / “Adjudicating Authority”) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (“IBC” / “the Code”) against “Value Industries Limited” (the “Corporate Debtor”) / “the Company”), the Adjudicating Authority had admitted the application for the initiation of the corporate insolvency resolution process (“CIRP”) of the Corporate Debtor vide an order dated September 5, 2018 and appointed Mr. Dushyant Dave as the insolvency resolution professional.

Thereafter, separate applications were filed by State Bank of India (on behalf of all the financial creditors) and Mr. Venugopal Dhoot (one of the promoters of the Videocon group) for the consolidation of the Corporate Debtor along with other group companies. The Adjudicating Authority, vide its order dated August 8, 2019, allowed State Bank of Indias application by, inter alia,

(i) allowing the consolidation of the CIRP of the Corporate Debtor with that of 12 other Videocon group companies namely, Videocon Industries Limited, Videocon Telecommunications Limited, Evans Fraser 8s Co. (India) Limited, Millennium Appliances India Limited, Applicomp (India) Limited, Electroworld Digital Solutions Limited, Techno Kart India Limited, Century Appliances Limited, Techno Electronics Limited, PE Electronics Limited, CE India Limited and Sky Appliances Limited; (collectively referred to as the “Corporate Debtors” or “Videocon Group Entities”) and

(ii) appointing Mr. Mahender Khandelwal as the insolvency resolution professional for the Videocon Group Entities.

Subsequently, the first meeting of the Consolidated Committee of Creditors of the Corporate Debtors (CoC) was held on September 16, 2019. At the first meeting of the CoC, the CoC approved the name of Mr. Abhijit Guhathakurta as the Resolution Professional for the Videocon Group Entities, including the Corporate Debtor in place of Mr. Mahender Khandelwal. Mr. Abhijit Guhathakurtas appointment as the Resolution Professional of the Videocon Group Entities (“Resolution Professional” / “RP”) was approved by the Adjudicating Authority vide its order dated September 25, 2019. A copy of the said order of the Adjudicating Authority was made available to the Resolution Professional on September 27, 2019 when the same was uploaded on the website of the Adjudicating Authority. 0n and from the date of publication of the aforesaid order, the powers of the board of directors of the Corporate Debtor stand vested in the Resolution Professional.

Thereafter, CoC had approved the resolution plan submitted by Twin Star Technologies Limited (the “Resolution Plan”), by passing the requisite resolution with 95.09% majority/voting share in accordance with the provisions of Section 30(4) of the Code. The said Resolution Plan, as approved by the CoC, had been filed with the NCLT in accordance with the Section 30(6) of the Code for its approval on December 15, 2020. Further, NCLT vide order dated June 08, 2021 (“Approval Order”), approved the resolution plan submitted by Twin Star Technologies Limited (“Approved Plan”).

In terms of the Approved Plan, a steering committee had been constituted (“Steering Committee”). The Steering Committee in its meeting held on June 18, 2021 had appointed the Resolution Professional, Mr. Abhijit Guhathakurta, as the interim manager of the Corporate Debtors (“Interim Manager”), for undertaking the management and control the Company, from the date of Approval Order till the completion of the implementation process on the Closing Date (as provided under the Approved Plan).

However, pursuant to the appeals filed by three dissenting financial creditors (among others) before the Honble National Company Law Appellate Tribunal, New Delhi (the “NCLAT”), the Honble NCLAT, vide its order dated July 19, 2021 in the said Appeals (the “Stay Order”), inter-alia stayed the operation of the NCLT Approval Order till the next date of hearing and ordered the maintenance of status quo ante as before passing of the NCLT Approval Order. Further, as per the Stay Order, the Resolution Professional was directed to continue to manage the 13 Videocon Group Entities as per the provisions of the Code till the next date of hearing.

Later on, the NCLAT vide its final order dated January 05, 2022 set aside the Approval Order and remitted back the matter to the COC for completion of the process relating to CIRP in accordance with the provisions of the Code (the, “NCLAT Final Order”).

Subsequently, pursuant to the NCLAT Final Order, the COC in their meeting held on January 12, 2022, decided to invite afresh expressions of interest for submission of a consolidated resolution plan for Corporate Debtors in accordance with IBC and CIRP Regulations.

However, Twin Star Technologies Limited challenged the NCLAT Final Order in Civil Appeals bearing numbers 509, 512 and 894 of 2022 before the Honble Supreme Court (“SC Appeals”). The SC Appeals were listed on February 14, 2022, on which date, the Honble Supreme Court made oral remark to the Resolution Professional and COC to not proceed further with the CIRP of the Corporate Debtors till any further orders in subsequent hearings. Pursuant to these oral remarks of the Honble Supreme Court, the status quo is being preserved in the current CIRP of Consolidated Corporate Debtors till further orders/directions of the Honble Supreme Court. Therefore, the Resolution Professional continues to manage the Videocon Group Entities (including the Company), as per the provisions of the Code. As a result, the powers of board of directors of die Corporate Debtor are being exercised by the Resolution Professional in terms of provisions of Section 25 of the Code.

It is also understood that the Resolution Professional has filed applications with Honble NCLT under section 19 of the Code, seeking co-operation from promoters and erstwhile management of the company for providing various data, primarily pertaining to pre-CIRP period and certain additional data that is required for preparing the Financial Statements. The requested data is still not made available to be Resolution Professional / Company. Hence, in the absence of detailed books of accounts of earlier years, including ledger copies / supporting documents as required to be maintained under the provisions of section 128 of Companies Act, 2013, the Financial Statements have been prepared by the Group Resources on the basis of available data on best effort basis.

Disclaimer of Opinion

We have audited the Financial Statements of VALUE INDUSTRIES LIMITED ("the Company”), which comprise of the Balance Sheet as at March 31, 2024 the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity, and Statement of Cash Flows for the year then ended, and Notes to the financial statements, including a summary of significant accounting policies and other explanatory information for the year ended on the same date (hereinafter referred to as the "Financial Statements”).

We do not express an opinion on the accompanying Financial Statements of the Company. Because of the significance of the matters described in the Basis for Disclaimer of Opinion paragraph of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these Financial Statements of the Company as at March 31, 2024.

Basis for Disclaimer of Opinion

For the paragraphs mentioned below (1-18), we are unable to comment on the elements of Financial Statements which may require necessary disclosures/ documentation/ explanation/and or adjustments and impact of the same on the Financial Statements. 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 ended on March 31, 2024.

1) Vide Note No-56 of financial statements, the RP has disclaimed his liability on account of signing the Financial Statements and further stated that RP is not making any representations regarding the accuracy, veracity or completeness of the data or information in the financial statements. 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 after 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 128 of Companies Act, 2013. Thus, consequential cumulative effects on the Financial Statements are unascertainable.

2) 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 Property 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-52 of the Financial Statements, no revaluation or impairment assessment has been carried out on such assets. Neither any report pertaining to ----------- of such assets was made available to us. Accordingly, we are ---------- 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,

3) As mentioned, to Note No-4 along with Note No-52 to the Financial Statements. 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 holding/ ownership of all Investments. Further, The Company has neither revalued nor measured investments according to Ind AS-13 "Fair value measurements” nor has the Company complied with the requirements of Ind AS-36 “Impairment of assets”. As such, we are unable to determine whether any additional adjustments / disclosures are required on investments reported as at March 31, 2024.

4) We have not been provided with any physical verification reports along with valuation 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 March 31, 2024 which are stated in the Balance Sheets at INR 236,64 Million (2023: INR 243.98 Million) under note no. 8. As such, we are unable to determine whether any adjustments in accordance with Ind AS-2 “Inventories” are necessary to the Financial Statements in respect of recorded (or unrecorded) inventories and further cannot comment on the items which are obsolete, damaged and their proper reflection in the Financials Statements.

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 mentioned under Note No. 25.

5) The company has not produced any documents/ information/ relating to Grant form Ozone Project (as set out in Note No-17 to the Financial Statements with a carrying value of INR 0.69 million as at 31^st March, 2024). As such, we are unable to ascertain impact of the same in Financial Statements at this stage.

6) As mentioned in Note No-31 the company has not made any adjustment to Deferred Tax Asset/Liability for the year under consideration. Accordingly, Ind AS-12 “Income Tax” has not been followed by the Company. Resultant impact, if any, on the Financials Statements is not ascertainable at this stage.

7) With respect to Note No-33 to the Financial Statements regarding Financial Instruments, read with Note 52 to the financial statements, the company has not complied with the requirements of Ind AS -109 - Financial Instruments. As such, its impact on the Financial Statements is not ascertainable at this stage.

8) As referred in Note no-35, valuation towards employee benefit expenses is based on actuarial valuation report. Since the company is into CIRP, 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 Statements.

9) As mentioned in Note No- 36, in the absence of breakup/details pertaining to contingent liability as at 31^st Mar 2019, the company has relied on the opening balances; without evaluating if any changes are required to such opening balances during the year. As such, the company has not disclosed contingent liability in accordance with Ind AS-37 “Provisions, Contingent Liabilities and Contingent Assets”. Further, we are unable to comment on the completeness / exhaustiveness of the contingent liabilities covered and any impact that may be necessary on the Financial Statements at this stage.

10) With respect to Note Nos-39 (on SCN received from DRI) and 40 (on disclosures pertaining to MSMEs), we have not been provided any documents/ records. We are therefore unable to comment upon these.

11) With respect to related party disclosures made under Note No. 48 of the financial statements, we are unable to confirm or comment whether the details provided are complete and in compliance with the requirements of section 188 of the Companies Act, 2013 and Ind AS-24 “Related Party Disclosures”.

12) As mentioned in Note No. 53 to the financial statements, 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. Outcome 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 Hence, consequential impact, if any, is currently not ascertainable and we are unable to comment on possible financial impacts of the same.

Further, as mentioned in Note No-38 of financial Statement, the Company is under a co-obligor arrangement and its contingently liable in respect of the borrowings of other Obligors/Borrowers to the extent of outstanding principal balance of Rupee Term Loans as on 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 not ascertainable and we are unable to comment on possible financial impacts of the same.

Further as mentioned in Note No-19, 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, as mentioned under Note No. 18 and 29 since the commencement of CIRP, there is a Moratorium in terms of section 14 of the Code towards repayment of existing debts 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 interest 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 also unable to confirm whether the Borrowings of INR 16,412.38 Million and INR 4,400 million (unsecured) (2023: INR 14,654.52 Million and INR 4,400 million [unsecured]) as reported under Note No-18 and 29 provide an accurate status and whether the basis for interest charged in statement of profit and loss account is in accordance with Ind AS-23 “Borrowing Cost”.

13) 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, receivables, trade payables, and other receivables and payables. As such, we are unable to ascertain impact on Financial Statements. However, in case of balance with banks (INR 4.88 million), we have been provided most of 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.

14) As per the information and explanations given to us, the Company had carrying value of investments of INR 60.72 Million, has given advances of INR 35.16 Million and has trade receivables of INR 200.27 Million aggregating to INR 296.15 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 realisability of aforesaid investments, advances and trade receivables from group / affiliate companies till the completion of resolution process of group/ affiliate entities. The consequential cumulative effects thereof on loss including other comprehensive income for the year, assets and other equity is unascertainable. Further, we are also unable to assess the genuineness and recoverability of other loans and advances which were issued prior to 1st April, 2019.

15) 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.

16) The Company has not submitted its financial results for the quarter/period ended March 31, 2018 and subsequent periods within due time as required under regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Consequently, we are unable to comment on the monetary impact that may arise on the company for such or any other non-compliances. Additionally, the equity shares of the Company are also suspended from trading on the BSE Limited and National Stock Exchange of India Limited.

17) We also draw your attention to Note No-49 to the Financial Statements. The Resolution Professional has filed applications with Honble NCLT under section 19 of the Code seeking co-operation from promoters and erstwhile management of the company, for providing various data, primarily pertaining to pre-CIRP period and certain additional data that is required for preparing Financial Statements and data requested by various investigating agencies. In the absence of relevant data, financial have been prepared on the basis of available data on best effort basis.

Further, other deviations from the requirements of Companies Act, 2013 and Indian Accounting Standards have also been highlighted in this report. As such, the Company has not followed all of the standard accounting policies as prescribed in Note-1 to the Financial Statements on various matters and the Financial Statements have not been prepared in strict compliance with the requirements of relevant sections of the Companies Act, 2013 and Ind AS along with other rules and regulations. The overall financial impact, if any, is unascertainable.

We also draw your attention to Note no-50 and 51 of the Financial Statements, 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 Statements at this stage.

18) The Company has mentioned in Note No-54 of the Financial Statements that, considering the Company is required to be run as a going concern under CIRP, the Financial Statements have been prepared on going concern basis. However, we found Material uncertainty relating to Going Concern assumption applied to the Financial Statements. 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 reported at INR (16,825.72) Million 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. Thus, there exists a material uncertainty about the ability of the Company to continue as a “Going Concern. The same is dependent upon the outcome of SC Appeals and /or any other developments on the resolution process of Videocon Group Entities. 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. Further we are unable to comment on the remarks / explanation provided by the Company under Note No. 46 to the Financial Statements in relation to the Analytical Ratios.

For the matters mentioned in para (1) to (18) above, we are unable to determine the adjustments that are necessary in respect of Companys assets, liabilities as on Balance sheet date, income and expenses for the year, cash flow statement and related presentation and disclosures in Financial Statements so we disclaim to form any opinion on the financial statement.

We further inform that we were appointed as the Statutory Auditor of the company only on June 27, 2022 for conducting statutory audit from FY 2019-20. For the matters stated in the “Basis for Disclaimer of Opinion paragraph above”, we are not cognizant of matters that pertain to / transpired in earlier financial years (i.e. prior to FY 19-20) and hence cannot be implicated in ongoing proceedings for matters contained herein, which relate to earlier financial years.

Responsibilities of Management for the Financial Statements

The Companys management is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these Financial Statements that give a true and fair view of the state of affairs, profit and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. 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 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 Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The management is also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of Financial Statements

Our responsibility is to conduct an audit of the entitys Financial Statements in accordance with Standards on Auditing and to issue an auditors report. However, because of the matters described in the Basis for Disclaimer of Opinion paragraph of our report, we were not able to obtain sufficient appropriate audit evidence to provide an opinion on these Financial Statements.

Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Standards on Auditing (“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 Financial Statements.

We are independent of the entity in accordance with the ethical requirements in accordance with the requirements of the Code of Ethics issued by ICAI and the ethical requirements as prescribed under the laws and regulations applicable to the entity.

We further inform that we were appointed as the Statutory Auditor of the company only on June 27, 2022 for conducting statutory audit from FT 2019-20. For the matters stated in the “Basis for Disclaimer of Opinion paragraph above”, we are not cognizant of matters that pertain to / transpired in earlier financial years (i.e. prior to FY 19-20) and hence cannot be implicated in ongoing proceedings for matters contained herein, which relate to earlier financial years.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2020 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

a) As described in the Basis for Disclaimer of Opinion paragraph above, we have sought but were unable to obtain all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) Due to the possible effects of the matters described in the Basis for “Disclaimer Opinion” paragraph above and on account of relevant data not currently available with the Company for which applications have already been filed by the RP with NCLT under section 19 of the Code, we are unable to state whether 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 including Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the relevant books of accounts presently maintained by the Company and disclosed to us, subject to the observation highlighted in point (b) above. However, we are unable to comment if they present a true & fair view of the affairs of the Company.

d) Due to the possible effects of the matter described in the Basis for Disclaimer of Opinion paragraph above, we were unable to state whether the aforesaid Financial Statements comply with all the requirements of Indian Accounting Standards under section 133 of Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.

e) The matters described under the Basis for Disclaimer of Opinion paragraph and Material Uncertainty relating to Going Concern paragraph above in our opinion, may have an adverse effect on functioning of the Company and on the amounts disclosed in Financial Statements of the Company.

f) We have not received any written representation from the Directors as on March 31, 2024 with regard to disqualification from being appointed as a director in terms of Section 164(2) of the Act. Hence, we are unable to comment whether the directors are disqualified as on 31st March, 2024 from being appointed as a director in terms of Section 164 (2) of the Act.

g) With respect to the adequacy of the Internal Financial Control over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”.

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

(i) Due to the possible effects of the matter described in the Basis for Disclaimer of Opinion paragraph, we are unable to state whether the Company has disclosed complete impact of pending litigations on its financial position in the Financial Statements;

(ii) As per the information and explanation given to us, the Company did not have any long-term contracts including derivatives contracts for which there were any material foreseeable losses. (Refer note no.44).

(iii) As per the information and explanation given to us, the Company was not required to be transfer any amount to the Investor Education and Protection Fund during the year. However, for abundant clarification, some previous year balances lying with company continue to remain pending to be transferred.

(iv) (a) The Management has represented that, to the best of its knowledge and belief, as disclosed in the notes to accounts, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The Management has represented, that, to the best of its knowledge and belief, as disclosed in the notes to accounts, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf / of the ultimate Beneficiaries.

(c) Based on die audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

(v) (a) During the year No final dividend proposed, declared and paid by the Company in accordance with Section 123 of the Act, as applicable.

(b) During the year No interim dividend declared and paid by the Company until the date of this report is in compliance with Section 123 of the Act.

(c) The Board of Directors of the Company have neither proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting nor the dividend proposed is in accordance with section 123 of the Act, as applicable.

(vi) We have been informed that, the company has used an accounting software “SAP” for maintaining its books of account which has not a feature of recording Audit Trail (edit log) facility. So, we are unable to comment whether there were any instances of the audit trail feature been tampered or not during the year.

For KVA & Company	Vimal Kishore Agrawal
Chartered Accountants	Partner
Firms Registration No. 017771C	Membership No.510915
Place: New Delhi
Date: 08th August, 2024

ANNEXURE-A TO THE INDEPENDENT AUDITORS REPORT

The Annexure referred to in our report to the members of M/S VALUE INDUSTRIES LIMITED (” the Company”) for the year ended March 31, 2024. We report that:

(i) In respect of fixed assets:

a) (A) The Company has not maintained proper records showing full particulars, including quantitative details and situation of Property, Plant 8c Equipment. However, the Resolution Professional has explained that applications have already been filed with NCLT under section 19 of the Code seeking co-operation of the promoters / erstwhile management of the Company for providing the requisite data (incl. detailed fixed asset register).

(B) As per the Financial Statement, the Company does not have any intangible assets. Hence sub clause (B) of Paragraph 1 of the Order is not applicable

(b) We have not been given information regarding physical verification of Property, Plant & Equipment carried out if any, during the year by the Company. Hence, we are unable to comment as to whether there is any material discrepancies on physical verification.

(c) As per the information and explanation provided to us, i.e. holding confirmations from Trustee (SBICAP Trustee Company Ltd)/ copies of title deeds, immovable properties forming part of the financial statements are held in the name of the Company except for one immovable property having book value of INR 0.02 Million.

(d) As per information and explanations provided to us, the Company has not revalued any of its Property, Plant and Equipment (including right of-use assets) and intangible assets during the year.

(e) Considering the explanations provided by the Company under Note No. 45(i) of the Financial Statements, we are unable to comment whether any proceedings have been initiated or are pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

(ii) (a) (A) We have not been provided any reports pertaining to physical verification of inventories conducted during the year. Hence, no audit evidence is available according to SA-501. As such, we are unable to comment if the frequency of the physical verification of inventories is reasonable.

(B) We have not been provided any details pertaining to appointment of Valuer for verification of inventory and its valuation. Hence, we are unable to comment as to whether there is any material discrepancy noticed on physical verification which requires any adjustment in the books of accounts.

(b) As per information and explanation given to us, during the year, the Company has not been sanctioned any working capital limits in excess of five crore rupees, in aggregate, from banks or financial institutions on the basis of security of current assets.

(iii) As per the information and explanation given to us, the Company during the year has not granted any loans or advances, investment, guarantees, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register required to be maintained under Section 189 of the Act. Accordingly, paragraph 3(iii) (a) to (f) of the Order are not applicable.

(iv) In our opinion and according to the information and explanation given to us, the Company has not made any transaction during the year in violation of Section 185 and 186 of the Act, in respect of loans, investments, guarantees and security.

(v) According to the information and explanations given to us, the Company has not accepted any deposit during the period. Therefore, the provisions of clause 3 (v) of the Order are not applicable.

(vi) We have not been provided details of prescribed cost records required to be maintained by the company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended and prescribed by the Central Government under section 148(1) of the Companies Act, 2013, accordingly, we are unable to comment whether the company has maintained prescribed cost records.

(vii) (a) According to the information and explanations given to us, the Company was regular in depositing undisputed statutory dues payable during the year, including provident fund, employees state insurance, income tax, goods and service tax and other statutory dues with appropriate authorities wherever applicable. Further, according to the information and explanations given to us, undisputed arrears of statutory dues which were outstanding as on March 31, 2024 for a period of more than six months from the date they became payable and not paid till date (incl. dues in respect of period prior to CIRP commencement) are given below:

Name of the Dues	FY 2023-24
	Amount (Rs.in Million)
Tax Deducted at Source	0.12
Central Sales Tax	0.01
Value added tax	82.52
Entry Tax	3.73
Professional Tax	0.38
Provident Fund	7.97
ESIC	2.76

(b) According to the information and explanation given to us, details of dues of income tax, goods and service tax, sales tax, service tax, custom duty, excise duty, value added tax, cess which have not been deposited as on March 31, 2024 on account of disputes are given below:

Name of Statute	Nature of the Dues	1NR. in Million	Forum where dispute is pending
1. Customs Act, 1962	Custom	4.37	Commissioner
	Duty and Penalties	5.46	Asst. Commissioner
2. Central Excise Act, 1944	Excise	19.73	CESTAT
	Duty and Penalties	187.72	Commissioner (Appeals)
		2.81	Addl. Commissioner
		8.82	Deputy Commissioner
		0.49	Assistant Commissioner
3. Sales Tax Acts of various States	Sales Tax	3.57	Assistant Commissioner
		1.24	Deputy Commissioner
		0.46	Additional Commissioner
		48.17	Joint Commissioner
		927.44	Commissioner
4. Income Tax Act, 1961	Income Tax	17.60	CIT (Appeals)

(viii) According to the information and explanations given to us, the Company has not surrendered or disclosed any transactions not recorded in the books of account as Income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961).

(ix) A) According to the information and explanation given to us, we observed that the Company has defaulted in repayment of interest and principal amount of all loans to financial institutions and banks. The default runs into more than one year.

The Company has not borrowed from government and has not issued any debentures.

B) Considering Note 45(iv) of the financial statements, we are unable to comment if the Company is declared as a wilful defaulter by any bank or financial institution or other lender.

C) According to the information and explanations given to us, the Company has not taken any term loan during the year. Hence, the reporting under clause 3(ix)(c) of the Order is not applicable.

D) According to the information and explanations given to us, the Company has not raised any funds on short term basis during the year. Hence, the reporting under clause 3(ix)(d) of the Order is not applicable.

E) According to the information and explanations given to us, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures.

F) According to the information and explanations given to us, the Company has not raised loans during the year on the pledge of securities held in its subsidiaries, joint ventures or associate companies.

(x) A) According to the information and explanations given to us, the Company has not raised money by way of initial public offer or further public offer (including debt instruments) or term loans during the year.

B) During the year, the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully or partly or optionally) and hence reporting under clause 3(x)(b) of the Order is not applicable.

(xi) A) According to the information and explanations given to us, and on the basis of our examination of the records of the Company provided to us, no material fraud by the Company or any fraud on the Company by its officers or employees has been noticed or reported during the period.

B) No report under sub-section (12) of section 143 of the Companies Act has been filed by us in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors Sales, 2014 with the Central Government, from the date of appointment up to the date of this report.

C) As per the information and explanations given to us, the company has not received any whistle- blower complaints during the year.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the Order is not applicable.

(xiii) As explained in the Basis for “Disclaimer of Opinion” section of our main report, we are unable to comment whether the transactions during the year with the related parties were in compliance with Section 177 and 188 of the Companies Act, 2013.

(xiv) A) According to information and explanations given to us, the Company has not appointed an Internal Auditor during the year. However, we have been given to understand that the Company has established effective controls to monitor transactions undertaken post assumption of office of the Resolution Professional.

B) As no internal audit was conducted during the year, there is no internal audit report available for our consideration.

(xv) According to the information and explanation given to us and on the basis of our examination of the records of the Company, we observed that, the Company has not entered into any non-cash transactions with its directors or persons connected with them and hence provisions of section 192 of the Companies Act, 2013 are not applicable.

(xvi) A) In our opinion, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Therefore, the Clause (xvi) of (a) to (c) paragraph 3 of the Order is not applicable to the Company.

B) According to the information and explanation given to us and based on our examination of the records of the Company, there is no Core Investment Companies (CIC) in the group. Accordingly, provision of clause 3 (xvi)(d) of the Order are not applicable to the Company.

(xvii) As per information and explanation given to us the Company has incurred cash losses ofINR26.92 Million during the financial year and also incurred cash losses of INR 115.94 Million in the immediately preceding financial year. For the purpose of determination of cash losses, Finance cost has been considered as a non-cash item considering the explanation provided under note no- 29 to the financial statements.

(xviii) There has been no resignation of the statutory auditors of the company during the year.

(xix) With respect to capability of company of meeting its liabilities existing at the date of balance sheet (as and when they fall due within a period of one year from the balance sheet date), considering the Company is into CIRP, it remains subject to the outcome of CIRP and the provisions of Insolvency and Bankruptcy Code, 2016.

(xx) As per information and explanation given to us, there are no amounts required to be spent towards Corporate Social Responsibility (CSR) in compliance Section 135 of the Companies Act. Accordingly, reporting under clause 3(xx)(a) and (b) of the Order is not applicable for the year.

(xxi) As the Audit report is on Standalone Financial Statements, paragraph (xxi) of the Order is not applicable.

For KVA & Company	Vimal Kishore Agrawal
Chartered Accountants	Partner
Firms Registration No. 017771C	Membership No.510915
Place: New Delhi
Date: 08th August, 2024

ANNEXURE-B TO THE INDEPENDENT AUDITORS* REPORT

(Referred to in para 2 (g) under Report on other legal and regulatory requirement of our report of even date)

Report on internal financial control over financial reporting under clause (i) of sub-section 3 of section 143 of Companies Act 2013 (“the Act)

We have audited the internal financial control over financial reporting of VALUE INDUSTRIES LIMITED (“the company”) as of 31st March 2024 in conjunction with our audit of Financial Statements of the company for the year ended on that date.

Managements responsibility for internal financial controls

The companys management is responsible for establishing and maintaining internal financial controls based on internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on audit of internal financial controls over financial reporting issued by The Institute of Chartered Accountants of India (ICAI).These responsibilities include design and implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business including adherence to companys policies, the safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and the timely preparation of reliable financial information, as required under Companies Act, 2013.

Auditors responsibility

Our responsibility is to express an opinion on the companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the guidance note on audit of internal financial controls over financial reporting (the “Guidance Note”) Issued by The Institute of Chartered Accountants of India and the standards on Auditing prescribed under section 143(10) Of Companies Act 2013, to the extent applicable to an audit of internal financial controls. Those standards and Guidance Note require that we comply with ethical requirements and plan and perform the order to obtain reasonable Assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting includes obtaining understanding of internal financial controls over financial reporting and assessing the risk that material weaknesses exist, the and testing and evaluating the design and operating effectiveness of internal control based on Assessed risk. The procedures depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statement, due to fraud or error.

Meaning of internal financial controls over financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Financial Statements for external purposes in accordance with Generally Accepted Accounting Principles. A companys internal financial control over financial reporting includes those policies and procedures that

1. pertain to maintenance of records that, in reasonable details, accurately and fairly reflect the transactions and dispositions of asset of the company;

2. provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statement in accordance with Generally Accepted Accounting Principles and that receipts and expenditures of company are being made only in accordance with authorizations of Management of the company; and

3. Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent limitation of internal financial control over financial reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of Collusion or improper management oversight of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of the internal financial controls over financial reporting to future periods are subject to the risk that internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A ‘material weakness is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Companys annual or interim Financial Statements will not be prevented or detected on a timely basis.

Disclaimer of Opinion

Because of the significance of the matters described in the Basis for Disclaimer of Opinion paragraph below, we are unable to obtain sufficient appropriate audit evidence to provide a basis for our opinion whether the company had adequate interned financial controls over financial reporting and whether such internal financial controls were operating effectively as at March 31, 2024. Accordingly, we do not express an opinion on the companys financial controls over financial reporting.

Basis for Disclaimer of Opinion

For the reasons stated in our main report, i.e. "Basis for Disclaimer of Opinion” paragraph, we are unable to comment if the Company has an established system of internal control over financial reporting with regard to assessment of possible material adjustments that could arise/ may be required to be made to the recorded values in Financial Statements. Consequently, we are unable to obtain sufficient appropriate audit evidence so as to provide a basis for our opinion as to whether the Company had adequate internal financial controls over financial reporting and that whether such internal financial controls were operating effectively as at March 31, 2024.

We have considered the disclaimer reported above in determining the nature, timing, and extent of audit tests applied in our audit of the Ind AS Financial Statements of the Company for the year ended March 31, 2024, and the disclaimer has affected our opinion on the said Financial Statements of the Company and we have issued a Disclaimer of opinion on the Ind AS Financial Statements of the Company.

For KVA & Company	Vimal Kishore Agrawal
Chartered Accountants	Partner
Firms Registration No. 017771C	Membership No.510915
Place: New Delhi
Date: 08th August, 2024