Resurgere Mines & Minerals India Ltd

To,

The Members,

Resurgere Mines & Minerals India Limited.

We have audited the attached Balance Sheet of Resurgere Mines & Minerals IndiaLimited as at 31st March, 2010 and also the annexed Profit and Loss Account and Cash FlowStatement for the year ended on that date. These financial statements are theresponsibility of the Company’s Management. Our responsibility is to express anopinion on these financial statements based on our audit.

1. We conducted our audit in accordance with auditing standards generally accepted inIndia. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. Anaudit includes examining on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides a reasonable basisfor our opinion.

2. As required by the Companies (Auditors Report) Order, 2003 issued by the CentralGovernment of India in terms of Section 227(4A) of the Companies Act, 1956, we annexhereto a statement on the matters specified in the paragraphs 4 and 5 of the said Order.

3. Further to our comments in the Annexure referred to above, we report that: a) Wehave obtained all the information and explanations, which to the best of our knowledge andbelief were necessary for the purpose of our audit.

b) In our opinion, proper books of accounts as required by law have been kept by theCompany as it appears from our examination of such books.

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

d) In our opinion and to the best of our information and according to the explanationsgiven to us, the said Balance Sheet, the Profit and Loss Account and the Cash FlowStatement comply with the Accounting Standards referred to in Section 211 (3C) of theCompanies Act, 1956.

e) On the basis of written representation received from the Directors as on 31st March,2010 and taken approval by the Board, we report that none of the Directors is disqualifiedas on 31st March, 2010 from being appointed as Directors in terms of Clause (g) ofSubsection (1) of Section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanationsgiven to us, the said accounts read together with other notes thereon give the informationrequired by the Companies Act in the manner so required and give a true and fair view inconformity 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 31stMarch, 2010 and

ii) In the case of the Profit and Loss Account, of the profit of the Company for theyear ended on that date.

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

Annexure to Auditors Report

Annexure referred to in Paragraph 2 of the Auditors Report to the members of ResurgereMines & Minerals India Limited for the year ended 31st March 2010.

As required by the Companies (Auditors Report) Order, 2003 and amendments thereto andaccording to the information and explanations given to us during the course of the auditand on the basis of such checks of the books and records as were considered appropriate wereport that:

i) a) The Company has generally maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.

b) As explained to us, all the assets have been physically verified by the managementin accordance with a phased programme of verification, which in our opinion is reasonable,considering the size and the nature of business. The frequency of verification isreasonable and no material discrepancies have been noticed on such physical verification.

c) The Company has not disposed off any substantial part of its fixed assets during theyear.

ii) a) As explained to us, the management has conducted physical verification ofinventories during the year at reasonable intervals.

b) The procedures of physical verification of the inventories followed by themanagement are reasonable and adequate in relation to the size of the Company and thenature of its business.

c) The Company has maintained proper records of inventories and discrepancies noticedon physical verification of inventories as compared to book records were not material.

iii) a) The Company has granted unsecured loans to one party covered in the registermaintained under Section 301 of the Companies Act 1956. The maximum amount outstandingduring the year was Rs. 206.41 Lacs and the year end balance was Rs. 59.08 Lacs.

b) The interest rate and other terms & conditions on which the loans have beengiven are prima facie, not prejudicial to the interest of the Company.

c) The payment of the principal amount and interest are also regular of the said loan.

d) In view of our comments in Para (iii) (c) above, clauses 4 (iii) (d) of the saidOrder are not applicable to the Company.

e) The Company has not taken unsecured loans from parties covered in the registermaintained under section 301 of the Companies Act, 1956.

f) In view of our comments in para (iii) (e) above, clause 4(iii) (f) of the said orderis not applicable.

g) In view of our comments in para (iii) (e) above, clause 4(iii) (g) of the said orderis not applicable.

iv) In our opinion and according to the information and explanations given to us, thereare adequate internal control system commensurate with the size of the Company and thenature of its business with regard to purchases of inventory, fixed assets and with regardto the sale of goods and services During the course of our audit, we have not observed anycontinuing failure to correct major weakness in internal control systems.

v) a) Based on the audit procedures performed by us, we are of the opinion thatparticulars of contracts or arrangements referred to in Section 301 of the Act have beenentered in the register required to be maintained under that section.

b) The transactions made in pursuance of such contracts or arrangements have been madeat prices which are reasonable having regard to prevailing market prices at the relevanttime.

vi) The Company has not accepted any deposits from the Public.

vii) In our opinion, the Company has an internal audit system commensurate with thesize and nature of its business.

viii) We are informed by the management that the Central Government has not prescribedfor maintenance of Cost Records under section 209(1) (d) of the Companies Act, 1956 forthe products of the Company.

ix) a) Accordingly to the records of the Company, the undisputed statutory duesincluding Provident Fund, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty,and Cess except Income Tax have generally been regularly deposited with the appropriateauthorities. According to the information and explanations given to us, there are noundisputed amount payable in respect of such statutory dues, except Income Tax forAssessment year 09-10 amounting to Rs. 821.35 Lac, which have remained outstanding as at31st March, 2010 for a period more than six months from the date they became payable.

b) According to the information and explanations given to us, the Company has no duesof Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess whichhave not been deposited on account of disputes with the related authorities.

x) The Company has no accumulated losses at the end of the financial year and has notincurred cash losses in the current financial year and in the immediately precedingfinancial year.

xi) In our opinion and according to the information and explanation given to us theCompany has not defaulted in repayment of its dues to banks and financial institutions.

xii) The Company has not granted any loans or advances on the basis of security by wayof pledge of Shares, Debentures or Other Securities.

xiii) The provisions of any Special Statute applicable to Chit Fund, Nidhi or MutualBenefit Fund/ Societies are not applicable to the company.

xiv) According to the information and explanation given to us the company is notdealing or trading in shares, securities, debentures or other Investments.

xv) The Company has not given any guarantees for loans taken by others from banks andfinancial institutions.

xvi) The Company has applied all the amounts obtained as term loans during the year forthe purpose they were obtained.

xvii) On an overall examination of the balance sheet of the Company, we report that nofunds raised on Short-term basis have been used for Long term investment.

xvii) The Company has not made any preferential allotment of Equity Shares during theyear to parties covered in the register maintained under Section 301 of the Companies Act,1956.

xix) The Company has not issued any debentures during the year

xx) The Company has not made an Initial Public Offer during the year.

xxi) On the basis of our examination and according to the information and explanationgiven to us, no fraud, on or by the Company, has been noticed or reported during the year.