Jayaswal Neco Industries Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Mar 2022

Notes: 1 During the year:

(i)One of the bankers has done One Time Settlement (OTS) of its debt dues with the Company, which has resulted into write back of borrowings of Rs. 1110 Lakhs.

(ii)As of 31st March 2022, all the remaining eleven banks of the Company have assigned their fund-based debt along with the 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 ("These Trusts").

On 23rd August 2021, the Company entered into a restructuring support agreement with These Trusts in relation to restructuring of its outstanding debt owed to These Trusts, in accordance with Section 9 of the Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 ("SARFAESI Act"), as amended and restated from time to time ("Restructuring Support Agreement" or "RSA") with cut- off date as 31st March 2020.

To comply with the conditions of the "Restructuring Support Agreement", which is the principal agreement, as part of the transaction documents, the Company has also entered into a Shareholders' Agreement (SHA) on 23rd August 2021 with These Trusts and the Promoters and Promoter Group of the Company.

Post receipt of the necessary approvals and pursuant to the agreements as detailed in above, on 28th October 2021 the Company has issued and allotted 30,52,81,848 equity shares to These 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 Lakhs.

Accordingly, Rs. 87921 Lakhs of the total borrowings from These Trusts and Rs. 5800 Lakhs of Advance against Share Application Money and Rs. 2000 Lakhs of Inter Corporate Deposits of the Promoters / Promoter Group in the Company have been converted into equity shares of the Company. The above has resulted in increase in the Paid-up Equity Share Capital from Rs. 63863 Lakhs to Rs. 97099 Lakhs and increase in Securities Premium from Rs. 96346 Lakhs to Rs. 158830 Lakhs.

After the year end, the Company has complied with all the conditions precedent including that of the subsequent Amendment Agreements to the RSA.

Accordingly, as confirmed by These Trusts, the debt restructuring has become effective on 23rd May 2022 from the cut-off date of 31st March 2020, which has resulted into write back of borrowings of Rs. 8689 Lakhs, reversal of excess interest charged for the period of 1st April 2020 to 31st December, 2021 of Rs. 160836 Lakhs and recognition of one-time fair value gain as at the cut- off date amounting to Rs. 106689 Lakhs, in accordance with IND AS 109 "Financial instruments".

As per IND AS-10 "Events after the Reporting Period", this is an Adjusting event, and accordingly this event has been given accounting effect in the Books of Accounts of the Company in the quarter ended 31st March 2022.

(iii)Pursuant to the Scheme of Arrangement in relation to demerger and merger of Steel Division at Siltara, Raipur with the Company Under Section 391 to 394 of the Companies Act, 1956 as approved by the Hon'ble High Court of Mumbai, Nagpur Bench, Nagpur vide its order dated 16th September 2013, an amount payable of Rs. 10444 Lakhs was recognised in the books of the Company. The above amount payable remained subject matter of dispute between the Company and the Demerged Company. The Demerged Company also filed winding up petition under the provisions of Section 434 of the Companies Act, 1956, before the Hon'ble Bombay High Court, Nagpur Bench, Nagpur which was disputed by the Company. The said petition was subsequently withdrawn by the Demerged Company as confirmed by the Hon'ble Bombay High Court, Nagpur Bench, Nagpur, vide its order dated 25th February 2021 and thereafter no further claim in this regard has been received by the Company. In view of the above, the management is of the view that the above-mentioned amount is no more payable and hence the same has been written back during the year.

(iv)Write back of borrowings etc. of Rs. 20243 Lakhs, reversal of excess interest charged from 1st April 2020 to 31st March 2021 of Rs. 45518 Lakhs (Net of amortisation at effective interest rate) and one-time fair value gain of Rs. 106689 Lakhs have been shown as Exceptional Items in the above results.

(v) Subsequent to the quarter end and on account of the acquisition of the entire Principal Outstanding Debt of the Company by the various trusts declared and managed by Assets Care & Reconstruction Enterprise Limited in its capacity as a trustee of These trusts and the Company having entered into Restructuring Support Agreement with These Trusts, the Special Leave Petition filed by the Company with the Hon'ble Supreme Court challenging the Judgment dated 5th March 2018 passed by the Hon'ble Bombay High Court has been disposed of by the Hon'ble Supreme Court as withdrawn on 4th May 2022.

(vi) Subsequent to the quarter end and on account of the acquisition of the entire Principal Outstanding Debt of the Company by These trusts declared and managed by Assets Care & Reconstruction Enterprise Limited ('ACRE') in its capacity as a trustee of These trusts and the Company having entered into Restructuring Support Agreement with These trusts, ACRE-54 Trust (acting through its trustee ACRE and being assignee of the debt of State Bank of India ) has made the necessary filing for substitution and withdrawal of insolvency proceedings earlier initiated against the Company by the State Bank of India before the National Company Law Tribunal (NCLT), Mumbai Bench, under Section 7 of the Insolvency and Bankruptcy Code, 2016 in view of no default under the debt restructuring by the Company . The NCLT Mumbai Bench has closed the matter for appropriate order after hearing the matter on 10th May 2022. The Final order copy is awaited.

2 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 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 22nd September 2022. 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.

3 The figures for the corresponding previous period/year have been rearranged/regrouped wherever necessary, to make them comparable. The figures for the quarter ended 31st March 2022 and 31st March 2021 are the balancing figures between the audited figures of the full financial year and the published year to date figures up to the third quarter of the respective financial year.

4 The above results have been reviewed by the Audit Committee and approved by the Board of Directors at their meeting held on 30th May 2022.