Modipon - Limited Review For The Quarter Ended Mar 31, 2007

Modipon Ltd has informed that in the limited review report of the Company for the quarter ended December 31, 2006, the Auditors of the Company have made the following observations: As stated in note 2 to the unaudited quarterly financial results, the Company videagreement dated October 28, 2006 has sold its Chemical Division along with certain other immovable properties and investments in shares (ICC Division) as a going concern w.e.f. October 01, 2006 to Indofil Organics Industries Ltd (IOIL) for Rs 124.66 crores(arrived at by aggregating tax written down value in case of depreciable assets andnet book values for other assets / liabilities). Sale consideration of Rs 124.66 Croresis being discharged by IOIL by way of: (a) payment of Rs 17.83 crores in cash; (b)taking over the liabilities of Fibres Division of Rs 57.84 Crores and (c) balance saleconsideration of Rs 48.99 Crores has been applied for subscription to 1,17,57,085 fully paid up equity shares of Rs 10 each of IOIL at a premium of Rs 37.23 Crores to be issued and distributed directly to the equity shareholders of the Company. The shareholders of the Company has approved the above transaction of sale of ICC Division and issue of shares to themselves under sections 293(1)(a) and 293(3) respectively of the Companies Act, 1956.