Notes to Accounts of Nissan Copper Ltd.

Mar 31, 2013

Corporate Information

Nissan Copper Ltd. was established during 1989 as a private limited company. The Company was issued a fresh Certificate of Incorporation ensuing upon change of name on conversion to a public limited company on 8th December 2005 with the name Nissan Copper Limited. Its shares are listed on Bombay stock exchange. National stock exchange and Luxembourg Stock Exchange. The company started its first copper pipe unit at Umergaon in September, 1991. Its second manufacturing unit is situated at Silvassa. The main products manufactured by Nissan are Copper Rods/Section/f lats, Copper Ingots/Billets Bars, Copper Wire Bars, Copper Strips and Copper Pipes catering to FMCG, OEMs and Construction industry. As on date. Nissan has already started a new ACR Copper Tube project to manufacture Copper Level wound coils in Plain and Innergrooved Tubes, Copper Pancake coils with "Cast & Roll Technology".

1. During the FY 12-13 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 of consortium bankers for restructured debts was received on 30.03.2013. Effect for the restructured debts have been given in the said financial statements as per the sanction letters given.

2. The search & seizure action u/s. 132 which was carried out on 17.01.2009 resulted into a total demand of Rs. 280,335,020/- for theAY2003-04 to AY2009-10. Out of thetotal demand, company has paid Rs. 95,274,581/-upto31.03.2012. Thecompany had filed an appeal with the CIT (A) for the demand raised. The Ld. CTT (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, hence it is shown as contingent liability.

3. For Ay 2004-05, penalty of Rs.396, 528/- was levied u/s. 271 (1)(c) of the Income Tax Act, 1961 vide order dated 26.03.2013. Our Company has filed an appeal with CIT (A) on 15.04.2013 as disagree on Income Tax department''s view.

4. For AY 2010-11, company''s return of income was processed u/s. 143(1) and on a regular scrutiny order passed u/s. 143(3) demanding tax of Rs.38,454,130/-. Provision for the said amount has been done in the books. In response to the Income Tax Department our Company has filed an appeal with the CIT (A) on 15.04.2013 against demand raised.

5. For the FY 2006-07, Central Excise, Customs and Service Tax Commissionerate, Vapi levied penalty of Rs. 85,904,087/- under Cenvat Credit Rules, 2004 of Central Excise Act, 1944. 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 whole amount raised as demand remains disputed.

6. 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 full provision of the said amount alongwith interest payable of Rs. 6,340,130/- and penalty payable of Rs. 4,974,788/-. Hence, the same is not shown as contingent liability. During the year, company has paid Rs.2,150,000/- of the total demand.

7. There are 2 cases filed against the company before Gujarat High court u/s 433 r. w. 434 of Companies Act, 1956. Further 2 cases are filed u/s 138 of Negotiable Instrument Act. The amount payable to the parties is standing in the books -

8. Segment Information

(a) The Company deals in Copper Products and is treated as the only segment.

(b) Secondary Segment- Geographical by Sale

9. Related Party Disclosures

(i) Name of the related parties and related party relationship

(a) Individuals Controlling the Enterprise and Key Management Personnel Mr.SanjayS. Mardia Chairman

Mr. Ratanlal S. Mardia Managing Director

Mr. AtulS. Mardia Executive Director

Mr. Praveen Kumar H. Shah Director

Mr.Shailesh H.Shah Director

Mr. Islitin Mehta Director

(b) Relatives of Key Management Personnel

Mr. Shantilal Mardia Father of Chairman

Mrs. Bela S. Mardia Wife of Chairman

Mrs. Sunita R. Mardia Wife of Managing Director

(c) Enterprises in which key management personnel & their relatives are interested. Danial Investment Private Limited NC Middle East FZE

Note: Related party relationship on the basis of the requirements of Accounting Standard 18 (AS-18) as in 1 (a), 1 (b) a 1 (c) above is relied upon by the auditors.

(ii) Related party Transactions

The Following table provides the total amount of transactions that have been entered into with related parties for the relevant financial year

a. Sale/ Purchase of goods and services-Not Applicable.

10. Leases

Disclosure as required by Accounting Standard 19, "Leases", issued by the Institute of Chartered Accountants of India are given below:

(i) Lease payments are recognised in the statement of Profit & Loss Account under "Rent" in Note No. 32. Company with effect from September 2012 has shifted its corporate office. The said Agreement is for a period of 3 years.

(ii) The future minimum lease payments under non-cancellable operating lease -Not later than one year: Rs. 7,781,400/- Later than one year and not later than five years: Rs. 11,672,100/-

11. Sales & Services include Rs. 509,426,609/- (Previous Year- Rs. 2,111,350,642/-) for traded goods.

12. Computation of Earning per share (Basic & Diluted)

13. The outstanding balances of Sundry Debtors, Sundry Creditors, Deposits, Loans and Advances & Loans Liabilities are subject to confirmation.

14. All the amounts are stated in Indian Rupees, unless otherwise stated.

15. Previous years figuresare regrouped and rearranged wherever necessary.

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Mar 31, 2012

1. Corporateln formation

Nissan Copper Ltd. was established during 1989 as a private limited company. The Company was issued a fresh Certificate of Incorporation ensuing upon change of name on conversion to a public limited company on 8th December 2005 with the name Nissan Copper Limited. Its shares are listed on Bombay stock exchange. National stock exchange and Luxembourg Stock Exchange. The company started its first copper pipe unit at Umergaon in September, 1991. Its second manufacturing unit is situated at Silvassa. The main products manufactured by Nissan are Copper Rods/Section/flats, Copper Ingots/Billets Bars, Copper Wire Bars, Copper Strips and Copper Pipes catering to FMCG, OEMs and Construction industry. As on date, Nissan has already started a new ACR Copper Tube project to manufacture Copper Level wound coils in Plain and Innergrooved Tubes, Copper Pancake coils with "Cast & Roll Technology".

2. Basis of preparation of financial statements

The financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in India, Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956. These are based on the historical cost convention Method. The Company generally follows mercantile system of accounting and recognizes items of income and expenditure on accrual basis, except in case of significant uncertainties. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policies explained below.

a. Terms/ Rights attached to Equity Shares

The Company has only one class of Equity shares having par value of Rs. 10 per share. Each holder of Equity shares is entitled to one vote per share. The company declares and pays dividends in Indian Rupees.

b. During the financial year 2010-11, Company issued GDR's of Rs.100 crores & listed the same at Luxembourg Stock Exchange. The said proceeds of GDR was invested in NC Middle East FZE, wholly owned foreign subsidiary of Nissan Copper Ltd partly in the form of Equity and partly in the form of loans. During the year 2011-12, the entire proceeds of GDR was remitted as mentioned in the offer circular.

Note: During the previous year 2010-11, the Company had made provision for the dividend declared, subject to approval of Shareholders in the AGM. The Shareholders in the AGM dated 23.08.2011 did not give approval to the same and hence, during the FY2011-12, the said provision was reversed and added backto General Reserve.

Notes:-

1. Secured by Equitable mortgageof leaseholdLandatGIDC,Umergaon&FreeholdlandatKhanvel,U.T.,D.N.H.and Building constructed on said plots and hypothecation of Plant and Machineries.

2. Further secured by personal guarantees of three Promotor Directors and personal properties of Director & their relatives.

3. Car Loan is secured by hypothecation of the vehicles financed by the bank.

4. Terms of Repayment

SBI Term Loan : Repayable in 72 monthly installments with moratorium period of 21 months. Repayment started from April, 2011.

Union BankTerm Loan : Repayable in 72 unequal monthly installments plus monthly interest. Repayment started from April, 2011.

1. Secured by hypothecation of stock of raw materials, semi-finished goods, finished goods, packing materials, stores, spares, book-debts & other current assets and further secured by way of extention of charge over immovable properties of the Company.

2. Further secured by personal guarantees of three Promotor Directors and personal properties of Director & their relatives.

3. Terms of Repayment: Total Corporate loan of Rs. 10 crores repayable in 30 installments (from October 2009 to March 2010, 6 installments of Rs. 0.50 crores and from April 2010 to March 2012,24 installments of Rs.0.29 crores)

3. Contingent Liabilities

2011-12 2010-11

Bank Guarantees (net of margin) 69,635,323 1,459,92,201

Sales Bill Factoring 183,675,493 -

Excise Duty F.Y2006-07 85,904,087 85,904,087

Excise Duty F.Y2006-07 (Penalty) 85,904,087 -

Income Tax Appeal AY 04-05 761,217 656,217

AY 05-06 - 31,158,229

AY 06-07 - 130,275,458

AY 07-08 - 38,779,802

AY 08-09 - 43,254,954

AY 09-10 - 6,205,887

Income Tax Appeal AY 06-07 (Penalty) 330,426 -

Total Statutory Disputed Dues 172,899,817 336,234,634

Total Contingent Liabilities 426,210,633 482,226,835

4. 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. 9, 52, 74,581/- upto 31.03.2012. The company had filed an appeal with the CIT (A) for the demand raised. The Ld. CIT (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- O5 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.7,61,217/-, which the company has already paid but provision for the same has not been made, hence it is shown as contingent liability.

5. For AY 2006-07, penalty of Rs. 3, 30,426/- was levied u/s. 271(1) (c) of the Income Tax Act, 1961 vide order dated. 30.03.2012. The Company has filed an appeal with CIT (A) on 30.04.2012 for the said penalty levied as the Company does not agree to the same.

6. ACIT, CC- 20 had filed an appeal 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 Hon'ble High Court pronounced the order for the above said case in the Company's favour vide order dated. 12.01.2012.

7. For the FY 2006-07, Central Excise, Customs and Service Tax Commissionerate, Vapi levied penalty of Rs. 8, 59, 04,087/- under Cenvat Credit Rules, 2004 of Central Excise Act, 1944. 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 whole amount raised as demand remains disputed.

8. Segment Information

(a) The Company deals in Copper Products and is treated as the only segment.

(b) Secondary Segment-Geographical bySale

9. Related Party Disclosures

(i) Name of the related parties and related party relationship

(a) Individuals Controlling the Enterprise and Key Management Personnel

Mr. Sanjay S. Mardia Chairman

Mr. Ratanlal S. Mardia Managing Director

Mr. Atul S. Mardia Director

Mr. Praveen Kumar H. Shah Director

Mr. Shailesh H.Shah Director

Mr. VijayDuttVyas Director

(b) Relatives of Key Management Personnel

Mr. Shantilal Mardia Father of Chairman

Mrs. Bela S. Mardia Wife of Chairman

Mrs. Sunita R. Mardia Wife of Managing Director

(c) Enterprises in which key management personnel & their relatives are interested.

Danial Investment Private Limited

NC Middle East FZE

Note: Related party relationship on the basis of the requirements of Accounting Standard 18 (AS-18) as in 1(a), 1(b) & 1(c) above is pointed out and relied upon by the auditors.

(ii) Related party Transactions

The Following table provides the total amount of transactions that have been entered into with related parties for the relevant financial year:

a. Sale/Purchase of goods and services- Not Applicable.

10. Leases

Disclosure as required by Accounting Standard 19, "Leases", issued by the Institute of Chartered Accountants of India are given below:

(i) Lease payments are recognised in the statement of Profit & Loss Account under "Rent" in Note No. 28. Company with effect from 1 stJuly2010 has shifted its corporate office. The said Agreement is for a period of 3 years.

(ii) The future minimum lease payments under non-cancellable operating lease - Not laterthan oneyear: Rs. 27, 29,925/- - Laterthan one year and not laterthan five years: Rs. 1,09,19,700/-

11. Sales & Services include Rs. 2,111,350,642/- (Previous Year - Rs. 1,421,110,254) for traded goods.

12. Capitalization of Expenditure

During the year, the company has capitalized the following expenses of revenue nature to the cost of fixed asset/ capital WIP. Consequently, expenses disclosed under the respective notes are net of amounts capitalized by the company.

During the year, company has consolidated its equity share of the face value of Re. 1/- (Rupee One) each into 1 equity share of the face value of Rs. 10/- (Rupees Ten) each. The Face value of Paid up share Capital for the corresponding previous year ending 31st March 2011 is also considered at Rs.10/- per share for the purpose of comparison of EPS.

13. The outstanding balances of Sundry Debtors, Sundry Creditors, Deposits, Loans and Advances & Loans Liabilities are subject to confirmation.

14. 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.

15. All the amounts are stated in Indian Rupees, unless otherwise stated.

16. Previous years figures are regrouped and rearranged wherever necessary.

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Mar 31, 2011

1. During the Financial Year 2010-11, Company issued GDR's of Rs.100 crores & listed the same at the Luxembourg Stock Exchange. The company allotted 2,50,00,000 shares of Rs 10 per share at a premium of Rs 30 per share against GDR. Company has allotted 8,87,90,000 Equity Shares on conversion of Equity Warrants. The face Value of the shares has been subdivided from Rs.10/- each to Re.1/- each.

2. The outstanding balances of Sundry Debtors, Sundry Creditors, Deposits, Loans and Advances are subject to confirmation.

3. Sundry Creditors include amount due to Small Scale and ancillary Industrial Undertakings Rs. 4.16 Lacs (Previous year Rs. 14.29 lacs) to the extent such parties have been identified from available information with the Company. The small Scale and ancillary Industrial Undertakings to whom amounts outstanding for more than 30 days: Shree Laxmi Tubes.

4. Contingent Liabilities

(Rs. in Lacs)

2010-11 2009-2010

Bank Guarantees (net of margin) 1,459.92 306.72

Excise Duty F.Y. 2004-05 (Refer note no. 16). - 104.69

Excise Duty F.Y 2006-07 859.04 859.04

Income Tax Appeal – AY 04-05 6.56 -

AY 05-06 311.58

AY 06-07 1,302.75

AY 07-08 387.8

AY 08-09 432.55

AY 09-10 62.06

Total Statutory Disputed Dues 3,362.34 963.73

Total Contingent Liabilities 4,822.26 1,270.45

5. Installed Capacity, Production, Purchase & Sales & Stocks (i) Installed Capacity, Production, Purchases, Sales

NOTES:

(a) Installed Capacity includes 12,000 MT, installed capacity of New Plant -ACR Copper Tube, which was started on a trail run basis during the current financial year.

(b) Actual production includes production used for captive consumption and job work for customers.

(c) Sale includes traded sale also.

6. Segment Information

(a) The Company deals in Copper Products and is treated as the only segment.

(b) Secondary Segment – Geographical by Sale

7.Related Party Information

(i) Relationship

(a) Individuals Controlling the Enterprise and Key Management Personnel

1. Mr. Sanjay S. Mardia Chairman

2. Mr. Ratanlal S. Mardia Managing Director

3. Mr. Atul S. Mardia Director

4. Mr. Praveen Kumar H. Shah Director

5. Mr. Shailesh H. Shah Director

6. Mr. Nitin Mehta Director

(b) Relatives of Key Management Personnel

Mr. Shantilal Mardia Father of Chairman

Mrs. Bela S. Mardia Wife of Chairman

Mrs. Sunita R. Mardia Wife of Managing Director

(c) Enterprises in which key management personnel & their relatives are interested.

Danial Investment Private Limited

NC Middle East FZE

Note: Related party relationship on the basis of the requirements of Accounting Standard 18 (AS-18) as in 1(a), 1(b) & 1(c) above is pointed out and relied upon by the auditors.

8. Disclosure as required by Accounting Standard 19, “Leases”, issued by the Institute of Chartered Accountants of India are given below:

(i) Lease payments are recognised in the statement of Profit & Loss Account under “Rent” in schedule ‘N'. Company with effect from 1st July 2010 has shifted its corporate office. The said Agreement is for a period of 3 years.

(ii) The future minimum lease payments under non-cancellable operating lease

– Not later than one year: Rs. Nil.

– Later than one year and not later than five years: Rs. 24,569,325/-

9. Computation of Earning per share (Basic & Diluted)

During the year, company has subdivided its equity share of the face value of Rs. 10/- (Rupees Ten) each into ten equity shares of the face value Re. 1/- (Rupee One) each. The Face value of Paid up share Capital for the corresponding previous year ending 31st March 2010 is also considered at Re.1/- per share for the purpose of comparison of EPS.

10. Legal & Professional fees (Finance) (Refer Schedule “N” forming part of financial statements) has been increased as compared to last year, as the same has been paid as advisory fees in connection to raising funds for the new project – ACR Copper Tube.

11. Sales & Services include Rs. 14,211.10 Lacs (Previous Year - Rs. 6,832.62 Lacs) for traded goods.

12. Balances with Excise / Customs Authorities included Excise duty paid under dispute of Rs. 1,04,68,908/- which is now transferred to expenses since the credit for the same was not received.

13. A search & seizure action u/s. 132(1) was carried out on 17.01.2009. Due to this A.Y. 03-04 to A.Y. 09-10 were covered under Block assessments. Assessments for the respective years were completed and assessment order for the same was received on 31.12.2010. Total Demand raised was of Rs.348,227,165/- which was further reduced to Rs. 280,335,020/- after rectification of the assessment orders u/s 154 of Income Tax Act, 1961. Out of the total demand company has paid Rs. 3 crores. The company has filed an appeal with the CIT (A) for the demand raised for AY 2004- 05 to AY 2009-10 as the company do not agree to the disallowances made in the respective years. So the whole amount raised as demand remains disputed.

14. ACIT, CC- 20 has filed an appeal 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, Ahemadabad pronounced the order for the above said case in the Company's favour. The same matter is also disallowed in the Block Assessment order and thus has not been considered separately as it is shown in Contingent Liability in Point No. 7 of Notes to Accounts.

15. All the amounts are stated in Indian Rupees, unless otherwise stated.

16. Previous years figures are regrouped and rearranged wherever necessary.

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Mar 31, 2010

1. The outstanding balances of Debtors, Creditors, Deposits and advances are subject to confirmation.

2. Sundry Creditors include amount due to Small Scale and ancillary Industrial Undertakings Rs. 24.29 Lacs (Previous year Rs. 57.29 lacs) to the extent such parties have been identified from available information with the Company. The small Scale and ancillary Industrial Undertakings to whom amounts outstanding for more than 30 days: Spring Merchandisers Pvt. Ltd., Shree Laxmi Tubes.

3. Contingent Liabilities

(Rs. in Lacs) 2009-10 2008-2009 Bank Guarantees (net of margin) 306.72 748.66 Excise Duty F.Y. 2004-05 (Refer note no. 13). - 104.69 Excise Duty F.Y 2006-07 859.04 859.04 Income Tax appeal - I.Tax A.Y. 2005-06 - 57.69 Income Tax appeal - I.Tax A.Y 2006-07 - 702.63 D.D.I, searched on 17.01.2009 result awaited. - -

NOTES:

(a) Actual production includes production used for captive consumption and job work for customers.

(b) Sale includes traded sale also.

4 Segment information

(a) The Company deals in Copper Products and is treated as the only segment.

(b) Secondary Segment - Geographical by Sale

5 Related Party Information

(i) Relationship

(a) individuals Controlling the Enterprise and Key Management Personnel

1. Mr. Sanjay S. Mardia Chairman 2. Mr. Ratanlal S. Mardia Managing Director 3. Mr.AtuI S. Mardia Executive Director 4. Mr. Praveen kumar H. Shah Director 5. Mr. Shailesh H. Shah Director 6. Mr. Nitin Mehta Director

(b) Relatives of Key Management Personnel

Mrs. Bela S. Mardia Wife ofChairman Mr. Sunita R. Mardia Wife of Managing Director

(c) Enterprises in which key management personnel & their relatives are interested.

Danial Investment Private Limited

Note: Related party relationship on the basis of the requirements of Accounting Standard 18 (AS-18) as in 1(a), I (b) & I (c) above is pointed out and relied upon by the auditors.

6 Disclosure as required by Accounting Standard 19,"Leases", issued by the Institute of Chartered Accountants of India are given below:

(i) Lease payments are recognised in the statement of Profit & Loss Account under "Rent" in schedule N.

(ii) The future minimum lease payments under non-cancellable operating lease - not later than one year: Rs. nil- later than one year and not later than five years: Rs. nil.

7 Sales & Services include Rs. 6832.62 Lacs (Previous Year - Rs. 4540.74 Lacs) for traded goods.

8 Balances with Excise/Customs Authorities of Rs. 2,90,30,721 includes Rs. 1,04,68,908 which was debited against credit balance in RG23A by the company at the time of search but not agreed..

9 D.D.I, searched on 17.01.2009 which covers A.Y. 03-04 to A.Y. 08-09 (6 Years) Therefore Income Tax appeal -

10. Tax A.Y. 2005-06 & A.Y. 2006-07 is also getting covered in searched years.The Liabilities is not yet decided as result is awaited.

11 Figures of the previous year have been regrouped, rearranged & so as to make them comparable with the figures of the current year.