Modipon Ltd

To

The Shareholders,

Your directors take pleasure in presenting the 57th Annual Report ("Report") and audited financial statements of Modipon Limited (the "Company") for the financial year ended March 31,2024.

FINANCIAL HIGHLIGHTS

The audited financial statements of the Company for the financial year ended March 31, 2024, prepared as per Indian Accounting Standards ("Ind AS") and in accordance with the provisions of the Companies Act, 2013 (the "Act") and Securities and Exchange Board of India ("SEBI") (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") forms part of this Annual Report.

CLOSURE OF MANUFACTURING OPERATIONS

As reported earlier, the factory of the Company had been permanently closed down after seeking requisite permission from the Government of Uttar Pradesh (UP Government) under the provisions of the Uttar Pradesh Industrial Disputes Act, 1947. The Company is now exploring to develop the industrial project in Modinagar to have optimal utilization of its real estate. The Company is also pressing its land matter pending with the Government.

CURRENT STATUS OF OPERATIONS

Since the Company owns substantial real estate, in its endeavor to rehabilitate the Company and to tap its resources to augment finances in order to be able to liquidate its liabilities and to utilize the surplus for taking up new business activity in the Company, as authorized by the memorandum of association of the Company, the Company proposes to commence a new industrial project at an opportune time after the due approvals from the UP Government and post resolving the land matter pending with the UP Government.

BOARD MEETINGS

The board of directors ("Board"/ "Directors") of the Company met 4 (Four) times during the financial year 2023-24. The meeting details are provided in the Corporate Governance Report forming part of this Annual Report. The maximum interval between any two meetings did not exceed 120 days, as prescribed under the Act.

DIVIDEND

The Company has not declared dividend, keeping in view of the losses suffered by the Company in the past.

OPERATIONS

During the year under review, the Company has not earned revenue from operations and has reported a loss of Rs. 58.38 Lakhs.

SHARE CAPITAL

The authorized share capital of the Company as on March 31, 2024, was Rs. 25,00,00,000 divided into 2,00,00,000 equity shares of Rs. 10 each and 5,00,000 preference shares of Rs. 100 each. There was no change in the capital structure of the Company during the period under review. All equity shares of

the Company carry equal voting rights. During the year under review, the issued, subscribed and paid-up share capital of the Company consist of 1,15,76,689 equity shares of Rs. 10 each and 71,792 preference shares of Rs. 100 each.

DIRECTORS & KEY MANAGERIAL PERSONNEL (KMP)

The composition of board of directors and KMP of the Company as on March 31, 2024 is detailed in the Corporate Governance Report forming part of this Report. There has been no change in the composition of the directors and KMP during the year except the re-appointment of Mr. Manish Modi as Chairman & Managing Director of the Company by the board of directors on the recommendation of Nomination & Remuneration Committee of the Company and by the shareholders in the 56th annual general meeting of the Company held on September 27, 2023 for a further term of 5 years effective June 1, 2023, subject to approval of Central Government.

KEY MANAGERIAL PERSONNEL

In terms of section 203 of the Act, Mr. Manish Modi, Chairman & Managing Director and Mr. Vineet Kumar Thareja, Chief Financial Officer, Company Secretary & Compliance Officer of the Company were designated as KMP of the Company.

DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

The Company has received necessary declaration from each independent director that he / she meets the criteria of independence laid down in section 149(6), code for independent directors of the Act and regulation 16(1 )(b) of the Listing Regulations.

LISTING ON STOCK EXCHANGE

The Company's shares are listed on BSE Limited.

COMMITTEES OF THE COMPANY

As on March 31, 2024, the Board had four committees: Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Risk Management Committee.

During the year, all recommendations made by the committees were approved by the board of directors of the Company. A detailed note on the composition of the Board and its committees is provided in the Corporate Governance Report, which forms part of this Annual Report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

In compliance with section 177(9) of the Act and regulation 22 of Listing Regulations, the Company has in place a whistleblower policy including vigil mechanism to report genuine concerns and grievances and providing direct access to the Chairperson of the Audit Committee.

The Whistle Blower Policy has been posted on the Company's website and can be accessed at http://www.modipon.net/ company-policies/whistle-blower-policy/

It is affirmed that no person has been denied access to the Audit Committee.

INTERNAL FINANCIAL CONTROL

The Company has managed its own the internal accounts due to acute business losses over the last several years and there was no revenue from operation to the Company.

NOMINATION & REMUNERATION POLICY

The details about the Nomination & Remuneration Policy of the Company as formulated by the Nomination & Remuneration Committee of the Company is detailed in the Corporate Governance Report forming part of this Report. The Policy governs the criteria for nomination and appointment including criteria for determining their qualifications, positive attributes, their independence and remuneration for the directors, key managerial personnels and other employees of the Company. The Nomination and Remuneration Policy is available on the Company's website at http://www.modipon.net/companv- policies/nomination-remuneration-policy/

PARTICULARS OF LOAN, GUARANTEES OR INVESTMENTS

Details of loan(s), guarantee and investments forms part of the notes to Financial Statements provided in the Annual Report.

TRANSFER TO RESERVES

During the year under review, the Company has not transferred any money towards General Reserve.

CHANGES IN THE NATURE OF BUSINESS

The Company did not undergo any change in the nature of its business during the financial year 2023-24.

PARTICULARS OF REMUNERATION

The percentage increase in remuneration, ratio of remuneration of each director and key managerial personnel (KMP) (as required under the Act) to the median of employees' remuneration, as required under section 197(12) of the Act, read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided below:

a. Ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year

*Since Non Executive Directors did not receive any remuneration during the financial year 2023-24, except sitting fees for attending the board and committee meetings, the required details are not applicable.

b. Percentage increase in remuneration of Company Secretary, Chief Financial Officer in the financial year

*Remuneration to be paid includes bonus and excludes traveling expense</p>

c. The percentage increase in the median remuneration (based on salary) of employees in the financial year 2023-24. As on

March 31, 2024, there are two whole-time key managerial personnels in the Company and one employee. Information is not comparable and hence, not stated.

d. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration

As on March 31, 2024, there are two whole-time key managerial personnels in the Company and one employee. Information is not comparable and hence, not stated.

e. No. of permanent employees on the rolls of the Company

As on March 31,2024, the Company had 4 (four) employees, out of which two are on retainership basis.

Subsequent to the closure of the manufacturing operations of the Company, all issues of ex-workmen/employees have been amicably resolved. The total dues of these workmen/employees (other than 5 workmen who have not yet collected their payment) have been paid. These 5 ex-workmen/employees had approached Debt Recovery Tribunal (DRT) - II, New Delhi seeking order for payment of dues in excess of the legal dues as paid to the other workmen/employees. Hon'ble DRT had directed them to approach the Labour Commissioner for adjudication of their dues. None of the workmen/ ex-employees has approached the Labour Commissioner till date. However, as directed by the DRT, the Company deposited Rs. 27 Lakhs being the amount payable to the workmen/ ex-employees with DRT which in the absence of any claim by these workmen, has been released by DRT to Punjab National Bank (PNB). Recently, Deputy Labour Commissioner has passed its detailed order dated September 8, 2022 and the said order has also been submitted with the Special Secretary, Industrial Department, Lucknow as part of land issue matter which was pending before the Industrial Department since 2019. In the aforesaid order, the total dues to be paid to worker was Rs. 21,74,758 only against the alleged dues of Rs. 2,84,75,199. In Compliance of the aforesaid order dated September 08, 2022, the Company has duly deposited cheque of an amount of Rs. 21,74,758 in the name of each workmen as mentioned in the detailed order. The aforesaid order was challenged by the workers before Hon'ble High Court of Allahabad which is pending for hearing.

None of the employees were in receipt of remuneration of Rs. 1.02 crores or more per annum or none of the employees employed for part of the year and in receipt of remuneration of Rs. 8.5 Lakhs or more, as required under section 197(12) of the Act, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The employees are neither relatives of any directors of the Company, nor hold 2% or more of the paid-up equity share capital of the Company as per rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

f. Affirmation with Remuneration Policy

It is hereby affirmed that the remuneration paid is as per the Remuneration Policy of the Company.

FIXED DEPOSITS

Your Company has not accepted any fixed deposits, including from the public, and, as such, no amount of principal or interest was outstanding as of the balance sheet date. Further, there were no deposit liable to be transferred to the credit of Investors' Education and Protection Fund.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF FINANCIAL YEAR AND TILL THE DATE OF THIS REPORT

There have been no material change and commitment which affect the financial position of the Company that have occurred between the end of the financial year to which the Financial Statements relate and the date of this Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

In view of the permanent closure of the manufacturing operations, provisions relating to furnishing of the details of

(i) conservation of energy, (ii) research and development and technology absorption and (iii) foreign exchange earning and outgo are not applicable.

AUDITORS AND AUDIT REPORT

B.M. Chatrath & Co. LLP, Chartered Accountants, Noida (Firm Regn. No. E300025) were appointed as the statutory auditors of the Company to hold the office for a second term of five consecutive years from the conclusion of the 54th annual general meeting held on September 27, 2021 till the conclusion of 59th AGM to be held in the year 2026, as required under section 139 of the Act read with The Companies (Audit and Auditors) Rules, 2014.

With reference to the qualifications contained in the Auditors' Report, your Directors wish to state that the Notes on Accounts and Significant Accounting Policies referred to by the Auditors in their Report are self-explanatory and hence do not call for any further comment.

COST AUDIT

In view of permanent closure of operations, the Company had applied for exemption from the requirement of cost audit. Accordingly, the appointment of cost auditor is not envisaged.

REPORTING OF FRAUDS

During financial year under review, the statutory auditor and the secretarial auditor has not reported any instance of fraud committed in the Company by its officers or employees.

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors of your Company confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(ii) they have selected such accounting policies and applied them consistently, and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit/ loss of the Company for that period;

(iii) they have taken proper and sufficient care for the 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 fraud and other irregularities;

(iv) that in view of the permanent closure of the manufacturing operations of the Company, the annual accounts are not prepared on a going concern basis.

(v) they have laid down internal financial controls which are adequate and operating effectively;

(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

SUBSIDIARY COMPANIES

The Company does not have any subsidiary company.

ANNUAL RETURN

In accordance with the Act, the annual return in the prescribed format is available on website of the Company at http://www. modipon.net/ and can accessed through link http://www. modipon.net/corporate-filings/.

SECRETARIAL AUDIT

Mr. Ranjeet Kumar Verma, Ranjeet Verma & Associates, Practicing Company Secretary (FCS No. 6814 and CP No.7463) has been

re-appointed as Secretarial Auditor of the Company for financial year 2024-25.

The Secretarial Auditors' Report for financial year 2023-24 does not contain any qualification, reservation, or adverse remark. The Secretarial Auditors' Report is enclosed as Annexure I to the Director's Report forming part of Annual Report.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS

During the year under review, there have been no significant and material orders passed by any regulators/courts/tribunals that could impact the Company's operations in future, except the pendency of litigation before the UP Government, High Court and Supreme Court.

DISCLOSURES UNDER COMPANIES (ACCOUNTS) RULES, 2014

With respect to details required under rule 8 sub rule 5 clause (xi) and (xii) of Companies (Accounts) Rules, 2014 please refer note no. VI and VII of the independent auditors' report forming part of the Annual Report.

RELATED PARTY TRANSACTIONS

The Company has in place a policy on related party transactions and the said policy can be accessed on Company's website at http://www.modipon.net/related-partv-transaction/.

No contracts or arrangements have been entered with related party in the context of section 188 of the Act during the year under review. Further, the details of other related party transaction as approved by the audit committee and board of directors of the Company entered during the financial year 2023-24 forms part of the notes (refer note no. 41) to financial statements.

FORMAL ANNUAL EVALUATION

The details about the performance evaluation is provided in Corporate Governance Report forming part of this Report.

DISCLOSURE ON CONFIRMATION WITH THE SECRETARIAL STANDARDS

Your directors confirm that the Secretarial Standards issued by the Institute of Company Secretaries of India have been duly complied with.

CORPORATE GOVERNANCE

Our report on corporate governance for the financial year 202324 is annexed hereto and forms part of this Annual Report.

POLICY ON SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

The Company has also adopted the mandatory policy on Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. Employees have been sensitized on the provisions of this enactment and the Company has complied with the provision of internal complaints committee to deal with complaints, if any, under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Nil complaints were received during the year.

ISSUE OF SHARES

During the year under review, the Company has not issued any sweat equity shares or shares with differential rights or under Employee Stock Option Scheme nor did it buy-back any of its shares.

STATUTORY DISCLOSURES

None of the Directors are disqualified under the provisions of section 164(2) of the Act. The Directors have made the requisite disclosures, as required under the provisions of the Act.

APPRECIATION

Your Directors would like to express their sincere appreciation for the cooperation and assistance received from the various departments of the Central and State Governments, UP State Industrial Development Authority (UPSIDA) and investors for their continued valuable support and assistance. Your directors also wish to thank all the officers and staff of the Company at all levels for their contribution, support and continued co-operation throughout the year.