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Notes to Accounts of Jayaswal Neco Industries Ltd.

Mar 31, 2023

In the earlier years, the Directorate of Enforcement by way of two attachments had provisionally attached the Plant and Machinery under installation at Dagori Integrated Steel Plant situated at Bilha, Bilaspur (Chhattisgarh) and certain property, plant and equipment at Steel Plant Division, Siltara, Raipur to the extent of Rs. 30758.39 Lakhs for alleged misuse of coal raised from Gare Palma IV/4 coal block in Chhattisgarh.

The Adjudicating Authority had confirmed the above provisional attachments. Subsequently, the Appellate Authority stayed both the attachments on an appeal filed by the Company where the matter has been put up for hearing on 23^rd August 2023. The Company has a good case on merits, is likely to succeed in refuting the allegations and does not expect any material liability on the Company on this account.

In the earlier years, after completion of investigation the CBI had filed Charge-Sheet against the Company and Mr. Ramesh Jayaswal, Jt. Managing Director (JMD) alleging misrepresentation and violation of the terms and conditions of the Gare IV/4 Coal Block Allotment Letter and the executed Mining Lease.

The aforesaid action was in connection with FIR of Central Bureau of Investigation (CBI), Economic Offence Wing, New Delhi registered on 22^nd May 2014 against the Company and unknown Public Servants in connection with the allotment of Gare IV/4 Coal Block situated in the State of Chhattisgarh.

On 30^th May 2019, the Special CBI Court, New Delhi, took cognizance of the matter and issued summons against the Company and Mr. Ramesh Jayaswal - JMD. The summons was received by the Company in June, 2019. The Company and Mr. Ramesh Jayaswal had been charged for the offence under Section 120-B/420/406 of the Indian Penal Code.

The Company strongly refutes all the allegations. The Company believes it has a good case on merits and is confident that the Company and Mr. Ramesh Jayaswal -JMD would be able to defend themselves before the authorities during the course of trial.

During the year, active development of project of DRI and Captive Power Plant at Bilaspur, Chhattisgarh remained suspended and accordingly the Company has not capitalised Borrowing Costs as per Ind AS - 23.

CWIP includes Bilha Bilaspur project amounting to Rs. 47969.11 Lakhs (Previous Year Rs. 47646.09 Lakhs) had been put under abeyance on account of cancellation of the captive coal mines of the Company by the Honourable Supreme Court of India. The Company had recognised an impairment provision of Rs. 43670.11 Lakhs (Previous Year Rs. 43347.09 Lakhs) for the same in accordance with the Indian Accounting Standards (Ind AS) 36 - ''Impairment of Assets'' and the Project remained suspended during the year.

In accordance with the Indian Accounting Standard (Ind AS) 36 on "Impairment of Assets", during the year, the management carried out an exercise of identifying the assets that may have been impaired in accordance with the said Ind AS. On the basis of a review carried out by the management, there was no further impairment loss on property, plant and equipment and Capital Work in Progress during the year ended 31^st March, 2023.

There are no projects under capital work in progress (CWIP) whose completion is overdue except as stated above and in Note no. 2.09 and 2.10.

(b) The Company does not have any intangible assets under development, whose completion is overdue or has exceeded its cost compared to its original plan except as mentioned in Note No.3.03.

3.03 The Intangible Assets under Development include Rs. 1520.75 Lakhs towards Metabodeli Mines (50 Hectares) and Rs. 46.88 Lakhs towards the Ramdongri Mines and Rs. 27.40 Lakhs towards Sonadehi Mines; in case of Metabodeli Mines, the Company had challenged the validity of Section 10 A (2) (c) of the MMDR Amendment Act, 2015 and Rule 8 (4) of the MCR, 2016 before the Hon''ble Chhattisgarh High Court which was pleased to pass an interim order dated 12^th January, 2017, keeping the application of the company alive for consideration. Presently, the matter has been transferred to the Hon''ble Supreme Court where the interim order of the Hon''ble High Court continues to be alive.

In case of Ramdongri Mines, the State Government of Maharashtra had granted Mining Lease in favor of the Company on 17^th August, 2004. The said order was challenged by an aggrieved party before the Mines Tribunal first and then before the Hon''ble Bombay High Court, Nagpur Bench, Nagpur. On 17^th November, 2022, the Petitioner has withdrawn the petition filed before the Hon''ble High Court. Now the company is perusing the matter with the Government authorities for completion of procedural formalities for execution of the Mining Lease.

The company has challenged the 2021 Amendment to the MMDR Act, 1957, before the Hon''ble Chhattisgarh High Court, vide Writ Petition No. 3696 of 2021, wherein, after hearing the parties, the Hon''ble High Court was pleased to grant interim stay on 6^th October, 2021. Vide the above referred Writ Petition, the company has included Sonadehi, Devpura and Metabodeli Mines while challenging the provisions of Amendment of MMDR Act, 2021.

In view of the Central Government''s clarification to the State Government as regards the eligibility of the Prospecting license holder for the grant of Mining Lease, the Company opines that its case with respect to the Metabodeli Mines

falls Under Section 10 A (2) (b) and not under clause (C) thereof, as advised by the State Government in the past.

That in view of above, the company filed Writ Petition No. 2757 of 2020, before the Hon''ble Chhattisgarh High Court, to ensure that the Mining Lease over the subject area is granted in favor of the Company in terms of Section 10 A (2) (b) of the MMDR Act, 1957, upon completion of all the conditions contained therein. Presently the matter is pending for consideration before the Hon''ble High Court.

The Company is also of the view that the Company''s above cases are already pending under Section 10A (2) (c) of the Mining Act and the matters are subjudice, therefore the amendments done in Section 10A (2) (b) will not have any impact on the status of the Mines. Further the amendment under the Mining Act in the second Proviso of Section 10A (2) (b) provides that "the holder of a reconnaissance permit or prospecting license whose rights lapsed under the first proviso, shall be reimbursed the expenditure incurred towards reconnaissance or prospecting operations in such a manner as may be prescribed by the Central Government"; accordingly, the Company does not envisage any losses on account of the above amendment.

3.04 The Company had filed Mining Lease applications for Rowghat Iron Ore Deposit, Bastar, Chhattisgarh. The Chhattisgarh State Government (SG) had rejected the same by a common order which was challenged by the Company. The SG had filed a complaint before the Ministry of Mines which had referred the matter to the Chief Vigilance Officer (CVO), which couldn''t make out any case against the Company. The revision petition of the Company was allowed and subsequently the Hon''ble Delhi High Court also confirmed the order. The Hon''ble Delhi High Court had specifically observed that the Company had successfully undertaken prospecting operations in the area.

Subsequently in 2012, SG filed a fresh complaint containing the same allegations before the Chief Vigilance Commission (CVC). The Central Bureau of Investigation (CBI) on the directions of the CVC had registered an FIR against the Company alleging certain irregularities. Post completion of the investigations by CBI, the Chargesheet was filed by the CBI before Special CBI Court Nagpur. The Company doesn''t expect any financial effect of the above matter under litigation.

16.02 During the year ended 31^st March, 2022, pursuant to the Restructuring Support Agreement (RSA) and Shareholders'' Agreement (SHA), on 28^th October 2021, the Company had issued and allotted 30,52,81,848 equity shares to Assets Care & Reconstruction Enterprise Ltd (ACRE) acting in its capacity as trustee of various trusts ("ACRE Trusts") and 2,70,83,333 equity shares to the Promoters / Promoter Group (face value of Rs. 10 each) at the issue price of Rs. 28.80 per share aggregating to Rs. 95721.17 Lakhs.

Accordingly, Rs. 87921.17 Lakhs of the total borrowings from ACRE Trusts and Rs. 5800.00 Lakhs of Advance against Share Application Money and Rs. 2000.00 Lakhs of Inter Corporate Deposits of the Promoters / Promoter Group in the Company were converted into equity shares of the Company.

16.05 Rights of Equity Shareholders

The Company has only one class of equity shares having a face value of Rs. 10/- per share. Each shareholder is eligible for one vote per share held. In the event of liquidation of the Company, the equity shareholders will be entitled to receive any of remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

16.06 There are no shares reserved for issue under options and contracts / commitments.

16.07 Dividend Paid and Proposed of Rs. Nil (Previous Year : Rs. Nil)

NATURE AND PURPOSE OF RESERVES

Capital Reserve

The Capital Reserve was created pursuant to the Scheme of Merger ofthe Steel Division of Corporate Ispat Alloys Limited, Amalgamation of Nagpur Alloy Casting Limited and Capital incentive received from Government of Maharashtra. It shall be utilised in accordance with the provisions of the Companies Act, 2013.

Securities Premium

Securities Premium was created when shares were issued at premium. It shall be utilised in accordance with the provisions of the Companies Act, 2013.

General Reserve

The General Reserve was created pursuant to the Scheme of Amalgamation of Inertia Iron and Steel Industries Private Limited, Merger of Sponge Iron Plant and Power Plant of Corporate Ispat Alloys Limited and Abhijeet Infrastructure Limited. It shall be utilised in accordance with the provisions of the Companies Act, 2013.

Capital Redemption Reserve

Capital Redemption Reserve was created for redemption of Preference Shares. It shall be utilised in accordance with the provisions of the Companies Act, 2013.

Retained Earnings

Retained Earnings represent the accumulated profits/losses made by the Company over the years.

Revaluation Reserve

Revaluation Reserve was created for revaluation of Factory Building and Shed. It shall be utilised in accordance with the provisions of the Companies Act, 2013.

Other Comprehensive Income

Other Comprehensive Income (OCI) represents the amount recognised in Other Equity consequent to remeasurement of Defined Benefit Plan.

Equity Component of Compound Financial Instruments

The Company had received the Interest free Inter Corporate Deposits from the Promoters and under Ind AS the difference between the Fair Value and Transaction Value is recognised as Equity Component of Compound Financial Instruments under Other Equity.

18.01 As per the terms of the Restructuring Support Agreement (RSA) dated 23^rd August 2021, the Company has to refinance its outstanding amount of Term Loans (Refer Note No. 23) and Interest Accrued but not due on Borrowings (Refer Note No. 26) of Assets Care & Reconstruction Enterprise Limited (ACRE) acting in its capacity as trustee of various trusts (ACRE Trusts) on or before 15^th December 2023. The Company has the potential and is confident that it will refinance the term loans on or before the extended date of Refinancing i.e 15^th December, 2023 as per the terms of RSA. Over and above the scheduled debt servicing, the company has already made prepayment as cash sweep of its term loans of Rs. 60884.60 Lakhs for the period from 1^st April 2020 to 31^st March 2023 to reduce its debt obligations significantly.

However as on 31^st March, 2023, in view of IND AS-1 (Presentation of Financial Statements), as the Company does not have an unconditional right to defer the settlement of the liability beyond twelve months from the reporting period of 31^st March, 2023 and the liability is due for refinance on 15^th December, 2023, hence the entire Term loans from ACRE Trusts has now been shown under the head "Current Liabilities".

If the above amount would have been continued to be classified as non-current, the Company''s Non-Current Borrowings would have been higher by Rs. 315688.18 Lakhs and consequently the current borrowing would have been lower to that extent.

18.02 The Term Loans from the ACRE Trusts referred to in Note no. 23 & 26 aggregating to Rs. 339288.18 Lakhs (including Rs. 4200.00 lakhs of Interest Accrued but not due shown under the head Other Current Financial Liabilities) are guaranteed by an unconditional and irrevocable personal guarantee provided by Mr. Basant Lall Shaw (Chairman of Company), Mr. Arvind Jayaswal (Managing Director of Company) and Mr. Ramesh Jayaswal (Joint Managing Director of Company). Further the entire Term Loans from the ACRE Trusts are secured by way of pledge of the entire Equity Shares of the Company held by the Promoters and Promoter Group Companies.

18.03 Term loans from the ACRE Trusts referred to in Note no. 23 & 26 aggregating to Rs. 339288.18 Lakhs (including Rs. 4200.00 lakhs of Interest Accrued but not due shown under the head Other Current Financial Liabilities) are secured by way of:

a. a pari passu first charge / equitable mortgage on all the immovable properties of the Company (excluding the ED Attached Assets - Dagori (Bilaspur) and the CIAL Assets acquired under merger), including but not limited to the immovable properties of the Company.

b. a pari passu first charge / equitable mortgage on the Neco Ceramics Land and other immovable assets, if any.

c. a pari passu first charge on all the present and future movable fixed assets of the Company (excluding the ED Attached Assets - Dagori (Bilaspur)), including but not limited to its movable plant and machinery, machinery spares, tools and accessories and movables (except current assets), including but not limited to goodwill, undertaking, uncalled capital and intellectual property rights, present and future howsoever and whosesoever in the possession of the Company.

d. a pari passu second charge on all the present and future current assets of the Company, including but not limited to raw materials, finished and semi-finished goods, book debts, revenue and receivables, claims, consumable stores and marketable securities.

18.04 Term loans from ACRE Trusts referred to in Note no. 23 & 26 aggregating to Rs. 339288.18 Lakhs (including Rs. 4200.00 lakhs of Interest Accrued but not due shown under the head Other Current Financial Liabilities) are to be repaid/refinanced as per the sanction terms as under:

Rs. 195688.18 Lakhs is to be Refinanced by 15^th December 2023 (Extended date of refinance).

Rs. 120000.00 Lakhs is to be Refinanced by 15^th December 2023 (Extended date of refinance).

Rs. 19400.00 Lakhs is repayable in monthly instalments of Rs. 2300.00 Lakhs till the extended date of refinancing as per the terms and conditions of the RSA and the balance outstanding will be waived off in case the refinancing is done before 15^th December, 2023 (Extended date of refinance).

Rs. 4200.00 Lakhs of Interest Accrued but not due shown under the head Other Current Financial Liabilities, is to be Refinanced by 15^th December 2023 (Extended date of refinance).

28.01 During the year 2005, the Government of Chhattisgarh published the Chhattisgarh Upkar (Sansodhan) Adhiniyam, 2004, according to which the Company is liable to pay energy development cess @10 paise per unit generated from its captive power plants. The levy of energy development cess has been disputed by the Company and the matter is pending before the Hon''ble Supreme Court of India.

The Office of the Chief Electrical Inspector, Government of Chhattisgarh, had sent demands for the energy development cess since the Hon''ble Supreme Court of India vide its interim order dated 2^nd November 2007, permitted the department to raise the bill, however it directed that no coercive steps shall be taken by the State to recover the dues till further orders.

The legislative competence of the Government of Chhattisgarh is not under challenge. The Company had been legally advised in the past that it is highly unlikely that the provision by which the State Government has imposed energy development cess will be struck down by the Hon''ble Supreme Court of India. In view of the above and as a matter of prudence, the Company has made a provision of energy development cess aggregating to Rs. 5904.56 Lakhs till 31^st March 2023.

The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. In presenting the above sensitivity analysis, the present value of Defined Benefit Obligation has been calculated using the Projected Unit Credit method at the end of reporting period, which is the same as that applied in calculating the defined obligation liability recognised in the Balance Sheet.

32.04 Risk Exposures

These plans typically expose the company to Actuarial risks as Investment Risk, Interest Rate risk, Longevity risk and Salary risk.

Investment Risk The present value of the defined benefit plan obligation is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds.

Interest Rate Risk A decrease in the bond interest rate will increase the plan obligation; however, this will be partially offset by an increase in the return on the plan debt investments.

Longevity Risk The present value of the defined benefit plan Obligation is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s obligation.

Salary Risk The present value of the defined plan liability is calculated by reference to the future salaries of plan

participants. As such, an increase in the salary of the plan participants will increase the plan''s obligation.

NOTE : 37 CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for) (Rs. in lakhs)
Particulars	For the year ended 31.03.2023	For the year ended 31.03.2022
A I GUARANTEES
a. Guarantees given by the Company''s Bankers	1833.66	1850.38
(Bank guarantees are provided under contractual / legal obligation)
TOTAL	1833.66	1850.38
II LETTERS OF CREDIT OUTSTANDING
a. Letters of Credit opened in favour of Suppliers	11638.61	24764.72
(Cash flow is expected on receipt of material from suppliers)
b. Liability in respect of Bills Discounted	460.17	747.53
TOTAL	12098.78	25512.25
III OTHER CONTINGENT LIABILITIES
Claims against the Company not acknowledged as debts
a. Disputed Excise Duty and Service Tax	907.68	265.60
b. Disputed Sales Tax	1494.17	1266.28
c. Disputed Customs Duty	184.79	184.79
d. Other Disputed Demands	6984.04	6408.01
(Mainly related to demand of Electricity Duty and Stamp Duty)
e. Third Party Claims	254.72	4911.24
(Matters are pending before various forums)
TOTAL	9825.40	13035.92

B Management is of the view that above litigations will not impact significantly the financial position of the Company.

C The Company had received Show Cause notices from the Excise and Goods and Service Tax (GST) department which mainly

relate to demand of duty for sale of exempted goods and denial of credit on structural steel, new plants, railway receipt, bank expenses and outward freight, Demand on CAMPA fund and Royalty etc. The Company has also received a Show Cause notice from the Additional Director General, DGGI, which relates to demand of service tax on amount received against the cancellation of three coal mines/block. The Company does not foresee any losses on this account.

B. Segment Identification, Reportable Segments and definition of each segment :

i. Reportable Segments :

The Company''s operating segments are established on the basis of those components that are evaluated regularly by the Chief

Operating Decision Maker, in deciding how to allocate resources and in assessing performance. These have been identified and

reported taking into account the differing risks and returns, nature of products, the organisational structure and the internal

reporting system of the Company.

ii. Primary / Secondary Segment Reporting Format :

a) The risk-return profile of the Company''s business is determined predominantly by the nature of its products. Accordingly, the business segments constitute the Primary Segments for disclosure of segment information.

b) Since all the operations of the Company are predominantly conducted within India, there are no separate reportable geographical segments.

c) No Non-Current Assets of the Company is located outside India as on 31^st March, 2023 and 31^st March 2022.

d) No single customer has accounted for more than 10% of the Company revenue for the year ended 31^st March, 2023 and 31^stMarch, 2022.

iii. Segment Composition :

a) Steel Segment is engaged in manufacture and sale of Pig Iron, Billets, Rolled Products including Alloy Steel, Sponge Iron and includes its captive Power Plants at its unit located at Siltara, Raipur and Mining activities in the state of Chhattisgarh and Maharashtra.

b) I ron and Steel Castings Segment comprises of manufacture and sale of Engineering and Automotive Castings with production facilities at Nagpur in Maharashtra and Anjora in Chhattisgarh.

c) Other Segment comprises of trading of PVC pipes.

d) Unallocated comprises of income, expenses, assets and liabilities which can not be directly identified to any of the above segments.

NOTE : 39 RELATED PARTY DISCLOSURES :

In accordance with the requirements of Ind AS 24, on Related Party Disclosures, name of the related party, related party relationship, transactions and outstanding balances including commitments where control exists and with whom transactions have taken place during reported year, are as detailed below:

ii) Level 2 :- Inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). It includes fair value of the financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on the Company specific estimates. If all significant inputs required to fair value an instrument are observable then instrument is included in level 2.

43.02 Fair Valuation techniques used to determine Fair Value

The Company maintains procedures to value its financial assets or financial liabilities using the best and most relevant data

available. The Fair Values of the financial assets and liabilities are included at the amount that would be received to sell an

asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The following methods and assumptions were used to estimate the Fair Values:

i) Fair Value of Cash and Cash Equivalents, Other Bank Balances, Trade Receivable, Trade Payables, Current Loans, Current Borrowings, Deposits and other Current Financial Assets and Liabilities are approximate at their carrying amounts largely due to the short-term maturities of these instruments.

ii) The Fair Values of Non-Interest bearing and Concessional Interest bearing Secured Non-current Borrowings is calculated based on discounted cash flows using a lending rate. They are classified as level 2 fair values in the fair value hierarchy due to the inclusion of observable inputs. The Fair Value of Security Deposits are approximate at their carrying amount due to interest bearing features of these instruments.

iii) Fair values of Investment in equity are derived from quoted market prices in active markets.

iv) The Fair Value of the remaining financial instruments is determined using discounted cash flow analysis.

v) The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

43.03 Fair Value Hierarchy

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation

techniques:-

i) Level 1 :- Quoted prices / published Net Assets Value (unadjusted) in active markets for identical assets or liabilities. It includes fair value of financial instruments traded in active markets and are based on quoted market prices at the Balance Sheet date and financial instruments like mutual funds for which Net Assets Value is published by mutual fund operators at the Balance Sheet date.

NOTE : 44 Financial Risk Management - Objective and Policies

The Company is exposed to Market Risk, Credit Risk and Liquidity Risk. Risk management is carried out by the company under the policy and plan as approved by the Board of Directors. The Risk management plan defines how risks associated with the Company will be identified, analysed, and managed. It outlines how risk management activities will be performed, recorded, and monitored by the Company. The basic objective of risk management plan is to implement an integrated risk management approach to ensure that all significant areas of risks are identified, understood and effectively managed, to promote a shared vision of risk management and encourage discussions on risks at all levels of the organization to provide a clear understanding of risk / benefit trade-offs, to deploy appropriate risk management methodologies and tools for use in identifying, assessing, managing and reporting on risks, and to determine the appropriate balance between cost and control of risk and deploy appropriate resources to manage / optimise key risks. The activities are developed to provide feedback to management and other interested parties (e.g. Audit committee, Board etc.) by way of Action taken report. The results of these activities ensure that risk management plan is effective in the long term.

44.01 Market Risk and Sensitivity:

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprise three types of risks: Foreign Currency Rate risk, Interest Rate risk and other Price risks, such as Commodity price risk. Financial instruments affected by market risk include Loans and Borrowings, Deposits and Investments.

The sensitivity analysis relates to the position as at 31^st March, 2023 and 31^st March, 2022.

The sensitivity analysis excludes the impact of movements in market variables on the carrying value of post-employment benefit obligations, provisions and on the non-financial assets and liabilities. The sensitivity of the relevant Statement of Profit and Loss item is the effect of the assumed changes in the respective market risks. This is based on the financial assets and financial liabilities held as at 31^st March, 2023 and 31^st March, 2022.

(a) Foreign Currency Exchange Risk and Sensitivity:

Foreign Currency Exchange risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in Foreign Currency Exchange rates. The Company''s exposure to the risk of changes in foreign currency exchange rates relates primarily to the Company''s operating activities. The Company transacts forex business primarily in USD, SEK and EURO. The Company has foreign currency trade payables and trade receivables and is therefore, exposed to foreign currency exchange risk. The Company regularly reviews and evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management policies and plan.

The Company prices its Iron and Steel products as per the accepted market practices.

The Company primarily purchases its raw materials (other than captively sourced material) in the open market from third parties or approved suppliers on contract basis. The Company is therefore subject to fluctuations in prices for the purchase of noncoking and coking coal and other raw material inputs. The Company purchased substantially large part of its coal requirement from third parties and approved vendors in the open market during the year ended 31^st March, 2023. The company''s major requirement of the Iron ore and fines (major raw materials) is fulfilled from its captive Iron ore mines hence, the commodity price risk of raw materials has been reduced to a great extent.

The Company aims to sell its products at prevailing market prices. Similarly, the Company procures key raw materials like coal based at prevailing market rates. Predominantly the selling prices of steel and castings and that of input raw materials move in the same direction although with a lag effect.

44.02 Credit Risk

Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and other financial instruments.

a) Trade Receivables:

The Company measures the expected credit loss of trade receivables, which are subject to credit risk, based on historical trend, industry practices and the business environment in which the entity operates and adjusted for forward looking information. Loss rates are based on actual credit loss experience and past trends.

b) Interest Rate Risk and Sensitivity:

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is having current borrowings in the form of Term Loan. There is a fixed rate of interest in case of Term Loans and hence, there is no interest rate risk associated with these borrowings upto the date of Refinancing. However, the company has to mitigate the Interest rate risk by negotiating with the new lenders for debt refinancing basis robust debt servicing performance under the debt restructuring.

c) Commodity Price Risk:

The Company''s revenue is exposed to the market risk of price fluctuations related to the sale of its iron, steel and castings products. Market forces generally determine prices for the products sold by the Company. These prices may be influenced by factors such as supply and demand, production costs (including the costs of raw material inputs), global and regional economic conditions and growth. Adverse changes in any of these factors may reduce the revenue that the Company earns from the sale of its products.

b) Financial Instruments and Cash Deposits:

The Company considers factors such as track record, size of the institution, market reputation and service standards to select the banks with which its balances are maintained. The Credit risk from balances with bank is managed by the Company''s finance and treasury department. Investment of surplus funds are also managed by finance and treasury department. The Company does not maintain significant cash in hand. Excess balance of cash other than those required for its day to day operations is deposited into the bank.

For other financial instruments, the finance and treasury department assesses and manages credit risk based on internal assessment. Internal assessment is performed for each class of financial instrument with different characteristics.

44.03 Liquidity Risk:

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. It will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. The Company''s objective is to, at all times, maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company relies on short term borrowings and operating cash flows to meet its need for fund.

With implementation of the debt restructuring, the cash flow position of the Company, financial leverage levels, Liquidity position have improved and have resulted in elimination of the financial stress. Restructuring has also led to realignment of debt to sustainable level, the Company has been doing prompt servicing of debt dues as per the Debt Restructuring from the cut-off date of 31^st March, 2020. (Refer Note No. 18).

For the purpose of Company''s capital management, capital includes issued capital, all other equity reserves and debt. The primary objective of the Company''s capital management is to maximise shareholders value. The Company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirements of the financial covenants.

The Company monitors capital using gearing ratio, which is Net debt divided by the Total Capital Employed (Equity plus Net Debt). Net debt is non-current and current debts as reduced by cash and cash equivalents, other bank balances, non-current bank deposits and current investments. Equity comprises all components including other comprehensive income.

46.01 The Company was having 5.946 acres leasehold Industrial land in the Light Industrial Area, Bhilai, situated in the Village Chhawani of Tehsil Durg, of the Durg District (Construction Casting Division, Bhilai). The Bhilai Plant setup on this land is not in operations. The Company had entered into an Agreement to Sell on 20^th December 2021 for the sale of the Immovable Properties related to Bhilai Plant to an identified buyer. Accordingly, the Company had received part consideration amounting to Rs. 525.00 Lakhs upto 31^st March 2022 as per the executed agreement. The Company has received the remaining consideration of Rs. 250.00 Lakhs in the financial year ended 31^st March 2023 and has submitted all the necessary documents to District Trade & Industrial Centre (DIC) Bhilai for transfer of the said leasehold land. In view of above, the Company has recognised sale of such leasehold land in the financial year ending 31^st March 2023.

44.04 Competition and Price Risk:

The Company faces competition from local and foreign competitors. Nevertheless, it believes that it has competitive advantage as it sells high quality products and by continuously upgrading its expertise and range of products, it strictly adheres to the delivery schedules to meet the needs of its customers.

50.01 The Company had entered into a Contract for setting up 70 TPD Oxygen Plant on lease basis and for its operations and maintenance with M/S Goyal MG Gases Pvt Ltd (Lessor) in the year 2002-03. Subsequently in the year 2015-16 dispute arose between both the parties on couple of issues and the matter was referred to the Sole Arbitrator for adjudication of dispute.

On August 4, 2017 and corrected vide its order dated on September 15, 2017, the Sole Arbitrator passed an Arbitral Award against the company. As per the Arbitral Award, the claims of the company were rejected, and the counter claims were allowed. The Company challenged the Arbitral Award before the Hon''ble Delhi High Court under the Arbitration and Conciliation Act 1996. The Hon''ble High Court dismissed the appeals filed by the company vide its judgment dated December 21, 2017 and judgement dated April 5, 2018.

The Company then filed Special Leave Petition (SLP) in the Hon''ble Supreme Court which granted stay on August 6, 2018 on any action subject to the Company depositing an amount of Rs. 800.00 Lakhs before the Registry of Hon. Supreme Court. The said amount of Rs. 800.00 Lakhs was deposited by the Company. On September 06, 2022, the Company''s SLP has been dismissed by the Hon''ble Supreme Court.Subsequently, Hon''ble High Court vide its order dated November 28, 2022 directed the Company to honour the arbitral award and pay the award amount along with any Interest thereon as per the directions given in the order.

In view of the above, during the year ended 31^st March, 2023, the Company has recognized Rs. 5118.91 Lakhs which has been disclosed as an Exceptional item. In addition to the above, certain matters are yet to achieve finality and which are under consideration of the Hon''ble High Court. The impact of them, if any, will be recognised as and when the same are decided.

50.02 Exceptional items for the year ended 31^st March, 2022 represents write back of borrowings etc. of Rs. 20243.14 Lakhs, reversal of excess interest charged from 1^st April, 2020 to 31^st March, 2021 of Rs. 45517.56 Lakhs (Net of amortisation at effective interest rate) and one-time fair value gain of Rs. 106689.25 Lakhs which is mainly on account of Debt restructuring with Assets Care and Reconstruction Enterprise Limited (ACRE) acting in its capacity as trustee of various trusts which became effective on 23^rdMay, 2022 from the cut-off date of 31^st March, 2020.

51.01 The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

51.02 The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise)that the Intermediary shall: (a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

51.03 The Company has not received any fund from any person(s) or entity(s), including entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (b) Provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

51.04 The Company does not have any such transaction which is not recorded in the books of account surrendered or disclosed as income during the year in the tax assessments under the Income-tax act, 1961.

51.05 No proceeding has been initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

51.06 The Company is not declared wilful defaulter by any bank or financial institution or other lender.

51.07 There is no charge or satisfaction which is yet to be registered with Registrar of Companies beyond the statutory period.

51.08 The company does not have any borrowings from banks or financial institutions on the basis of security of current assets.

NOTE : 52 Previous Year''s figures have been regrouped / rearranged wherever necessary, to make them comparable with those of

current year.

Mar 31, 2021

2.06 In the earlier years, the Directorate of Enforcement by way of two attachments had provisionally attached the Plant and Machinery under installation at Dagori Integrated Steel Plant situated at Bilha, Bilaspur (Chhattisgarh) and certain property, plant and equipment at Steel Plant Division, Siltara, Raipur to the extent of Rs. 30758.39 Lakhs for alleged misuse of coal raised from Gare Palma IV/4 coal block in Chhattisgarh.

The Adjudicating Authority had confirmed the above provisional attachments. Subsequently, the Appellate Authority stayed both the attachments on an appeal filed by the Company where the matter has been put up for hearing on 20th July, 2021. The Company has a good case on merits, is likely to succeed in refuting the allegations and does not expect any material liability on the Company on this account.

2.07 During the previous year, after completion of investigation CBI had filed Charge-Sheet against the Company and Mr. Ramesh Jayaswal, Jt. Managing Director (JMD) alleging misrepresentation and violation of the terms and conditions of the Gare IV/4 Coal Block Allotment Letter and the executed Mining Lease.

The aforesaid action was in connection with FIR of Central Bureau of Investigation (CBI), Economic Offence Wing, New Delhi registered on 22nd May, 2014 against the Company and unknown Public Servants in connection with the allotment of Gare IV/4 Coal Block situated in the State of Chhattisgarh.

On 30th May, 2019, the Special CBI Court, New Delhi, took cognizance of the matter and issued summons against the Company and Mr. Ramesh Jayaswal - JMD. The summons were received by the Company on 11th June, 2019. The Company had been summoned for offence under section 120-B/420/406 of the Indian Penal Code (IPC), whereas Mr. Ramesh Jayaswal had been summoned for offence under section 120-B/406 of the IPC.

The Company strongly refutes all the allegations. The Company believes it has a good case on merits, is exploring all possible legal remedies and is confident that the Company and Mr Ramesh Jayaswal -JMD would be able to defend themselves before the authorities during the course of trial.

2.08 During the year active development of project of DRI and Captive Power Plant at Bilaspur, Chhattisgarh remained suspended and accordingly the Company has not capitalised Borrowing Costs as per Ind AS - 23.

2.09 In accordance with the Indian Accounting Standard (Ind AS 36 ) on â Impairment of Assetsâ, during the year, the management carried out an exercise of identifying the assets that may have been impaired in accordance with the said Ind AS. On the basis of a review carried out by the management, there was no impairment loss on property, plant and equipment and Capital Work in Progress during the year ended 31st March, 2021.

In the Previous year, the impairment loss of Property, Plant and Equipment of Rs. 13469.59 Lakhs and Capital Work In Progress of Rs. 43347.09 Lakhs were recognised and disclosed as exceptional items.

2.10 During the previous year, the Deputy Collector Land Acquisition (General) Nagpur has compulsorily acquired the Companyâs land under the National Highway Act, 1956. Cost of the land is Rs. 5.68 Lakhs .

3.03 Intangible Assets under Development include Rs. 1520.75 Lakhs towards Metabodeli Mines (50 Hectares), Rs. 46.88 Lakhs towards the Ramdongri Mines and Rs. 27.40 Lakhs towards Sonadehi Mines; in case of Metabodeli Mines, the Company had challenged the validity of section 10 A (2) (c) of the MMDR Amendment Act, 2015 and Rule 8 (4) of the MCR 2016 before the Honâble Chhattisgarh High Court which was pleased to pass an interim order dated 12th January, 2017 keeping the application of the company alive for consideration. Presently, the matter is transferred to the Honâble Supreme Court where the interim order of the Honâble High Court continues to be alive.

In case of Ramdongri Mines, the State Government of Maharashtra had granted Mining Lease in favor of the Company on 17th August, 2004. The said order was challenged by an aggrieved party before the Mines Tribunal which after hearing both the parties on 5th October, 2007 was pleased to uphold the order dated 17th August, 2004 of the State Government. Subsequently, the order of Mines Tribunal was challenged before the Honâble Bombay High Court, Nagpur Bench, Nagpur which on 6th January, 2017 was pleased to pass interim order in favor of the company.

ti_____4-4. _ ______4.:______.. ,:4-i. 4-1__i i___11_ i _ i i:__i_ 4

On 28th March, 2021, a Proviso has been inserted in Section 10A (2) (b) of the Mines and Minerals (Development and Regulation) Act (the âMining Actâ) stating that âfor the cases covered under this clause including the pending cases, the right to obtain a prospecting license followed by a mining lease or a mining lease, as the case may be, shall lapse on that date.

The Company is of the view that the Companyâs above cases are already pending under Section 10A (2) (c) of the Mining Act and the matters are subjudice, therefore the above amendment in Section 10A (2) (b) will not have any impact on the status of the Mines.

Further, with regards to Sonadehi Mines, the Company is in the process of challenging the provisions of the amended Mining Act.

Further the amendment under the Mining Act in the second Proviso of Section 10A (2) (b) provides that âthe holder of a reconnaissance permit or prospecting license whose rights lapsed under the first proviso, shall be reimbursed the expenditure incurred towards reconnaissance or prospecting operations in such a manner as may be prescribed by the Central Governmentâ; accordingly the Company does not envisage any losses on account of the above amendment.

3.04 The Company had filed Mining Lease applications for Rowghat Iron Ore Deposit, Bastar, Chhattisgarh. The Chhattisgarh State Government (SG) had rejected the same by a common order which was challenged by the Company. The SG had filed a complaint before the Ministry of Mines which had referred the matter to the Chief Vigilance Officer (CVO), which couldnât make out any case against the Company. The revision petition of the Company was allowed and subsequently the Honâble Delhi High Court also confirmed the order. The Honâble Delhi High Court had specifically observed that the Company had successfully undertaken prospecting operations in the area.

Subsequently in 2012, SG filed a fresh complaint containing the same allegations before the Chief Vigilance Commission (CVC). The Central Bureau of Investigation (CBI) on the directions of the CVC had registered an FIR against the Company alleging certain irregularities. Post completion of the investigations by CBI, the case is subjudice. The Company doesnât expect any financial effect of the above matter under litigation.

3.05 In accordance with the Indian Accounting Standard (Ind AS)- 36 on âImpairment of Assetsâ, the Management during the year carried out an exercise of identifying the assets that may have been impaired in respect of each cash generating unit in accordance with the said Ind AS. On the basis of this review carried out by the management, there was no impairment loss on Intangible Assets during the year ended 31st March, 2021.

16.03 Rights of Equity Shareholders

16.04 There are no shares reserved for issue under options and contracts / commitments.

NATURE AND PURPOSE OF RESERVES

Equity Component of Compound Financial Instruments

The Company has received the Interest free Inter Corporate Deposits from the Promoters and under Ind AS the difference between the Fair Value and Transaction Value is recognised as Equity Component of Compound Financial Instruments under Other Equity.

Capital Reserve

The Capital Reserve was created pursuant to the Scheme of Merger of the Steel Division of Corporate Ispat Alloys Limited, Amalgamation of Nagpur Alloy Casting Limited and Capital incentive received from Government of Maharashtra. It shall be utilised in accordance with the provisions of the Companies Act, 2013.

Securities Premium

Securities Premium was created when shares were issued at premium. It shall be utilised in accordance with the provisions of the Companies Act, 2013.

General Reserve

Capital Redemption Reserve

Capital Redemption Reserve was created for redemption of Preference Shares. It shall be utilised in accordance with the provisions of the Companies Act, 2013.

Retained Earnings

Retained Earnings represent the accumulated profits/losses made by the Company over the years.

Revaluation Reserve

Revaluation Reserve was created for revaluation of Factory Building and Shed. It shall be utilised in accordance with the provisions of the Companies Act, 2013.

Other Comprehensive Income

Other Comprehensive Income (OCI) represents the amount recognised in Other Equity consequent to remeasurement of Defined Benefit Plan.

18.01 As at 31st March, 2021, ten out of twelve bankers of the Company have assigned their fund based debt along with underlying financial documents together with their rights, benefits and obligations in favour of Assets Care & Reconstruction Enterprise Ltd (ACRE) acting in its capacity as trustee of various trusts. Accordingly as on 31st March, 2021, total debt assignment from ten bankersâ amounts to Rs. 356324.74 lakhs constituting 97.91% of the total Principal Fund Based Outstanding.

Subsequent to year end, out of the two remaining bankers (as above), one banker has assigned their fund based debt of Rs. 6187.03 lakhs constituting 1.70 % to ACRE and the other banker with Rs. 1432.00 lakhs constituting 0.39% of the total Principal Fund Based Outstanding did One Time Settlement (OTS) of its debt dues with the Company. Hence 100% of the fund based debt of the twelve bankers amounting to Rs. 363943.77 lakhs has been settled either by way of debt assignment to ACRE or OTS with the Company.

The Company is in final stages of restructuring of its outstanding debt with the Lenders.

18.02 The Term Loans from Banks and ARC referred to above aggregating to Rs. 183111.16 lakhs and Rs. 117779.62 lakhs included in Current Maturities of Long Term Debts in Note No. 24 are guaranteed by some of the Directors in their personal capacities. Out of the above, loan amounting to Rs. 6181.07 lakhs and Rs. 7549.65 lakhs included in Current Maturities of Long Term Debts in Note No. 24 are further secured by way of pledge of 5,72,41,566 equity shares of the Company held by the Promoters.

18.03 Term loans from Banks and ARC referred to above aggregating to Rs. 183111.16 lakhs and Rs.117779.62 lakhs included in Current Maturities of Long Term Debts in Note No. 24 are secured by way of :

a. First Charge on the moveable and immoveable Property, Plant and Equipment of the Company, both present and future on pari-passu basis.

b. First Ranking Charge on all titles and interest of the borrower in respect of all project documents / contracts / licenses including insurance contracts and rights except mining rights pertaining to the assets of the borrower on pari-passu basis.

c. Charge on all the current assets of the Company including Raw Materials, Finished Goods, Stock-in-process, Trade Receivable, both present and future on pari-passu basis amongst them ranking next to the charge in favour of bankers and ARC to secure their working capital loans.

18.04 Term Loans of Rs. NIL (Previous year 0.89 lakhs) included in Current Maturities of Long Term Debts in Note No. 24 were secured by way of hypothecation of the specific Equipments / Vehicles financed.

18.05 Term Loans from Banks and ARC referred to above aggregating to Rs. 183111.16 lakhs and Rs. 24600.56 lakhs included in Current Maturities of Long Term Debt (excluding overdue of principal) in Note No.24 are to be repaid as per sanction terms as under :

Rs.181779.68 lakhs is repayable in 132 structured monthly installments, ending in March, 2032.

Rs. 12844.91 lakhs is repayable in 23 equal monthly installments of Rs. 558.47 lakhs each, ending in February, 2023. Rs.4802.78 lakhs is repayable in 26 equal monthly installments of Rs. 184.72 lakhs each, ending in May, 2023. Rs.5775.00 lakhs is repayable in 44 structured monthly installments, ending in November, 2024.

Rs. 2509.35 lakhs is repayable in 57 equal monthly installments of Rs. 44.02 lakhs each, ending in December, 2025.

18.06 The Company was entitled to defer its liability to pay Sales Tax (including a portion of Purchase Tax) in respect of its certain units. The liability under the Schemes as on 31st March, 2021 is Rs.7863.02 lakhs (Previous Year : Rs. 7863.02 lakhs) which is provided for on the basis of its Net Present Value (Net of payments) of Rs.4865.53 lakhs (Previous Year : Rs. 5240.23 lakhs). This Sales-tax liability is repayable in five equal annual installments starting at the end of the tenth year from the year to which it relates and will be fully paid up by 30th April, 2028.

18.07 Interest free Inter Corporate Deposits are repayable after the repayment of Term Loans taken for Long Term Working Capital Margin i.e. after December, 2025. The Company classified this loan as Fair Value Measured at Amortised Cost having an Effective Interest Rate of 14.50% per annum.

General description of Lease terms :

(i) Lease Rentals are charged on the basis of agreed terms.

(ii) Assets are taken on lease for a period of 5 to 99 years.

18.09 As on 31st March, 2021, the Company has overdue of principal of Rs.93179.05 lakhs (Previous Year : Rs. 69941.22 lakhs) and Interest of Rs.276805.55 lakhs (Previous Year : Rs.199510.39 lakhs) included in Current Maturities of Long term debt and Interest Accrued and Due respectively in Note No. 24. The overdue of Principal comprises of Rs.87368.26 lakhs and Rs.5810.79 lakhs outstanding for a period of more than 3 months and less than 3 months respectively and overdue of Interest comprises of Rs.256316.75 lakhs and Rs.20488.80 lakhs outstanding for a period of more than 3 months and less than 3 months respectively. Further, due to default in servicing of its dues by the Company, the Banks have classified the credit facilities (Principal Outstanding) given to the Company aggregating to Rs.7619.03 lakhs (Previous Year : Rs. 20983.01 lakhs) as at 31st March, 2021 as Non Performing Asset (NPA) in their books of account.

As on 31st March, 2021, the Company has overdue of Lease Obligations of Rs.29.48 lakhs (Previous Year : Rs.29.48 lakhs) and Interest of Rs.0.52 lakhs (Previous Year : Rs.0.52 lakhs) included in Current Maturities of Lease Obligations and Interest Accrued and Due respectively in Note No. 24.

18.10 The agreements in respect of non-current borrowings as at 31st March, 2021 of Rs 183111.16 lakhs contains certain restrictive covenants including non-adherence of initial Rupee Term Loan repayment schedule and non-payment of interest thereon, as stipulated and debt service facility ratio. The Company has not complied with the terms of these covenants. The Company has not classified the said long term borrowings to current liabilities as required by Ind AS 1 - âPresentation of Financial Statementsâ.

22.01 Working Capital Loans from Banks and ARC are secured by the hypothecation of whole of moveable properties including Stocks and Book Debts, both present and future, and by second charge on immoveable properties of the Company.

22.02 The Working Capital Loans from Banks and ARC are guaranteed by some of the Directors in their personal capacities.

22.03 Working Capital Rupee Loans from Banks and ARC referred to above includes Devolved Letter of Credit of Rs.Nil (Previous Year : Rs. 965.23 lakhs).

22.04 As on 31st March, 2021, the Company has overdue Working Capital Interest Rs 17831.40 lakhs (Previous Year : Rs. 8563.06 lakhs) included in Interest Accrued and Due in Note No. 24 for a period of less than 5 years.

22.05 As on 31st March, 2021, the Company has overdue Interest on unsecured loan Rs 292.05 lakhs (Previous Year : Rs. 292.05 Lakhs) included in Interest Accrued and Due in Note No. 24 for a period of less than 2 years.

22.06 Inter Corporate Deposits from others include a sum of Rs. 10432.79 Lakhs Outstanding towards Corporate Ispat Alloys Limited (CIAL) being the amount Credited in the books at the time of merger of Strip Mill Division of CIAL with the Company. CIAL had filed a winding up petition under the provisions of Section 434 of the Companies Act, 1956 before the Honâble Bombay High Court, Nagpur Bench and the Company had disputed the same amount. The said petition has been withdrawn by the petitioner as confirmed by the Honâble Bombay High Court, Nagpur Bench order dated 25th February, 2021.

Further the Company had filed a civil suit claiming a sum of Rs. 70027.00 lakhs from CIAL towards the loss suffered by it due to delay / withholding the merger of Strip Mill Division of CIAL with a malafide intention which is pending before the Honâble Civil Judge Senior Division, Nagpur.

24.01 Represents the amount received from the Promoter entities towards the upfront Promoters Contribution as per the conditions under the proposed Debt Restructuring Scheme of the Company. Due to uncertainty on account of matters being pending before the National Company Law Tribunal and the Honâble Supreme Court, as detailed in Note No. 36, the amount has been kept in the special account with the scheduled bank and depending upon the final outcome of the above matters either the equity shares will be allotted against the specified Share Application Money or it will be refunded to the applicants as per the provisions of the Companies Act, 2013 and other laws as applicable.

26.01 During the year 2005, the Government of Chhattisgarh published the Chhattisgarh Upkar (Sansodhan) Adhiniyam, 2004, according to which the Company is liable to pay energy development cess @10 paise per unit generated from its captive power plants. The levy of energy development cess has been disputed by the Company and the matter is pending before the Honâble Supreme Court of India.

The Office of the Chief Electrical Inspector, Government of Chhattisgarh, had sent demands for the energy development cess since the Honâble Supreme Court of India vide its interim order dated 2nd November, 2007 permitted the department to raise the bill, however it directed that no coercive steps shall be taken by the state to recover the dues till further orders.

The legislative competence of the Government of Chhattisgarh is not under challenge. The Company had been legally advised in the past that it is highly unlikely that the provision by which the State Government has imposed energy development cess will be struck down by the Honâble Supreme Court of India. In view of the above and as a matter of prudence, the Company has made a provision of energy development cess aggregating to Rs. 5121.84 Lakhs till 31st March, 2021.

# Third Party claims include :

The Company had entered into a Contract for setting up 70 TPD Oxygen Plant and its operations and maintenance with M/S Goyal MG Gases Pvt Ltd in the year 2002-03. Subsequently in the year 2015-16 dispute arose between both the parties on couple of issues and the matter was referred to the Sole Arbitrator for adjudication of dispute.

On 4th August, 2017 and corrected vide its order dated on 15th September, 2017, the Sole Arbitrator passed an Arbitral Award against the company. As per the Arbitral Award, the claims of the company were not entertained and the counter claims were allowed. The Company had challenged the Arbitral Award before the Honâble Delhi High Court under the Arbitration and Conciliation Act 1996. The Honâble High Court dismissed the appeals filed by the company vide its judgment dated 21st December, 2017 and judgement dated 5th April, 2018.

The Company believes that the entire award is contrary to public policy, is without any evidence and reasoning. Counter claims to the tune of Rs 940.88 Lakhs have been allowed. The Learned Arbitrator has allowed the payment of lease rentals and at the same time has also directed the company to hand over possession of the plant which is contrary in nature.

Considering the above described factual aspects, the company believes that it has good case on merits. Hence the Company filed Special Leave Petition (SLP) in the Honâble Supreme Court which granted stay on any action on the request of the Company.

As on 31st March, 2021, the Company has estimated the total amount of Arbitral award is to be around Rs. 3943.00 lakhs, out of which Rs. 800.00 Lakhs have been deposited by the Company with the Supreme Court Registry on the instructions of the Honâble Supreme Court and disclosed in Note No. 6. The pleadings have been completed and now the matter is expected to be listed for final hearing. No fixed listing date has been determined yet. The management is of the view that at this stage no provisioning is required against the said award.

B The Ministry of Coal (MOC) had invoked Bank Guarantee (BG) of Rs. 1000.00 Lakhs for delay in start of production of Moitra Coal Block, Jharkhand. The Company had challenged the BG invocation before the Honâble Delhi High Court, wherein vide order dated 24th August, 2015 it granted interim relief to the Company, that no coercive steps will be taken subject to Company keeping the BG alive. The matter is now listed for hearing on 24th August, 2021. The Company is confident that its case is on merits and doesnât envisage any financial impact of the above matter. In identical matters MOC has not invoked BG of other companies.

C Management is of the view that above litigations will not impact significantly the financial position of the Company.

D The Company has received Show Cause notices from the Excise department which mainly relate to demand of duty

for sale of exempted goods and denial of credit on structural steel, new plants, railway receipt, bank expenses and outward freight etc. The Company has also received a Show Cause notice from the Additional Director General, DGGI, which relates to demand of service tax on amount received against the cancellation of three coal mines/block. The Company does not foresee any losses on this account.

E Capital Commitments :

Estimated amount of contracts remaining to be executed on

Capital Accounts and not provided for (Net of Advances) 24174.32 24063.67

NOTE :36 The Company underwent significant financial stress in the last six years due to cancellation of its three captive coal mines, payment of additional levy on mined coal as per the Honâble Supreme Court order, COVID 19 related lockdown of business units, its consequent adverse impact on the Company and various other reasons which have resulted in financial constraints to the Company, losses in the operations, wipe out of the net worth and calling back of loans by few of the secured lenders. Further, an appropriate debt restructuring scheme was approved by the super majority of the secured lenders and the Company had complied with the conditions of debt restructuring scheme and got its Master Restructuring Agreement signed by the Lenders.

However on the directions of Reserve Bank of India (RBI), which had not agreed to the approved debt restructuring scheme being fully implemented within the stipulated time line of 13th December, 2017, State Bank of India (SBI), the erstwhile lead secured lender, had filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against the Company claiming an amount of Rs. 51383.41 Lakhs as default as on 30th November, 2017.

In view of the Status Quo order issued by the Honâble Supreme Court on 16th April, 2018, the case had been adjourned sine die by the National Company Law Tribunal (NCLT), Mumbai in its hearing dated 14th November, 2019. The matter is at pre admission stage in NCLT and would be listed only after the Special Leave Petition (SLP) filed by the Company is disposed of by the Honâble Supreme Court.

ACRE continues to support the operations of the Company. The Company is in final stages of restructuring of its outstanding debt with its Lenders. Further the Company has taken active steps for effective and efficient operations including cost reduction. Accordingly the Company continues to prepare its books of account on going concern basis.

B. Segment Identification, Reportable Segments and definition of each segment :

i. Reportable Segments :

The Companyâs operating segments are established on the basis of those components that are evaluated

regularly by the Chief Operating Decision Maker, in deciding how to allocate resources and in assessing

performance. These have been identified and reported taking into account the differing risks and returns,

nature of products, the organisational structure and the internal reporting system of the Company.

ii. Primary / Secondary Segment Reporting Format :

a) The risk-return profile of the Companyâs business is determined predominantly by the nature of its products. Accordingly, the business segments constitute the Primary Segments for disclosure of segment information.

b) Since all the operations of the Company are predominantly conducted within India, there are no separate reportable geographical segments.

c) No Non-Current Assets of the Company is located outside India as on 31^st March, 2021 and 31^st March 2020.

d) No single customer has accounted for more than 10% of the Company revenue for the year ended 31^st March, 2021 and 31^st March 2020.

iii. Segment Composition :

a) Steel Segment is engaged in manufacture and sale of Pig Iron, Billets, Rolled Products, Sponge Iron and includes its captive Power Plants at its unit located at Siltara, Raipur and Mining activities in the state of Chhattisgarh and Maharashtra.

b) Iron and Steel Castings Segment comprises of manufacture and sale of Engineering and Automotive Castings with production facilities at Nagpur, Bhilai and Anjora.

c) Other Segment comprises of trading of Coal, Coke and PVC pipes.

NOTE : 38 RELATED PARTY DISCLOSURES :

In accordance with the requirements of Ind AS 24, on related party disclosures, name of the related party, related party relationship, transactions and outstanding balances including commitments where control exists and with whom transactions have taken place during reported year, are as detail below:

42.02 Fair Valuation techniques used to determine Fair Value

The Company maintains procedures to value its financial assets or financial liabilities using the best and most relevant data available. The Fair Values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The following methods and assumptions were used to estimate the Fair Values:

ii) The Fair Values of Unsecured Non-current Borrowings is calculated based on discounted cash flows using a lending rate. They are classified as level 2 fair values in the fair value hierarchy due to the inclusion of observable inputs. The Fair Values of Secured Non-current Borrowings and Security Deposits are approximate at their carrying amount due to interest bearing features of these instruments.

iii) Fair values of Investment in equity are derived from quoted market prices in active markets.

iv) The Fair Value of the remaining financial instruments is determined using discounted cash flow analysis.

42.03 Fair Value Hierarchy

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation techniques:-

i) Level 1 Quoted prices / published Net Assets Value (unadjusted) in active markets for identical assets or liabilities. It includes fair value of financial instruments traded in active markets and are based on quoted market prices at the Balance Sheet date and financial instruments like mutual funds for which Net Assets Value is published by mutual fund operators at the Balance Sheet date.

iii) Level 3 :- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs). If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. The following table provides hierarchy of the fair value measurement of Companyâs asset and liabilities, grouped into Level 1 (Quoted prices in active markets), Level 2 (Significant observable inputs) and Level 3 (Significant unobservable inputs) as described below:

NOTE: 43 Financial Risk Management - Objective and Policies

determine the appropriate balance between cost and control of risk and deploy appropriate resources to manage / optimise key risks. The activities are developed to provide feedback to management and other interested parties (e.g. Audit committee, Board etc.) by way of action taken report. The results of these activities ensure that risk management plan is effective in the long term.

43.01 Market Risk and Sensitivity :

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprise three types of risk : Foreign Currency Rate risk, Interest Rate risk and other Price risks, such as Equity Price risk and Commodity Price risk. Financial instruments affected by market risk include Loans and Borrowings, Deposits and Investments.

The sensitivity analysis relate to the position as at 31^st March 2021 and 31^st March 2020.

The sensitivity analysis excludes the impact of movements in market variables on the carrying value of postemployment benefit obligations, provisions and on the non-financial assets and liabilities. The sensitivity of the relevant Statement of Profit and Loss item is the effect of the assumed changes in the respective market risks. This is based on the financial assets and financial liabilities held as at 31^st March, 2021 and 31^st March, 2020.

(a) Foreign Currency Exchange Risk and Sensitivity :

Foreign Currency Exchange risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in Foreign Currency Exchange rates. The Companyâs exposure to the risk of changes in foreign currency exchange rates relates primarily to the Companyâs operating activities. The Company transacts forex business primarily in USD,SEK and Euro. The Company has foreign currency trade payables,supplier Credit and trade receivables and is therefore, exposed to foreign currency exchange risk. The Company regularly reviews and evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management policies and plan including use of derivatives like Foreign exchange forward contract to hedge exposure to Foreign currency exchange risk.

The following table demonstrates the sensitivity in the USD, SEK, CAD and Euro to the Indian Rupee with all other variables held constant. The impact on the Companyâs Loss Before Tax (LBT) due to changes in the fair values of monetary assets and liabilities is given below:

b) Interest Rate Risk and Sensitivity :

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is having non current borrowings in the form of Term Loan and Intercorporate Deposits. Further, the Company is having current borrowings in the form of Working Capital, Inter Corporate Deposit and Suppliers Credit. There is a fixed rate of interest in case of Supplier Credit, Vehicle Loan and Inter-corporate Deposits and hence, there is no interest rate risk associated with these borrowings.

The table below illustrates the impact of a 2% increase / decrease in interest rates on interest on financial liabilities assuming that the changes occur at the reporting date and has been calculated based on risk exposure outstanding as of date. The year end balances are not necessarily representative of the average debt outstanding during the year.

c) Commodity Price Risk :

The Companyâs revenue is exposed to the market risk of price fluctuations related to the sale of its iron, steel and castings products. Market forces generally determine prices for the products sold by the Company. These prices may be influenced by factors such as supply and demand, production costs (including the costs of raw material inputs) and global and regional economic conditions and growth. Adverse changes in any of these factors may reduce the revenue that the Company earns from the sale of its products.

The Company prices its Iron and Steel products as per the accepted market practices.

The Company primarily purchases its raw materials in the open market from third parties. The Company is therefore subject to fluctuations in prices for the purchase of iron ore, fines, non coking and coking coal and other raw material inputs. The Company purchased substantially large part of its iron ore, fines and coal requirement from third parties in the open market during the year ended 31st March, 2021.

The Company aims to sell its products at prevailing market prices. Similarly the Company procures key raw materials like iron ore, fines and coal based at prevailing market rates , predominantly the selling prices of steel and castings and that of input raw materials move in the same direction although with a lag effect.

43.02 Credit Risk

The Company measures the expected credit loss of trade receivables, which are subject to credit risk, based on historical trend, industry practices and the business environment in which the entity operates and adjusted for forward looking information (including COVID 19 outbreak). Loss rates are based on actual credit loss experience and past trends.

The Company has used practical expedient by computing the expected credit loss allowance for trade receivables based on provision matrix . The provision matrix has taken into account historical credit loss experience and adjusted for forward looking information. The expected credit loss allowance is based on ageing of the days the receivables are due. The impact due to Covid 19 outbreak on recoveries has started to reduce since the customers have recommenced their operations and process of recoveries has been expedited.

b) Financial Instruments and Cash Deposits :

The Company considers factors such as track record, size of the institution, market reputation and service standards to select the banks with which its balances are maintained. The Credit risk from balances with bank is managed by the Companyâs finance and treasury department. Investment of surplus funds are also managed by finance and treasury department. The Company does not maintain significant cash in hand. Excess balance of cash other than those required for its day to day operations is deposited into the bank.

43.03 Liquidity Risk :

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. It will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. The Companyâs objective is to, at all times, maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company relies on short term borrowings and operating cash flows in the form of suppliers credit and working capital to meet its need for fund.

The Company underwent significant liquidity issues for the reasons mentioned in note no. 36,Further, ACRE continues to support the operations of the Company.

43.04 Competition and Price Risk :

The Company faces competition from local and foreign competitors. Nevertheless, it believes that it has competitive advantage as it sells high quality products and by continuously upgrading its expertise and range of products and strictly adheres to the delivery schedules to meet the needs of its customers.

NOTE : 44 CAPITAL RISK MANAGEMENT

For the purpose of Companyâs capital management, capital includes issued capital, all other equity reserves and debts. The primary objective of the Companyâs capital management is to maximise shareholders value. The Company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirements of the financial covenants.

The Company monitors capital using gearing ratio, which is Net Debt divided by the Total Capital Employed (Equity plus Net Debt). Net debt are Non-current and Current debts as reduced by Cash and Cash Equivalents, Other Bank Balances, Non-current Bank Deposits and Current Investments. Equity comprises all components including other comprehensive income.

The Company monitors its capital employed using Gearing ratio, which is Net debt divided by Total Capital Employed (Equity plus Net Debt)

The above Loan has been given for business purpose.

Corporate Guarantee given to the lenders of MUUL for the financial facilities availed by that company.

NOTE : 47 The Management and authorities have the power to amend the Financial Statements in accordance with section 130 and 131 of the Companies Act, 2013.

NOTE : 48 Previous Yearâs figures have been regrouped / rearranged wherever necessary, to make them comparable with those of current year.

Mar 31, 2018

NOTE: 1

A CORPORATE INFORMATION

Jayaswal Neco Industries Limited (âthe Companyâ) is domiciled and incorporated in India under the provision of the Companies Act, 1956 and its shares are listed on the Bombay Stock Exchange (âBSEâ) and National Stock Exchange of India (âNSEâ). The registered office of the Company is situated at F-8, MIDC Industrial Area, Hingna Road, Nagpur - 440016, Maharashtra, India and manufacturing facilities are located in the states of Chhattisgarh and Maharashtra, in India.

The Company is engaged in manufacture and supply of pig iron, sponge iron, pellet, steel and Iron & steel casting.

The financial statements of the Company for the year ended 31st March, 2018 were approved and adopted by Board of Directors in their meeting dated 30th April, 2018.

B BASIS OF PREPARATION AND PRESENTATION OF FINANCIAL STATEMENTS:

The financial statements of the Company have been prepared on a going concern basis and to comply with the Indian Accounting Standards (Ind AS), including the rules under the relevant provisions of the Companies Act, 2013.

The financial statements have been prepared on a historical cost basis except certain financial assets and liabilities, assets held for sale and defined benefit plans measured at fair value:

Financial Statements are presented in Indian rupees (Rs.), which is the Companyâs functional and presentation currency. All amounts are rounded to the nearest lakhs and two decimals thereof, except as stated otherwise.

C SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

i. Depreciation / Amortisation and useful lives of Property, Plant and Equipment (PPE)/ Intangible Assets:

PPE / intangible assets are depreciated / amortised over their estimated useful lives, after taking into account estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation to be recorded during any reporting period. The useful lives and residual values are based on the Companyâs historical experience with similar assets and take into account anticipated technological changes. The depreciation /amortisation for future periods are revised if there are significant changes from previous estimates.

ii. Decommissioning Liabilities:

The Liability for decommissioning costs is recognised when the Company has obligation to perform site restoration activity. In determining the fair value of such provision, assumptions and estimates are made in relation to discount rates, the expected cost to dismantle and remove the plant from the site and the expected timing of those costs. The expected cost to be incurred at the end of the lease term is based on the estimated provided by the internal technical experts.

iii. Tax:

The Company reviews at each balance sheet date the carrying amount of deferred tax assets. The factors used in estimates may differ from actual outcome which could lead to an adjustment to the amounts reported in the financial statements.

iv. Contingencies:

Management has estimated the possible outflow of resources at the end of each annual financial year, if any, in respect of contingencies / claim / litigations against the Company as it is not possible to predict the outcome of pending matters with accuracy.

v. Impairment of Financial Assets:

The impairment provisions for financial assets are based on assumptions about risk of default and expected cash loss. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

vi. Impairment of non-Financial Assets:

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the assetâs recoverable amount. An assetâs recoverable amount is the higher of an assetâs or Cash Generating

Units (CGU) fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent to those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pretax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less cost of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples or other available fair value indicators.

vii. Defined Benefits Plans:

The Cost of the defined benefit plan and other post-employment benefits and the present value of such obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and attrition rate. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

viii. Recoverability of Trade Receivable:

Judgements are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment.

ix. Provisions:

Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability require the application of judgement to existing facts and circumstances, which can be subject to change. Since the cash outflows can take place many years in the future, the carrying amounts of provisions and liabilities are reviewed regularly and adjusted to take account of changing facts and circumstances

x. Fair value measurement of Financial Instruments :

When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

1.01 Pre-operative Expenses

Details of Pre-operative Expenses included as part of Capital Work-in-Progress and Intangible Assets under Development are as under:

1.02 The Ministry of Coal (MOC) had invoked Bank Guarantee (BG) of Rs. 1000.00 lakhs for delay in start of production of Moitra Coal Block, Jharkhand. The Company has challenged the BG invocation before the Honâble Delhi High Court, wherein vide order dated 24th August, 2015 it granted interim relief to the Company, that no coercive steps will be taken subject to Company keeping the BG alive. The matter is now listed for 2nd May, 2018. The Company is confident that its case is on merits and doesnât envisage any financial impact of the above matter. In identical matters MOC has not invoked BG of other companies.

1.03 The Company had filed Mining Lease applications for Rowghat Iron Ore Deposit, Bastar, Chhattisgarh. The Chhattisgarh State Government (SG) had rejected the same by a common order which was challenged by the Company. The SG had filed a complaint before the Ministry of Mines which had referred the matter to the Chief Vigilance Officer (CVO), which couldnât make out any case against the Company.

The revision petition of the Company was allowed and subsequently the Honâble Delhi High Court also confirmed the order. The Honâble Delhi High Court had specifically observed that the Company had successfully undertaken prospecting operations in the area. Subsequently in 2012, SG filed a fresh complaint containing same allegations before the Chief Vigilance Commission (CVC). The Central Bureau of Investigation (CBI) on the directions of the CVC had registered an FIR against the Company alleging certain irregularities. Post completion of the investigations by CBI the case is subjudiced.

The Company doesnât expect any financial effect of the above matter under litigation.

1.04 The Directorate of Enforcement vide its order dated 9th June, 2017 has provisionally attached, under sub-section 1 of section 5 of the Prevention of Money Laundering Act (PMLA), 2002, the plant and machinery under installation at Dagori Integrated Steel Plant situated at Bilha, Bilaspur (Chhattisgarh) to the extent of Rs. 20616.40 lakhs for alleged misuse of coal raised from Gare Palma IV/4 coal block at Chhattisgarh. The Company had challenged the provisional order before the Adjudicating Authority. The Adjudicating Authority vide its order dated 10th November, 2017, dismissed the appeal filed by the Company and confirmed the Provisional Attachment Order dated 9th June, 2017. The Company then filed appeal against the order dated 10th November, 2017 passed by the Adjudicating Authority, before the Appellate Authority. The Appellate Authority, vide its order dated 12th February, 2018, issued notice to Directorate of Enforcement and also directed Directorate of Enforcement not to take any coercive steps. The next date in the matter is 29th May, 2018. The Company has a good case on merits, is likely to succeed in refuting the allegations and does not expect any material liability on the Company on this account.

1.05 During the year the Company has suspended its active development of project of DRI and Captive Power Plant at Bilaspur, Chhattisgarh and accordingly the Company has also suspended the Capitalisation of Borrowing Costs.

1.06 The Company has taken valuerâs certificate in respect of valuation of Property, Plant and Equipment which is more than its carrying value, accordingly as per the management there is no impairment loss during the year ended 31st March, 2018.

2.01 In accordance with the Indian Accounting Standard - 36 on âImpairment of Assetsâ, the Management during the year carried out an exercise of identifying the assets that may have been impaired in respect of each cash generating unit in accordance with the said Ind AS. On the basis of this review carried out by the management, there was no impairment loss on Intangible Assets during the year ended 31st March, 2018.

3.01 For method of valuation Refer Note No. 1C(VI).

3.02 For Inventories hypothecated as security refer Note No. 19 and 23.

3.03 The cost of Inventories of Stores, Spares and Consumables recognised as expense include provision of non moving items amounting to Rs. Nil (Previous Year : Rs. 54.95 lakhs).

4.01 3,26,49,600 (Previous Year : 3,26,49,600) shares were allotted in the last five years pursuant to Scheme of Arrangement without payment being received in cash.

4.02 Rights of Equity Shareholders

4.03 There are no shares reserved for issue under options and contracts / commitments.

4.04 Dividend Paid and Proposed of Rs. Nil (Previous Year : Rs. Nil)

NATURE AND PURPOSE OF RESERVES Capital Reserve

The Capital Reserve was created pursuant to the Scheme of Merger of the Steel Division of Corporate Ispat Alloys Limited, Amalgamation of Nagpur Alloy Casting Limited and Capital incentive received from Government of Maharashtra. It shall be utilised in accordance with the provisions of the Companies Act, 2013.

Securities Premium Reserve

Securities Premium Reserve was created when shares were issued at premium. It shall be utilised in accordance with the provisions of the Companies Act, 2013.

General Reserve

The General Reserve was created pursuant to the Scheme of Amalgamation of Inertia Iron and Steel Industries Private Limited, Merger of Sponge Iron Plant and Power Plant of Corporate Ispat Alloys Limited (CIAL) and Abhijeet Infrastructure Limited ( AIL). It shall be utilised in accordance with the provisions of the Companies Act, 2013.

Capital Redemption Reserve

Capital Redemption Reserve was created for redemption of Preference Share. It shall be utilised in accordance with the provisions of the Companies Act, 2013.

Revaluation Reserve

Revaluation Reserve was created for revaluation of Factory Building and Shed. It shall be utilised in accordance with the provisions of the Companies Act, 2013.

Equity Component of Compound Financial Instruments

# Net off of processing fees amounting to Rs. 356.41 lakhs (Previous Year : Rs. 430.86 lakhs).

5.01 The Term Loans from Banks referred to above aggregating to Rs. 254530.94 lakhs and Rs. 50862.23 lakhs included in Current Maturities of Long Term Debts in Note No. 25 are guaranteed by some of the Directors in their personal capacities. Out of the above, loan amounting to Rs. 11481.31 lakhs and Rs. 2412.58 lakhs included in Current Maturities of Long Term Debts in Note No. 25 are further secured by way of pledge of 5,72,41,566 equity shares of the Company held by the Promoters.

5.02 Term loans from Banks referred to above aggregating to Rs. 254530.94 lakhs and Rs. 50862.23 lakhs included in Current Maturities of Long Term Debts in Note No. 25 are secured by way of :

a. First Charge on the moveable and immoveable Property, Plant and Equipment of the Company, both present and future on pari-passu basis.

5.03 Term Loans of Rs. 10.03 lakhs and Rs. 13.29 lakhs included in Current Maturities of Long Term Debts are secured by way of hypothecation of the specific Equipments / Vehicles financed.

5.04 Term Loans from Banks referred to above and Rs. 20489.28 lakhs included in Current Maturities of Long Term Debt (excluding overdue of principal) in Note No.25 are to be repaid as per terms of refinance scheme as under :

Rs. 211654.30 lakhs is repayable in 168 structured monthly installments, ending in March, 2032.

Rs. 1984.39 lakhs is repayable in 15 equal monthly installments of Rs. 132.29 lakhs each, ending in June, 2019. Rs. 32949.98 lakhs is repayable in 59 equal monthly installments of Rs. 558.47 lakhs each, ending in February, 2023.

Rs. 4800.00 lakhs is repayable in 23 structured monthly installments, ending in February, 2020.

Rs. 11452.78 lakhs is repayable in 62 equal monthly installments of Rs. 184.72 lakhs each, ending in May, 2023. Rs. 8480.77 lakhs is repayable in 80 structured monthly installments, ending in November, 2024.

Rs. 3698.00 lakhs is repayable in 84 equal monthly installments of Rs. 44.02 lakhs each, commencing from January, 2019 and ending in December, 2025.

Vehicle Loans amounting to Rs. 23.32 lakhs are repayable in 36 to 60 monthly installments as per repayment schedule.

Interest rate on the above Term Loans ranging from 12.15% p.a. to 14.20% p.a.

5.05 The Company was entitled to defer its liability to pay Sales Tax (including a portion of Purchase Tax) in respect of its certain units. The liability under the Schemes as on 31st March, 2018 is Rs. 7863.02 lakhs (Previous Year : Rs. 7808.35 lakhs) which is provided for on the basis of its Net Present Value of Rs. 6079.14 lakhs (Previous Year : Rs. 5520.90 lakhs). This Sales-tax liability is repayable in five equal annual installments starting at the end of the tenth year from the year to which it relates and will be fully paid up by 30th April, 2028.

5.06 Interest free Inter Corporate Deposits are repayable after the repayment of Term Loans taken for Long Term Working Capital Margin i.e. after December, 2025. The Company classified this loan as Fair Value Measured at Amortised Cost having an Effective Interest Rate of 14.50% per annum.

5.07 In respect of Property, Plant and Equipment acquired on finance lease, the minimum lease rentals outstanding as on 31st March, 2018 are as follows:

General description of Lease terms :

(i) Lease Rentals are charged on the basis of agreed terms.

(ii) Assets are taken on lease for a period of 5 to 99 years.

19.08 As on 31st March, 2018, the Company has overdue of principal of Rs. 30372.95 lakhs (Previous Year : Rs. 12101.44 lakhs) and Interest of Rs. 100329.17 lakhs (Previous Year : Rs. 48557.38 lakhs) included in Current Maturities of Long term debt and Interest Accrued and Due respectively in Note No. 25. The overdue of Principal comprise of Rs. 25283.64 lakhs and Rs. 5089.31 lakhs outstanding for a period of more than 3 months and less than 3 months respectively and overdue of Interest comprise of Rs. 85573.99 lakhs and Rs. 14755.18 lakhs outstanding for a period of more than 3 months and less than 3 months respectively. Further, due to default in servicing of its dues by the Company, all the Banks have classified the credit facilities given to the Company aggregating to Rs. 366315.45 lakhs (Previous Year : Rs. 371103.89 lakhs) as at 31st March, 2018 as Non Performing Asset (NPA) in their books of account.

As on 31st March, 2018, the Company has overdue of Lease Obligations of Rs. 109.88 lakhs (Previous Year : Rs. 567.01 lakhs) and Interest of Rs. 10.11 lakhs (Previous Year : Rs. 317.98 lakhs) included in Current Maturities of Lease Obligations and Interest Accrued and Due respectively in Note No. 25.

5.09 The agreements in respect of Non-current Borrowings as at 31st March, 2018 of Rs. 254530.94 lakhs contains certain restrictive covenants including non-adherence of initial Rupee Term Loan repayment schedule and nonpayment of interest thereon, as stipulated and debt service facility ratio. In the current year also, the Company has not complied with the terms of these covenants. Further, one of secured lenders had given loan recall notice in respect of Non-current Borrowings but allowing regular operations to the Company. The Company has not classified the said Non-current borrowings to current liabilities as required by Ind AS 1 - âPresentation of Financial Statementsâ.

5.10 The Company underwent significant financial stress in the last four years due to cancellation of its three captive coal mines which resulted in significant viability issues of the end use Iron and Steel making facilities, payment of additional levy on mined coal as per the Honâble Supreme Court order, huge dumping of steel in the country which resulted in the low capacity utilisation of its new steel making facilities and unavailability of incremental working capital support due to Reserve Bank of Indiaâs (RBIâs) Asset Quality review classifying the Companyâs accounts as technical Non-performing Asset from back date effect.

All these have resulted in financial constraints to the Company, losses in the operations, erosion of net worth and calling back of loans by few of the secured lenders. The company had approached its secured lenders for an appropriate debt restructured plan with the objective to make the operations of the Company viable and sustainable, which was approved by the super majority of the secured lenders. The Company had complied with the conditions of Debt Restructuring Scheme including getting Independent Evaluation Committee recommendation to the scheme, infusion of stipulated additional funds as Promoters Contribution as per the scheme and signing of its Master Restructuring Agreement by the Lenders.

However on the directions of RBI, which had not agreed to the approved Debt Restructuring Scheme being fully implemented within the stipulated time line of 13th December, 2017, State Bank of India (SBI), the lead secured lender, had filed an application under section 7 of the Insolvency and Bankruptcy Code, 2016, against the Company, claiming an amount of Rs. 51383.41 lakhs as default as on 30th November, 2017. The matter has been listed for hearing on 6th July, 2018 before the National Company Law Tribunal (NCLT), Mumbai. The matter is currently in pre-admission stage.

Being aggrieved by the non implementation of the approved Debt Restructuring Scheme, the Company had filed Writ Petition (WP) before the Honâble Bombay High Court, Mumbai, against RBI and the other respondents, raising various questions of law and challenging various communications issued by RBI from time to time, which had adversely affected the implementation of the approved Debt Restructuring Scheme of the Company. The Honâble Bombay High Court had dismissed the WP of the Company. The Company has challenged the order of the Honâble Bombay High Court before the Honâble Supreme Court of India and subsequent to the year end, on 16th April, 2018 the Honâble Supreme Court was pleased to issue notice and directed parties to maintain status quo. The matter is now likely to be listed on 2nd July, 2018.

In the last six months the steel sector in India has improved, the margins and orders of the Company have improved, further all the lenders of the Company are continually supporting the operations of the Company; accordingly the Management is of the view that the above circumstances will not affect the operations of the Company and continued to prepare the book of accounts on Going Concern basis.

6.01 Working Capital Loans from Banks are secured by the hypothecation of whole of moveable properties including Stocks and Book Debts, both present and future, and by second charge on immoveable properties of the Company.

6.02 The Working Capital Loans from Banks are guaranteed by some of the Directors in their personal capacities.

6.03 As on 31st March, 2018, the Company has overdue Working Capital Interest Rs. 3500.68 lakhs (Previous Year : Rs. 2297.88 lakhs) included in Interest Accrued and Due in Note No. 25 for a period of less than 2 years.

6.04 Inter Corporate Deposits from others include a sum of Rs. 10432.79 lakhs outstanding towards Corporate Ispat Alloys Limited (CIAL) being the amount credited in the books at the time of merger of Strip Mill Division of CIAL with the Company. CIAL has filed a winding up petition under the provisions of section 434 of the Companies Act, 1956 before the Honâble Bombay High Court, Nagpur Bench and the Company had disputed the same amount. The petition is still at pre admission stage and as per the Company the petition is not sustainable.

7.01 Disclosures of the Micro, Small And Medium Enterprises Development Act, 2006

Micro, Small and Medium Enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 have been determined based on the information as available with the Company and the required disclosures are given below :

8.01 Represents the amount received from the Promoter entities towards the upfront Promoters Contribution as per the conditions under the proposed Debt Restructuring Scheme of the Company. Due to uncertainty on account of matters being pending before the National Company Law Tribunal and the Honâble Supreme Court, as detailed in Note No. 19.10, the amount has been kept in the special account with the scheduled bank and depending upon the final outcome of the above matters either the equity shares will be allotted against the specified Share Application Money or it will be refunded to the applicants as per the provisions of the Companies Act, 2013 and other laws applicable.

9.01 During the year 2005 the Government of Chhattisgarh published the Chhattisgarh Upkar (Sansodhan) Adhiniyam, 2004 according to which the Company is liable to pay Energy Development Cess @10 paise per unit generated from its captive power plants. The levy of Energy Development Cess has been disputed by the Company and the matter is pending before the Honâble Supreme Court of India. The Office of the Chief Electrical Inspector, Government of Chhattisgarh, has been continuously sending demands for the energy development cess since the Honâble Supreme Court of India vide its interim order dated 2nd November, 2007 permitted the department to raise the bill. However it directed that no coercive steps shall be taken by the state to recover the dues till further orders. The legislative competence of the Government of Chhattisgarh is not under challenge. During the last year, the Company has been legally advised that it is highly unlikely that the provision by which the State Government has imposed Energy Development Cess will be struck down by the Honâble Supreme Court of India. In view of the above and as a matter of prudence, the Company has made a provision of EnergyDevelopment Cess aggregating amounts to Rs. 4008.35 lakhs till 31st March, 2018.

9.02 In Previous year, the Company had recognised liabilities based on substantial degree of estimation for Excise Duty payable on clearance of goods lying in stock. During the period till 30th June, 2017, Rs. 4779.77 lakhs was utilised for clearance of goods. Excise duty is discontinued with effect from 1st July, 2017 upon implementation of Goods and Service Tax (GST).

10.01 Sale of Products up to 30th June 2017 includes excise duty, which is discontinued with effect from 1st July, 2017 upon implementation of Goods and Service Tax (GST). In accordance with âInd AS 18 - Revenueâ, GST is not included in Revenue from operations. In view of the aforesaid change in indirect taxes, Revenue from Operations for the year is not comparable with those of previous year.

(b) Defined Benefit Plan

The employees Gratuity Fund Scheme, which is a Defined Benefit Plan, is managed by Life Insurance Corporation of India (LIC). The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefits entitlement and measures each unit separately to build up the final obligation.

11.01 Risk Exposures

These plans typically expose the company to Actuarial risks as Investment Risk, Interest Rate risk, Longevity risk and Salary risk.

Interest Rate Risk A decrease in the bond interest rate will increase the plan obligation; however, this will be partially offset by an increase in the return on the plan debt investments.

Salary Risk The present value of the defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the planâs obligation.

# Third Party claims include :

The Company had entered into a Contract for setting up 70 TPD Oxygen Plant and its operations and maintenance with M/s Goyal MG Gases Private Limited in the year 2002-03. Subsequently in the year 2015-16 dispute arose between both the parties and the matter was referred to the Sole Arbitrator for adjudication of dispute.

The Sole Arbitrator passed an Arbitral Award against the Company dated 4th August, 2017 readwith order dated on 15th September, 2017. As per the Arbitral Award, all the claims of the Company were rejected and all the counter claims were allowed. The Company had challenged the Arbitral Award before the Honâble Delhi High Court under the Arbitration and Conciliation Act, 1996. The Honâble High Court dismissed the appeals filed by the Company vide its judgement dated 21st December, 2017 and judgement dated 5th April, 2018.

According to the management of the Company, the entire award is without any evidence and reasoning. Counter claims to the tune of Rs 940.88 lakhs have been allowed. Ld. Arbitrator has allowed payment of lease rentals and at the same time has also directed the Company to hand over possession of the plant which is contrary in nature. Considering the above described factual aspects the Company believes that it has good case on merits. The Company is in the process of filing Special Leave Petition (SLP) in the Supreme Court. The total amount of Arbitral award is estimated to be around Rs. 1600.00 lakhs, accordingly the management is of the view that at this stage no provisioning is required against the said award.

B Management is of the view that above litigations will not impact significantly the financial position of the Company.

C The Company has received Show Cause notices from the Excise department which mainly relate to demand of duty for sale of exempted goods, differential duty on sale to related parties and denial of credit on structural steel, new plants, railway receipt, bank expenses and outward freight etc. The Company does not foresee any losses on this account.

NOTE : 12 SEGMENT REPORTING :

A. Segment information as per Indian Accounting Standard - 108 - âOperating Segmentsâ :

Information provided in respect of Revenue items for the year ended 31st March, 2018 and in respect of Assets / Liabilities as at 31st March, 2018.

Note : Figures in brackets represent previous yearâs 2016-17 amounts.

B. Segment Identification, Reportable Segments and definition of each segment :

i. Reportable Segments :

The Companyâs operating segments are established on the basis of those components that are evaluated regularly by the Chief Operating Decision Maker, in deciding how to allocate resources and in assessing performance. These have been identified and reported taking into account the differing risks and returns, nature of products, the organisational structure and the internal reporting system of the Company.

ii. Primary / Secondary Segment Reporting Format :

b) Since all the operations of the Company are predominantly conducted within India, there are no separate reportable geographical segments.

c) No Non-Current Assets of the Company is located outside India as on 31st March, 2018 and 31st March 2017.

d) No single customer has accounted for more than 10% of the Company revenue for the year ended 31st March, 2018 and 31st March 2017.

iii. Segment Composition :

b) Iron and Steel Castings Segment comprises of manufacture and sale of Engineering and Automotive Castings with production facilities at Nagpur, Bhilai and Anjora.

c) Other Segment comprises of trading of Coal, Coke and PVC pipes.

NOTE : 13 RELATED PARTY DISCLOSURES :

In accordance with the requirements of Ind AS 24, on related party disclosures, name of the related party, related party relationship, transactions and outstanding balances including commitments where control exits and with whom transactions have taken place during reported periods, are as detail below:

A. List of Related Parties :

(As certified by the Management)

I. Associate Company

Maa Usha Urja Limited

II. Key Management Personnel and their Relatives

Shri B. L. Shaw Shri Arbind Jayaswal Shri Ramesh Jayaswal Shri P. K. Bhardwaj

Shri Avneesh Jayaswal Shri Archit Jayaswal Shri M.P. Singh Shri Ashutosh Mishra

III. Enterprises in which key managerial personnel and their relatives are able to exercise significant influence with whom transactions have taken place during the year :

Other Related Parties

Apex Spinning Mills Private Limited Avon Sales and Services Private Limited Jayaswal Neco Infrastructures Private Limited Jayaswal Neco Metallics Private Limited Jayaswal Neco Steel and Mining Limited Karamveer Impex Private Limited Neco Ceramics Limited The Jayaswal Basant Lall Shaw Family Trust

Anurag Sales and Services Private Limited

AMR Iron and Steel Private Limited

Jayaswal Neco Energy Private Limited

Neco Defence Systems Limited

Nine Star Plastic Packaging Services Private Limited

Neco Heavy Engineering and Castings Limited

NSSL Private Limited

Jayaswal Neco Urja Limited

NOTE : 14

THE EXCEPTIONAL ITEMS :

The Exceptional items for the year ended 31st March, 2018 include :

Exceptional Items for the year ended 31st March, 2018 represent the amount realised (Net of written off) in respect of Companyâs Coal Mines at Moitra Coal Block which was cancelled by the Honâble Supreme Court of India during the year 2014.

NOTE : 15

EXPENDITURE RELATED TO CORPORATE SOCIAL RESPONSIBILITY (CSR) AS PER SECTION 135 OF THE COMPANIES ACT, 2013 READ WITH SCHEDULE VII.

a. CSR amount required to be spent as per Section 135 of the Companies Act, 2013 read with Schedule VII thereof by the Company during the year is Rs. Nil (Previous Year : Rs. 15.33 lakhs)

b. Expenditure incurred related to Corporate Social Responsibility is Rs. 209.24 lakhs (Previous Year : Rs. 104.42 lakhs).

NOTE : 16 FAIR VALUES

16.01 Financial Instruments by category:

Set out below is a comparison by class of the carrying amounts and fair value of the Companyâs financial assets and liabilities that are recognised in the financial statements.

16.02 Fair Valuation techniques used to determine Fair Value

The following methods and assumptions were used to estimate the Fair Values:

iii) Fair values of Investment in equity are derived from quoted market prices in active markets and Fair values of Mutual Fund are derived from published NAV at reporting date.

iv) The Fair Value of the remaining financial instruments is determined using discounted cash flow analysis.

16.03 Fair Value Hierarchy

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation techniques:-

The following table provides hierarchy of the fair value measurement of Companyâs asset and liabilities, grouped into Level 1 (Quoted prices in active markets), Level 2 (Significant observable inputs) and Level 3 (Significant unobservable inputs) as described below:

# since the Investments under level 3 category are not material and its fair value is zero, so the disclosure for the same is not given.

Note 17 : Financial Risk Management - Objective and Policies

The Company is exposed to Market Risk, Credit Risk and Liquidity Risk. Risk management is carried out by the company under policies approved by the Board of Directors. This Risk management plan defines how risks associated with the Company will be identified, analysed, and managed. It outlines how risk management activities will be performed, recorded, and monitored by the Company. The basic objective of risk management plan is to implement an integrated risk management approach to ensure all significant areas of risks are identified, understood and effectively managed, to promote a shared vision of risk management and encourage discussion on risks at all levels of the organization to provide a clear understanding of risk / benefit trade-offs, to deploy appropriate risk management methodologies and tools for use in identifying, assessing, managing and reporting on risks, and to determine the appropriate balance between cost and control of risk and deploy appropriate resources to manage / optimise key risks. Activities are developed to provide feedback to management and other interested parties (e.g. Audit committee, Board etc.). The results of these activities ensure that risk management plan is effective in the long term.

17.01 Market Risk and Sensitivity :

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprise three types of risk : Foreign Currency Rate risk, Interest Rate risk and other Price risks, such as Equity Price risk and Commodity risk. Financial instruments affected by market risk include Loans and Borrowings, Deposits and Investments.

The sensitivity analysis relate to the position as at 31st March 2018 and 31st March 2017.

(a) Foreign Currency Exchange Risk and Sensitivity :

Foreign Currency Exchange risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in Foreign Currency Exchange rates. The Companyâs exposure to the risk of changes in foreign currency exchange rates relates primarily to the Companyâs operating activities. The Company transacts business primarily in USD and Euro. The Company has foreign currency trade payables and receivables and is therefore, exposed to foreign currency exchange risk. The Company regularly reviews and evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management policies including use of derivatives like Foreign exchange forward contract to hedge exposure to Foreign currency exchange risk.

b) Interest Rate Risk and Sensitivity

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is having non current borrowings in the form of Term Loan and Intercorporate Deposits. Also, the Company is having current borrowings in the form of Working Capital and Suppliers Credit. There is a fixed rate of interest in case of Supplier Credit, Vehicle Loan and Inter-corporate Deposits and hence, there is no interest rate risk associated with these borrowings. The Company is exposed to interest rate risk associated with Term Loan and Working Capital facility due to floating rate of interest.

Further, due to default in servicing of its dues by the Company, all the Banks of the Company have classified the credit facilities given to the Company as Non Performing Asset (NPA) in their books of account and interest in respect of those specified banks are provided in the books of the Company but actual interest levy may vary depending upon as and when it is charged by the banks. The Lenders of the Company had signed the Master Restructuring Agreement for its debts, however on instructions of Reserve Bank of India (RBI) which had not agreed to the approved Debt Restructuring Scheme being fully implemented within the stipulated time line of 13th December, 2017, State Bank of India (SBI), the lead secured lender, had filed an application under section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC), against the Company. Being aggrieved by the non-implementation of the approved Debt Restructuring Scheme the Company had filed Writ Petition (WP) before the Honâble Bombay High Court, Mumbai, against RBI and the other respondents. The Honâble Bombay High Court had dismissed the WP of the company. The Company has challenged the order of the Honâble Bombay High Court before the Honâble Supreme Court of India and subsequent to the year end, the Honâble Supreme Court was pleased to issue notice and directed parties to maintain status quo.

The assumed movement in basis points for interest rate sensitivity analysis is based on the currently observable market environment.

c) Commodity Price Risk :

The Companyâs revenue is exposed to the market risk of price fluctuations related to the sale of its steel products. Market forces generally determine prices for the steel products sold by the Company. These prices may be influenced by factors such as supply and demand, production costs (including the costs of raw material inputs) and global and regional economic conditions and growth. Adverse changes in any of these factors may reduce the revenue that the Company earns from the sale of its steel products.

The Company primarily purchases its raw materials in the open market from third parties. The Company is therefore subject to fluctuations in prices for the purchase of iron ore, coking coal and other raw material inputs. The Company purchased substantially all of its iron ore and coal requirement from third parties in the open market during the year ended 31st March, 2018.

The Company aims to sell the product at prevailing market prices. Similarly the Company procures key raw materials like iron ore and coal based on prevailing market rates as the selling prices of steel prices of input raw materials move in the same direction.

The following table details the Companyâs sensitivity to a 5% movement in the input price of Iron Ore and Coking Coal.

17.02 Credit Risk

a) Trade Receivables :

The Company extends credit to customers in normal course of business. The Company considers factors such as credit track record in the market and past dealings with the Company for extension of credit to customers. The Company monitors the payment track record of the customers. Outstanding customer receivables are regularly monitored. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets. The history of trade receivables shows a negligible provision for bad and doubtful debts. Therefore, the Company does not expect any material risk on account of non performance by any of the counterparties.

b) Financial Instruments and Cash Deposits :

The Company considers factors such as track record, size of the institution, market reputation and service standards to select the banks with which balances are maintained. Credit risk from balances with bank is managed by the Companyâs finance department. Investment of surplus funds are also managed by finance department. The Company does not maintain significant cash in hand. Excess balance of cash other than those required for its day to day operations is deposited into the bank.

For other financial instruments, the finance department assesses and manage credit risk based on internal assessment. Internal assessment is performed for each class of financial instrument with different characteristics.

17.03 Liquidity Risk :

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. It will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. The Companyâs objective is to, at all times, maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company relies on short term borrowings and operating cash flows in the form of suppliers credit and working capital to meet its need for fund.

The Company underwent significant liquidity issues in the last four years including the current year, due to cancellation of its three captive coal mines which resulted in significant viability issues of the end use Iron and Steel making facilities, payment of additional levy on mined coal as per the Honâble Supreme Court order, huge dumping of steel in the country which resulted in the low capacity utilisation of its new steel making facilities and unavailability of incremental working capital support due to Reserve Bank of Indiaâs (RBIâs) Asset Quality review classifying the Companyâs accounts as technical Non-performing Asset from back date effect. All these have resulted in financial constraints to the Company, losses in the operations, erosion of net worth and calling back of loans by two of the secured lenders. The Company had approached its secured lenders for an appropriate debt restructured plan with the objective to make the operations of the Company viable and sustainable, which was approved by the super majority of the secured lenders. The Company had complied with the conditions of Debt Restructuring Scheme including getting Independent Evaluation Committee recommendation to the scheme, infusion of stipulated additional funds as Promoters Contribution as per the scheme and signing of its Master Restructuring Agreement by the Lenders which was not agreed to by the Reserve Bank of India which directed the lead Bank - State Bank of India (SBI) to file application under the Insolvency and Bankruptcy Code, 2016 (IBC) against the Company. However the Company has contested the same and currently the matter is subjudice in the Supreme Court which has granted status quo on the IBC proceedings.

* Loan called back by one of secured lenders is not considered.

# Processing fees has not been considered.

17.04 Competition and Price Risk :

The Company faces competition from local and foreign competitors. Nevertheless, it believes that it has competitive advantage in terms of high quality products and by continuously upgrading its expertise and range of products to meet the needs of its customers.

Note : 18 CAPITAL RISK MANAGEMENT

The Company monitors capital using gearing ratio, which is net debt divided by total capital (equity plus net debt). Net debt are Non-current and Current debts as reduced by Cash and Cash Equivalents, Other Bank Balances, Noncurrent Bank Deposits and Current Investments. Equity comprises all components including other comprehensive income.

The above Loan has been given for business purpose.

Corporate Guarantee given to the lenders of MUUL for the financial facilities availed by that company.

Note : 19 STANDARDS ISSUED BUT NOT EFFECTIVE :

On 28th March, 2018, the Ministry of Corporate Affairs (MCA) has notified Ind AS 115 - Revenue from Contract with Customers and certain amendment to existing Ind AS. These amendments shall be applicable to the Company from 1st April, 2018.

19.01 Issue of Ind AS 115 - Revenue from Contracts with Customers

Ind AS - 115 will supersede the current revenue recognition guidance including Ind AS - 18 Revenue, Ind AS 11 - Construction Contracts and the related interpretations. The core principles of Ind AS 115 is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

19.02 Amendment to Existing issued Ind AS

The MCA has also notified certain amendments to the following Accounting Standards:

i. Ind AS 21 - The Effects of Changes in Foreign Exchange Rates

ii. Ind AS 12 - Income Taxes

Applications of the above standards are not expected to have any significant impact on the Companyâs Financial Statements.

Note :20 The Management and authorities have the power to amend the Financial Statements in accordance with section 130 and 131 of the Companies Act, 2013.

Mar 31, 2016

1. The Company is entitled to defer its liability to pay Sales Tax (including a portion of Purchase Tax) in respect of its certain units. The liability under the Schemes as on 31st March, 2016 is Rs. 7808.35 lacs (Previous Year Rs. 7797.64 lacs) which is provided for on the basis of its Net Present Value of Rs. 4981.95 lacs (Previous Year Rs. 4411.10 lacs). This Sales-tax liability is repayable in five equal annual installments starting at the end of the tenth year from the year to which it relates and will be fully paid up by 30th April, 2028.

2. As on 31st March, 2016, the Company has overdue of principal of Rs. 740.93 lacs (Previous Year Rs. 1618.89 lacs) and Interest of Rs. 9502.36 lacs (Previous Year Rs. 6557.07 lacs) included in Current Maturities of Long Term Debts and Interest Accrued and Due respectively in Note No. 10 for a period of less than 90 days. Further due to non achievement of Date of Commencement of Commercial Operations (DCCO) for the Companyâs project, 13 banks have classified the credit facilities given to the Company aggregating to Rs. 329729.11 lacs as at 31st March, 2016 as Non Performing Asset (NPA) in their Books o account.

As on 31st March, 2016, the Company has overdue of Lease Obligations of Rs. 207.24 lacs (Previous Year Rs. 23.29 lacs) included in Current Maturities of Lease Obligations in Note No. 10.

3. Interest free Inter Corporate Deposits are repayable after the repayment of Term Loans taken for Long Term Working Capital Margin i.e. after December, 2025.

4. The Provision for Site Restoration Expenses was made in terms of guidelines for preparation of mines closure plan issued by Ministry of Coal, Government of India. In view of the cancellation of the mines, during the year the provision has been reversed and adjusted to the cost of mining assets ( Refer Note No. 12.10 )

5. Working Capital Loans from Banks are secured / to be secured by the hypothecation of whole of moveable properties including Stocks and Book Debts, both present and future, and by second charge on immoveable properties of the Company.

6. The Working Capital Loans from Banks are guaranteed by some of the Directors in their personal capacities.

7. Working Capital Rupee Loans from Banks referred to above includes Devolved Letter of Credit aggregating to Rs. 1036.67 lacs (Previous Year Rs. Nil).

8. As on 31st March, 2016, the Company has overdue of Working Capital Interest of Rs. 157.74 lacs (Previous Year Rs. Nil) included in Interest Accrued and Due in Note No. 10 for a period of less than 60 days.

9. The Company has recognized liabilities based on substantial degree of estimation for Excise Duty payable on clearance of goods lying in stock, Entry Tax and Cess on Metallurgical Coke paid under dispute. The Excise Duty payable on clearance of goods lying in stock as at 31st March, 2015 was of Rs. 4378.44 lacs as per the estimated pattern of dispatches. During the year Rs. 4378.44 lacs was utilized for clearance of goods. Liability recognized under this clause for the year end is Rs. 3359.51 lacs which is outstanding as on 31st March, 2016. Actual outflow is expected in the next financial year. Any additional information in this regard can be expected to prejudice seriously the position of the Company.

10. Buildings include cost of building aggregating to Rs. 144.43 lacs (Previous Year Rs. 144.43 lacs) constructed on land, ownership of which does not vest with the Company.

11. Indefeasible Right to Use represents the cost incurred by the Company for the exclusive right of usage of certain pieces of land during the contract period.

12. Addition to Plant and Equipments includes Borrowing Cost of Rs. 21451.87 lacs (Previous Year Rs. Nil).

13. The gross block of fixed assets includes Rs. 44.28 lacs (Previous Year Rs. 44.28 lacs) on account of revaluation of fixed assets. Consequent to said revaluation there is an additional charge of depreciation of Rs. 0.76 lacs (Previous Year Rs. 0.76 lacs) and an equivalent amount has been withdrawn from Revaluation Reserve and credited to Surplus.

14. The Ministry of Coal (MoC) had invoked Bank Guarantee of Rs. 1000 lacs for delay in start of production of Moitra Coal Block, Jharkhand. The Company has challenged the Bank Guarantee (BG) invocation before the Hon''ble Delhi High Court , vide W. P. (C) 8117 of 2015, wherein vide order dated 24.08.2015 granted interim relief to the Company, that no coercive steps will be taken subject to Company keeping the BG alive. The matter is now listed for 04.08.2016 . The Company is confident that its case is on merits and doesn''t envisage any financial impact of the above matter. In identical matters Ministry of Coal has not invoked BG of other companies.

15. The Company had filed Mining Lease applications for Rowghat Iron Ore Deposit, Bastar, Chhattisgarh. The Chhattisgarh State Government (SG) had rejected the same by a common order which was challenged by the Company. The SG had filed a complaint before the Ministry of Mines which had referred the matter to the Chief Vigilance Officer (CVO), which couldnât make out any case against the Company.

The revision petition of the Company was allowed and subsequently the Hon''ble Delhi High Court also confirmed the order. The Hon''ble Delhi High Court, had specifically observed that the Company had successfully undertaken prospecting operations in the area. Subsequently in 2012, SG filed a fresh complaint containing same allegations before the Chief Vigilance Commission (CVC). The Central Bureau of Investigation (CBI) on the directions of the CVC had registered an FIR against the Company alleging certain irregularities. Post completion of the investigations by CBI the case is subjudiced.

The Company doesnât expect any financial effect of the above matter under litigation.

16. The Hon''ble Supreme Court of India by its Order dated 24th September, 2014 had cancelled number of coal blocks allotted to various entities which included three coal blocks consisting of one operational coal block at Gare Palma IV/4 - Raigarh, Chhattisgarh and two under development coal blocks at Gare Palma IV/8 - Raigarh, Chhattisgarh and Moitra at North Karanpura, Jharkhand allotted to the Company by the Ministry of Coal, Government of India. The Government of India has issued second Ordinance on 26th December, 2014 for implementing the order of the Hon''ble Supreme Court and fixation of Compensation etc.

The Company had filed a Writ Petition (WP) before the Hon''ble Delhi High Court, challenging the provisions of Ordinance and Tender process. The Hon''ble Delhi High Court after hearing all the parties has closed the matter for orders.

In the E Auction, above three coal mines of the Company got awarded to different bidders.

In respect of the above Coal Mining Assets, the Company has received Rs. 7682.18 lacs towards moveable assets from a successful bidder and Rs. 6757.91 lacs is receivable against other assets as per the letter dated 17th September, 2015 issued by the Ministry of Coal, Government of India against mining assets having carrying value of Rs. 19373.71 lacs (net of provisions of Rs. 2694.95 lacs for Site Restoration expenses). Consequently, the Company has adjusted and charged off the net balance of Rs. 4933.62 lacs to the Statement of Profit and Loss.

17. During the Previous Year, the Company had applied the estimated useful lives as specified in Schedule II of the Act or as determined based on technical evaluation in respect of certain plant and machineries of the Company. Accordingly the unamortized carrying value was being depreciated / amortized over the revised / remaining useful life. The written down value of fixed assets whose life had expired as at 1st April, 2014 amounting to Rs. 1180.16 lacs had been adjusted net of deferred tax of Rs. 408.43 lacs against the retained earnings.

18. In accordance with the Accounting Standard (AS-28) on "Impairment of Assets", the Management during the year carried out an exercise of identifying the assets that may have been impaired in respect of each cash generating unit in accordance with the said Accounting Standard. On the basis of this review carried out by the management, there was no impairment loss on Fixed Assets during the year ended 31st March, 2016.

19. During the year, the Company is not liable to pay Minimum Alternate Tax (MAT) under section 115JB of the Income Tax Act, 1961 ( The Act). However, the amount paid as MAT during earlier years are allowed to be carried forward for being set off against the future tax liabilities computed in accordance with the provisions of the Act, other than Section 115JB, in next ten years. Based on the future projection of the performances, the Company will be liable to pay the income tax computed as per provisions, other than under section 115JB of the Act. Accordingly as advised in Guidance note on â Accounting for Credit available in respect of Minimum Alternate Tax under the Income Tax Act 1961 â issued by the Institute of Chartered Accountants of India, Rs. Nil (Previous Year Rs. 377.36 lacs) being the excess of tax payable under section 115JB of the Act over tax payable as per the provisions other than section 115JB of the Act has been considered as MAT Credit Entitlement and credited to Statement of Profit and Loss. The total MAT Credit as at 31st March, 2016 is Rs. 9336.30 lacs (Previous Year Rs. 9929.83 lacs).

NOTE : 20 Previous Year''s figures have been reworked / regrouped / rearranged / reclassified wherever necessary.

NOTE : 21 SEGMENT REPORTING :

A. Segment information as per Accounting Standard - 17 on Segment Reporting :

Information provided in respect of revenue items for the year ended 31st March, 2016 and in respect of assets / liabilities as at 31st March, 2016.

Information about Primary (Product wise) segments :

B. Segment Identification, Reportable Segments and definition of each segment :

i. Primary / Secondary Segment Reporting Format :

b) Since all the operations of the Company are predominantly conducted within India, there are no separate reportable geographical segments.

ii. Reportable Segments :

Segments have been identified and reported taking into account the differing risks and returns, nature of products, the organizational structure and the internal reporting system of the Company.

iii. Segment Composition :

b) Iron and Steel Castings Segment comprises of manufacture and sale of Engineering and Automotive Castings with production facilities at Nagpur, Bhilai and Anjora.

c) Other Segment comprises of trading of Cotton Yarn, Coal and PVC pipes.

NOTE : 22 THE EXCEPTIONAL ITEMS :

(i) The Exceptional items include for the year ended 31st March, 2016 :

a. Write off of Mining Assets amounting to Rs. 4933.62 lacs pursuant to cancellation of coal blocks (Refer Note No. 12.10).

b. In the earlier years the Company invested Rs. 1370.55 lacs in the equity of Jayaswal Neco Urja Limited, the subsidiary of the Company and has also advanced (including interest receivable) Rs. 896.22 lacs as at 31st March, 2016. The subsidiary was setting up a power plant to use Middlingâs from Companyâs coal mines. In view of the cancellation of coal mines as detailed in Note No. 12.10, the subsidiary has abandoned its power plant project and has charged off the expenses incurred by it towards the project to the Statement of Profit and Loss of the subsidiary. Consequently the Company has also fully provided for its Investment and Advances aggregating to Rs 2266.77 lacs in the Statement of Profit and Loss.

(ii) The Exceptional item for the year ended 31st March, 2015 represents :

a. Additional levy @ Rs. 295 per MT amounting to Rs. 9161.53 lacs on the coal extracted till 31st March, 2014, in pursuance of the order dated 24th September, 2014 of Hon''ble Supreme Court.

NOTE : 23 Corporate Ispat Alloys Limited has filed a winding up petition under the provisions of Section 434 of the Companies Act, 1956 before the Honâble Bombay High Court, Nagpur Bench, Nagpur, against claiming an amount of Rs. 10226.78 lacs. The petition is still at pre admission stage and as per the Company the petition is not sustainable.

NOTE : 24 EXPENDITURE RELATED TO CORPORATE SOCIAL RESPONSIBILITY AS PER SEC 135 OF THE COMPANIES ACT, 2013 READ WITH SCHEDULE VII.

a. CSR amount required to be spent as per Section 135 of the Companies Act, 2013 read with Schedule VII thereof by the Company during the year is Rs. 118.80 lacs (Previous Year Rs. 161.84 lacs)

b. Expenditure incurred related to Corporate Social Responsibility is Rs. 92.30 lacs (Previous Year Rs. 101.12 lacs)

Mar 31, 2015

1. The Company is entitled to defer its liability to pay Sales Tax (including a portion of Purchase Tax) in respect of its certain units. The liability under the Schemes as on 31st March, 2015 is Rs.7797.64 lacs (Previous Year : Rs. 7797.64 lacs) which is provided for on the basis of its Net Present Value of Rs.4411.10 lacs (Previous Year : Rs.3942.29 lacs). This Sales-tax liability is repayable in five equal annual installments starting at the end of the tenth year from the year to which it relates.

2. As on 31st March, 2015, the Company has overdue of principal of Rs.1618.89 lacs (Previous year Nil ) and Interest of Rs.6557.07 lacs (Previous year Nil ) included in current maturities of Long term debt and interest accrued and due on borrowings respectively in Note No. 10 for a period of less than 60 days.

As on 31st March, 2015, the Company has overdue of Lease Obligations of Rs. 23.29 lacs (Previous year Rs.17.62 lacs) included in current maturities of lease obligations in Note No. 10.

NOTE: 3. Previous Year's figures have been reworked / regrouped / rearranged / reclassified wherever necessary.

B Management is of the view that above litigations will not impact significantly on the financial position of the Company.

NOTE: 4 SEGMENT REPORTING :

A. Segment information as per Accounting Standard - 17 on Segment Reporting :

Information provided in respect of revenue items for the year ended 31st March 2015 and in respect of assets / liabilities as at 31st March, 2015.

Information about Primary (Product wise) segments :

B. Segment Identification, Reportable Segments and definition of each segment : i. Primary / Secondary Segment Reporting Format :

a) The risk-return profile of the Company's business is determined predominantly by the nature of its products. Accordingly, the business segments constitute the Primary Segments for disclosure of segment information.

b) Since all the operations of the Company are predominantly conducted within India, there are no separate reportable geographical segments.

ii. Reportable Segments :

Segments have been identified and reported taking into account the differing risks and returns, nature of products, the organizational structure and the internal reporting system of the Company.

iii. Segment Composition :

a) Steel Segment is engaged in manufacture and sale of Pig Iron, Billets, Rolled Products, Sponge Iron and includes its captive Power Plants at its unit located at Siltara, Raipur and Mining activities in the state of Chhattisgarh, Jharkhand and Maharashtra.

b) Iron and Steel Castings Segment comprises of manufacture and sale of Engineering and Automotive Castings with production facilities at Nagpur, Bhilai and Anjora.

c) Other Segment comprise of trading of cotton yarn, coal & PVC pipes.

NOTE : 5 IN ACCORDANCE WITH CLAUSE 32 OF LISTING AGREEMENT THE DETAILS OF ADVANCE IS AS UNDER : a. To Jayaswal Neco Urja Limited (JNUL), a Subsidiary , closing balance as on 31st March, 2015 is Rs.758.30 lacs (Previous year Rs. 758.30 lacs). Maximum balance outstanding during the year was Rs.758.30 lacs (Previous year Rs. 758.30 lacs).

NOTE: 6 The Exceptional item represents additional levy @ Rs. 295 per MT amounting to Rs.9161.53 lacs on the coal extracted till 31st March, 2014, in pursuance of the order dated 24th September, 2014 of Hon'ble Supreme Court .

NOTE: 7 Expenditure related to Corporate Social Responsibility as per Sec 135 of the Companies Act, 2013 read with Schedule VII.

a) Gross amount Rs. 161.84 lacs required to be spent by the Company during the year.

b) Amount spent during the year Rs. 101.12 lacs and Rs. 60.72 lacs short spend.

NOTE: 8 Details of Loan given, Investment made and Corporate Guarantee given covered u/s 186(4) of the Companies Act, 2013.

Mar 31, 2013

1.01 Buildings include cost of building aggregating to Rs. 144.43 lacs ( Previous Year Rs. 144.43 lacs) constructed on land, ownership of which does not vest with the Company.

1.02 Indefeasible Right to Use represents the cost incurred by the Company for the exclusive right of usage of certain pieces of land during the contract period.

1.03 Addition to Plant and Equipments includes Borrowing Cost of Rs 888.17 lacs (Previous Year Rs. 1968.92 lacs).

1.04 The gross block of fixed assets includes Rs. 44.28 lacs ( Previous Year Rs. 44.28 lacs) on account of revaluation of fixed assets. Consequent to said revaluation there is an additional charge of depreciation of Rs. 0.76 lacs (Previous Year Rs. 0.77 lacs) and an equivalent amount has been withdrawn from Revaluation Reserve and credited to Surplus.

1.05 The Company has undertaken Projects for enhancement of capacities of its Foundries in Nagpur and Integrated Steel Plant in Chattisgarh by expanding its Steel Melt Shop, Rolling Mills, Pellet Plant, Sponge Iron Plant, Captive Power Plants, Coal Washeries, and developing its Coal and Iron Ore Mines (the Projects). Since the projects are under construction stage, the expenditure incurred towards construction of projects has been considered as Pre- operative Expenditure, the details of which are as under:

1.06 During the year Ministry of Coal raised a demand for invoking the Bank Guarantee of Rs. 1000 Lacs furnished by the Company, in respect of the Company''s Moitra Coal Block in Jharkhand for delay in start of production of coal. The Company has filed a writ petition before the Hon''ble High Court at New Delhi, which has, by an interim order, restrained the Bank from transmitting the amount till the next date of hearing.

1.07 The Company had filed Mining Lease applications for Rowghat Iron Ore Deposit in Bastar District Chhattisgarh. The Chhattisgarh State Government (SG) had rejected the same which were challenged by the Company by filing a revision application. The SG had filed a complaint before Ministry of Mines which had referred the matter to the Chief Vigilance Officer (CVO) which couldn''t make out any case against the Company. Subsequently revision petition of the Company was allowed by the Adjudicating authority as well as the Delhi High Court which upheld the order of the Revisional Authority and also observed that the Company had successfully undertaken the Prospecting operations in the area. During the year, on a fresh complaint by the SG to the Chief Vigilance Commission (CVC) containing the same allegations the Central Bureau of Investigations(CBI) on the directions of the CVC had registered a FIR against the Company alleging certain irregularities against which the company has filed a writ petition for quashing of the FIR before the Hon''ble Delhi High Court, in which the High Court has directed CBI not to take any coercive action against the Petitioners till the next date of hearing.

1.08 In accordance with the Accounting Standard (AS-28) on "Impairment of Assets", the Management during the year carried out an exercise of identifying the assets that may have been impaired in respect of each cash generating unit in accordance with the said Accounting Standard. On the basis of this review carried out by the management, there was no impairment loss on Fixed Assets during the year ended 31st March, 2013.

1.09 Presently the company is liable to pay Minimum Alternate Tax (MAT) under section 115JB of the Income Tax Act, 1961 ( The Act) and the amount paid as MAT is allowed to be carried forward for being set off against the future tax liabilities computed in accordance with the provisions of the Act, other than Section 115JB, in next ten years. Based on the future projection of the performances, the Company will be liable to pay the income tax computed as per provisions, other than under section 115JB of the Act. Accordingly as advised in Guidance note on " Accounting for Credit available in respect of Minimum Alternate Tax under the Income Tax Act 1961 " issued by the Institute of Chartered Accountants of India, Rs. 864.84 lacs being the excess of tax payable under section 115JB of the Act over tax payable as per the provisions other than section 115JB of the Act has been considered as MAT Credit Entitlement and credited to Statement of Profit and Loss. The total MAT Credit as at 31st March, 2013 is Rs.7194.37 lacs (Previous Year Rs. 6329.53 lacs).

NOTE : 2

In the opinion of the management, Current Assets and Loans and Advances are of the value stated, if realised in the ordinary course of business.

NOTE : 3 SEGMENT REPORTING :

A Segment information as per Accounting Standard - 17 on Segment Reporting :

Information provided in respect of revenue items for the year ended 31st March 2013 and in respect of assets / liabilities as at 31st March, 2013.

Information about Primary (Product wise) segments :

B. Segment Identification, Reportable Segments and definition of each segment :

i. Primary / Secondary Segment Reporting Format :

a) The risk-return profile of the Company''s business is determined predominantly by the nature of its products. Accordingly, the business segments constitute the Primary Segments for disclosure of segment information.

b) Since all the operations of the Company are predominantly conducted within India, there are no separate reportable geographical segments.

ii. Reportable Segments :

Segments have been identified and reported taking into account the differing risks and returns, nature of products, the organisational structure and the internal reporting system of the Company.

iii. Segment Composition :

a) Steel Segment is engaged in manufacture and sale of Pig Iron, Billets, Rolled Products, Sponge Iron and includes its captive Power Plants at its unit located at Siltara, Raipur and Mining activities in the state of Chhattisgarh, Jharkhand and Maharashtra.

b) Iron and Steel Castings Segment comprises of manufacture and sale of Engineering and Automotive Castings with production facilities at Nagpur, Bhilai and Anjora.

NOTE : 4 RELATED PARTY DISCLOSURES :

A. List of related parties :

(As certified by the Company)

I. Subsidiary

Jayaswal Neco Urja Limited

II. Associate Companies Maa Usha Urja Limited

III. Key Management Personnel

Shri B L Shaw Shri Ramesh Jayaswal

Shri Arbind Jayaswal Shri P K Bhardwaj

IV. Enterprises in which key managerial personnel and their relatives are able to exercise significant influence with whom transactions have taken place during the year :

(Other related parties)

Abhijeet Infrastructure Limited

Neco Heavy Engineering & Castings Limited

Neco Ceramics Limited NSSL Limited

North Karnapura Coal Company Limited

Deify Infrastructures Limited

Jayaswal Neco Metallics Private Limited

Apex Spinning Mills Private Limited

Avon Sales & Services Private Limited

Jyotikant Investments Private Limited

Jayaswal Neco Infrastructures Private Limited

Jayaswal Neco Steel & Mining Limited

Parivar Food Industries Private Limited

Abhijeet Ferrotech Limited

AMR Iron & Steel Private Limited

Neco Mining Company Limited

Steel & Tube Exports Limited

Corporate Ispat Alloys Limited

Jayaswal Neco Power Holding Company Limited

Jayaswal Holdings Private Limited

Anurag Sales & Services Private Limited

Karamveer Impex Private Limited

Nine Star Plastic Packing Service Private Limited

Vibrant Electronics Limited

Jayaswal Neco Energy Private Limited

Jayaswal Neco Power Private Limited

Terra Infra Development Limited

Nagpur Scrap Suppliers Private Limited

NOTE : 5 IN ACCORDANCE WITH CLAUSE 32 OF LISTING AGREEMENT THE DETAILS OF ADVANCE IS AS UNDER:

a. To Jayaswal Neco Urja Limited (JNUL), a Subsidiary , closing balance as on March 31, 2013 is Rs. 603.79 lacs (Previous year Rs. 238.94 lacs). Maximum balance outstanding during the year was Rs. 603.79 lacs (Previous year Rs. 238.94 lacs).

b. JNUL has not made investment in the shares of the Company.

c. As per the Company''s policy loans to employees are not considered in ''a'' above.

NOTE : 6

Previous Year''s figures have been reworked / regrouped / rearranged / reclassified wherever necessary to make them comparable with those of current year.

Mar 31, 2012

NOTE : 1 CONTINGENT LIABILITIES AND COMMITMENTS

(to the extent not provided for) 31.03.2012 31.03.2011 (Rs.in lacs) (Rs.in lacs)

A Contingent Liabilities (To the extent not provided for):

(No cash outflow is expected except stated otherwise)

a. Guarantees given by the Company's Bankers. 2834.36 2739.35

(Bank guarantees are provided under contractual/legal obligation)

b. Corporate Guarantee 1181.00 1181.00 (Given to Banks against the borrowings taken by one of the associate Company)

c. Demands not acknowledged as debts

i) Disputed Excise Duty and Service Tax 2724.49 2527.31

ii) Disputed Sales Tax 2971.85 1381.64

iii) Disputed Customs Duty 787.30 761.65 (Relating to cess on Metallurgical Coke)

iv) Other Disputed Demands 1680.91 1723.26

(Mainly related to demand of Cess on Power and Electricity Duty.)

v) Third Party Claims 407.21 321.61

(Matters are pending before various forum)

d. Liability in respect of Bills Discounted 14323.71 8158.92

e. Letters of credit opened in favour of suppliers 41634.26 9790.07 (Cash flow is expected on receipt of material from suppliers)

B Capital Commitments :

Estimated amount of contracts remaining to be executed on Capital Accounts and not provided for (net of advances) 135227.71 130277.93 (Cash flow is expected on execution of such capital contracts on progressive basis)

NOTE : 2

In the opinion of the management, Current Assets and Loans and Advances are of the value stated, if realised in the ordinary course of business.

NOTE : 3 SEGMENT REPORTING :

A. Segment information as per Accounting Standard - 17 on Segment Reporting :

Information provided in respect of revenue items for the year ended 31st March 2012 and in respect of assets / liabilities as at 31st March, 2012.

Information about Primary (Product wise) segments :

B. Segment Identification, Reportable Segments and definition of each segment : i. Primary / Secondary Segment Reporting Format :

a) The risk-return profile of the Company's business is determined predominantly by the nature of its products. Accordingly, the business segments constitute the Primary Segments for disclosure of segment information.

b) Since all the operations of the Company are predominantly conducted within India, there are no separate reportable geographical segments.

ii. Reportable Segments :

Segments have been identified and reported taking into account the differing risks and returns, nature of products, the organisational structure and the internal reporting system of the Company.

iii. Segment Composition :

a) Steel Segment is engaged in manufacture and sale of Pig Iron, Billets, Rolled Products, Sponge Iron and includes its captive Power Plants at its unit located at Siltara, Raipur and Mining activities in the state of Chhattisgarh, Jharkhand and Maharashtra.

b) Iron and Steel Castings Segment comprises of manufacture and sale of Engineering and Automotive Castings with production facilities at Nagpur, Bhilai and Anjora.

NOTE : 4

Previous Year's figures have been reworked / regrouped / rearranged / reclassified wherever necessary to make them comparable with those of current year.

Mar 31, 2011

31.03.2011 31.03.2010

(Rs.in Lacs) (Rs.in Lacs)

1 Previous Year's figures have been reworked / regrouped / rearranged / reclassified wherever necessary.

2 Contingent Liabilities :

a. Guarantees given by the Company's Bankers. 2739.35 2879.53 (Bank guarantees are provided under contractual/legal obligation. No cash outflow is expected.)

b. Corporate Guarantee 1181.00 457.83 (Given to Banks against the borrowings taken by one of the associate Company)

c. Demands not acknowledged as debts

i) Disputed Excise Duty and Service Tax 2527.31 734.88

(No cash outflow is expected in the near future.)

ii) Disputed Sales Tax 1381.64 1044.09

(No cash outflow is expected in the near future.)

iii) Disputed Customs Duty 761.65 736.01

(Relating to cess on Metallurgical Coke)

iv) Other Disputed Demands 1723.26 51.33

(Mainly related to demand of Cess on Power, no cash outflow is expected in the near future.)

v) Third Party Claims 321.61 329.44

(Matters are pending before various forum. No cash outflow is expected.)

e. Liability in respect of Bills Discounted 8158.92 3141.78 (No cash outflow is expected.)

f. Letters of credit opened in favour of suppliers 9790.07 2949.31 (Cash flow is expected on receipt of material from suppliers)

3 Estimated amount of contracts remaining to be executed on 130277.93 86.47 Capital Accounts and not provided for (net of advances)

(Cash flow is expected on execution of such capital contracts on progressive basis)

3 In the opinion of the management, Current Assets, Loans and Advances are of the value stated, if realised in the ordinary course of business.

4 a. The Company has undertaken Projects for enhancement of Capacities of its Intergrated Steel Plant in Chattisgarh by expanding its Steel Melt Shop, Rolling Mills, Sponge Iron Plant, Captive Power Plants, Coal Washeries and developing its Coal and Iron Ore Mines (the Project). A part of the cost of the Project is to be financed by the Equity Contribution. Accordingly the Promoters along with their Associates have contributed Rs.22029 Lacs which has been accounted as "Advance received against Share Application" pending necessary approvals and compliance of the legal requirements as required under the Companies Act, 1956 and SEBI Guidelines for issuance of shares on preferential basis.

5 During the year, the Board of Directors has approved the Scheme of Arrangement ("the Scheme") under section 391-394 of the Companies Act, 1956, between the Company and Corporate Ispat Alloys Limited ("CIAL") providing for demerger of Steel Division of CIAL for the purpose of its merger with the Company with effect from 1st April, 2008. Necessary approvals from the Stock Exchanges under clause 24(f) of the Listing Agreement have been received. The Company is in the process of filing the application to the High Court seeking directions for convening meetings of Shareholders and Creditors of the Company.

On obtaining the required statutory approvals and sanction of the High Court, and the Scheme coming into force, the Company shall pursuant to the Scheme issue as consideration for transfer of Assets and Liabilities of the Steel Division, 3,26,49,600 Equity Shares of Rs. 10/- each credited as fully paid up to the eligible shareholders of CIAL in the ratio of 114 Equity Shares of the Company for every 10 Equity Shares held by them in CIAL as on the record Date.

iii) The expenditure on account of exchange difference on outstanding forward exchange to be recognised in the Profit and Loss account of subsequent period - Rs. 20.45 Lacs (Rs 26.10 Lacs) 8 The Company is entitled to defer its liability to pay Sales Tax (including a portion of Purchase Tax) in respect of its certain units. The liability under the Schemes as on 31st March, 2011 is Rs. 5096.14 Lacs (Previous Year : Rs.4147.55 Lacs) which is provided for on the basis of its Net Present Value of Rs. 2124.96 Lacs (Previous Year : Rs.1687.51 Lacs).

B. Segment Identification, Reportable Segments and definition of each segment :

i. Primary / Secondary Segment Reporting Format :

a) The risk-return profile of the Company's business is determined predominantly by the nature of its products. Accordingly, the business segments constitute the Primary Segments for disclosure of segment information.

b) Since all the operations of the Company are predominantly conducted within India, there are no separate reportable geographical segments.

ii. Reportable Segments :

Segments have been identified and reported taking into account the differing risks and returns, nature of products, the organisational structure and the internal reporting system of the Company.

iii. Segment Composition :

a) Steel Segment is engaged in manufacture and sale of Pig Iron, Billets, Rolled Products, Sponge Iron and includes its captive Power Plants at its unit located at Siltara, Raipur and Mining activities in the state of Chhattisgarh, Jharkhand and Maharashtra.

b) Iron and Steel Castings Segment comprises of manufacture and sale of Engineering and Automotive Castings with production facilities at Nagpur, Bhilai and Anjora.

6 Related Party Disclosures :

A. List of related parties :

(As certified by the Company)

I. Subsidiary

Jayaswal Neco Urja Limited (formerly known as Raigarh Energy Limited)

II. Associate Companies

Maa Usha Urja Limited

Ferromax Mines and Minerals Private Limited (upto 02.02.2011)

III. Key Management Personnel

Shri B.L. Shaw

Shri Arbind Jayaswal

Shri Ramesh Jayaswal

Shri P.K.Bhardwaj

IV. Enterprises in which key managerial personnel and their relatives are able to exercise significant influence with whom transactions have taken place during the year:

(Other related parties)

Abhijeet Infrastructure Limited

AMR Iron and Steel Private Limited

Neco Heavy Engineering and Castings Limited

Neco Mining Company Limited

Neco Ceramics Limited

Steel & Tube Exports Limited

NSSL Limited

Corporate Ispat Alloys Limited

JLD Yavatmal Energy Limited

Neco Industries Limited

North Karnapura Coal Company Limited

Jayaswal Holdings Private Limited

Deify Infrastructures Limited

Anurag Sales & Services Private Limited

Nilhat Commodities Private Limited

Karamveer Impex Private Limited

Apex Spinning Mills Private Limited

Nine Star Plastic Packaging Services Private Limited

Avon Sales & Services Private Limited

Vibrant Electronics Limited

Jyotikant Investments Private Limited

Jayaswal Neco Energy Private Limited

Jayaswal Neco Infrastructures Private Limied

Jayaswal Neco Power Private Limited

Jayaswal Neco Steel and Mining Private Limited

7 During the year ended 31st March 2011, the Company disposed off its entire investment in Ferromax Mines and Minerals Private Limited (FMMPL). Resultantly, FMMPL has ceased to be an associate of the Company.

8 In accordance with the Accounting Standard (AS-28) on "Impairment of Assets", the Management during the year carried out an exercise of identifying the assets that may have been impaired in respect of each cash generating unit in accordance with the said Accounting Standard. On the basis of this review carried out by the management, there was no impairment loss on Fixed Assets during the year ended 31st March, 2011.

9 Presently the Company is liable to pay Minimum Alternate Tax (MAT) under section 115JB of the Income Tax Act, 1961 ( The Act) and the amount paid as MAT is allowed to be carried forward for being set off against the future tax liabilities computed in accordance with the provisions of the Act, other than Section 115JB, in next ten years. Based on the future projection of the performances, the Company will be liable to pay the income tax computed as per provisions, other than under section 115JB, of the Act. Accordingly as advised in Guidance note on " Accounting for Credit available in respect of Minimum Alternate Tax under the Income Tax Act 1961 " issued by the Institute of Chartered Accountants of India, Rs. 2977.09 Lacs being the excess of tax payable u/s 115JB of the Act over tax payable as per the provisions other than section 115JB of the Act has been considered as MAT credit entitlement and credited to Profit and Loss Account. Further, during the year, pursuant to the Scheme of Arrangement between the Company and Inertia Iron and Steel Industries Private Limited (IISPL) for the Assessment Year: 2008-09, the Company has accounted for MAT Credit Entitlement which is relating to IISPL aggregating to Rs.25.18 Lacs by adjusting the General Reserves. The aggregate MAT Credit Entitlement available to the Company as on 31st March, 2011 is Rs. 5390.88 Lacs.

10 The Company has received various Show-cause Notices from the Office of the Commissioner of Central Excise which mainly relates to availment of Cenvat /Customs Duty /Service Tax Credit on Inputs/ Services taken under lease etc. The Company does not foresee any losses on this account and accordingly no provision has been made in the books of account.

11 a. The cost of assets taken on lease prior to 1st April, 2001 amounted to Rs. 665.16 Lacs (Previous Year Rs. 1270.66 Lacs). Future Obligations towards Lease Rentals under the lease agreements are Nil (Previous Year Nil).

(i) The above Cash Flow Statement has been prepared under the "Indirect Method" as set out in Accounting Standard - 3 "Cash Flow Statements" issued by the Institute of Chartered Accountants of India.

(ii) Figures in brackets indicate Outflows.

(iii) Cash and Cash Equivalents at the end of the year includes deposits with banks aggregating to Rs. 5508.21 Lacs (Previous Year Rs. 2433.92 Lacs) which are pledged with banks as margin for Bank Guarantee and Letters of Credit.

(iv) Previous year's figures have been regrouped / rearranged wherever necessary to make them comparable with those of current year.

Mar 31, 2010

1 Contingent Liabilities :

a. Guarantees given by the Companys Bankers. 2879.53 4457.38 (Bank guarantees are provided under contractual/legal obligation.

No cash outflow is expected.)

b. Corporate Guarantee 457.83 11.62 (Given to Banks against the borrowings taken by one of the associate Company)

c. Demands not acknowledged as debts

i) Disputed Excise Duty and Service Tax 734.88 1031.08 (No cash outflow is expected in the near future.)

ii) Disputed Sales Tax 1044.09 169.68 (No cash outflow is expected in the near future.)

iii) Disputed Customs Duty 736.01 97.24 (Relating to cess on Metallurgical Coke)

iv) Other Disputed Demands 51.33 15.54 (No cash outflow is expected in the near future.)

v) Third Party Claims 329.44 302.73 (Matters are pending before various forum. No cash outflow is expected.)

e. Liability in respect of Bills Discounted 3141.78 1534.75 (No cash outflow is expected.

f. Letters of credit opened in favour of suppliers 2949.31 418.89 (Cash flow is expected on receipt of material from suppliers)

2 Estimated amount of contracts remaining to be executed on 86.47 784.26

iii) The expenditure on account of exchange difference on outstanding forward exchange to be recognised in the Profit and Loss account of subsequent period - Rs. 26.10 lacs (Previous Year Nil)

3 The Company is entitled to defer its liability to pay Sales Tax (including a portion of Purchase Tax) in respect of its certain units. The liability under the Schemes as on 31st March, 2010 is Rs. 4147.55 lacs (Previous Year : Rs.3590.16 lacs) which is provided for on the basis of its Net Present Value of Rs. 1687.51 lacs (Previous Year : Rs.1354.32 lacs).

Defined Benefit Plan

The employees Gratuity Fund Scheme, which is a defined benefit plan, is managed by a Trust maintained with Life Insurance Corporation of India (LIC). The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to addtional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

* The details are not furnished as the informations are not available with the Company

4 Segment Reporting :

A. Segment information as per Accounting Standard - 17 on Segment Reporting :

Information provided in respect of revenue items for the year ended 31st March 2010 and in respect of assets / liabilities as at 31st March, 2010.

Note : Figures in brackets represent previous years amounts.

B. Segment Identification, Reportable Segments and definition of each segment : i. Primary / Secondary Segment Reporting Format :

a) The risk-return profile of the Companys business is determined predominantly by the nature of its products. Accordingly, the business segments constitute the Primary Segments for disclosure of segment information.

b) Since all the operations of the Company are predominantly conducted within India, there are no separate reportable geographical segments.

ii. Reportable Segments

Segments have been identified and reported taking into account the differing risks and returns, nature of products, the organisational structure and the internal reporting system of the Company.

iii. Segment Composition :

a) Steel Segment is engaged in manufacture and sale of Pig Iron, Billets, Rolled Products, Sponge Iron and includes its captive Power Plants at its unit located at Siltara, Raipur and Mining activities in the state of Chhattisgarh, Jharkhand and Maharashtra.

b) Iron and Steel Castings Segment comprises of manufacture and sale of Engineering and Automotive Castings with production facilities at Nagpur, Bhilai and Anjora.

5 Related Party Disclosures :

A. List of related parties :

(As certified by the Company)

I. Subsidiary

Raigarh Energy Limited ( w.e.f. 3rd July 2009)

II. Associate Companies

Jayaswal Holdings Private Limited

Maa Usha Urja Limited

Ferromax Mines and Minerals Private Limited

III. Key Management Personnel

Shri B.L. Shaw

Shri Arbind Jayaswal

Shri Ramesh Jayaswal

Shri P.K.Bhardwaj

IV. Enterprises in which key managerial personnel and their relatives are able to exercise significant influence with whom transactions have taken place during the year:

(Other related parties)

Abhijeet Infrastructure Limited AMR Iron and Steel Private Limited

Neco Heavy Engineering and Castings Limited Paranjpe Minerals Private Limited

Neco Ceramics Limited Steel & Tube Exports Limited

NSSL Limited Corporate Ispat Alloys Limited

Jayaswals Ashoka Infrastructure Private Limited Neco Industries Limited

Note : Figures in brackets represent previous years amounts.

6 Disclosures of Loans and Advances

Note: -

Loans to Employees as per Companys policy are not considered.

* Falls under the category of Loans & Advances in the nature of Loans where there is no repayment schedule and are repayable on demand.

** The companies cease to be companies under the same management. Hence balance as on 31st March, 2010 not given.

7 Basic and Diluted Earning Per Share

8 a Dividend accrued on Redeemable Preference Shares not provided for Particulars

b During the year the Company has redeemed 10% Optionally Convertible Cumulative Redeemable Preference Shares (OCCRPS) at a premium of Rs. 53.0224 per OCCRPS and 0.001% Cumulative Redeemable Preference Shares (CRPS) at a premium of Rs. 0.0062 per CRPS. The total amount payable on redemption of the Preference Shares aggregating to Rs. 4950.37 lacs and premium payable on redemption amounting to Rs. 1530.87 lacs is drawn out of the General Reserve of the Company in terms of the scheme of arrangement sanctioned by the Honble High Court of Mumbai judicature at Nagpur vide order dated 13th November 2009

Liability for Gratuity and other long term benefits is provided on actuarial basis for the Company as a whole, the amount pertaining to directors is not ascertainable and, therefore, not included above.

9 In accordance with the Accounting Standard (AS-28) on "Impairment of Assets", the Management during the year carried out an exercise of identifying the assets that may have been impaired in respect of each cash generating unit in accordance with the said Accounting Standard. On the basis of this review carried out by the management, there was no impairment loss on Fixed Assets during the year ended 31st March, 2010.

10 Presently the Company is liable to pay Minimum Alternate Tax (MAT) under section 115JB of the Income Tax Act, 1961 ( Ãthe ActÃ) and the amount paid as MAT is allowed to be carried forward for being set off against the future tax liabilities computed in accordance with the provisions of the Act, other than Section 115JB, in next ten years. Based on the future projection of the performances, the Company will be liable to pay the income tax computed as per provisions, other than under section 115JB, of the Act. Accordingly as advised in Guidance note on Ã Accounting for Credit available in respect of Minimum Alternate Tax under the Income Tax Act 1961 Ã issued by the Institute of Chartered Accountants of India, Rs. 1795.08 lacs being the excess of tax payable u/s 115JB of the Act over tax payable as per the provisions other than section 115JB of the Act has been considered as MAT credit entitlement and credited to Profit and Loss Account. The aggregate MAT Credit Entitlement available to the Company as on 31st March, 2010 is Rs. 2388.60 lacs.

11 a. The cost of assets taken on lease prior to 1st April, 2001 amounted to Rs. 1270.66 lacs (Previous Year Rs. 1270.66 lacs). Future Obligations towards Lease Rentals under the lease agreements are Nil (Previous Year Nil). b. The Company has acquired certain items of Plant & Machinery on finance lease on or after 1st April, 2001, amounting to Rs.2324.93 lacs

(Previous year Rs. 2324.93 lacs). The Minimum Lease Rentals outstanding as on 31st March, 2010 in respect of these assets are as follows :

12 Particulars in respect of Licensed Capacity, Installed

* Net of 432 MT (Previous Year : 6467 MT) being captive consumption.

** Net of 27257 MT (Previous Year : 30802 MT) being captive consumption and 185181 MT (Previous Year : 101990 MT) being hot metal consumed for production of Billets

# Net of 89088 MT (Previous Year : 29412 MT) being captive consumption and includes 6832 MT (Previous Year Nil) produced on Jobwork basis.

@ Net of 38807 MT (Previous Year : 19021 MT) being captive consumption.

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