Auditor Report of Nissan Copper Ltd.

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of NISSAN COPPER LIMITED (hereinafter referred to as "the Company"). which comprise the Balance Sheet as at March 31,2013, and 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 Standards referred to in sub-section (30 of section 211 of the Companies Act, 1956 ("the Act"). 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 misstatement.

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. 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.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the said Financial Statements read together with the Significant Accounting Policies and 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:

i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31 st March, 2013;

ii) In the case of the Profit and Loss Account, of the loss for the year ended on that date; and

iii) In the case of Cash Flow Statement, of the cash Hows for the year ended on that date.

Emphasis of Matter

a) During the F Y12-13, the company decided to make a proposal to Corporate Debt Restructuring cell (CDR) in order to reschedule its debts in line with the projected potential earnings. The said proposal was approved by the CDR - EG and the final letter of approval was received on 24.01.2013.The Master Restructuring Agreement between the Company and Consortium lenders was signed on 30.03.2013 cut - off date being 01.04.2012. Sanction letter for restructured debts was received by the consortium bankers on 30.03.2013. Effects for the restructured debts have been given in the said financial statements as per the sanction letters given. (Ref. Note No. 33 forming part of Financial Statements)

b) The search & seizure action u/s. 132(1) which was carried out on 17.01.2009 resulted into a total demand of Rs. 280,335,020/- for the AY 2003-04 to AY 2009-10. Out of the total demand, company has paid Rs. 95,274,581/- upto 31.03.2012. The company had filed an appeal with the CIT (A) for the demand raised. The Ld. CfT (A) has pronounced the orders in the company''s favour, except minimal disallowances. The Company has filed further appeal with the Hon''ble Tribunal for AY 2004-05 on 17.04.2012 as the company do not agree to the disallowances made by Ld. CIT (A). The total disputed amount for the said year is Rs.761, 217/-, which the company has already paid but provision for the same has not been made.(Ref. Note No. 37 forming part of Financial Statements)

c) For AY 2010-11, company''s return of income was processed u/s. 143(1) and on a regular scrutiny order was passed u/s. 143(3) demanding tax of Rs.38,454,130/-. Provision for the said amount has been made in the books but payment for the same is still pending. (Ref. Note No. 39 forming part of Financial Statements)

d) For AY 2006-07. penalty of Rs. 85,904,087/- for the F.Y. 2006-07 levied under Cenvat Credit Rules, 2004 of Central Excise Act 1944 by the Central Excise, Customs and Service Tax Commissionerate, Vapi. The Company has filed an appeal with Hon''ble CESTAT for the said demand as the Company does not agree with the same. (Ref. Note No. 40 forming part of Financial Statements)

e) A search action u/s. 64 of the Maharashtra Value Added Tax Act 2002, was carried on 06.07.2012 which resulted in a total VAT demand of Rs. 20,507,763/-. The company has made provision of the said amount alongwith interest payable of Rs. 6,340,130/- and penalty payable of Rs. 4,974,788. (Ref. Note No. 41 forming part of Financial Statements)

Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements v

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, 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;

b) 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

c) 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.

d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3Q of section 211 of the Companies Act 1956;

e) On the basis of written representations received from the directors as on March 31,2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

We further report the following:-

a) Pending confirmations and reconciliation, the balances under the heads Sundry Creditors, Loans Liabilities, Loans & Advances, Deposits and of the Sundry Debtors remain as per book balance the impact of which cannot be quantified at this stage

b) The effect of qualifications given above on the profit as well as assets and liabilities of the company could not be ascertained for want of details in respect of (a) above.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT

(Referred to in the paragraph above of our Report of even date on the accounts of NISSAN COPPER LIMITED for the year "ended on 31 st March, 2013)

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

1. (a) The company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets.

(b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, no fixed asset has been disposed during the year and therefore does not affect the going concern assumption.

2. (a) The inventories of the company at all its locations have been physically verified by the management during the year.

(b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

(c) The company has maintained proper records of inventories and the discrepancies between the physical inventories and the book records which have been properly dealt with in the books of account were not material.

3. (a) The Company has granted loans to the Companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. The Maximum amount involved during the year and the year-end balance of such Loan aggregates to Rs. 12,661.80 lacs & Rs. 12,648.25 lacs respectively

(b) In our opinion, the rate of interest and other terms and conditions of the above loan granted by the company, are not prima facie, prejudicial to the interest of the company.

(c) There is no stipulation as to the receipt of the loan granted by the Company.

(d) There are no amounts overdue more than Rs 1 lakh and the loan given by the Company to its wholly owned foreign subsidiary company is receivable on demand and therefore the question of overdue amount does not arise.

(e) The Company has taken loans from the Companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. The Maximum amount involved during the year and the year-end balance of such Loan aggregates to Rs.983.08 lacs 8i Rs. 906.58 lacs respectively.

(f) In our opinion, the rate of interest and other terms and conditions of the above loan taken by the company, are not prima facie, prejudicial to the interest of the company.

(g) There is no stipulation as to the payment of the loan taken by the Company.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures that commensurate with the size of the Company and nature of its business with regard to the purchase of inventory and fixed assets, and with regard to the sale of goods. Further, on the explanation given to us, we have neither come across nor have been informed of any continuing failure to correct major weakness in the aforesaid internal control system.

5. (a) Based on the audit procedures applied and according to the information and explanations given, particulars of contracts or arrangements referred to in Section 301 of the Ac, have been entered in the register required to be maintained under that Section.

(b) Based on the audit procedures applied, in our opinion, and according to the information and explanations given, the contracts or arrangement have been made at prices which are prima facie, reasonable having regard to the prevailing market prices at the relevant time or the prices at which transactions for similar services have been made with other parties or as per information available with the Company. -*»

6. In our opinion and according to the information and ex&M/Mm made available to us by the management, the company has not accepted any deposit from public within the meaning of Section 58A and 58AA or any other relevant provision of the Companies Act, 1956 and the rules framed there under. * *

7. In our opinion, the company has internal audit system commensurate with the size of the company and nature of its business.

8. The Central Government has prescribed maintenance of the cost records under section 209(1) (d) of the Companies Act, 1956, in respect to the company''s products. As per the information and explanation provided to us, we are of the opinion that prima facie, the prescribed records have been made and maintained. We have however not made a detailed examination of the record with a view to determine whether they are accurate or complete.

9. In respect of statutory dues:

(a) According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty. Excise Duty, Cess, and other statutory dues have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31,2013 for a period of more than six months from the date of becoming payable.

(b) According to the information and explanations given, there are no dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess which have not been deposited on account of any dispute, except as under:

Name of the Statute Forum where dispute is pending Amount Period (Nature of Dues)

Income tax Act 1961, Income Tax CIT(A) Rs.396,528 F.Y.2003-04 (penalty)

Income tax Act 1961, Income Tax CIT(A) Rs. 38,454,130 F.Y.2009-10

Excise Duty Hon''ble CESTAT Rs. 85304,087 F.Y. 2006-07

Excise Duty (Penalty) Hon''ble CESTAT Rs. 85,904,087 F.Y. 2006-07

10. The Company does not have accumulated losses more than 50% of its net worth as at the end of the financial year. However the company has incurred cash losses only during the current financial year but has not incurred any cash losses in the preceding year.

11. According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to the publicfinancial institution as at the balance sheet date.

12. According to the information and explanations given to us and based on the documents and records produced to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a Chit Fund or a Nidhi/Mutual Benefit Fund/Society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the Company.

14. In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in shares, securities, debentures and other investments.

15. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

16. Based on the information and explanation given to us, term loan was applied for the purpose for which the loan was obtained.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet and Cash Flow Statement of the Company, we report that no funds raised on short term basis have been used for long term investment.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956 during the year.

19. Since the Company has not issued any debentures, clause 4 (xix) of the Order is not applicable to the Company.

20. Since the Company has not raised any money through a public issue during the year, clause 4 (xx) of the Order is not applicable to the Company.

21. During the course of our examination of books and records of the Company, carried out in accordance with auditing standards generally accepted in India, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.



For R.C. JAIN & ASSOCIATES

Chartered Accountants FRN No. 103952W

Sd/-

R.C.Jain

Place: -Mumbai (Partner)

Date: 30th May, 2013 M.NO.038096

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of M/s. NISSAN COPPER LIMITED (hereinafter referred to as "the Company") as at 31st March 2012, the Profit & Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. 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 the auditing standards generally accepted in India. Those 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 examination 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 presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) order, 2003 (hereinafter referred to as "the Order") issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, and on the basis of such checks of the books and records as we considered appropriate and according to the information and explanations given to us in the course of our audit, we give in the Annexure hereto a statement on the matters specified in paragraphs 4 & 5 of the said order.

4. Without qualifying our opinion, we draw attention to:-

a) Note No. 36 forming part of the Financial Statements relating to statutory disputed dues with Income Tax Authorities in connection with Search conducted on 17.01.2009, order of which was passed on 31.12.2010. A demand of Rs. 34.83 crores has been raised against the company by the Assessing Officer of Income Tax Department which was further reduced to Rs. 28.03 crores after rectification of assessment orders u/s 154 of Income Tax Act, 1961. The company has filed an appeal before the CIT (A) and the Ld. CIT (A) has pronounced the orders in the company's favour, except for minimal disallowances. The Company has further filed an appeal with the Hon'ble Tribunal for AY 2004-05 on 17.04.2012. The Management considers that the said appeal matter would be pronounced in the favour of the company and hence the claim has been disclosed under'Contingent Liabilities'.

b) Note No. 37 forming part of the Financial Statements relates to penalty of Rs. 3, 30,426/- levied u/s. 271(1) (c) of the Income Tax Act, 1961 for AY 2006-07, vide order dated. 30.03.2012. The Company has filed an appeal with CIT (A) on 30.04.2012 for the said penalty levied. The Management considers that the said appeal matter would be pronounced in the favour of the companyand hence the claim has been disclosed under' Contingent Liabilities'.

c) Note No. 39 forming part of the Financial Statements relates to penalty of Rs. 8, 59, 04,087/- for the F.Y 2006-07 levied under Cenvat Credit Rules, 2004 of Central Excise Act, 1944 by the Central Excise, Customs and Service Tax Commissionerate, Vapi. The Company has filed an appeal with Hon'ble CESTAT for the said demand as the Company does not agree with the same. So the Management considers the Hon'ble CESTAT would pronounce the matter in the favour of the companyand hence the claim has been disclosed under' Contingent Liabilities'.

5. Further to our comments in the Annexure referred to in Paragraph 3, 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;

b) 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;

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

d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 to the extent applicable;

e) On the basis of the written representations received from the Directors as on March 31, 2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2012 from being appointed as a director in terms of Section 274(1)(g) of the Act;

6. We fur the report the following:-

a) Pending confirmations and reconciliation, the balances under the heads Sundry Creditors, Loans Liabilities, Loans & Advances, Deposits and of the Sundry Debtors remain as per book balance the impact of which can not be quantified at this stage. (Ref. Note No. 47 forming part of Financial Statements.)

b) The effect of qualifications given above on the profit as well as assets and liabilities of the company could not be ascertained forwant of details in respect of (a) above.

c) The Board of Directors of the Company in its meeting held on May 03, 2012 has made a proposal to Corporate Debt Restructuring Cell (CDR) to correct its working capital position and to reschedule its debts in line with projected potential earnings Cell and authorized to enter into debtors - creditors agreement with the lenders under CDR.

7. Subject to the matter referred to in paragraph 6 above, in our opinion and to the best of our information and according to the explanations given to us, the said Financial Statements read together with the Significant Accounting Policies and 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:

i) In the case of the Balance Sheet, of the state of Affairs of the Company as at 31st March, 2012;

ii) In the case of the Profit and Loss Account, of the profit for the year ended on that date; and lii) In the case of Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in paragraph 3 of our Report of even date on the accounts of NISSAN COPPER LIMITED for the year ended on 31st March, 2012)

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets.

(b) As explained, physical verification of assets was carried out by the management in a phased manner in a period of 3 Years and no material discrepancies were observed on such verification.

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

2. (a) The inventories of the company at all its locations have been physically verified by the management during the year.

(b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

(c) The company has maintained proper records of inventories and the discrepancies between the physical inventories and the book records which have been properly dealt with in the books of account were not material.

3. (a) The Company has granted loans to the Companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. The Maximum amount involved during the year and the year-end balance of such Loan aggregates to Rs. 12250.76 lacs & Rs. 11727.13 lacs respectively

(b) In our opinion, the rate of interest and other terms and conditions of the above loan granted by the company, are not prima facie, prejudicial to the interest of the company.

(c) There is no stipulation as to the receipt of the loan granted by the Company.

(d) There are no amounts overdue more than Rs 1 lakh and the loan given by the Company to its wholly owned foreign subsidiary company is repayable on demand and therefore the question of overdue amount does notarise.

(e) The company has not taken loans from parties listed in the Register maintained under Section 301 of the Companies Act, 1956. Accordingly, clause 4 (iii) (f) to (g) of the order are not applicable.

4. 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 nature of its business with regard to the purchase of inventory and fixed assets, and with regard to the sale of goods. Further, on the explanation given to us, we have neither come across nor have been informed ofany continuing failure to correct major weakness in the aforesaid internal control system.

5. (a) Based on the audit procedures applied and according to the information and explanations given, 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) Based on the audit procedures applied, in our opinion, and according to the information and explanations given, the contracts or arrangement have been made at prices which are prima facie, reasonable having regard to the prevailing market prices at the relevant time or the prices at which transactions for similar services have been made with other parties or as per information available with the Company.

6. In our opinion and according to the information and explanations made available to us by the management, the company has not accepted any deposit from public within the meaning of Section 58A and 58AA or any other relevant provision of the Companies Act, 1956 and the rules framed there under.

7. In our opinion, the company has internal audit system commensurate with the size of the company and nature of its business.

8. The Central Government has prescribed maintenance of the cost records under section 209(1) (d) of the Companies Act, 1956, in respect to the company's products. As per the information and explanation provided to us, we are of the opinion that prima facie, the prescribed records have been made and maintained. We have however not made a detailed examination of the record with a view to determine whether they are accurate or complete.

9. In respect of statutory dues:

(a) According to the information and explanations given to us, the company has been generally regular in depositing undisputed statutory dues payable in respect of Provident Fund, Workman Compensation Fund, Income Tax, Sales Tax, Wealth Tax, Customs Duty, Excise Duty, Cess and any other material statutory dues applicable to it with the appropriate authorities during the year.

According to the information and explanations given to us, there are no dues relating to income tax, sale tax, wealth tax, custom duty, excise duty and cess as at 31st March, 2012 outstanding for a period of more than six months from the date they become payable except for Self Assessment Tax relating to F.Y. 2010-11 of Rs. 3,62,19,040 /-. The management considers adjusting the Self Assessment Tax against the refunds due on account of Appeal Matter of Search & Seizure u/s 132(1).

(b) According to the information and explanations given, there are no dues of Income tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess which have not been deposited on account of any dispute, except as under:

Name of the Statute Forum where dispute is pending Amount Period (Nature of Dues)

lncometax Act 1961, CIT Order in favor of the company but awaiting for Rs.17900000 FY2004-05

Income Tax Order Giving Effect to CIT(A)'s order from A.O.

lncometaxAct1961, CIT Order in favor of the company but awaiting for Rs.94000000 FY2005-06

Income Tax Order Giving Effect to CIT(A)'s order from A.O.

lncometaxAct1961, CIT Order in favor of the company but awaiting for Rs.29700000 FY2006-07

Income Tax Order Giving Effect to CIT(A)'s order from A.O.

lncome tax Act1961, CIT Order in favor of the company but awaiting for Rs.39154546 FY2007-08

Income Tax Order Giving Effect to CIT(A)'s order from A.O.

lncometaxAct1961, CIT Order in favor of the company but awaiting for Rs.4305893 FY2008-09

Income Tax Order Giving Effect to CIT(A)'s order from A.O.

Excise Duty Hon'ble CESTAT Rs. 85904087 FY2006-07

Excise Duty (Penalty) Hon'ble CESTAT Rs. 85904087 FY2006-07

Income Tax (Penalty) CIT(A) Rs.330426 FY2005-06

10. The Company does not have accumulated losses at the end of financial year and has not incurred cash losses during the financial year and in immediately preceding financial year

11. According to the records of the Company examined by us and the information and explanations given to us, the Company has defaulted in repayment of dues to the banks as at the balance sheet date.; the details thereof is mentioned in Note No "4(5)" forming part financial statements.

12. According to the information and explanations given to us and based on the documents and records produced to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a Chit Fund ora Nidhi/Mutual Benefit Fund/Society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

14. In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in shares, securities, debentures and other investments.

15. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

16. Based on the information and explanation given to us, term loan was applied for the purpose for which the loan was obtained.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet and Cash Flow Statement of the Company, we report that no funds raised on shortterm basis have been used for long term investment.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956 during the year.

19. Since the Company has not issued any debentures, clause 4 (xix) of the Order is not applicable to the Company.

20. Since the Company has not raised any money through a public issue during the year, clause 4 (xx) of the Order is not applicable to the Company.

21. During the course of our examination of books and records of the Company, carried out in accordance with auditing standards generally accepted in India, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year nor have we been informed of such case by the management.

For R C Jain & Associates Chartered Accountants FRN no.: 103952W

Sd/-

Place: Mumbai Gopal Kumar Agarwal

Date: 30th May, 2012 Partner

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of M/s. NISSAN COPPER LIMITED as at 31st March 2011, the Profit & Loss Account and the Cash Flow Statement of the Company for the year ended on that date. These financial statements are the responsibility of the management of the Company. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those 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 examination 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 presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) order, 2003 issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, and on the basis of such checks of the books and records as we considered appropriate and according to the information and explanations given to us in the course of our audit, we give in the Annexure hereto a statement on the matters specified in paragraphs 4 & 5 of the said order.

4. Without qualifying our opinion, we draw attention to:-

a) Note 17 of schedule “P” forming part of the Financial Statements relating to statutory disputed dues with Income Tax Authorities in connection with Search conducted on 17.01.2009, order of which was passed on 31.12.2010. A demand of Rs. 34.83 crores has been raised against the company by the Assessing Officer of Income Tax Department. The company has filed an appeal before the CIT (A) and the same has not been yet scheduled for hearing. The Management considers that the appeal matter would be pronounced in the favour of the company and hence the claim has been disclosed under ‘Contingent Liabilities'.

b) Note 18 of schedule “P” forming part of the financial statement relating to appeal filed by ACIT, CC- 20 before the Hon'ble High Court u/s. 260A on 26.04.2010 for the AY 2005-06 in relation to deduction allowed under section 80IB, the outcome of which is still pending. The Hon'ble Income Tax Appellate Tribunal, Ahemdabad pronounced the order for the above said case in the Company's favour. So the Management considers the Hon'ble High Court would pronounce the matter in the favour of the company and hence the claim has been disclosed under ‘Contingent Liabilities'.

5. Further to our comments in the Annexure referred to in Paragraph 3, 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.

b) 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.

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

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

e) On the basis of the written representations received from the Directors as on March 31, 2011, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

6. We further report that :-

a) Pending confirmations and reconciliation, the balances under the heads Sundry Creditors, Loans & Advances and some of the Sundry Debtors remain as per book balance the impact of which can not be quantified at this stage.

(Ref. Note No. 2 of Schedule “P” forming part of Financial Statements.)

b) The effect of qualifications given above on the profit as well as assets and liabilities of the company could not be ascertained for want of details in respect of (a) above.

7. Subject to the matter referred to in paragraph 6 (a) above, in our opinion and to the best of our information and according to the explanations given to us, the said Financial Statements read together with the Significant Accounting Policies and 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:

i) In the case of the Balance Sheet, of the state of Affairs of the Company as at 31st March, 2011;

ii) In the case of the Profit and Loss Account, of the profit for the year ended on that date; and

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

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in paragraph 3 of our Report of even date on the accounts of NISSAN COPPER LIMITED for the year ended on 31st March, 2011)

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets.

(b) The fixed assets of the company have been physically verified in a phase wise manner during the year by the management and no material discrepancies between the book records and the physical inventory have been noticed.

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

2. (a) The inventories of the company at all its locations have been physically verified by the management during the year.

(b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

(c) The company has maintained proper records of inventories and the discrepancies between the physical inventories and the book records which have been properly dealt with in the books of account were not material.

3. (a) The Company has granted loans to the Companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. The Maximum amount involved during the year and the year-end balance of such Loan aggregates to Rs. 8,155.26 lacs & Rs. 7,701.68 lacs respectively.

(b) In our opinion, the rate of interest and other terms and conditions of the above loan granted by the company, are not prima facie, prejudicial to the interest of the company.

(c) There is no stipulation as to the receipt of the loan granted by the Company.

(d) There are no amounts overdue more than Rs 1 lakh and the loan given by the Company to its wholly owned foreign subsidiary company is repayable on demand and therefore the question of overdue amount does not arise.

(e) The company has taken loans from parties listed in the Register maintained under Section 301 of the Companies Act, 1956. The Maximum amount involved during the year and the year-end balance of such Loan aggregates to Rs. 552.38 lacs & Rs. Nil respectively.

(f) In our opinion, the rate of interest and other terms and conditions of the above loan taken by the company, are not prima facie, prejudicial to the interest of the company.

(g) There is no stipulation as to the repayment of the loan taken by the Company.

4. 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 nature of its business with regard to the purchase of inventory and fixed assets, and with regard to the sale of goods. Further, on the explanation given to us, we have neither come across nor have been informed of any continuing failure to correct major weakness in the aforesaid internal control system.

5. (a) In our opinion, the transactions that need to be entered in the Register maintained under Section 301 of the Act have been so entered.

(b) In our opinion, the aforesaid transactions have been made at prices which are reasonable having regard to the prevailing market prices.

6. In our opinion and according to the information and explanations made available to us by the management, the company has not accepted any deposit from public within the meaning of Section 58A and 58AA or any other relevant provision of the Companies Act, 1956 and the rules framed there under.

7. In our opinion, the company has internal audit system commensurate with the size of the company and nature of its business.

8. The Central Government has prescribed maintenance of the cost records under section 209(1) (d) of the Companies Act, 1956, in respect to the company's products. As per the information and explanation provided to us, we are of the opinion that prima facie, the prescribed records have been made and maintained. We have however not made a detailed examination of the record with a view to determine whether they are accurate or complete.

9. In respect of statutory dues:

(a) According to the information and explanations given to us, the company has been generally regular in depositing undisputed statutory dues payable in respect of Provident Fund, Workman Compensation Fund, Income Tax, Sales Tax, Wealth Tax, Customs Duty, Excise Duty, Cess and any other material statutory dues applicable to it with the appropriate authorities during the year.

According to the information and explanations given to us, there are no dues relating to income tax, sale tax,wealth tax, custom duty, excise duty and cess as at 31st March, 2011 outstanding for a period of more than six months from the date they become payable.

(b) According to the information and explanations given to us, details of dues of Income Tax amounting to Rs 2503.30 lakhs & Excise Duty amounting to Rs. 859.04 lakhs (Refer Note No. 7 of Schedule “P” forming part of financial statements for details) net of deposits made have not been deposited on account of disputes pending at various forums.

10. The company has no accumulated losses as at 31st March, 2011 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank as at the balance sheet date.

12. According to the information and explanations given to us and based on the documents and records produced to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a Chit Fund or a Nidhi/Mutual Benefit Fund/Society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

14. In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in shares, securities, debentures and other investments.

15. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

16. Based on the information and explanation given to us, term loan was applied for the purpose for which the loan was obtained.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet and Cash Flow Statement of the Company, we report that no funds raised on short term basis have been used for long term investment.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956 during the year. However preferential equity warrant were issued by the company in the Financial year 2009-10 which were partly forfeited at the request of subscribers & converted to shares in the same year & the remaining part was forfeited and converted to shares at the request of subscribers in the current financial year.

19. According to the information and explanations given to us, and the records examined by us, the company has not issued any debentures during the year.

20. The Company has issued shares against GDR's amounting to Rs 100 crores during the current financial year, the purpose of which was specified in the Offering Circular. According to the information and explanations given to us, and the records examined by us, the money raised by way of GDR has been used for the specified purpose.

21. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the Financial Statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit, nor have we been informed of such case by the management.

For R.C. JAIN & ASSOCIATES Chartered Accountants FRN No. 103952W

sd/-

R.C.Jain Partner

Place : Mumbai Date : 28th May 2011

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of M/s. NISSAN COPPER LIMITED as at 31st March 2010, the Profit & Loss Account and the Cash Flow Statement of the Company for the year ended on that date.These financial statements are the responsibility of the management of the Company. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India.Those 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 examination 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 presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) order, 2003 issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, and on the basis of such checks of the books and records as we considered appropriate and according to the information and explanations given to us in the course of our audit, we give in the Annexure hereto a statement on the matters specified in paragraphs 4 & 5 of the said order.

4. Further to our comments in the Annexure referred to in Paragraph 3, 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.

b) 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.

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

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

e) On the basis of the written representations received from the Directors as on March 31,2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2010 from being appointed as a director in terms of clause (g) of sub-section (I) of section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said Financial Statements read together with the Significant Accounting Policies and 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:

i) In the case of the Balance Sheet, of the state of Affairs of the Company as at 31st March, 2010;

ii) In the case of the Profit and Loss Account, of the profit for the year ended on that date; and

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

ANNEXURE TO THE AUDITORS REPORT

(Referred to in paragraph 3 of our Report of even date on the accounts of NISSAN COPPER LIMITED for the year ended on 3 Ist March, 2010)

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of

its fixed assets.

(b) The fixed assets of the company have been physically verified during the year by the management and no material discrepancies between the book records and the physical inventory have been noticed.

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

2. (a) The inventories of the company at all its locations have been physically verified by the management during the year.

(b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

(c) The company has maintained proper records of inventories and the discrepancies between the physical inventories and the book records which have been properly dealt with in the books of account were not material.

3. (a) The company has taken unsecured loans from parties listed in the Register maintained under Section 301 of the

Companies Act, 1956.The Maximum amount involved during the year and the year-end balance of such Loan aggregates to Rs. 7.60 lacs & Rs. Nil respectively.The Company has granted unsecured loan to the Companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. The Maximum amount involved during the year and the year-end balance of such Loan aggregates to Rs. 22.24 lacs & Rs. Nil respectively.

(b) In our opinion, the rate of interest and other terms and conditions of the above loan taken by the company, are not prima facie, prejudicial to the interest of the company.

(c) There is no stipulation as to the repayment of the loan taken by the Company.

4. 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 nature of its business with regard to the purchase of inventory and fixed assets, and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls.

5. (a) In our opinion, the transactions that need to be entered in the Register maintained under Section 301 of the Act have

been so entered.

(b) In our opinion, the aforesaid transactions have been made at prices which are reasonable having regard to the prevailing market prices.

6. The Company has not accepted any deposits from the public within the meaning of Section 58 A and 58AA of the Act and the Rules framed there under.

7. The company does not have internal audit system but in our opinion, it has internal control & check systems commensurate with its size and nature of its business.

8. The Central Government has prescribed maintenance of the cost records under section 209(l)(d) of the Companies Act, 1956, in respect to the companys products. As per the information and explanation provided to us, we are of the opinion that prima facie, the prescribed records have been made and maintained.We have however not made a detailed examination of the record with a view to determine whether they are accurate or complete.

9. (a) The company has been regular in depositing undisputed statutory dues including Provident Fund, Workman

Compensation Fund, Income Tax, Sales Tax, Wealth Tax, Customs Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities for the year.

(b) At the end of the financial year there were no undisputed dues of Income Tax, Sales Tax, Wealth Tax, Customs Duty and Cess which were due for a period more than six months from the date they became payable.

10. The company has no accumulated losses as at March 31,2010 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank as at the balance sheet date.

12. According to the information and explanations given to us and based on the documents and records produced to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a Chit Fund or a Nidhi/Mutual Benefit Fund/Society.Therefore, the provisions of clause 4 (xiii) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

14. In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in shares, securities, debentures and other investments.

15. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

16. Based on the information and explanation given to us, term loan was applied for the purpose for which the loan was obtained.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet and Cash Flow Statement of the Company, we report that no funds raised on short term basis have been used for long term investment.

18. The Company has not made any preferential allotment of shares during the year. However preferential equity warrant were issued by the company & forfeited at the request of subscribers.

19. According to the information and explanations given to us, and the records examined by us, the company has not issued any debentures during the year.

20. The Company has not issued any shares during the year.

21. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the Financial Statements and as per the information and explanations given by the management, we report that no material fraud on or by the Company has been noticed or reported during the course of our audit.

For R.C.JAIN & ASSOCIATES Chartered Accountants R. C.Jain Partner Place: Mumbai Date: 28th May, 2010