We have audited the Financial Statements of MODIPON LIMITED
('the Company'), which comprise the Balance Sheet as at March
31,2025, the Statement of Profit and Loss for the year (including
Other Comprehensive Income), the Statement of Cash Flows
and the Statement of Changes in Equity for the year ended and
notes to the Financial Statements, including material accounting
policies and other explanatory information (hereinafter referred
to as "Financial Statements").

In our opinion and to the best of our information and according
to the explanations given to us, except for the effects of the
matter described in the Basis for Qualified Opinion section of our
report, the aforesaid financial statements give the information
required by the Companies Act, 2013 ("Act") in the manner so
required and give a true and fair view in conformity with the
Indian Accounting Standards prescribed under section 133 of
the Act read with the Companies (Indian Accounting Standards)
Rules, 2015, as amended, ("Ind AS") and other accounting
principles generally accepted in India, of the State of Affairs
of the Company as at March 31, 2025, the Loss and Total
Comprehensive Loss, Changes in Equity and its Cash Flows for
the year ended on that date.

Basis for Qualified Opinion

I. Balance confirmation certificates were not obtained by the
Company from creditors, loans and advances given/received,
house/shop security depositors, in-operative current
accounts with banks and loan account with Punjab National
Bank (PNB). Consequent adjustments required, if any, has
not been carried out in the financial results.

II. (a) The Company has not provided interest of R 1000.54

Lakhs up to March 31, 2008 on overdue amounts
payable to a supplier resulting in understatement of
liabilities and debit balance of reserve and surplus by R
1000.54 Lakhs each; and

(b) The amount of interest to be provided for in the books
of account for the period April 1, 2008 to March 31st,
2025 has not been ascertained.

III. The amount of interest to be provided for in the books of
account, if any, for the period April 1, 2007 to March 31,
2025 to Small and Micro Enterprise has not been ascertained.

IV. During the year ended March 31, 2009, the Company has
sold 65,743 sq.yds of its vacant land at Modi Nagar for R
1021.15 Lakhs (original cost R 1.95 Lakhs) for which the
approval of bank is pending.

V. During the year 2011-12, the Company has given physical
possession of its vacant 59 (46 as on March 31, 2015)
houses located at Modi Nagar, Uttar Pradesh to a lender i.e.,
Ashoka Mercantile Limited (AML), a related party, (balance
outstanding of loan taken from AML as on March 31,
2015 as per books of account: secured loan R 882.29 Lakhs
and unsecured loan R 1125.57 Lakhs) for use without any
charges/rent/security deposit and no lease rent agreement
has been entered into with AML. The Company contends
that the temporary possession of houses for use without
charges was given to AML as security only as the Company
was unable to repay the loans taken from AML.

VI. The Punjab National Bank (PNB) had approved one time
settlement of its outstanding dues of R 1900 lakhs vide its
approval letters dated April 02, 2014 and April 12, 2014
respectively. In terms of the settlement, OTS amount of
R 1710 lakhs (Net of upfront payment of R 190 lakhs) was
to be paid by the company in four quarterly installments
with interest during financial year 2014-15. However, the
company was able to manage the payment of R 630 lakhs up

to March 31, 2015 and at the request of the Company, PNB
condone the delay and revived the OTS vide its letter dated
July 02, 2015 requiring the Company to make payment of
residual OTS amount of R 1270 lakhs by March 31, 2016
and total interest on OTS payment @ 10.25% (simple) by
June 30, 2016. The Company has paid R 1270 lakhs up to
December 31st, 2018 along with interest of Rs 2,59,62,100/.
The company has already made provision of interest on
account of delayed payment of OTS of Rs 94,43,358/- in
their books up to 30th September 2018 and booked balance
amount of interest in the quarter ending 31 December 2018.

VII. (a) The Punjab National Bank has initiated the proceeding
against the company under section 7 of the Insolvency and
Bankruptcy Code, 2016 before the NCLT, Allahabad Bench
and other Proceeding before DRT-II and recovery Officer,
DRT- II, New Delhi due to non-fulfillment of oTs Terms/
conditions vide OTS letter dated July 02, 2015 issued by PNB.

Further as per Debts Recovery Tribunal-II, Delhi an order dated
30 July, 2018, has been passed in favor of the company and
directed PNB to accept R 65 lakhs as outstanding principal of
OTS plus R 2,59,62,100/- as interest @10.25% as per revived
OTS vide its letter dated July 02, 2015 on delayed payment
up to 15 March, 2018 which was later on accepted and paid
by the company in terms of the DRAT order.

During the pendency of the appeal, PNB has encashed
the said amount of R 65 Lacs towards principal OTS and
R 2,59,62,100/- towards interest in term of the order of Debts
Recovery Appellate Tribunal (DRAT), New Delhi. Further, the
DRAT has reserved the order on 27.12.2018 in the said
matter and not pronounced till the date of our reporting,
as a result the company has not considered any liability in
its books in addition to the dues already settled as per DRT
order dated 30 July, 2018.

During the pendency of order before DRAT, the PNB has
revived OTS vide letter dated 25.03.2019 against payment
of R 459.62 lacs on the following terms & conditions:

Terms & conditions:

1. The proceeds of FDRs amounting to R 65 lacs and
R 259.62 lacs kept with us will be appropriated
simultaneously on conveying approval of revival of OTS.

2. R 135 lacs will be deposited within one week of receipt
of this sanction letter.

3. The party to undertake to pay commercial tax liability as
demanded by the Commercial Tax Authority.

4. No Dues Certificate will be issued, Bank's charge on the
security/tittle deeds will be released only after receipt of
OTS amount in full and on clearance of commercial tax
liability as stated above. (Satisfactory proof/letter from
the competent authority in this regard to be submitted).

The company has already deposited balance of OTS
amount of R 65 lacs plus delayed period interest of R
259.62 lacs with the bank in terms of DRT & DRAT orders
and further R 135 lacs over and above original OTS
amount deposited by the company in terms of revived
OTS vide letter dated 25.03.2019 within one week of
receipt of letter.

In respect of commercial tax liability the company has
filed an appeal against the order of Commissioner of
Commercial Tax before Hon'ble High Court of Allahabad
through Punjab National Bank and the Court has
directed vide order dated 26.11.2018 that the operation
and effect of the impugned order dated 08.08.2018
passed by the Commercial Tax Tribunal, Ghaziabad in
Appeal no 1353 of 2013, shall remain stayed subject
to the applicant depositing 50% of the commercial
tax liability imposed on it and furnish security for the
balance amount other than cash or bank guarantee to
the satisfaction of the tribunal within a period of three
weeks from the date of direction.

The company deposited Commercial Tax of Rs 54.94 lacs
out of Commercial Tax liability of Rs 183.90 lacs along
with interest of Rs 3.07 lacs for the period starting
from 18.12.2018 to 02.05.2019 as on 03.05.2019 in
compliance with order dated 26.11.2018 of the Hon'ble
High Court of Allahabad and communicated the same to
PNB vide letter dated 03.05.19.

Further, PNB vide letter dated 04.05.2019 requested
the company to submit No Dues Certificate from tax
authorities after paying the commercial tax liability to
bank for compliance of OTS Sanction within 3 days
else OTS will be declared as failed. Since the company
failed to reply to the same, PNB vide letter dated
04.07.2019 informed that the tax authorities have
declared OTS revival as failed and PNB is resuming all
recoveries as usual. Further, DRAT allowed appeal of PNB
on 20.08.2019. The Company filed Writ Petition in the
Delhi High Court against order of the DRAT. The Hon'ble
Delhi High Court vide its order dated 24.10.2019, stayed
the DRAT and NCLT proceedings filed by the PNB till the
next date of hearing which was listed on 19th February,
2020. On 19th February, 2020 interim order dated 24th
October, 2019 was made absolute during the pendency
of the Writ Petition. The next date of hearing in the
matter is 20.08.2025. Further, NCLT matter has been
dismissed on 22.09.2023 due to non-appearance on
behalf of financial creditor (PNB), the matter has been
dismissed for non -prosecution.

(b) The outstanding liability in the books of the company
is higher than the OTS amount by R 183.90 lakhs and
in the absence of any documentary evidences from the
management as well as PNB, we are unable to quantify
the amount of interest on the amount of R183.90 lakhs;
the amount of R183.90 lakhs is over and above the loan
amount on account of the sales tax liability on PNB on
account of the auction held by the bank for old plant
and machinery of the company.

The above matter is subjudice before Hon'ble High Court
of Allahabad for further hearing.

VIII. The Commissioner Central Excise & Service Tax, Kamla Nehru
Nagar CGO, Complex 2 Ghaziabad vide its memorandum
order No.31/COMM/CX/GZB/2017-18 dated 31.01.2018 had
ordered for payment of

a. Amount of central excise duty of R 44,92,663/-

b. Amount of interest of R 6,56,116/-

c. Amount of penalty of R 6,56,116/-
for the period from 1994 to 1997.

The company has not made provision of the said amount
& further interest thereon in its books till 31st March,2025,
due to which profit is understated by R 66,16,146.19 plus
interest.

Further the company has filed appeal against the order of
Commissioner Central Excise & Service Tax, Kamla Nehru
Nagar CGO, Complex 2 Ghaziabad before custom excise &
service tax appellate tribunal, Allahabad.

IX. (a). The amounts paid by the Ashoka Mercantile Limited

(AML), a related party, to Abu Dhabi Commercial Bank
(ADCB) on account of One Time Settlement (OTS) of
dues of the bank was accounted for in the books of the
Company to the extent of OTS amount paid to the ADCB
by AML and the balance amount of R 153.92 Lakhs is
still lying unallocated under unsecured loans in view of
pending successful implementation of OTS of the dues
of PNB as the settlement of assigned dues with AML is
linked to the OTS of dues with PNB.

(b) The amount paid to Karnataka Bank by Ashoka
Mercantile Limited (AML), a related party, during the
year ended March 31, 2012, on account of OTS of
dues of the bank was accounted for in the books of
the Company to the extent of OTS amount paid to the
Karnataka Bank by AML and the balance amount of R
339.20 Lakhs is still lying unallocated under unsecured
loans in view of pending successful implementation o
OTS of the dues of PNB as the settlement of dues with
AML is linked to the OTS of dues with PNB.

(c) The part payment made to Bank of Baroda by Ashoka
Mercantile Limited (AML), a related party, during the yea
ended March 31,2013 on account of OTS of dues of the
bank was accounted for in the books of the company to
the extent of OTS amount paid to the Bank of Baroda
by AML and the Company and the balance amount of R
232.04 Lakhs is still lying unallocated under unsecurec
loans in view of pending successful implementation o
OTS of the dues of PNB as the settlement of dues with
AML is linked to the OTS of dues with PNB.

The effect if any, on the income/expenditure of the
company on final OTS with PNB cannot be ascertained.

X. The company has 1 5% redeemable cumulative preference
shares of Rs 100 each. Preference shares due for redemption
since 31st March 1996.

We conducted our audit of the financial statements in
accordance with the Standards on Auditing (SAs) specified
under section 143(10) of the Companies Act, 2013. Ou
responsibilities under those Standards are further described
in the Auditor's Responsibilities for the Audit of the Financia
Statements section of our report. We are independent of the
Company in accordance with the Code of Ethics issued by the
Institute of Chartered Accountants of India (ICAI) togethei
with the independence requirements that are relevant to
our audit of the financial statements under the provisions
of the Companies Act, 2013 and the Rules made thereunder
and we have fulfilled our other ethical responsibilities ir
accordance with these requirements and the ICAI's Code o
Ethics. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our audi
opinion on the financial statements.

Material Uncertainty Related to Going Concern

We draw attention to Note 35 in the financial statements, which
indicates that the financial statements of the Company for the
year ended March 31,2025 have not been prepared on a going
concern basis since the Company has closed its manufacturing
operations since May 19, 2007 (closure of factory w.e.f
September 8, 2007) on account of huge losses incurred and sale
of entire plant & machinery during the year ended March 31
2010. Our opinion is not qualified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professiona
judgment, were of most significance in our audit of the financia
statements of the current period. These matters were addressed
in the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do nol
provide a separate opinion on these matters. In addition to the
matters described in the Basis for Qualified Opinion section anc
Material Uncertainty Related to Going Concern section, we have
determined the matters described below to be the key audi
matters to be communicated in our report:

Information Other than the Financial Statements and Auditor's
Report thereon

The Company's management and Board of Directors are
responsible for the other information. The other information
comprises the information included in the Company's annual
report, but does not include the financial statements and our
auditors' report thereon.

Our opinion on the financial statements does not cover the
other information and we do not express any form of assurance
conclusion thereon.

In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that
there is a material misstatement of this other information; we
are required to report that fact. We have nothing to report in
this regard.

Management's Responsibilities for the Financial Statements

The Company's Board of Directors 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 financial position, financial performance including other
comprehensive income, changes in equity and cash flows of the
Company in accordance with the Ind AS and other accounting
principles generally accepted in India. 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 Company's ability to continue as
a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting
unless management either intends to liquidate the Company or
to cease operations, or has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing the
company's financial reporting process.

Auditor's Responsibilities for the Audit of the 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
auditor's 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 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.

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

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

• Obtain an understanding of internal control relevant
to the audit in order to design audit procedures that are
appropriate in the circumstances. Under section 143(3)
(i) of the Companies Act, 2013, we are also responsible
for expressing our opinion on whether the company has
adequate internal financial controls system in place and the
operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and related
disclosures made by management.

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

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

Materiality is the magnitude of misstatements in the financial
statements that, individually or in aggregate, makes it probable
that the economic decisions of a reasonably knowledgeable
user of the financial statements may be influenced. We consider
quantitative materiality and qualitative factors in (i) planning the
scope of our audit work and in evaluating the results of our work;
and (ii) to evaluate the effect of any identified misstatements in
the financial statements

We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.

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

From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the financial statements of the
current period and are therefore the key audit matters. We
describe these matters in our auditor's report unless law or
regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2020
("the Order") issued by the Central Government of India in
terms of sub-section (11) of section 143 of the Act, we give
in the Annexure A, a statement on the matters specified in
the paragraph 3 and 4 of the order.

2. As required by section 143(3) of the Act, based on our audit
we report that:

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

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

c. The Balance Sheet, the Statement of Profit and Loss
including Other Comprehensive Income, the Statement
of Changes in Equity and the Statement of Cash Flow
dealt with by this Report are in agreement with the
books of account.

d. In our opinion the aforesaid financial statements comply
with the IND AS section 133 of the Act.

e. On the basis of written representations received from
the directors as on March 31, 2025 taken on record
by the Board of Directors, none of the directors is
disqualified as on March 31,2025 from being appointed
as a director in terms of Section 164(2) of the Act.

f. With respect to the adequacy of the internal financial
controls over financial reporting of the Company and
the operating effectiveness of such controls, refer to our
separate Report in "Annexure B".

g. With respect to the matter to be included in the
Auditors' Report under section 197(16) of the Act:

In our opinion and according to the information and
explanations given to us, the remuneration paid by the
Company to its directors during the current year is in
accordance with the provisions of Section 197 of the
Act.

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

i) The Company has disclosed the impact of pending

litigations on its financial position in its financial
statements - Refer Note 33 to the financial
statements;

ii) The Company did not have any long-term contracts
including derivative contracts for which there were
any material losses;

iii) There were no amounts which were required to
be transferred, to the Investor Education and
Protection Fund by the company.

iv) A) The Management has represented that, to the
best of its knowledge and belief, 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, 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 the 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) The company has not declared or paid any dividend
during the year in contravention of the provision of
Section 123 of Companies Act, 2013.

vi) Based on our examination, which include test
checks, the company has used accounting software
for maintaining its books of account for the financial
year ended 31st March 2025 which do not has a
feature of recording audit trail (edit log) facility.

For B. M. Chatrath & Co. LLP

Chartered Accountants,
FRN: E300025

Sd/-

CA. Sunil Kumar Jha

Place : New Delhi Partner

Date : May 30, 2025 Membership No.543805

UDIN: 25543805BMJRGE6341