Modern Insulators Ltd.की ऑडीटर रिपोर्ट

Mar 31, 2025

We have audited the accompanying Standalone Financial Statements of Modern
Insulators Limited (the ''Company'') which comprise the Balance Sheet as at 31
March 2025, the Statement of Profit and Loss (including Other Comprehensive
Income), the Statement of Cash Flows and the Statement of Changes in Equity
for the year then ended, and notes to the financial statements, including a summary
of the significant accounting policies and other explanatory information
(hereinafter referred to as the ''Standalone Financial Statements'').

In our opinion and to the best of our information and according to the explanations
given to us, except for the effect of the matters described in "Basis for Qualified
Opinion” section of our report, the aforesaid standalone financial statements,
give the information required by the Companies Act, 2013 (the ''Act'') in the
manner so required and give a true and fair view in conformity with the accounting
principles generally accepted in India including Indian Accounting Standards
(Ind AS) specified under section 133 of the Act, of the state of affairs of the
Company as at 31 March 2025, its profit (including Other Comprehensive
Income), its cash flows and the changes in equity for the year ended on that
date.

Basis for Qualified Opinion

Provision for taxation including interest to the extent of estimated Rs.1915.17
lacs for the year ended 31 March 2025 (Previous Year Rs.2209.77 lacs; upto the

year Rs.11844.19 lacs) has not been made in accounts in view of the proposed
amalgamation under the provisions of Companies Act, 2013. (Refer note no.
35(iv)(a))

We conducted our audit in accordance with the Standards on Auditing specified
under section 143(10) of the Act. Our responsibilities under those standards are
further described in the "Auditor''s Responsibilities for the Audit of the Standalone
Financial 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'') together with the ethical requirements that are
relevant to our audit of the financial statements under the provisions of the Act
and the rules made there under and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the ICAI''s Code of
Ethics. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified opinion on the standalone financial
statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of
most significance in our audit of the standalone financial statements for the year
ended 31 March 2025. These matters were addressed in the context of our audit
of the standalone financial statements as a whole and in forming our opinion
thereon, and we do not provide a separate opinion, on these matters.

In addition to what has been stated in the "Basis for Qualified Opinion" section,
we have determined the matters described below to be the key audit matters to
be communicated in our report.

Key Audit Matters	How our audit addressed the Key Audit Matter
Measurement, presentation and disclosure of allowance for Expected Credit Losses (ECL) on trade receivables	Our audit procedures included, but were not limited to the following:
• The Company is required to recognize allowance for ECL on trade receivables due to the credit risks associated with each individual trade receivable. • Management determines the allowance for ECL on trade receivables by reviewing customers ageing profile, historical loss adjusted to reflect current and estimated future economic conditions, credit history and suit filed cases for additional allowance. • The determination of allowance for ECL is subjective and requires management to make judgements and assumptions, hence this is considered as key audit matter. • Refer note no. 1, 1A and 8 to the standalone financial statements.	• Tested the effectiveness of Company''s controls with respect to (i) development of methodology for allowance for expected credit losses, (ii) completeness and accuracy of the information used and (iii) computation of allowance for expected credit losses. • Tested sample of the data used in the model to the underlying accounting records. • Evaluated the ECL model calculations, agreeing the data inputs and checking the mathematical accuracy of the calculations. • Assessed the key inputs and assumptions used • Assessed whether the disclosures in the financial statements are adequate.

Information other than the Standalone Financial Statements and Auditor’s
Report thereon

The Company''s Board of Directors and Management is responsible for the other
information. The other information comprises the information included in the
Company''s annual report, but does not include the standalone financial
statements, consolidated financial statements and our auditor''s reports thereon.
Our opinion on the standalone 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 standalone financial statements, our
responsibility is to read the other information and, in doing so, consider whether
such other information is materially inconsistent with the standalone financial
statements or our knowledge obtained during the course of our 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 Responsibility for the Standalone Financial Statements
The accompanying standalone financial statements have been approved by the
Company''s Board of Directors. The Company''s Board of Directors and
Management is responsible for the matters stated in section 134(5) of the Act
with respect to the preparation and presentation of these financial statements
that give a true and fair view of the financial position, financial performance,
cash flows and changes in equity of the Company in accordance with the
accounting principles generally accepted in India, including the Ind AS prescribed
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 of 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 standalone financial statements, Board of Directors and
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 Board of Directors and
Management either intends to liquidate the Company or to cease operations, or
has no realistic alternative but to do so.

The Board of Directors and Management are also responsible for overseeing the
Company''s financial reporting process.

Auditor’s Responsibilities for the Audit of the Standalone 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 Standards on Auditing 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 Standards on Auditing, 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 financial controls relevant to the audit in
order to design audit procedures that are appropriate in the circumstances.
Under section 143(3)(i) of the Act, we are also responsible for expressing our
opinion on whether the Company has adequate internal financial controls
with reference to financial statements 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 the
Management.

• Conclude on the appropriateness of Board of Directors and 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 upto 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.

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 for the year ended 31 March 2025 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
As required by the Companies (Auditor''s Report) Order, 2020 ("the Order")
issued by the Central Government of India in terms of section 143(11) of the
Companies Act, 2013 and on the basis of such checks of the books and records
of the company as we considered appropriate and according to the information
and explanations given to us, we give in the Annexure A, a statement on the
matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
As required by section 143(3) of the Act, 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 purposes 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 Standalone Balance Sheet, the Statement of Profit and Loss including
Other Comprehensive Income, the Statement of Cash Flows and the Statement
of Changes in Equity dealt with by this Report are in agreement with the
books of account;

d) Except for the effects of the matter described in the "Basis for Qualified
Opinion" section, in our opinion, the aforesaid financial statements comply
with the Ind AS specified under section 133 of the Act;

e) On the basis of written representations received from the directors and taken
on record by the Board of Directors, none of the directors is disqualified as
on 31 March 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 with reference
to financial statements of the Company and the operating effectiveness of
such controls under clause (i) of sub-section 3 of section 143 of the Companies
Act, 2013, refer to our report in Annexure B;

g) With respect to the other matters to be included in the Auditor''s Report in
accordance with the requirements of section 197(16) of the Act, in our opinion
and to the best of our information and according to the explanations given to
us, the remuneration paid / provided by the Company to its directors during
the 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 standalone financial statements. (Refer note no. 39)

ii) The Company has made provision, as required under the applicable law
or Ind AS for material foreseeable losses, if any, on long term contracts
including derivative contracts. (Refer note no. 52)

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, as disclosed in note no. 51(v), 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 to 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 note no. 51(vi), 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 to 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 performed, 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 sub
clause (a) and (b) above, contain any material misstatement.

v) The Company has not declared or paid any dividend during the year ended
31 March 2025.

vi) Based on our examination, which included test checks, except for the
exception mentioned below, the Company has used accounting software
for maintaining its books of accounts for the year ended 31 March 2025,
which have a feature of recording audit trail (edit log) facility and the
same has operated throughout the year for all relevant transactions recorded
in the software. Further during the course of our audit, we did not come
across any instance of the audit trail feature being tampered with and the
audit trail has been preserved by the Company as per the statutory
requirements other than the exception mentioned below:

One unit (separate segment) of the company has used such accounting software
for maintaining books of accounts for the year ended 31 March 2025, which
does not have a feature of recording audit trail (edit log) facility and consequently
we are unable to report whether the audit trail facility has been operated and
maintained throughout the year for all relevant transactions recorded in the
software or if the audit trail feature has been tampered with or the audit trail has
been preserved by the Company as per the statutory requirements. (Refer note
no. 53)

For R B Verma & Associates
Chartered Accountants
Firm Registration No. 012650C

Rajesh Verma
Partner

Place - Abu Road Membership No. 404029

Date - 28th May, 2025 UDIN - 25404029BMOTOY9896

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Mar 31, 2024

We have audited the accompanying Standalone Financial Statements of Modern Insulators Limited (the ‘Company’) which comprise the Balance Sheet as at 31 March 2024, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and notes to the financial statements, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as the ‘Standalone Financial Statements’).

In our opinion and to the best of our information and according to the explanations given to us, except for the effect of the matters described in “Basis for Qualified Opinion” section of our report, the aforesaid standalone financial statements, give the information required by the Companies Act, 2013 (the ‘Act’) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including Indian Accounting Standards (Ind AS) specified under section 133 of the Act, of the state of affairs of the Company as at 31 March 2024, its profit (including Other Comprehensive Income), its cash flows and the changes in equity for the year ended on that date.

Basis for Qualified Opinion

Provision for taxation including interest estimated at Rs.2209.77 lacs for the year ended 31 March 2024 (Previous Year Rs.1762.36 lacs; upto the year Rs.9929.02 lacs) has not been made in accounts in view of the proposed amalgamation under the provisions of Companies Act, 2013. (Refer note no. 34(iv)(a))

We conducted our audit in accordance with the Standards on Auditing specified under section 143( 10) of the Act. Our responsibilities under those standards are further described in the “Auditor’s Responsibilities for the Audit of the Standalone Financial 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’) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules made thereunder and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the year ended 31 March 2024. These matters were addressed in the context of our audit of the standalone financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion, on these matters. In addition to what has been stated in the “Basis for Qualified Opinion” section, we have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matters	How our audit addressed the Key Audit Matter
Measurement, presentation and disclosure of allowance for Expected Credit Losses (ECL) on trade receivables	Our audit procedures included, but were not limited to the following:
• The Company is required to recognize allowance for ECL on trade receivables due to the credit risks associated with each individual trade receivable. • Management determines the allowance for ECL on trade receivables by reviewing customers ageing profile, historical loss adjusted to reflect current and estimated future economic conditions, credit history and suit filed cases for additional allowance. • The determination of allowance for ECL is subjective and requires management to make judgements and assumptions, hence this is considered as key audit matter. • Refer note no. 1, 1A and 8 to the standalone financial statements.	• Tested effectiveness of controls with respect to (i) development of methodology for allowance for expected credit losses, (ii) completeness and accuracy of the information used and (iii) computation of allowance for expected credit losses. • Tested sample of the data used in the model to the underlying accounting records. • Evaluated the ECL model calculations, agreeing the data inputs and checking the mathematical accuracy of the calculations. • Assessed the key inputs and assumptions used • Assessed whether the disclosures in the financial statements are adequate.

Information other than the Standalone Financial Statements and Auditor’s Report thereon

The Company’s Board of Directors / Management is responsible for the other information. The other information comprises the information included in the Company’s annual report, but does not include the standalone and consolidated financial statements and our auditor’s reports thereon.

Our opinion on the standalone 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 standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our 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 Responsibility for the Standalone Financial Statements

The accompanying standalone financial statements have been approved by the Company’s Board of Directors. The Company’s Board of Directors / Management is responsible for the matters stated in section 134(5) of the Act with respect to the preparation and presentation of these financial statements that give a true and fair view of the financial position, financial performance, cash flows and changes in equity of the Company in

accordance with the accounting principles generally accepted in India, including the 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 of 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 standalone financial statements, Board of Directors / 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 Board of Directors / Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors / Management are also responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Standalone 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 Standards on Auditing 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 Standards on Auditing, 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 financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143 (3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements 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 the Management.

• Conclude on the appropriateness of Board of Directors / 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 upto 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.

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 for the year ended 31 March 2024 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

As required by the Companies (Auditor’s Report) Order, 2020 (“the Order”) issued by the Central Government of India in terms of section 143(11) of

the Companies Act, 2013 and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

As required by section 143(3) of the Act, 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 purposes 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 Standalone Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flows and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

d) Except for the effects of the matter described in the “Basis for Qualified Opinion” section, in our opinion, the aforesaid financial statements comply with the Ind AS specified under section 133 of the Act;

e) On the basis of written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2024, 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 with reference to financial statements of the Company and the operating effectiveness of such controls under clause (i) of sub-section 3 of section 143 of the Companies Act, 2013, refer to our report in Annexure B;

g) With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of section 197(16) of the Act, in our opinion and to the best of our information and according to the explanations given to us, the remuneration paid / provided by the Company to its directors during the 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 standalone financial statements. (Refer note no. 38)

ii) The Company has made provision, as required under the applicable law or Ind AS for material foreseeable losses, if any, on long term contracts including derivative contracts. (Refer note no. 51)

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, as disclosed in note no. 50(v), 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 to 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 note no. 50(vi), 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 to 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 performed, 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 (a) and (b) above, contain any material misstatement.

v) The Company has not declared or paid any dividend during the year ended 31 March 2024.

vi) Based on our examination, which included test checks, except for the exception mentioned below, the Company has used accounting software for maintaining its books of accounts for the year ended 31 March 2024, which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further during the course of our audit, we did not come across any instance of the audit trail feature being tampered with other than the exception mentioned below:

One unit (separate segment) of the company has used such accounting software for maintaining books of accounts for the year ended 31 March 2024, which does not have a feature of recording audit trail (edit log) facility and consequently we are unable to report whether the audit trail facility has been operated and maintained throughout the year for all relevant transactions recorded in the software or if the audit trail feature has been tampered with.

As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from 01 April 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial year ended 31 March 31 2024. (Refer note no. 52)

For R B Verma & Associates

Chartered Accountants Firm Registration No. 012650C

Rajesh Verma

Partner

Place - Abu Road Membership No. 404029

Date - 30th May, 2024 UDIN - 24404029BKHHYH4002

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Mar 31, 2023

Modern Insulators Limited

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

We have audited the accompanying Standalone Financial Statements of Modern Insulators Limited (the ‘Company’) which comprise the Balance Sheet as at 31 March 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and notes to the financial statements, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as the ‘Standalone Financial Statements’).

In our opinion and to the best of our information and according to the explanations given to us, except for the effect of the matters described in “Basis for Qualified Opinion” section of our report, the aforesaid standalone financial statements, give the information required by the Companies Act, 2013 (the ‘Act’) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including Indian Accounting Standards (Ind AS) specified under section 133 of the Act, of the state of affairs of the Company as at 31 March 2023, its profit (including Other Comprehensive Income), its cash flows and the changes in equity for the year ended on that date.

Basis for Qualified Opinion

Provision for taxation including interest estimated at Rs.1762.36 Lacs for

the year ended 31 March 2023 (Previous Year Rs.1306.15 Lacs; upto the year Rs.7719.25 Lacs) has not been made in accounts in view of the proposed amalgamation under the provisions of Companies Act, 2013. (Refer note no. 33(iv)(a))

We conducted our audit in accordance with the Standards on Auditing specified under section 143( 10) of the Act. Our responsibilities under those standards are further described in the “Auditor’s Responsibilities for the Audit of the Standalone Financial 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’) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules made thereunder and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the year ended 31 March 2023. These matters were addressed in the context of our audit of the standalone financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion, on these matters. In addition to what has been stated in the “Basis for Qualified Opinion” section, we have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matters	How our audit addressed the Key Audit Matter
Measurement, presentation and disclosure of allowance for Expected Credit Losses (ECL) on trade receivables	Our audit procedures included, but were not limited to the following:
• The Company is required to recognize allowance for ECL on trade receivables due to the credit risks associated with each individual trade receivable. • Management determines the allowance for ECL on trade receivables by reviewing customers ageing profile, historical loss adjusted to reflect current and estimated future economic conditions, credit history and suit filed cases for additional allowance. • The determination of allowance for ECL is subjective and requires management to make judgements and assumptions, hence this is considered as key audit matter. Refer note no. 1, 1A and 7 to the consolidated financial statements.	• Tested effectiveness of controls with respect to (i) development of methodology for allowance for expected credit losses, (ii) completeness and accuracy of the information used and (iii) computation of allowance for expected credit losses. • Tested sample of the data used in the model to the underlying accounting records. • Evaluated the ECL model calculations, agreeing the data inputs and checking the mathematical accuracy of the calculations. • Assessed the key inputs and assumptions used • Assessed whether the disclosures in the financial statements are adequate.

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

The Company’s Board of Directors / Management is responsible for the other information. The other information comprises the information included in the Company’s annual report, but does not include the standalone and consolidated financial statements and our auditor’s reports thereon.

Our opinion on the standalone 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 standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our 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 Responsibility for the Standalone Financial Statements

The accompanying standalone financial statements have been approved by the Company’s Board of Directors. The Company’s Board of Directors / Management is responsible for the matters stated in section 134(5) of the Act with respect to the preparation and presentation of these financial statements that give a true and fair view of the financial position, financial

performance, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the 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 of 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 standalone financial statements, Board of Directors / 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 Board of Directors / Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors / Management are also responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Standalone 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 Standards on Auditing 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 Standards on Auditing, 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 financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements 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 the Management.

• Conclude on the appropriateness of Board of Directors / 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 upto 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.

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 for the year ended 31 March 2023 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

As required by the Companies (Auditor’s Report) Order, 2020 (“the Order”) issued by the Central Government of India in terms of section 143(11) of the Companies Act, 2013 and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

As required by section 143(3) of the Act, 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 purposes 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 Standalone Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flows and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

d) Except for the effects of the matter described in the “Basis for Qualified Opinion” section, in our opinion, the aforesaid financial statements comply with the Ind AS specified under section 133 of the Act;

e) On the basis of written representations received from the directors as on 31 March 2023 and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2023, 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 with reference to financial statements of the company and the operating effectiveness of such controls under clause (i) of sub-section 3 of section 143 of the Companies Act, 2013, refer to our report in Annexure B;

g) With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of section 197(16) of the Act, in our opinion and to the best of our information and according to the explanations given to us, the remuneration paid / provided by the Company to its directors 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 standalone financial statements. (Refer note no. 37)

ii) The Company has made provision, as required under the applicable law or Ind AS for material foreseeable losses, if any, on long term contracts including derivative contracts. (Refer note no. 50)

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, as disclosed in note no. 49(v), 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 note no. 49(vi), 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 performed, 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 (a) and (b) above, contain any material misstatement. v) Since the Company has not declared or paid any dividend during the year ended 31 March 2023, the question of commenting upon the same does not arise.

vi) The proviso to rule 3(1) of the Companies (Accounts) Rule 2014, for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company only w.e.f. 01 April 2023, and accordingly the reporting under rule 11(g) of the Companies (Audit and Auditors) Rule 2014, is not applicable for the financial year ended 31 March 2023.

For R B Verma & Associates

Chartered Accountants Firm Registration No. 012650C

Rajesh Verma

Partner

Place - Abu Road Membership No. 404029

Date - 29th May, 2023 UDIN - 23404029BGXOLD6619

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Mar 31, 2014

We have audited the accompanying financial statements of Modem Insulators Ltd. ("the Company"), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India including Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control 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.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Basis for Qualified Opinion

(a) Provision for taxation (including interest) estimated at Rs. 885.79 lacs for current year (upto the year T 7148.07 lacs) has not been made in accounts, in view of proposed amalgamation proceedings awaiting approvals. Meanwhile Income Tax department has completed assessments for Assessment Year 2008-09, 2009-10 & 2011-12 wherein substantive orders have been passed allowing losses pertaining to proposed amalgamation and at the same time protective assessment orders have been made (presuming that no amalgamation had taken place) with demand of Rs. 2710.22 lacs which shall be effective if the amalgamation scheme is not sanctioned. The department had also completed assessment for the Assessment Year 2010-11 and had raised demand of Rs. 961.47 lacs in respect of disallowance of losses pertaining to proposed amalgamation pending approval from concerned authorities; the company has filed appeal against the said demand before CIT (Appeals).

(b) Balances of Trade Payables & Trade Receivables are subject to reconciliations /confirmations.

(c) The company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid/ payable under this Act have not been given.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effect of the matters described in "Basis for Qualified opinion" paragraph, the aforesaid financial statements, give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

(b) In the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

(c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to Note No. 25 to the financial statements pertaining to exceptional item. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of Section 227(4A) of the Act, and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, we report that:

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


(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) Except for the effect of the matters described in the "Basis for Qualified Opinion paragraph, in our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement, dealt with by this report, comply with the Accounting Standards referred to in section 211 (3C) of the Act, read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013;

(e) On the basis of the written representations received from, the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of Section 274(l)(g) of the Act.

Referred to in the report of even date of the Auditors to members of MODERN INSULATORS LIMITED.

(i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets except furniture & fixtures for which detailed records are not maintained.

(b) As per information and explanations given to us, most of the fixed assets have been physically verified during the year by management in accordance with a phased programme of verification at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) During the year, the company has not disposed off substantial part of the fixed assets.

(ii) (a) As explained to us, the inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) According to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) On the basis of our examination of the records of inventory, we are of the opinion that the company is maintaining proper records of inventories. As explained to us, the discrepancies noticed on physical verification between the physical stocks and the book records were not material.

(iii) (a) The company had given loans to two subsidiaries. In respect of the said loans, the maximum amount outstanding at any time during the year was Rs. 3620 lacs and the year end balance isRs. 1300 lacs (Previous yearRs. 4200 lacs & Rs. 3620 lacs respectively). The said loan is without interest and principal amount is repayable on demand.

(b) The company has given interest-free loan/advance to a company covered under section 301 of companies Act, 1956 in view of proposed amalgamation awaiting approvals. Maximum amount outstanding during the year was Rs. 3326.95 lacs and the year end balance is Rs. 2715.95 lacs (previous yearRs. 2789.85 lacs & Rs. 2245.15 lacs respectively).

(c) The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of clauses 4(iii)(f) and 4(iii)(g) of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for purchases of inventory, fixed assets and for the sale of goods. On the basis of our examination of the books and records of the Company and according to the information and explanations given to us, we have neither come across, nor have we been informed of any continuing failure to correct major weakness in the aforesaid internal control system.

(v) a) Based on audit procedures applied by us and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section, b) In our opinion and according to the information and explanations given to us, there are no transactions made in pursuance of such contracts or arrangements, referred to in section 301 of Companies Act 1956, exceeding Rupees Five lacs in respect of each party during the year.

(vi) The Company has not accepted any deposits from the public during the year.

(vii) In our opinion, the internal audit carried out during the year commensurate with the size of the company and the nature of its business.

(viii) We have broadly reviewed the cost records maintained by the Company pursuant the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209( 1 )(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to detotmvxve, wh&dvex wi aaouate or complete.

(ix) (a) According to the records of the company, the company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, service tax, sales-tax, wealth tax, custom duty, excise duty and other statutory dues applicable to it and no undisputed statutory dues as noted above is outstanding for a period of more than six months from the date it became payable. The company has notpaid/provided income tax (refer comments under the Head "Basis for Qualified Opinion" in Auditors'' Report and Note No.31 of Financial Statement).

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of Income tax, sales tax, excise duty and Service Tax etc. as at 31st March, 2014 which have not been deposited on account of dispute, are as follows:

Name of the Statute Nature of dues Amount

( Rs. in lacs)

Central Sales Tax Act CST and VAT 231.82 1956 and RV Act 2003

115.72 15.48

Income Tax Act 1961 Income Tax 961.47*

Central Excise Act Excise Duty & 99.69 1944 Service Tax

6.51

91.09







Central Excise Act 1944

Name of the Statute Period to Forum where which the the dispute is amount pending relates

Central Sales Tax Act 1956 and RV Act 2003 2007- 08 Rajasthan Tax Board, Ajmer

2008- 09 Rajasthart Tax Board, Ajmer

2009- 10 Assistant Commissionei & 2011-12 Commercial Taxes, Pal

Income Tax Act 1961 2009-10 CIT (Appeals), Jaipur

Central Excise Act 1944 Various Central Excise and years from Service Tax Appellate 2005-06 Tribunal, Delhi to 2010-11

2012-13 Commissioner Central Excise (Appeals), Jaipur

2004-05 to Additional 2009-10 Commissioner, Central Excise, Jaipur Joint Commissioner Central Excise, Jodhpui

* Refer Note No. 31 of Financial Statement.

(x) The Company does not have accumulated losses as at the end of the financial year and it has not incurred any cash losses during the financial year covered by our audit and the immediately preceding financial year,

(xi) Based on our audit and as per information and explanations given by the management, there has been no default in repayment of dues to any financial institution or bank or debenture holders during the year.

(xii) Based on our examination of books of account and information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The provisions of any special statutes applicable to chit fund, nidhi or mutual benefit fund/society are not applicable to the company.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments and hence requirement of para 4(xiv) is not applicable.

(xv) As per information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) The company has not taken any fresh term loan during the year under review.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we'' report that no funds raised on short-term basis have been used for long-term investment.

(xviii) No allotment of shares has been made by the company during the year.

(xix) The company has not issued any debenture during the year covered by audit.

(xx) During the year the company has not raised any money by way of public issue.

(xxi) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the Management.

For B.L. VERM A & CO.

(Formerly known as S.S. ICothari & Co.)

Chartered Accountants (Firm Registration No. 001064C)

(B.L. VERMA)

Place : Jaipur PARTNER

Date : 19th June, 2014 (Membership No. 10900)

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Mar 31, 2012

1. We have audited the attached Balance Sheet of MODERN INSULATORS LIMITED as at 31 st March' 2012' the Statement of Profit and Loss and Cash Flow Statement of the Company for the year ended on that date annexed hereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on a test basis' evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management' as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by Companies (Auditor's Report) Order' 2003 as amended by Companies (Auditor's Report) (Amendment) Order' 2004' issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act' 1956' we give in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Further to our comments in the annexure referred to in paragraph 3 above' we report that:

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

(ii) In our opinion' proper books of account' as required by law' have been kept by the Company so far as appears from our examination of those books.

(iii) The Balance Sheet' Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account.

(iv) In our opinion' the Balance Sheet' Statement of Profit and Loss and Cash Flow Statement dealt with by this report' comply with the applicable Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act' 1956.

(v) (a) Balances of Trade Receivables and Trade Payables are subject to reconciliations/confirmations. (NoteNos. 8&14)

(b) The Company has not received information from vendors regarding their status under the Micro' Small and Medium Enterprises Development Act 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid/payable under this Act have not been given. (Note No.8)

(c) Provisionfor taxation (including interest etc.)estimated at f 680.16 lacs for current year (upto the year Rs. 4640.13 lacs) has not been made and Debenture Redemption Reserve amounting to f 5.80 lacs has not been created' in view of proposed amalgamation proceedings awaiting approvals. Meanwhile Income Tax Department has completed assessment for Assessment Years 2008-09 & 2009-10 and demand of Rs. 1611.16 lacs has been raised in respect of disallowance of losses pertaining to proposed amalgamation pending approval from concerned authorities. However' the Company filed appeals against the said demand and CIT (Appeals) has directed the Assessing Officer to make substantive assessment order (allowing losses pertaining to proposed amalgamation) as well as protective assessment order (presuming that no amalgamation had taken place) and further held that in case if the amalgamation scheme is not sanctioned then the protective assessment order shall prevail over the substantive order. Order of Assessing Officer giving appeal effect is awaited. (Note No.29)

(vi) On the basis of written representations received from the directors as on 31st March' 2012 and taken on record by the Board of Directors' none of the directors is disqualified as on 31 st March' 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of Companies Act' 1956.

(vii) In our opinion and to the best of our information and according to the explanations given to us' the said accounts read together with the significant Accounting Policies' notes thereon and subject to our comments in para (v) above' give the information required by the Companies Act' 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of Balance Sheet' of the state of affairs of the Company as at 31st March' 2012.

(b) In the case of Statement of Profit and Loss of the profit of the Company for the year ended on that date.

(c) In the case of Cash Flow Statement' of the cash flows for the year ended on that date.

ANNEXURE FORMING PART OF THE AUDITORS' REPORT

Referred to in the report of even date of the Auditors to members of MODERN INSULATORS LIMITED.

(i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets except furniture & fixtures for which detailed records are not maintained.

(b) As per information and explanations given to us' most of the fixed assets have been physically verified during the year by management in accordance with a phased programme of verification at reasonable intervals. According to the information and explanations given to us' no material discrepancies were noticed on such verification.

(c) During the year' the company has not disposed off substantial part of the fixed assets.

(ii) (a) As explained to us' the inventories have been physically verified during the year by the management. In our opinion' the frequency of verification is reasonable.

(b) According to the information and explanations given to us' the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) On the basis of our examination of the records of inventory' we are of the opinion that the company is maintaining proper records of inventories. As explained to us' the discrepancies noticed on physical verification between the physical stocks and the book records were not material.

(iii) (a) The company had given loans to two subsidiaries. In respect of the said loans' the maximum amount outstanding at any time during the year was Rs. 4500 lacs and the year end balance is Rs. 4200 lacs (Previous year Rs. 4750 lacs & Rs. 4500 lacs respectively). The said loans are without interest and principal amounts are repayable on demand.

(b) The company has given interest-free loan/advance ofRs. 2245.15 lacs to a company covered under section 301 of Companies Act' 1956 in view of proposed amalgamation awaiting approvals. Maximum amount outstanding during the year was Rs. 2245.15 lacs and the year end balance was X 2245.15 lacs (previous period Rs. 1945.61 lacs & Rs. 1945.61 lacs respectively).

(c) The Company has not taken any loans' secured or unsecured from companies' firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly' the provisions of clauses 4(iii)(f) and 4(iii)(g) of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us' there are adequate internal control procedures commensurate with the size of the company and the nature of its business for purchases of inventory' fixed assets and for the sale of goods. During the course of our audit' we have not observed any major weakness in internal controls.

(v) (a) Based on audit procedures applied by us and according to the information and explanations given to us' the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section. (b) In our opinion and according to the information and explanations given to us' there are no transactions made in pursuance of such contracts or arrangements' referred to in section 301 of Companies Act 1956' exceeding Rupees Five lacs in respect of each party during the year.

(vi) The Company has not accepted any deposits from the public during the year.

(vii) In our opinion' the internal audit carried out during the year commensurates with the size of the company and the nature of its business.

(viii) We have broadly reviewed the cost records maintained by the Company pursuant the Companies (Cost Accounting Records) Rules' 2011 prescribed by the Central Government .under Section 209(1 )(d) of the Companies Act' 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have' however' not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(ix) (a) According to the records of the company' the company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund' investor education and protection fund' employees' state insurance' service tax' sales tax' wealth tax' custom duty' excise duty and other statutory dues applicable to it and no undisputed statutory dues as noted above is outstanding for a period of more than six months from the date it became payable. The company has not paid/provided income tax (refer clause 4(v)(c) of Auditors' Report).

(b) According to the information and explanations given to us and the records of the Company examined by us' the particulars of dues of Income tax' sales tax' excise duty and cess etc. as at 31 st March' 2012 which have not been deposited on account of dispute' are as follows

Name of the Statute Nature of dues Amount (Rs.in lacs)

Central Sales Tax Act CSTand VAT 314.66 1956 and RV Act 2003

133.28

9.42

Income Tax Act 1961 Income Tax 1611.16

Central Excise Act Excise Duty & 72.34

1944 Service Tax

16.91

69.47

Name Period to Forum where which the the dispute is amount pending relates

Central Sales Tax Act 2007-08 Rajasthan Tax Board' Ajmer

2008-09 Deputy Commissioner Commercial Taxes (Appeals)' Jodhpur

2009-10 Assistant Commissioner Commercial Taxes. Pali

Income Tax Act 1961 2007-08 & Deputy Commissioner 2008-09 (1. Tax)' Jaipur Various Central Excise and years from Service Tax Appellate

2003-04 Tribunal. Delhi to 2010-11

Central Excise Act 2009-10 & Commissioner Central 2010-11 Excise (Appeals)' Jaipur 2009-10 & Additional

2010-11 Commissioner'

Central Excise' Jaipur / Deputy Commissioner Central Excise' Jodhpur

(x) The Company does not have accumulated losses as at the end of the financial year and it has not incurred any cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xi) Based on our audit and as per information and explanations given by the management' there has been no default in repayment of dues to any financial institution or bank or debenture holders during the year.

(xii) Basedonour examination of books of account and information and explanations given to us' the company has not granted loans and advances on the basis of security by way of pledge of shares' debentures and other securities.

(xiii) The provisions of any special statutes applicable to chit fund' nidhi or mutual benefit fund/society are not applicable to the company.

(xiv) The Company is not dealing or trading in shares' securities' debentures and other investments and hence requirement of para 4(xiv) is not applicable.

(xv) As per information and explanations given to us' the Company has not given any guarantee for loans taken by otiiers from bank or financial institutions.

(xvi) On the basis of records examined by us' we have to state that the company has prima facie' applied the term loan for the purpose for which it was obtained .

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company' we report that no funds raised on short-term basis have been used for long-term investment

(xviii) No allotment of shares has been made by the company during the year.

(xix) The company has not issued any debenture during the year covered by audit.

(xx) During the year the company has not raised any money by way of public issue.

(xxi) Based upon the audit procedures performed and information and explanations given by the management' no fraud on or by the company has been noticed or reported during the year.

For S.S. KOTHARI & CO. Chartered Accountants

(Firm Registration No. 001064C)

(B.L.VERMA)

Place : Jaipur PARTNER

Date : 30th June' 2012 (Membership No. 10900)

---

Sep 30, 2009

1. We have audited the attached Balance Sheet of MODERN INSULATORS LIMITED as at 30th September 2009, the Profit & Loss Account and cash flow statement of the Company for the period from 1st April, 2008 to 30th September, 2009 annexed hereto These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement pre- sentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by Companies (Auditors Report) Order, 2003 as amended by Companies (Auditors Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of Section 227 (4-A) of the Companies Act, 1956, we give in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Further to our comments in the annexure referred to in paragraph 3 above, we report that:

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

(ii) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books.

(iii) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account.

(iv) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report, comply with the applicable accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

(v) (a) Balances of debtors and creditors are subject to reconciliations/confirmations (Note No.4 of Schedule 14).

(b) In view of insufficient information from the suppliers regarding their status as SSI units, amount overdue to such undertakings could not be ascertained. (Note No. 10 (i) of Schedule 14).

(c) Provision for taxation (including interest etc.) estimated at Rs, 2252.65 lacs (including for previous year Rs.927.28 lacs reversed during the period) has not been made in accounts in view of proposed amalgamation proceedings awaiting approvals; this has resulted in over- statement of Reserves & Surplus /profits and understatement of Current Liabilities & Provisions to this extent. (Note No. 13 of Schedule 14)

(vi) Some of the existing directors of the company are not eligible from being re-appointed as directors under the proviso to Section 274(1 )(g) of the Companies Act, 1956. However, the Company has obtained an opinion according to which such directors of the Company can continue to be in office during their tenure and they can also be re-appointed as directors on the expiry of their tenure. We have been further informed that the Company had made representation to the Central Government (Department of Company Affairs) seeking appropriate exemption from the applicability of the said section.

(vii) In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to our comments in para (v) above and read with other notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of Balance Sheet, of the state of affairs of the Company as at 30th September, 2009.

(b) In the case of Profit & Loss Account, of the profit of the Company for the period from 1st April, 2008 to 30th September, 2009.

(c) In the case of Cash Flow Statement, of the cash flows for the period from 1st April, 2008 to 30th September, 2009.

Referred to in the report of even date of the Auditors to members of MODERN INSULATORS LIMITED.

(i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets except furniture & fixtures for which detailed records are not maintained.

(b) As per information and explanations given to us, most of the fixed assets have been physically verified during the period by management in accordance with a phased programme of veri- fication at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) During the period, the company has not disposed off substantial part of the fixed assets.

(ii) (a) As explained to us, the inventory has been physically verified during the period by the management. In our opinion, the frequency of verification is reasonable.

(b) According to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) On the basis of our examination of the records of inventory, we are of the opinion that the company is maintaining proper records of inventory. As explained to us, the discrepancies noticed on physical verification between the physical stocks and the book records were not material.

(iii) (a) The company during the period has given interest-free loan of Rs.1300 lacs to subsidiary company. The company has also given interest-free advance of Rs.280 lacs to a company covered under section 301 of companies Act, 1956 in view of proposed amalgamation awaiting approvals. Maximum amounts involved during the period and the period end balances of such loans and advances are Rs.1580 lacs and Rs.1580 lacs respectively.

(b) The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the.register maintained under Section 301 of the Act. Accordingly, the pro- visions of clauses 4(iii)(f) and 4(iii)(g) of the Order are not applicable. (iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for purchases of inventory, fixed assets and for the sale of goods. During the course of our audit, we have not observed any major weakness in internal controls. (v) (a) Based on audit procedures applied by us and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section. (b) In our opinion and according to the information and explanations given to us, there are no transactions made in pursuance of such contracts or arrangements exceeding Rupees Five lacs in respect of any party during the period. (vi) The Company has not accepted any deposits from the public during the period. (vii) In our opinion, the Company has an internal audit system commensurates with the size of the company and the nature of its business. (viii) The Central Government has prescribed the maintenance of cost records u/s 209(l)(d) of the Companies Act, 1956 in respect of the Yarn product only. On the basis of the records produced, we are of the opinion that prima-facie the records and accounts have been maintained as prescribed by the Central Government u/s 209( l)(d) of the Companies Act, 1956. However we have not carried out detailed examination of such records and accounts with a view to ascertain whether they are accurate or complete. Maintenance of such records has not been prescribed for insulators. (ix) (a) According to the records of the company, the company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, service tax, sales- tax, custom duty, excise duty and other statutory dues applicable to it and no undisputed statutory dues as noted above is outstanding for a period of more than six months from the date they became payable. The company has not paid/provided income tax (refer clause 4(v)(c) of Auditors Report).

(b) According to the information and explanations given to us and as per the records examined by us, there are no disputed dues of Income tax/Sales tax/Service tax/Custom duty/Wealth tax/ Excise duty/Cess as at 30th September2009.

(x) The Company does not have accumulated losses as at the end of the financial period and it has not incurred any cash losses during the financial period covered by our audit and the immediately preceding financial year.

(xi) Based on our audit and as per information and explanations given by the management, there has been no default in repayment of dues to any financial institution or bank or debenture holders during the period.

(xii) Based on our examination of books of account and information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. (xiii) The provisions of any special statutes applicable to chit fund, nidhi or mutual benefit fund/society are not applicable to the company. (xiv) The Company is not dealing or trading in shares, securities,debentures and other investments and hence requirement of para 4

(xiv) is not applicable.

(xv) As per information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions, the terms and conditions whereof are prejudicial to the interest of the company.

(xvi) On the basis of records examined by us, we have to state that the company has prima facie, applied the term loan for the purpose for which it was obtained. (xvii) According to the information andexplanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term investment. (xviii)No allotment of shares has been made by the company during the period.

(xix) During the period covered by our audit report, the Company has allotted 200 Zero Coupon Secured Redeemable Debentures of Rs. Ten lacs each aggregating to Rs. 2000 lacs. Debenture certificates are yet to be issued, pending mortgage of immovable properties of yarn division.

(xx) During the period the company has not raised any money by way of public issue.

(xxi) Based upon the audit procedures performed and information and explanations given by the management, no fraud on or by the company has been noticed or reported during the period.

For S.S. KOTHARI & CO.

Chartered Accountants

(B.L. VERMA)

Place: Mumbai Partner

Date : 31st December, 2009 (Membership No. 10900)