Videocon Industries Ltd

Dear Shareholders,

The Hon'ble National Company Law Tribunal, Mumbai Bench, ("NCLT')"), had vide its order dated June 06, 2018 admitted the application for the initiation of the corporate insolvency resolution process ("CIRP") of Videocon 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 Hon'ble 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 Twenty-Ninth Annual Report together with the Audited Accounts and Auditors' Report for the financial period ended on March 31,2019.

PERFORMANCE REVIEW

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

The revenue from operations for the year ended 31st March, 2019 stood at Rs. 9,065.97(Rs. in Million)) as compared to 28,398.61 (Rs. in Million)) for the previous year ending 31st March, 2018.

The loss before tax for the year ended 31st March, 2019 stood at Rs. 69,114.09 (Rs. in Million) as compared to loss of Rs. 58,401.55 (Rs. in Million)) for the year ending 31st March, 2018. The Loss after Tax stood at Rs. 67,607.55 (Rs. in Million) for the year ending 31st March, 2019 as compared to loss of Rs. 52,640.37 (Rs. in Million) for the previous year.

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 Standalone and Consolidated Financial Statements of the company for the Financial Year 2018-19 have been prepared as per Indian Accounting Standards.

OPERATIONS

• CONSUMER ELECTRONICS & HOME APPLIANCES:

During the period under review, the Company faced various challenges in both external and internal environment. Consequent to

commencement of CIRP under the Code, the sales were impacted drastically. Admission of Company into CIRP had a severe impact on the perceptions of the dealers/customers on account of uncertainty of the after sales services etc., forcing the Company to reduce the price drastically and/or offer additional discounts and incentives resulting in losses. There were persistent severe strains on the working capital and accordingly there was considerable decline in the level of operations of the company.

• OIL & GAS:

The Company has established its presence in Oil and Gas business in India and Overseas, directly and through its subsidiaries/joint ventures. The interest in the domestic Ravva block is directly held by Videocon Industries Limited while the Participating Interest in the overseas oil and gas assets is held through subsidiaries/joint ventures.

The original term of the Ravva product sharing contract was due to expire on October 27, 2019. After the balance sheet date, the production sharing contract was extended and, accordingly, the production sharing contract (PSC) is now valid effective 28th October, 2019, for the next 10 years. The extension will enable the joint venture partners to recover about 13 million barrels of oil equivalent (boe) of oil.

• TELECOM:

The Company is currently having National Long Distance (NLD) and International Long Distance (ILD) licenses. The Company is providing connectivity to corporate clients under NLD License.

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 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 auditors 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. 11,12,475/-. However, in absence of clarity consequent to commencement of CIRP, the Company couldn't 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 has kept all the unclaimed shares under abeyance/ stop and in process of dematerialization/ transfer of the said shares to Unclaimed Suspense Account - Shares. As at the end of year (31st March, 2019), 1,03,683 equity shares held by 24,031 equity shareholders were unclaimed. The voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares.

ISSUES/ALLOTMENT

During the year under review, the Company has not issued/ allotted any Equity Shares. As on the end of financial year, Foreign Currency Convertible Bonds (Bonds) amounting to US$ 75.20 Million which are due on December 31,2020, were outstanding.

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 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 arm's 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 Company's financial statements in accordance with the Indian Accounting Standards (Ind AS). However, in terms of Section 134 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.videoconindustriesltd.com/Documents/ Related%20Party%20Transaction%20Policy.pdf

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

As on March 31, 2019, your Company has 18 subsidiaries (including step down subsidiaries) namely, Electroworld Digital Solutions Limited (Formerly: Videocon International Electronics Limited), Jumbo Techno Services Private Limited, Pipavav Energy Private Limited, Prosperous Energy Private Limited, Senior Consulting Private Limited, Videocon Australia WA-388-P Limited, Videocon Brasil Petroleo Ltda., Videocon Easypay Private Limited (Formerly: Datacom Telecommunications Private Limited), Videocon Electronics (Shenzhen) Limited, Videocon Energy Brazil Limited, Videocon Energy Limited, Videocon Global Limited, Videocon Hydrocarbon Holdings Limited, Videocon Indonesia Nunukan Inc., Videocon JPDA 06-103 Limited, Videocon Mauritius Energy Limited, VOVL Limited (Formerly: Videocon Oil Ventures Limited) and Videocon Telecommunications Limited.

During the year, Middle East Appliances LLC (upto April 26, 2018), Videocon Brasil Ventures B.V. (upto December 27, 2018), Videocon Hydrocarbon Ventures B.V. (upto December 27, 2018), Videocon International Cooperatie U.A. (upto December 27, 2018) ceased to be the subsidiary of the Company.

The Joint Ventures of the Company are Videocon Infinity Infrastructures Private Limited and IBV Brasil Petroleo Limitada. The associate company of the Company as at the end of financial year is Radium Appliances Private Limited and VISPL LLP.

In accordance with Section 129(3) of the Companies Act, 2013, a statement containing the details of the subsidiaries (including step down subsidiaries) /joint ventures/associate companies including the details of performance and financial positions of each of the subsidiaries/joint ventures/ associates

are given in Form AOC-1 which is annexed to Financial Statement.

As per the provisions of the Companies Act, 2013, your Company has provided the Consolidated Financial Statements as on March 31, 2019. The Financial Statements of the subsidiaries/ joint ventures/ associate companies will also be available for inspection during the business hours at the Registered Office of your Company and the respective subsidiaries/ joint ventures/ associate companies.

The Annual Report of your Company does not contain full financial statements of the subsidiary companies. However, the Company shall make available the audited annual accounts and related information of the subsidiary companies, upon request by any Member of your Company and the same are displayed on the Company's website viz. www. videoconindustriesltd.com.

COMPANY'S POLICY ON DIRECTOR'S 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 '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 RESPONSIBILITYPOLICY

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

We are focusing on identifying and motivating the skills of the physically challenged youth and helping them to enhance them. This is based on the belief that growth and development are effective only when they result in wider access to opportunities and benefit a broader section of society.

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

Safety is an area of paramount importance in our Company. A well-defined occupational health and safety management system is in place to ensure the safety of employees, workforce as well as equipment and machinery. Our Company continues to exhibit a robust assurance towards Safety, Health and Environment during the period under review.

Apart from the health and safety measures to be adopted under various regulatory requirements, the following health & safety initiatives which were adopted in the past were continued to be under implementation in the year under review:

• Regular counseling and medical checkups to ensure fitness of its employees.

• Arrangements at manufacturing plants for ensuring safety and absence of risks to health in connection with the use, handling, storage and transport of articles and substances.

• Established a CCTV control room in respective shop floors areas for the close monitoring of safety and Emergency purpose.

• Fire extinguisher (Ball type) to attend immediate small fire in case of emergency.

• Fire Demonstration kit and training to all employees and workmen.

• Display of all Emergency Exit and Evacuation plan in auto glow board at shop floors.

• Installed safe loader instrument to EOT crane at Moulding division to avoid crane accident at shop floor area.

• Additional stopper provided in LOT crane to ensure crane will halt in specified location.

• Installation of LPG gas detector at paint shop in LPG gas bank area.

• Defined the fire points at high hazard area (Zone-0).

• Provision of Safety equipment's in campus such as PG gas detector, Road Convex mirror, Fire blanket, Fire Bucket, First aid box and Breathing Apparatus set.

• Strictly adhere to hot work permit system with availability of security guard for close monitoring.

• Adequate provision of Ambulance Van along with suitable medical accessories to reduce response time during emergency situation & human injury.

• Displayed cautionary signs at high hazardous area to warn workers about imminent hazard dealt at site.

• Enhance road safety - displayed road convex mirror, speed limit board and guidelines for visitors.

• Emergency evacuation plans with location of fire extinguisher are displayed at the entrance of the building.

• Visualization in the campus to access assembly point, first aid box &emergency exit door.

• Availability of well-equipped Occupational Health Center (OHC) in case of emergency.

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:

• Usage of Effluent treatment Plant (ETP) & Sewage Treatment Plant (STP) and using treated water for gardening and flush.

• Ensuring that all washrooms are connected to STP.

• Installation of ETP for paint shop waste water treatment.

• Hazardous waste is sent to authorized parties for disposal.

• Established the Chemical Lab for Waste Water Testing purpose in campus as per Central Pollution Control Board norms.

• Regular Air & Water Monitoring as per (NAAQS - 2010) Standards.

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 (LODR), your Company has established a whistle blower/vigil mechanism for its employees and Directors to report their genuine concerns. The same has been uploaded on the website of the Company and can be accessed at http://www. videoconindustriesltd.com/Documents/Whistle%20Blower%20policy.pdf

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. This whole exercise is helping us in bringing efficiency in our operations, building controls etc., 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 period 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 . videoconindustriesltd.com/Documents/Familiarisation%20Program%20 for%20independent%20directors.pdf

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.

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). The Global Depository Receipts (GDRs) and Foreign Currency Convertible Bonds (FCCBs) issued by your Company are listed on the Bourse de Luxembourg and Singapore Exchange Securities Trading Limited respectively.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report for the year under review as stipulated under Regulation 34(2)(e) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 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.

CONSOLIDATED FINANCIAL STATEMENTS

As stipulated by Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Consolidated Financial Statements have been prepared by the Company in accordance with the applicable Accounting Standards. The Audited Consolidated Financial Statements together with Auditors' Report form part of the Annual Report.

Pursuant to the provisions of Section 136 of the Companies Act, 2013, the financial statements of the subsidiary, associates and joint venture companies will be kept for inspection by the shareholders at the Registered Office of the Company during working hours for a period of 21 days before the date of the Annual General Meeting. The Company shall provide the copy of the financial statements of its subsidiaries, associates and joint venture companies to the shareholders upon their request. The audited accounts are also available on the website of the Company viz. www. videoconindustriesltd.com

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 Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the Stock Exchanges in India, 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 27th Annual General Meeting held on December 22, 2017 until the conclusion of the 32nd Annual General Meeting of the Company.

Pursuant to the Notification issued by the Ministry of Corporate Affairs on May 7, 2018, amending section 139 of the Companies Act, 2013, the mandatory requirement for ratification of appointment of Auditors by the Members at every Annual General Meeting has been omitted. Accordingly, the Directors are not seeking approval of members by passing a resolution, for ratification of Auditors.

AUDIT REPORT:

The Statutory Auditors of the Company have submitted Auditors' Report, which have certain Qualifications on the Standalone and Consolidated Financial Statements for the period ended on March 31,2019.

Management's Explanation to the Auditors' Qualifications: Standalone:

a) The Company has made investments, given advances and has trade receivables aggregating to Rs. 181,386.43 Million in subsidiary/ group/affiliate companies, namely Electroworld Digital Solutions Limited, Videocon Telecommunications Limited, VOVL Limited, Value Industries Limited, Trend Electronics Limited, KAIL Limited, Millennium Appliances India Limited, Applicomp (India) Limited, Sky Appliances Limited, Techno Electronics Limited, Century Appliances Limited, PE Electronics Limited, Techno Kart India Limited, Evans Fraser and Co. (India) Limited, CE India Limited and Planet M Retail Limited, which have been referred to NCLT under the Code by their lenders and subsquently been admitted into CIRP. The actual amount of loss on these investments, advances and trade receivables are not ascertainable till the completion of resolution process of these subsidiary/group/entities.

b) The manufacturing activity of Glass Shell division which manufactured panels and funnels used in Colour Picture Tube of Colour Television, has been suspended from July, 2017 due to poor demand. According to management, there are indication of impairment loss. However, the Company has not assessed or reviewed the plant and machinery and other fixed assets related to the Glass Shell division for impairment. In respect of other fixed assets, management has not carried out any assessment of impairment, and the impairment loss, if any, has not been ascertained.

c) 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.

d) The Company had given 40,000 equity shares of Asian Electronics Limited, 7,000 equity shares of Lumax Industries Limited and 3,00,000 equity shares of Man Industries (India) Limited, shown in Non-Current Investments amounting to Rs. 32.69 Million as a security for the loans and advances taken from Nippon Investments & Finance Company Private Limited. These shares are not held by the Company in its own name. The Company is in the process of obtaining the confirmation of the outstanding balance of loans and advances of Rs. 15.00 Million from and the holding of shares by Nippon Investments & Finance Company Private Limited.

e) Pursuant to commencement of CIRP of the Company under the Code, there are various claims submitted by the financial creditors, operational creditors, employees and other creditors to the Resolution Professional. 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 nonreceipts of claims for operational and financial creditors.

f) During the year, the Company has entered into agreement in April, 2018 with Mr. Said Salehal Hinai, for sale of Middle East Appliances LLC, a subsidiary company for RO 50,000 (equivalent to Rs. 8.60 Million). Out of which RO 25,000 (equivalent to Rs. 4.30 Million) had been received and balance RO 25,000 (equivalent to Rs. 4.30 Million) are not yet received. Further, as per the Foreign Exchange Management Act, 1999, the said balance of RO 25,000 (equivalent to Rs. 4.30 Million) should have been received within 90 days. The Company is making efforts for recovering the same.

g) Material uncertainty relating to Going Concern:

The Company has been referred to NCLT under the Code as amended, and there are persistent severe strains on the working capital 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 continue to incur losses. Since the CIRP is currently in progress, as per the Code, it is required that the Company be managed as going concern during CIRP. Accordingly, the standalone financial statements are continued to be prepared on going concern basis. The Company continues the process for ascertaining the realisable value for its assets (including inventories and trade receivables) and necessary adjustments to the carrying value will be affected in due course, the impact of which is not ascertainable at this stage.

Management's Explanation to the Auditors' Qualifications:

Consolidated:

a) The Company and its 3 subsidiaries viz. VTL, EDSL and VOVL have made investments, given advances and have trade receivables aggregating to Rs. 124,215.69 Million in group/ affiliate companies, namely Value Industries Limited, Trend Electronics Limited, KAIL Limited, Millennium Appliances India Limited, Applicomp (India) Limited, Sky Appliances Limited, Techno Electronics Limited, Century Appliances Limited, PE Electronics Limited, Techno Kart India Limited, Evans Fraser and Co. (India) Limited, CE India Limited, Planet M Retail Limited, Dome-Bell Electronics (India) Private Limited and Nippon Investments & Finance Company Private Limited which have been referred to National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016 by their lenders and subsquently been admitted into 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/affiliate entities.

b) The manufacturing activity of Glass Shell division which manufactured panels and funnels used in Colour Picture Tube of Colour Television, has been suspended from July, 2017 due to poor demand. According to management, there are indication of impairment loss. However, the Company has not assessed or reviewed the plant and machinery and other fixed assets related to the Glass Shell division for impairment. In respect of other fixed assets, management has not carried out any assessment of impairment, and the impairment loss, if any, has not been ascertained.

c) 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.

d) The Company had given 40,000 equity shares of Asian Electronics Limited, 7,000 equity shares of Lumax Industries Limited and 300,000 equity shares of Man Industries (India) Limited, shown in Non-Current Investments amounting to Rs. 32.69 Million as a security for the loans and advances taken from Nippon Investments & Finance Company Private Limited. These shares are not held by the Company in its own name. The Company is in the process of obtaining the confirmation

of the outstanding balance of loans and advances of Rs. 15.00 Million from and the holding of shares by Nippon Investments & Finance Company Private Limited

e) Pursuant to commencement of CIRP of the Company under the Code, there are various claims submitted by the financial creditors, operational creditors, employees and other creditors to the Resolution Professional. 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 nonreceipts of claims for operational and financial creditors.

f) During the year, the Company has entered into agreement in April, 2018 with Mr. Said Salehal Hinai, for sale of Middle East Appliances LLC, a subsidiary company for RO 50,000 (equivalent to Rs. 8.60 Million). Out of which RO 25,000 (equivalent to Rs. 4.30 Million) had been received and balance RO 25,000 (equivalent to Rs. 4.30 Million) are not yet received. Further, as per the Foreign Exchange Management Act, 1999, the said balance of RO 25,000 (equivalent to Rs. 4.30 Million) should have been received within 90 days. The Company is making efforts for recovering the same.

g) In respect of auditors of subsidiary VTL have given adverse opinion, the explanation of management is as under:

i. Consequent to VTL's agreement dated March 16, 2016 with Bharti Airtel Limited for trading the right to use 2x5 MHz spectrum allocated to it in the 6 circles, GSM Network Assets including Assets held for Sale of Rs. 8,077.70 Million has been shown under "Current Assets" as ‘Disposal group-assets held for Sale'. VTL is in the process of ascertaining the impairment loss, if any, on its fixed assets including capital work-in-progress. The requisite accounting effect, if any, will be given upon such ascertainment/determination.

ii. VTL had given advances of Rs. 12,860.00 Million to Quadrant Televentures Limited (QTL) for the proposed acquisition of indefeasible Rights of Use (IRU) the UAS License of QTL in Punjab circle, subject to regulatory approvals. The same has been converted into Unsecured Zero Coupon Compulsory Convertible Debentures of face value Rs. 1000/- each (CCD) (Convertible into 2% Non-Cumulative, Non-Convertible, Redeemable Preference Shares). VTL is in process of ascertaining the fair value of Unsecured Zero Coupon Compulsory Convertible Debentures and its accounting impact, if any, will be given upon such fair valuation.

iii. VTL has not recognised the notional guarantee income as per Ind AS 109 for corporate guarantee given to ultimate holding company. The notional guarantee income is determined with reference to the guarantee commission which a third party would have charged in an arm's length arrangement.

iv. During the year, VTL has incurred a net loss of Rs. 5,915.29 Million resulting into accumulated losses of Rs. 72,937.87 Million as at March 31, 2019. VTL has also stopped its International Long Distance (ILD) Business. Though VTL has huge accumulated losses, its net worth as on March 31,2019 is positive and the management of VTL is confident of continuing its commercial operations in the National Long Distance (NLD) Business. Accordingly, the financial statements of VTL have been prepared on a going concern basis.

h) The Department of Telecommunications (DoT) had raised demand notice to VTL for license fee, spectrum usage charges and electronic magnetic field (EMF) penalty from the financial year 2007-08 to financial year 2015-16 aggregating to Rs. 10,301.00 Million and the same are under reconciliation. No provision has been made for the same in the consolidated financial statements.

All the telecom operators had challenged the judgement of TDSAT on AGR matter before Hon'ble Supreme Court of India. That vide its judgement dated October 24, 2019, Hon'ble Supreme Court dismissed the telecom operators appeal in favour of DoT. Now DoT shall recalculate the demands and shall raise demands for payment of license fees based on AGR.

i) The subsidiary Videocon Mauritius Energy Limited (VMEL) holds investments of Rs. 17,719.54 Million classified as unquoted investments in equity instruments - financial assets, which have been recognised at cost, and have not been carried at fair value. The financial statement for the period have not been audited. However, the auditors of VMEL for the previous year have given disclaimer of opinion as it has not been possible to estimate the financial effects of not carrying these investments at fair value.

j) Material uncertainty relating to Going Concern:

The Company and its 3 subsidiaries namely VTL, EDSL and VOVL have been referred to NCLT under the Codeas amended, and there are persistent severe strains on the working capital 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 continue to incur losses.. Further, VOVL and its subsidiaries and the joint venture are in exploration/appraisal stage and have spent significant amounts on acquisitions, explorations and evaluation costs and have liabilities on this account. 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 consolidated financial statements are continued to be prepared on going concern basis. The Company continues the process for ascertaining the realisable value for its assets (including inventories and trade receivables) and necessary adjustments to the carrying value will be effected in due course, the impact of which is not ascertainable at this stage.

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 Directors of the Company have accorded its approval for appointment of B. Sen & Co. Cost Accountants (Membership No. 6324), Aurangabad, which was taken on record by the Resolution Professional, as the Cost Auditors of the Company, to conduct audit of Cost Accounting Records maintained by the Company for the financial year commencing from April 1, 2019 to March 31, 2020 in respect of the products covered as below:

1. Electricals or Electronic Machinery

2. Other Machinery and Mechanical Appliances

3. Petroleum Products

In compliance with the provisions, the remuneration payable to the Cost Auditor has to be ratified by the members of the Company. 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 commencing from April 1,2019 to March 31,2020.

Pursuant to the provisions of the Companies Act, 2013 read with Rule 6 (3A) of the Companies (Cost Records and Audit) Rules, 2014, the Company approved the appointment of B. Sen & Co. Cost Accountants (Membership No. 6324), Aurangabad, as the Cost Auditor of the Company to conduct the audit of the cost accounting records of the Company for the financial year commencing from April 1, 2018 to March 31, 2019 due to the casual vacancy of previous auditor i.e. Jayant B Galande at a remuneration of Rs. 75,000/- (Rupees Seventy Five Thousand Only) excluding applicable Goods and Services Tax, reimbursement of travelling and other out of pocket expenses at actual. In terms of the provisions of Section 148(3) of the

Companies Act, 2013 read with Rule 14 of the Companies (Audit & Auditors) Rules, 2014, the remuneration payable to the Cost Auditors as fixed by the Directors of the Company on the recommendation of the Audit Committee, which was taken on record by the Resolution Professional, and the same shall be subsequently ratified by the shareholders of the Company at a general body meeting.

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 has not yet filed the Cost Audit Report for the financial year ended on March 31, 2018 and March 31, 2019. The delay in filing the cost audit report for March 31, 2018 was on account of technical difficulties. The delay in filing the cost audit report for March 31,2019 was on account of non-availability of required data in timely manner for completion of cost audit and consequently non-updation of the prescribed cost records pursuant to the Companies (Cost Records and Audit)Rules, 2014, as amended and prescribe by the Central Government under section 148(1) of the Companies Act, 2013 due to resignation of the qualified and experienced staff handling the said activity and various practical difficulties. The Company has now updated the cost audit records and is in the process of getting the requisite cost audit completed through the Cost Auditor B Sen & Co., Cost Accountants (Membership No. 6324), Aurangabad. Once the cost audit is completed, the cost audit report shall be placed before the Directors/Resolution Professional for approval/taking on record the same.

3. SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT:

Section 204 of the Companies Act, 2013 inter-alia requires every listed company to annex to its Board's 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 Chief Executive Officer and 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, DIR-12 and others were on account of technical issues.

• The Company couldn't transfer (I) the unpaid/unclaimed dividend to IEPF, declared at the 22nd Annual General Meeting held on 29th June, 2011; (ii) the shares in respect of which dividend is unclaimed or unpaid for 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 RTA due to non-payment.

• Chief financial officer of the Company has been appointed after the financial year under review.

• The inadequate disclosure in the Report of the Board of Directors cannot be made good, however, abundant precaution is taken in the current years Report of the Board of Directors.

• The delay in filing of E Form AOC 4 XBRL, MGT 7 was on account of technical difficulty and procedural issues.

• The delay in compliance and/or non-compliance of the provisions of Regulations 13(3), 33(3), 47(3), 31, 29, intimation of cessation of the KMP, 34(1), 27(2), 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 Securities and Exchange Board of India ( Listing Obligations and Disclosure

Requirements) Regulations, 2015 were on account of technical difficulties, volumnious activities under CIRP, lack of resources inter-alia including qualified staff having resigned pre-post CIRP.

• In terms of the Code, the outstanding dues pertaining to pre- CIRP period are to be filed as claims and will be treated as per the provisions of IBC and accordingly payment is not made even though the same is pertaining to Listing Fees.

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

• In respect of observation related to disqualification of directors, the Directors submit that the put option clause mentioned in the FCCB contract was incorporated under duress and accordingly no amount has yet become due and payable and the Company had filed claim challenging the action of the bondholders. Thus, according to the Company, directors are not disqualified as the matter is subjudice.

• In view of inadequacy of profits at the subsidiary level and in order to ensure that subsidiaries remain a going concern, the holding company need to financially support its subsidiary at all times and accordingly the Company has not charged interest on the loans granted to subsidiaries.

• The Company couldn't maintained the prescribed cost auditor records 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 due to resignation of the qualified and experienced staff handling the said activity and on account of various practical difficulties.

• The other observations or adverse remarks are selfexplanatory

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

No fraud/misconduct was 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 Company's 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.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return pursuant to the provisions of Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is available on the website of the Company and shall be made available to the members on request.

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 Company's 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.

ACKNOWLEDGEMENT

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

For VIDEOCON INDUSTRIES LIMITED V. N. DHOOT

CHAIRMAN, MANAGING DIRECTOR AND CEO

DIN:00092450

Place: Mumbai

Date: 03rd December 2019