The Directors are delighted to present the Twenty-Third Annual Report
 of the Company together with the Audited Accounts and Auditors Report
 for the period ended 31st December, 2010.
 
 FINANCIAL RESULTS AND OPERATIONS
 
 The performance of the Company for the period ended 31st December,
 2010, is summarized hereunder:
 
                                                        (Rs. Million)
 
                                            15 months      12 months
                                                ended          ended
 Particulars
                                       31st December, 30th September,
                                                 2010            2009
 
 Net Sales                                  17,136.27       12,041.78
 
 Other Income                                   97.09           19.80
 
 Total Income                               17,233.36       12,061.58
 
 Profit before Interest, 
 Depreciation and Tax                        2,064.83        1,455.76
 
 Interest 792.20 578.94
 
 Depreciation, Amortisation and Impairment   1,042.24          802.07
 
 Profit before Tax                             230.39           74.75
 
 Provision for Taxation                         69.85           25.34
 
 Profit for the period/year                    160.54           49.41
 
 
 The total income of the Company, during this period, increased to Rs.
 17,233.36 Million as against Rs. 12,061.58 Million for the previous
 financial year ended on 30th September, 2009. Correspondingly, the
 Profit for the period increased to Rs. 160.54 Million as against Rs.
 49.41 Million for the year ended on 30th September, 2009.
 
 EXTENSION OF FINANCIAL YEAR
 
 The Financial Year of the Company was extended by a period of three
 months. Accordingly, the Financial Year under review comprises of a
 period of fifteen months commencing from 1st October, 2009 and ending
 on 31st December, 2010. Subsequent Financial Years shall be from 1st
 January to 31st December.
 
 DIVIDEND
 
 Considering the financial performance of the Company and Companys
 policy to pay sustainable dividend, your Directors are pleased to
 recommend a dividend of Rs. 1.00 per equity share, (Previous year, Rs.
 1.00 per equity share), on the equity shares of the Company for the
 period ended 31st December, 2010, for approval of shareholders of the
 Company.
 
 TRANSFER TO RESERVE
 
 Your Directors propose to transfer an amount of Rs. 20.00 million to
 the General Reserve and an amount of Rs. 6.15 million to Capital
 Redemption Reserve. After appropriations, the balance remaining of the
 Profit and Loss Account amounting to Rs. 849.12 million is proposed to
 be carried to the Balance Sheet.
 
 FIXED DEPOSIT
 
 During the period under review, the Company has not accepted/renewed
 any deposit within the meaning of Section 58A of the Companies Act,
 1956 and as such, no amount of principal/interest was outstanding as on
 the balance sheet date.
 
 PARTICULARS OF EMPLOYEES
 
 The Company does not have any employee whose particulars are required
 to be furnished under Section 217(2A) of the Companies Act, 1956, read
 with the Companies (Particulars of Employees) Rules, 1975, as amended
 from time to time.
 
 FOREIGN EXCHANGE EARNINGS AND OUTGO
 
 During the period under review, Foreign Exchange outflow amounted to
 Rs. 1,203.24 million as against Rs. 1,077.05 million for the previous
 year.  There were no Foreign Exchange Earnings during the current and
 previous period/year under review.
 
 CONSERVATION OF ENERGY
 
 Your Company believes in sustainable consumption of natural resources
 and the conservation of energy remains a key focus area at all times.
 The Company continues its efforts for the betterment of the
 environment.  The Company gives utmost importance to the conservation
 of energy as a part of its Corporate Social Responsibility and is
 committed to produce eco-friendly products and adopt eco-friendly
 practices in all its areas of operations.
 
 The Company has undertaken several initiatives to reduce energy
 consumptions at different levels. The implementation progress of these
 initiatives, led by In-House Team of Experts, is reported at regular
 intervals. The In-House Team submits its findings on various energy
 consumption centers highlighting the measures taken for conservation of
 energy and their implementation status, at scheduled intervals, for
 management consideration. Further corrective measures are taken as
 appropriate.
 
 Key Energy Conservation initiatives taken, during the period under
 review, by the Company are outlined as under:
 
 - Reduction of fuel consumption;
 
 - Installation of Natural Ventilators in the plant for exhaust in
 balance areas;
 
 - Auto shut-off of air conditioners and other equipments during lunch
 breaks and during shift change;
 
 - Replacement of conventional tube lights by CFL tube lights, to save
 energy; and
 
 - Preventive maintenance of various equipments to keep them in good
 condition.
 
 As a result, there is a reduction in maintenance cost, machine downtime
 and thereby savings in unit consumption which has helped in reducing
 the overall cost of production.
 
 RESEARCH AND DEVELOPMENT AND TECHNOLOGY ABSORPTION
 
 The future of any business depends upon its ability to upgrade existing
 products and innovate new products by continuously performing research
 and development activities and finding ways to blend in the latest
 technology. Your Company understands the role of Research and
 Development (R & D) activities in the areas in which it operates. It is
 the need of the hour to provide modernized technologies at affordable
 prices, so as to sustain competitive environment.
 
 The R & D Centre of the Company works towards achievement of this goal.
 At the R & D Centre, new innovative and quality products are developed
 to provide our customers with better value for their money.  The
 In-House Team of experts is committed towards developing new versions
 of products, improved process of manufacturing various parts and
 assembling the same.
 
 The R & D Centre of the Company is focused towards the following:
 
 - To provide effective support and assurance to manufacturing plants
 and businesses.
 
 - To balance technology sourcing by a flexible strategy of smart
 buying, fast customization and flagship development of key
 technologies.
 
 - To improve technical productivity on a continuous basis.
 
 - To create a high performance environment to promote innovation.
 
 - To identify and support various opportunities in technological
 development to add value across the businesses of the Company.
 
 - To cut down the cost of production.
 
 The R & D initiatives undertaken by the Company have resulted in
 maximizing product yield; improved products quality; optimization of
 efficiency and reliability of plant processes by using advanced tools
 and technology developed by the team and higher consumer satisfaction.
 
 During the period under review, the R & D expenses amounted to Rs.
 10.90 million representing 0.06% of turnover.
 
 Future Plan of Action:
 
 1.  Intensify the R & D efforts in quality improvement and energy
 conservation products.
 
 2.  Develop cost effective intelligent home appliances solutions,
 particularly for Air Conditioners, for optimizing energy cost.
 
 3.  Design and develop technologies that give higher reliability.
 
 4.  Extend the technology to other related areas like manufacturing of
 components which are procured from market.
 
 INFORMATION TECHNOLOGY
 
 Information Technology (IT) provides a number of options for data
 analysis; processing and storage enabling business decision making; and
 productivity. Your Company understands the importance of IT and has
 implemented mySAP, a customized ERP programme. The ERP
 
 system supports the essential functions of the business processes and
 operations efficiently and manages financials, operations and human
 resource management. These segments revolve around automated processes
 eliminating repetition of tasks; loss due to human error and risks
 involved due to negligence of timely upgrades. The sophistication of
 the modern work stations and general working conditions has become
 better due to the development of Information Technology.
 
 HEALTH AND SAFETY
 
 Your Company believes in effective healthcare of its employees; and
 building healthy working atmosphere in all areas of work. Health
 promotional activities like regular checkups, timely preventions
 against contagious diseases are part of the employees yearly health
 agenda at the Company. Many health care facilities are also extended to
 employees family members.
 
 Safe manufacturing practices are critical part of Companys Overall
 Value System. Training and checks are conducted frequently during the
 period.
 
 The Company further emphasizes on providing a healthy, safe and
 motivational environment ensuring the development of the employee with
 that of the Company.
 
 INDUSTRIAL RELATIONS
 
 Your Company continues to enjoy the support from the workforce.
 Industrial Relations were cordial during the period under review.
 
 DIRECTORS
 
 The Board of Directors of the Company is duly constituted and there is
 no change in the composition of the Board of Directors of the Company,
 during the period under review.
 
 Pursuant to the provisions of the Companies Act, 1956 and in terms of
 the Articles of Association of the Company, Mr. Subhash S. Dayama and
 Mr. Naveen B. Mandhana, Directors, retire by rotation at the ensuing
 Annual General Meeting and, being eligible, have offered themselves for
 re-appointment. The Board recommends re-appointment of Mr.  Subhash S.
 Dayama and Mr. Naveen B. Mandhana.
 
 Pursuant to the provisions of the Clause 49 of the Listing Agreement, a
 brief profile of the Directors proposed to be re-appointed forms part
 of the Corporate Governance Report.
 
 AUDITORS
 
 M/s. Khandelwal Jain & Co., Chartered Accountants, Mumbai and M/s.
 Kadam & Co., Chartered Accountants, Ahmednagar, Auditors of the
 Company, retire at the conclusion of ensuing Annual General Meeting and
 being eligible, have offered themselves for re-appointment. Your
 Directors recommend their re-appointment at the ensuing Annual General
 Meeting.
 
 The Company has received certificates from the said Auditors to the
 effect that their re-appointment, if made, would be within the limits
 prescribed under Section 224(1B) of the Companies Act, 1956.
 
 AUDITORS REPORT
 
 The Auditors Report is unqualified. The notes to Accounts, referred to
 in the Auditors Report, are self-explanatory and therefore, do not
 call for further clarifications under Section 217(3) of the Companies
 Act, 1956.
 
 AUDIT COMMITTEE
 
 The Company has constituted the Audit Committee, pursuant to the
 provisions of Section 292A of the Companies Act, 1956 and provisions of
 the Listing Agreement. The composition, scope and powers of Audit
 Committee together with details of meetings held during the period
 under review forms part of Corporate Governance Report.
 
 SUBSIDIARY
 
 The Company does not have any subsidiary.
 
 CASH FLOW STATEMENT
 
 The Cash Flow Statement for the financial period ended 31st December,
 2010, in conformity with the provisions of Clause 32 of the Listing
 Agreement with the Stock Exchange(s), is annexed hereto.
 
 MANAGEMENT DISCUSSION AND ANALYSIS
 
 A detailed review of performance and future prospects is included in
 the section ‘Management Discussion and Analysis of the Annual Report.
 
 CORPORATE GOVERNANCE REPORT
 
 Your Company believes in practicing highest standards of governance in
 all business activities that it carries. It considers Corporate
 Governance as one of the most important instrument enabling in
 discharging its economic and social responsibilities.
 
 A separate section on Corporate Governance together with a Compliance
 Certificate from the Statutory Auditors of the Company forms part of
 this Annual Report.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 The Audited Accounts for the period under review are in conformity with
 the requirements of the Companies Act, 1956 and the Accounting
 Standards. The Financial Statements refect fairly the form and
 substances of transactions carried out; and reasonably present the
 Companys financial condition and results of operations. Your Directors
 confirm:
 
 a) that in the preparation of the Annual Accounts, the applicable
 accounting standards have been followed along with proper explanations
 relating to material departures, if any;
 
 b) that the accounting policies selected have been applied
 consistently; and judgements and estimates are made that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the Company as at 31st December, 2010 and of the profit of the
 Company for the period ended on that date;
 
 c) that proper and sufficient care has been taken 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 frauds and other irregularities; and
 
 d) that the Annual Accounts of the Company have been prepared on ‘going
 concern basis.
 
 APPRECIATION
 
 Your Directors record their grateful appreciation for the
 encouragement, assistance, co-operation and consistent support received
 from Members, Government Authorities, Banks, Financial Institutions,
 Business Partners and Customers. We also thank them for the trust they
 reposed in the Management and wish to thank all employees for their
 commitment and contributions.
 
 The Directors would also like to thank all stakeholders for the
 continued confidence and trust placed by them with the Company.
 
                              For and on behalf of Board of Directors
                                             VALUE INDUSTRIES LIMITED
 
                                         V. N. DHOOT   N. B. MANDHANA
                                            Director         Director
 
 Place : Mumbai
 Date  : 26th May, 2011