Modern Threads (I) Ltd Auditor Reports

TO THE MEMBERS OF MODERN THREADS INDIA LIMITED Report on the Audit of the Financial Statements Qualified Opini?n

We llave audited the fmancial statements of MODERN THREADS (INDIA) LIMITED (‘the Company"), which comprise the Balance Sheet as at 31^st Match 2024, and the Statement of Profit and Loss (includmg other comprehensive income), Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and notes to the financial statements, including a summary of material accounting policies and other explanatory information (hereinafter referred to as "the fmancial statements")

In our opini?n and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in ?ie Basis for Qualified Opini?n section of our report, the aforesaid fmancial 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 Indian Accounting Standards piescribed tmder section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (‘lnd-AS") and other accounting principies generally acceptedin India, of the State of affairs of the Compan} as at 3 l^st March 2024, and its profit (including other comprehensive income), changes in equity and its cash flows for the year ended on tliat date.

Basis for Qualified Opini?n

(i) The company lias not provided for Interest (Dividend) on cumulative redeemable preference sliares amounting to Rs. 36.13 Laldis for the year (Rs. 1011.61 Laldis upto 31.03.2024) as the company is in process of settlement of remauiing redeemable preference sliare capital. (Note No. 17.2b)

(ii) Balances of trade payables and trade receivables are subject to confmnation and consequential adjustments, if any. (Note No. 16.1 and 9.1)

Our audit opini?n for the year ended 31^st March, 2023 was also modified in respect of the above matters. Had tlie impact of above qualification in Para (i), without considering Para (ii) for which impact could not be detennined, been considered, the total comprehensive income for the year would llave been Rs. 2542.76 Laklis as against reported total comprehensive income of Rs. 2578.89 Lakhs and other equity would llave been Rs. 8425.01 Lakhs as against the reported figure of Rs. 9436.62 Lakhs and Other Cuirent fmancial liabilities would llave been Rs 3478 70 lakhs as against reported figure of Rs 2467 09 Lakhs.

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Act. Ourresponsibilitiesunderthose standards are further described in ?ie Auditor i Responsibilities for the Audit of the Financial Statements section of our report. We are mdependent of the Company in accordance with the Code ofEtliics issuedby the Institute of Chartered Accountants of India together with the ethical requirements tliat are relevant to our audit of the financial statements undertlie provisions of tile Act and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIs Code of Ethics. We believe thattlie audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opini?n.

Key Audit Matters

Key audit matters (‘KAM) are those matters tliat, in our professional judgment, were of most significance in our audit of the fmancial statements

of the cuirent period. These matters were addressed in the context of our audit of the fmancial statements as a whole, and in fonmiig our Opini?n thereon, and we do not provide a sep?rate opini?n on these matters. Except for the matters described in the Basis for Qualified Opini?n section, we have detennined tliat there are no key audit matters to be commimicated in our report.

Information Other than the Financial Statements and Auditors report thereon

The Companys Management and Board of Directors are responsible for the other information. The other infonnation comprises the infonnation included in the Companys aimual report, but does not inelude the fmancial statements and our auditors report thereon. The aimual report is expected to be made available to us after the date of this auditors report.

Our opini?n on the financial statements does not co ver the other information and we will not express any form of assurance conclusi?n thereon.

In connection with our audit of the financial statements, our responsibility is to read the other infonnation identified above when ?t becomes available and, in doing so, consider whether the other infonnation is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the other infonnation identified above, if we conclude tliat there is a material misstatement therein, we are required to communicate the matter to those charged with goveniance, and take necessary actions, as applicable under the relevant laws and regulations.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

The Companys Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the prepararon of these financial statements tliat give a true and fair view of the fmancial position, financial performance (including other comprehensive me?me), changes in equity and cash flows of the Company in accordance with the accounting principies generally accepted in India, including the Indian Accounting Standards (Lid 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 iiregularities; selection and application of appropriate accounting policies; raaking judgments and estimates tliat are reasonable and prudent; and design, implementation and maintenance of adequate infernal financial Controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the fmancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the fmancial statements, management and Board of Directors are responsible for assessing the Companys ability to continu? as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alteniative but to do so.

Those Board of Directors are also responsible for overseeing the Companys fmancial reporting process.

Auditors Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or eiror, and to issue an auditors report that ineludes our opini?n. Reasonable assurance is a liigh level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material

misstatement wlien it exists. Misstatements can arise from fraud or error and are considered matenal ?f, individnally or in the aggregate, they could reasonably be expected to influence Ihe economic decisions of users taken on the basis of these financial statements.

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

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or eiror, design and perform audit procedures responsive to those risks, and obtain audit evidence tliat is sufficient and appropriate to provide a basis for our opini?n The risk of not detecting a material misstatement resulting from fraud is liigher tlian for one resulting from error, as fraud may involve collusion, forgery, intenfional omissions, misrepresentations, or the override of intemal control.

• Obtain an understanding of intemal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. UnderSection 143(3)(i) oftlieAct, weare also responsible forexpressmg our opini?n on whether the company has adequate intemal financial Controls with reference to financial statements in place and the operating effectiveness of such Controls.

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

• Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material unceitainty exists related to events or conditions tliat may cast significant doubt on the Companys ability to continu? as a going concern. If we conclude that a material uncertainty exists, we are requiredto drawattentionin our auditors reportto the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opini?n Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, fiiture events or conditions may cause the Company to cease to continu? as a going concern

• Eval?ate the overall presentation, s truc ture and content of the financial statements, including the disclosures, and whetherfile financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the Financial Statements that, individually or in aggregate, malees it probable that the economic decisions of a reasonably knowledgeable user of the Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit woric and in evaluating the results of our Work; and (ii) to eval?ate the effect of any identified misstatements in the Financial Statements.

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

We also provide those chaiged with govemance with a statement that we llave complied with relevant ethical requirements regarding independence, and to communicate with them all relationsliips and otlier matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

Report on Other Legal and Regulatoiy Requirements

1. As required by the Companies (Auditors Report) Order, 2020 ("the Order") issued by the Central Government of India in tenns of Section 143(11) of the Act, we give in "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act, we report that

a. We llave sought and except for the possible effeets of the matters described in the basis for qualified opini?n paragraph, obtained all the infonnation and explanations which to the best of our knowledge and belief were necessary for the puiposes of our audit.

b. Except for the possible effeets of the matters described in the basis for qualified opini?n paragraph above, in our opini?n, proper books of account as required by law llave been kept by the Company so far as it appears from our examination of those books

c. The Balance Sheet, the Statement of Profit and Loss (including other comprehensivo income), the Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.

d. Except for the effeets ofthe matters described in the basis for qualified opini?n paragraph above, In our opini?n, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended.

e. On the basis of the written representations received from the directors as on 3 l^st Match 2024 taken on record by the Board of Directors, none of the directors is disqualified as on 3 l^5t Match 2024 from being appointed as a director in teims of Section 164(2) of the Act.

f. The qualification relating to the maintenance of account and other matters connected there with are as stated m the ‘Basis for Qualified Opini?n paragraph.

g. With respect to the adequacy of the intemal financial Controls with reference to financial statements of the Company and the operatmg effectiveness of such Controls, refer to our sep?rate Report in "Annexure B". Our report expresses a modified opini?n on the adequacy and operating effectiveness of the Companys intemal financial Controls with reference to financial statements.

h. Withrespect totheothermatteis tobeincluded in the AuditorsReport in accordance with the requirements of section 197(16) of the Act, as amended:

hi our opini?n and according to the infonnation and explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of Section 197 of the Act.

i. Withrespect to the othermatters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, m our opini?n and to the best of our infonnation and according to the explanations given to us:

i. The Company has disclosed the unpact of pending litigations as at 31^st March 2024 on its financial position in its financial statements - Refer Note 30 to the financial statements;

ii. The Company did not llave any long teim contracts including derivative, contracts for which there were any material foreseeable losses;

iii. There has been no delay in transferring amounts, required to be transfeired, to the Investor Education and Protection Fund by the company during the year ended on 3lst March, 2024. (Refer Note 17.1)

iv. (a) The Management has represented that, to the best of its

knowledge and belief, no fiinds (which are matenal either individually or in the aggregate) llave been advanced or loaned or invested (either from boirowed funds or sliare premian or any other sources or kind of fiinds) by the Company to or in any other person or entity, including foreign entity ("Intennedianes"), with the understanding, whether recoided

m writing or otlierwise, that tile Intemiediary sliall, whether, direetly orindirectly lend or invest m other persons or entities ?dentified ?n any mamer wliatsoever by or on belialf of the Company ("Ult?mate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ult?mate Beneficiares;

(b) The Management has represented, that, to the best of ?ts knowledge and belief, no funds (whioh are material either mdividually or ?n the aggregate) have been received by the Company from any person or entity, indud?ng foretgn enhty ("Funding Parties"), with the understanding, whether tecorded ?n writing or otlierwise, tliat the Company shall, whether, direetly or indirectly, lend or invest in other petsons or enhties ?dentified in any mannei whatsoever by or on belialf of the Funding Party ("Ult?mate Beneficiaties") or provide any guarantee, security or the like on behalf of the Ult?mate Beneficianes;

(c) Based on the audit procedures that have been considered reasonable and appropriate in thecircutnstances, nothing lias come to our notice tliat has caused us to believe ?iat the representahons under sub-c lause (i) and(ii) of Rule ll(e), as provided under (a) and (b) above, contaui any material misstatement

v. Tile company lias not declarad or paid any dividend duiing the FY 2023-24. Henee, the provisions of section 123 of Compames Act, 2013 does not apply.

vi. Proviso to Rule 3(1) of the Compames (Accounts) Rules, 2014 for maintaining books of account using accounting software wliich has a ?eatui e of recording audit trail (edit log) facility is applicable to the Company tvith effect fiom April 1, 2023.

Based on our examination wliich inchided test checks, the company lias used an accoimting software for maintaining its books of account for the financtal year ended Marcli 31, 2024 whichhas a fea tu re of recordmg audit trail (edit log) facility and the same has operated tlirougliout the year for all relevant transae?ons recorded in the software except ?iat audit trail feature was not enabled at database level of accounting software to log any direct changes. Further, dunng the course of our audit we did not come across any instance of audit trail feature bemg tampered with in respect of Accounting Software.

	For S?. Surana & Co.
	CharteredAccountaots
	Finn Registration No 001079C
	Pr a halad Gupta
	(Partner)
Place Bhilwara	Membership No 074458
Date 30/05/2024	UDIN: 24074458BKHIFW1027

ANNEXURE A FORMENG PART OF THE INDEPENDENT AUDITORS REPORT OF MODERN THREADS (INDIA) LIMITED

Referred to in paragraph under the heading of "Report on otlier Legal & Regulatory Requirements" of our report of even date to the Members of Modeill Threads (India) Limited on the Ind AS financia! statement for the year ended Maich 31st, 2024;

(i) (a) (A) The Company lias maintained proper records sliowing full particulars, mcluding quantitative details and situation of Property, Plant and Equipment and relevant details of rigjit-of-use as sets (B) The company has maintained proper records showing firll particul?i s of intangible assets.

(b) As explamed to us, the company has apliasedprogram for physical verification of Property Plant and Equipment and nght-of-use assets. In our opimon, the frequency of verification is reasonable, considermg the size of the company and nature of its Property, Plant and Equipment and riglit-of-use assets Pursuant to the program, physical verification lias been camed out during the year and no material discrepancies llave been noticed on such verification except for fiuiutnre & ?xtures for wlnch detailed records are not maintained.

(c) Accordmg to the mformation and explana?ons given to us and on the basis ofour examniation of the records of the Company. the title deeds of all the immovable properties (other tlian propeit?es where the company is the lessee and the lease agreements are duly executed m fivour of the lessee) are held in the l?ame of the Company except foi the following:

Description of Property	Gross Carrving Valu?	Held in ?ame of	Whether promoter, director or theii relative or emplovee	Period Held Since	Reasons for not being in the ?ame of the company
Leasehold land at ldiasra no. 3404,3745/3404,3747/3406, 3746/3409 at Hamirgarh Road, Bhilwara	92.25	Sum? Textiles Mills Pvt Ltd.	No	21.10.1994	Sum? Textile Mili Pvt Ltd. lias been amalgamated with Modem Threads India Ltd. Yide order of high court dated 21.10.1994
Leasehold land at ldiasra no. 2616 and 2617 at Hamirgarh Road. Bhilwara	125.00	Modem Woollens Pvt Ltd.	No	21.10.1994	Modem Woollens Pvt Ltd. Converted into Modem Woollens Ltd. On 13.08.1976 and subsequently has been aequiced by Modem Threads India Ltd. under the scheme of Reconstruction/ arrangement Yide order of lngli court dated 21.10.1994
Leasehold land at ldiasra no. 2616/1 at Hamiigarh Road, Bhilwara	7.50	Modem Woollen Mili (Finn)	No	21.10.1994	Modem Woollens Mills (Firm) Converted into Modem Woollens Pvt Ltd. and subsequently converted into Modem Woollens Ltd. And then lias been acquired by Modem Threads India Ltd. under the scheme of Reconstruction/ arrangement Yide order of high court dated 21.10.1994
Leasehold land at ldiasra no. 3361/2, 3367/3k, 3402/3k, 3368/2, 3402/2k, 3368/1 and 3367/2k at Hamirgarli Road. Bhilwara	43.77	Modem Woollens Ltd.	No	21.10.1994	Modem Woollens Ltd. has been acquired by Modem Threads India Ltd. under the scheme of Reconstruction/ arrangement V?de order of high court dated 21.10 1994
Freehold land at Aliemdabad	12.66	Modem Woollens Ltd	No	21.10.1994	Modem Woollens Ltd. has been acquired by Modem Threads India Ltd. under the scheme of Reconstruction/ arrangement V?de order of lngh court dated 21.10.1994

(d) The Company lias not revalued any of its Property. Plant and Equipment (mcluding right-of-use assets) and intangible assets dunng the year

(e) No proceedmgs have been mitiated during the year or are pendmg agarnst the Company as at March 31, 2024 for holding any benami property under the Benami Transactions (Prohibi?on) Act, 1988 (as amended in 2016) and rules made thereunder.

? (a) Tlie inventar?es were physically venfied dunng the year by the Management at reasonable intervals. In our opini?n and according to the infonnation and explanations given to us, the coverage and procedure of such veiification by the Management is appropnate having regard to the size of ?ie Company and the nature of its operations. Management has not found discrepancies of 10% or more in the aggregate for each class of mventones on such physical verification of inventories when compared with books of account.

(b) According to the infonnation and explanations given to us, at any point of time of the year, the Company has not been sanctioned any working capital facility from banks or financial institutions on the basis of security of current assets, and henee reporting under clause (ii)(b) of the Order is not applicable.

(m) In respect of Investment in, provided any guarantee or secunty or graiited any loaiis or alances in the na ture of loans, secured orunsecured, to companies, finns, Limited Liability Partnerships or any ofher parties:

(a) According to the infonnation and explanations given to us and on the basis of our examination of the records, the Company has not provided any loans or adv anees in the na ture of loans or guarantee or provided secunty to any otlier entity and henee repoiting under c?a use 3(iii)(a) is not applicable to the Company.

(b) According to the infonnation and explanations given to us and on the basis of our examination of the records of the Company, investment made are in the ordinary course of business and accordingly in our opini?n, prima facie, not prejudicial to the Companys interest. The Company has not provided any guarantees, given any security and the teims and granted any loans and advances in the nature of loans and guarantee.

(c) According to the infonnation and explanations given to us and on the basis of our examination of the records of the Company, the Company has not granted any loans or advances in the nature of loans and henee reporting under clauses 3(iii)(c), (d), (e) and (?) of the Order is not applicable to the Company.

iv) (v) (vi) In our Opini?n and according to the infonnation and explanations given to us, the Company has complied witli the provisions of section 185 and 186 of the Companies Act, 2013, with respect to the loans, investments and guarantees made, as applicable.

As per infonnation and explanations given to us, the company has not accepted any deposits or amounts which are deemed to be deposits within the meaning of Section 73 to 76 of the Act, and the mies framed thereunder. Accordingly, clause 3(v) of the Order is not applicable.

We llave broadly reviewed the books of account maintained by the Company in respect of produets ivliere the maintenance of cost records has been specified by the Central Government under sub-section (1) of Section 148 of the Act and the rules framed there under and we are of the opini?n tliat prima facie, the prescribed accounts and records llave been made and maintained

(vi) (a) According to the records of the company produced for our venfication, the company is generally regular in depositing undisputed statutory dues including pixmdent fiind, employees State insurance, income tax, sales tax, Service tax, customs duty, excise duty, valu? added tax, goods and Service tax, cess and any other statutory dues with appropriate authorities except arrear of outstanding statutory dues as at last day of financial year for more tlian 6 montlis from the date of becoming payable is as under:

• Textiles Committee Cess	Rs. 26.40	Lakhs
• Custom Duty	Rs. 1131	Laklis
• Mandi Tax	Rs. 455.20	Laklis

(b) According to the infonnation and explanation given to us, the dues in respect of bicorne Tax, Sales Tax, Service Tax, Custom duty, Excise

duty, Valu? added Tax, Goods and Service Tax or other statutory dues that have not been deposited on account of dispute and amouni involved and forum where dispute is pending are as under:

?ame of statute	Nature of Dues	Amount (Rs. in Lakhs)	Pei iod to which the amount relates	Forum where dispute is pending
Rajasthan Municipality Act, 1959	Urbau Tax	120.06	FY 2007- 2024	Rajasthan High Court, Jodlipur
Employee State	ESI	28.09	FY 1986-1999	Rajastlian High Court, Jodlipur
Insurance Act	ESI	3.53	FY 1993-1996	Labour Tribunal, Delhi

(vill) As per infonnation and explanations given to us and based on the records of the company, there were no transactions relating to previously unrecorded income that have been suirendered or disclosed as income during the year in the tax assessments under ?ie bicorne Tax Act, 1961 (43 of 1961)

(IX) (a) According to the records of the Company and infonnation given to us, the company does not have any loans or otlier boirowings, henee, reporting on clause (ix)(a) of the Order is not applicable.

(b) According to the infonnation and explanations given to us and on the basis of our audit procedures, we report that the company has been declared 111111111 defaulter by banks and Financial histitutions upto 31/03/2010. However, there are no dues of those banks/ Fls as on balance sheet date.

(c) The Company has not taken any term loan during the year and there are no unutilized terrn loans at the beginning of the year.

(d) On an overall examination of the ?nancial statements of tlie Company, in our opini?n, the company has not raised any short-tenn fund during the year and henee reporting under clause ix(d) of the Order is not applicable to the company

(e) On an overall examination of the financial statements of the Company and on the basis of infonnation and explanations given to us, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiarles, associates or joint ventares. However, the company does not have any subsidiary, joint ventares or associates.

(f) Hie Company lias not raised loans dunng the year on pledge of securities held in its subsidiaries or joint ventares or associates. However, ?ie company does not have any subsidiary, joint ventares or associates, henee, reporting on clause (ixXf) of the Order is not applicable.

(X) (a) Tlie Coinpaiiy lias not raised moneys by way of mitial public offer or further public offer (mcluding debt Instruments) during the year and henee reportmg mider clause 3(xXa) of tlie Order ?s not applicable.

(b) During the year, the Company has not made any preferential allotment or pr?vate placement of shares or convertible debentures (fiilly or partly or optionally) and henee reporting under clause 3(x)(b) of the Order is not applicable.

(xi) (a) According to the Information and explanations given to us, no fraud by the Company or on tlie Company has be en noticed or reported during tile course of our audit. Henee clause (xi)(a) of the order is not applicable.

(b) No report under sub-section (12) of section 143 of the Companies Act has been filed in Foim ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government, during the year and upto the date of this report.

(c) According to the infonnation and explanations given to us and based on our examination of records, No whistle-blower complamts were received by tlie company during the year.

(xn) In our opini?n and according to the infonnation and explanations given to us, ?ie Company is not a Nidhi company and henee reporting under clause (xii) of the Order is not applicable.

(xi?) According to the infonnation and explanations given to us and based on our examination of the records of the Company, all the transactions with the related parties are in compliance with sections 177 and 188 of the Act and details of such transactions llave been disclosed in the financial statements as required by the applicable Indian accounting standards.

(xiv) (a) In our opini?n the Company has an adequate intemal audit system commensurate with the size and the nature of its business.

(b) We llave considered the intemal audit reports for the year under audit issued to the Company during the year and till date, in detennining, nature, timing and extent of our audit procedure.

(xv) According to the infonnation and explanations given to us and based on our examination of records of the company, the company has not entered lllto any non cash transaction prescribed under section 192 of the Companies Act, 2013 with the directors or person connected with them during the year.

(xv? (a) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Henee, reporting under clause (xvi)(a) and (b) of the Order is not applicable.

(b) hi our opini?n and according to the infonnation and explanations given to us and based on our exammation of records, , the Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India. Accordmgly, clause 3(xvi)(c) of the Order is not applicable.

(c) According to the infonnation and explanations provided to us dunng the course of audit, the Group does not llave any CICs.

(XMl) Tlie Company has not mcurred cash losses dunng the financial year covered by our audit and the mimediately preceding fmancial year.

(xvrn) Hiere lias been no resignation of the statutory auditors ofthe Company during the year. Accordingly, reporting under this clause is not applicable.

(xjx) On the basis of the financial ratios, ageing and expected dates of realisation of financial assets and payment of fmancial liabilities, other infonnation accompanying the financial statements and our knowledge of the Board of Directors and Management plans and based on our examination of the evidence supporting the assumptions, notliing has come to our attention, wliich causes us to believe tliat any material uncertainty exists as on the date of the audit report indicating that Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due 111111111 a period of one year from the balance sheet date. We, however, State tliat this is not an assurance as to the fiiture viability of the Company. We fiirther state that our reporting is based on the faets up to the date of the audit report and we neitlier give any guarantee ?or any assurance that all liabilities falling due 111111111 a period of one year from the balance sheet date, will get discliaiged by the Company as and when they fall due.

(xx) According to the infonnation and explanation provided to us, theie are no unspent amount towards Corporate Social Responsibility (CSR) in respect of any ongoing or other ?ian ongomg project as at expiry of the Fmancial Year requinng a transferto a Fund specified m Schedule 311 to the Companies Act in compliance of second proviso to subsection 5 of section 135 ofthe saidAct or special accoimt in compliance with the provisi?n of sub- section (6) of section 135 of the said Act. Accordingly, reporting under clause (xx)(a) and (xx) (b) of the Order is not applicable to the company.

(xxi) Tlie reportmg under clause 3(xxi) of the Order is not applicable in respect of the audit of fmancial statements and henee no comment m respect of said clause has been included in this report.

	For S.S. Sin ana & Co.
	Chmteied Accountants
	Film Registration No. 001079C
	Prahalad Gupta
	(Partner)
Place: Blnlwara	Membersliip No. 074458
Date: 30/05/2024	UDIN: 240747588KHIFW1027

Annexure -B to the Independent Auditors Report on Financial Statements of Modern Threads (India) Limited

Referred to in paragraph under the heading of "Report on other Legal & Regulatory Requirements" of our report of even date to the Members of Modem Threads (India) Limited on the fmancial statement as at and for the year ended March 31* 2024;

Report on the Infernal Financial Controls under Clause (i) of Sub- section 3 of Section 143 ofthe Companies Act, 2013 ("the Act")

We have audited the infernal fmancial Controls with reference to financial statements of Modem Threads (hidia) Limited (‘the Company") as of 31st March 2024 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Managements Responsibility for Infernal Fmancial Controls The Companysmanagementisresponsibleforestablishingandmaintaining mtemal financial Controls based on the infernal control over financial reporting criteria established by the Company considering the essential components of infernal control stated in the Guidance Note on Audit of Infernal Financial Controls over Fmancial Reporting issued by the histitute of Chartered Accountants of India (ICAI). These responsibilities inelude the design, implementation and maintenance of adequate infernal financial Controls that were operating effectively for ensuring tlie orderly and efficient conduct of its business, ineluding adlierence to companys policies, the safeguaiding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and ?ie timely preparation of reliable fmancial information, as required under the Companies Act, 2013.

Auditor? Responsibility

Our responsibility is to express an opini?n on the Companys mtemal fmancial Controls over fmancial reporting based on our audit. We conducted our audit m aceordance with the Guidance Note on Audit of Infernal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of infernal fmancial Controls, both applicable to an audit of Infernal Fmancial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate mtemal fmancial Controls over financial reporting was established and maintained and if such Controls operated effectively in all material respeets.

Our audit involves perfomnng procedures to obtain audit evidence about the adequacy ofthe mtemal financial Controls system over fmancial reporting and their operating effectiveness. Our audit of infernal fmancial Controls over financial reporting included obtaming an understanding of mtemal fmancial Controls over fmancial reporting, assessing the risk tliat a material wealaiess exists, and testing and evaluating the design and operating effectiveness of infernal control based on the assessed risk. The procedures selected depend on the auditors judgment, meludmg the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opini?n on the Companys infernal fmancial Controls system over financial reporting. Meaning of Infernal Financial Controls over Financial Reporting A companys infernal financial control over fmancial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for extemal putposes m aceordance with generally accepted accounting principies. A companys mtemal financial control over financial reporting ineludes those policies and procedures that (1) pertam to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company, (2) provide reasonable assurance that transactions are recorded as necessary to penmt preparation of financial statements in aceordance with generally accepted accounting principies, and that receipts and expenditures of the company are being made only in aceordance with autliorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized aequisition, use, or disposition of the companys assets that could have a material effect on the fmancial statements.

Inherent Limitations of Infernal Financial Controls over Financial Reporting

Because of the inherent limitations of mtemal fmancial Controls over fmancial reporting, ineluding the possibility of collusion or improper management ovenide of Controls, material misstatements due to eiror or fraud may occur and not be detected. Also, projections of any evaluation of the infernal financial Controls over financial reporting to future periods are subject to tlie risk that the infernal financial control over financial reportmg may become in adequate because of changes in conditions, orthatthe degree of compliance with the policies or procedures may deteri?rate.

Basis of Qualified Opini?n

According to the information and explanation given to us and based on our audit, the following material weaknesshas been identified as at March 31, 2024:

1. The companys mtemal financial Controls were not operating effectively in respect of balance confirmation of trade payables and trade receivables. Material weakness is a deficiency, or a combination of deficiencies, in infernal fmancial control over fmancial reporting, such that there is a reasonable possibility that a material misstatement of the Companys annual fmancial statements 11111 not be prevented or detected on a timely basis. Qualified Opini?n

In our opini?n, except for the possible effeets of the material weakness described above and on the achievement of the objectives of control criteria, the Company has, in all matenal respeets, an adequate infernal fmancial Controls system over fmancial reporting and such infernal fmancial Controls over fmancial reporting were operating effectively as at March 31, 2024, based on the mtemal control over financial reporting criteria established by the Company considering the essential components of infernal control stated in the Guidance Note on Audit of Infernal Financial Controls Over Financial Reporting issued by the ICAI.

We llave considered the material weaknesses identified and reported above in determining the nature, timing and extent of audit tests applied in our audit of the financial statements ofthe Company for the year ended March 31, 2024 and ?iese material weaknesses have affected our opini?n on the fmancial statements of the Company and we have issued a qualified opini?n on the fmancial statements.

	ForS.S. Surana & Co.
	Chartered Accountants
	Film Registration No 001079C
	Prahalad Gupta
	(Partner)
Place: Bhilwara	Membersliip No. 074458
Date: 30/05/2024	UDIN:240747588KfflFW1027