1. (A). For all Secured Term Loans & Non Convertible Debentures excluding “B”.

i) Primary Security:

a) Pari- passu 1st charge over the entire fixed assets (both present & future) of the company’s coke units at Khambhalia and Bhachau in the state of Gujarat, Dharwad in the state of Karnataka, Waste Heat Recovery Power Plant (along with land) at Dharwad in the state of Karnataka, Steel unit at Bhachau in the state of Gujarat and Windmill units at various locations in the state of Gujarat.

b) Pari passu 2nd charge over the entire fixed assets (both present & future) of Bajrangbali Coke Industries Ltd. (since merged with the Company) at Bhachau in the state of Gujarat.

ii) Collateral Security:

a) Pari-passu 2nd charge over the entire current assets (both present & future) of the company’s coke units at Khambhalia and Bhachau in the state of Gujarat and Dharwad in the state of Karnataka and Steel unit at Bhachau in the state of Gujarat.

b) Along with Working Capital facilities

- First Pari-passu charge on Residential Property at 1, Clyde Row, Hastings, Kolkata in the name of Mr. Arun Kumar Jagatramka

- First Pari-passu charge on Residential-cum-office Property at NRE House, Saru Road, Jamnagar, Gujarat in the name of Mr. Arun Kumar Jagatramka

- Pledge of 78,478,035 Equity shares and 12,357,468 Class "B" Equity Shares of GNCL held by the promoters/ promoter Group Company .

- Personal Guarantees of Promoter Directors viz. Mr. Arun Kumar Jagatramka and Mrs. Mona Jagatramka.

- Corporate Guarantee (to the extent of the value of shares pledged) of promoter group companies namely Bharat NRE Coke Limited (since merger of Gujarat NRE Mineral Resources Ltd.) and Mangal Crystal Coke Pvt. Ltd.

- Corporate Guarantee of Bharat NRE Coke Ltd.

c) The Rupee Term Loan II of Rs. 54 Crores from ICICI Bank Ltd. further secured by Corporate guarantee of Gujarat NRE Pty Ltd.

(B) Term Loan from The Laxmi Vilas Bank Ltd. amounting to Rs. 48.50 Crores Primary Security:

Pari- passu 1st charge over the entire fixed assets (both present & future) of Bajrangbali Coke Industries Ltd. (since merged with the Company) at Bhachau in the state of Gujarat.

Collateral Security:

a) Pari- passu 2nd Charge over the entire fixed assets (both present & future) of the company’s coke units at Khambhalia and Bhachau in the state of Gujarat, Dharwad in the state of Karnataka, Waste Heat Recovery Power Plant (along with land) at Dharwad in the state of Karnataka, Steel unit at Bhachau in the state of Gujarat and Windmill units at various locations in the state of Gujarat.

b) Refer Note No.4(A)(II)(b)

iv General Descriptions of defined benefit plans:

a) Gratuity Plan:

The Company operates gratuity plan wherein every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service. The same is payable on Termination of service, or retirement, whichever is earlier. The benefit vests after five years of continuous service.

b) Provident Fund Plan:

The Company contributes 12% of salary for all eligible employees towards Provident Fund managed by the Regional Provident Fund Authority.

In the above statement, paid up Equity & Earning Per Share include both Equity Shares & B Equity Shares since both class of shares are pari-passu in all respect except for voting rights.

2. Debt Restructuring:

During the year 2013-14, the Company was referred to the Corporate Debt Restructuring (CDR) Cell. Pursuant to that a Corporate Debt Restructuring (CDR) Package was approved by the CDR Empowered Group (CDR EG) at its meeting held on 14th March 2014 and communicated vide Letter of Approval dated 22nd March 2014 as amended/modified vide letter dated 7th April 2014.

Sanctions under the CDR package have been received from all the lenders. The Master Restructuring agreement and Supplemental Master Restructuring agreement has been executed by the lenders. Debt owing to all the CDR lenders has been reclassified and interest has been recalculated in accordance with the cDr package. The above reclassifications and interest calculations are subject to reconciliation and approval by the lenders.

As per the terms of the CDR Scheme, the company has allotted 46,78,69,140 Equity Shares of Rs.10 each at a price of Rs.11.03 per share, aggregating to Rs. 516.06 crores (including a premium of Rs. 1.03 per equity share aggregating to Rs. 48.19 crores) on Preferential Basis towards conversion of FITL and WCTL to Corporate Debt Restructuring (CDR) Lenders except for State Bank of Patiala, State Bank of Travancore, IDBI Bank, Bank of Baroda, LICi and Corporation Bank.

Further as per terms of the CDR Scheme the CDR lenders have disbursed an amount of Rs 184.36 crores towards viability gap funding (VGF) during the year.

The aggregate maximum present value of the outstanding sacrifice made/to be made by CDR lenders as per the approved CDR package for the CDR tenure of 10 years is estimated at Rs. 342.39 Crores.

3. During 2007, the company and Armada (Singapore) Pte Ltd (“Armada”) entered into a five year charter party agreement for chartering of vessels. During 2009 Armada entered into Judicial Management, a Singaporean insolvency regime. Hence, the Company did not make further nominations as there was no security for Armada's performance for the balance period under the Agreement.

During 2010, Armada commenced an arbitration proceeding against the Company in London for the non-performance during 2009 and 2010. The Tribunal passed an order in favour of Armada assessing the liability of the Company for US$ 7.80 million (Rs. 51.74 cr) plus interest w.e.f. 5th April, 2012.

Aggrieved by the aforesaid order, the company has filed a civil suit against Armada with the Hon'ble High Court at Calcutta claiming for damages for an amount of Rs 144 crores and cancellation of the aforesaid order and restraining Armada from giving any effect to the order. An interim order was passed by the Hon'ble High Court at Calcutta restraining Armada to take any further steps to enforce the order passed by the Tribunal in India.

During 2012, Armada filed its claim for the year 2011 before the same Arbitral Tribunal in London which passed a further order assessing the liability of the Company for US$ 4.67 million (Rs. 30.98 cr) plus interest w.e.f 30th November, 2012. A petition was filed in High Court at Calcutta against the said order of the Arbitral Tribunal for its cancellation. Affidavit in oppositions was filed by both the parties and the matter is presently sub judice before the Hon'ble High Court at Calcutta.

Further during 2012, the Company sought Armada's performance under the agreement for the year 2012. Armada's failure to perform was taken as repudiation of the agreement and the same terminated by the Company. Inspite of this, Armada filed another claim in March 2013 for the year 2012 before a newly constituted Arbitral Tribunal. The company had filed a counter claim and opposed the claim of Armada. The Tribunal issued orders dated 23.1.14, 26.6.14 and 21.7.14 in favour of Armada for US$ 1.15 million (Rs. 7.63 cr) plus interest. A petition has been filed in High Court at Calcutta against the said orders. Affidavit in opposition has been filed by Armada. The matter is presently sub judice before the Hon'ble High Court at Calcutta.

The arbitration tribunal in London was not constituted in accordance with the arbitration agreement and as such the company has challenged enforcement of such arbitral orders in India and the management is fully confident of successfully resisting enforcement of such orders in India. Based on the Tribunal's orders Armada has obtained through the Federal Court of Australia, New South Wales a freezing order of the assets held by GNCL in Australia and the Court has appointed receivers on the shares held by the company in Wollongong Coal Limited (formerly Gujarat NRE Coking Coal Ltd.) (WLC) and Gujarat NRE Pty Limited (GNL).

Armada has filed three separate execution petitions before the Hon'ble High Court at Calcutta with respect to orders of the Arbitral Tribunal dated 5.4.12, 30.11.12, 23.1.14, 26.6.14 and 21.7.14 concealing material facts and details of the aforesaid legal proceedings in Australia. The company is strongly contesting the same and is confident of a favourable outcome.

Such orders or proceedings however do not affect any other assets of the Company and its operations in India in any manner. The matter is presently sub-judice.

In September 2011, the Company and Coeclerici Asia (Pte) Ltd. (“Coeclerici”) entered into an agreement for sale of met coke by 31st March 2012 against advance payment of USD 10 million (Rs. 66.33 cr) by Coeclerici, at a price to be mutually agreed. Sluggish market conditions, and no mutual agreement on price, lead to no cargo being supplied by 31st March, 2012 and the entire advance of USD 10 million (Rs. 66.33 cr) was required to be refunded to Coeclerici. The liability has been booked by the company as advance from customer. On or about August 2012, Coeclerici initiated arbitration proceedings in London. The Tribunal passed its order on 14th February, 2013 against the Company for an amount of US$ 8.5 million (Rs. 56.39 cr) and interest. The Company has repaid US$ 3.2 million (Rs. 21.23 cr) during the period June' 2012 to Sept'2013.

Thereafter Coeclerici had approached the Australian Court to enforce the Tribunal order and the Court has appointed a receiver to the shares held by the company in Wollongong Coal Limited (formerly Gujarat NRE Coking Coal Ltd.) (WLC) and Gujarat NRE Pty Ltd (GNL) and the shares held by Mr. Arun Kumar Jagatramka in WLC. The receivers took control over the 86,092,966 shares held by the company in WLC and have been selling them on Australian Stock Exchange. As on 30th June 2015 38,213,413 shares out of 86,092,966 shares of WLC have been sold by the receivers and an amount of AU$ 883,150 (Rs. 4.49 cr)have been realized by the receivers.

The company has filed a Petition against Coeclerici before the Hon'ble High Court at Calcutta on 3rd March, 2015 under section 34 of The Arbitration and Conciliation Act, 1996 to set aside the order dated 14th February, 2013 passed by the Learned Arbitral Tribunal. The award was passed ignoring the compliance with Reserve Bank guidelines and as such being against public policy in India. The matter is subjudice before the Hon'ble High Court at Calcutta and the management is confident of a favourable outcome.

Further, on or around June 2015 Coeclerici had filed a winding-up petition against the company for an amount of US$ 8.56 million (Rs. 56.78 cr). The company is strongly contesting the same and accordingly, have filed a suit against Coeclerici before the Hon'ble High Court at Calcutta on 16th October 2015 claiming a set off against the claim of Coeclerici in their winding-up petition and a cross claim for an amount of US$ 2.43 million (Rs 16.12 cr). The matter is sub judice before the Hon'ble High Court at Calcutta and the management is confident of a favourable outcome.

The Company had entered into a Time Charter Agreement on January 29, 2008 with Gregarious Estates Incorporated (“Gregarious” or “Owners”), for hire of a vessel for a period of 82 to 86 months. As Gregarious failed to provide the Company with a notice for a change in its management of Gregarious, and also did not provide the calculations for ascertaining super profits, the Company, contended that the said Agreement was illegal, null and void. Accordingly the Company did not take delivery of the vessel.

Gregarious on 18th February, 2013 initiated arbitration proceedings in London against the Company for a claim of US$ 38.94 million (Rs. 258.29 cr) and obtained an order on 30th June 2014 for US$ 36.34 million (Rs. 241.05 cr) plus interest.

The Company has filed an application under section 34 of the Arbitration and Conciliation Act, 1996 before the Hon'ble High Court at Calcutta to set aside the order of the Tribunal. The matter is presently sub judice before the Hon'ble High Court at Calcutta. The management is fully confident of successfully resisting enforcement of this award in India.

During November 2014, Wollongong Coal Ltd (WLC) and Wongawilli Coal Pty Ltd. (WCPL) have filed a Summon and a Commercial List Statement before the Supreme Court of New South Wales, Australia against the Company alleging non-payment by defendant against supply of coking coal by WLC and WCPL under coal purchase agreements and claimed an amount of US$ 54.26 million (Rs. 359.92 cr) from the Company. The Company has filed a Notice of Appearance and Commercial List Response on 23rd March, 2015 claiming set off of the aforesaid claim against (i) Unwashed coal adjustment payable by WLC / WCPL for an amount of US$ 37.26 million (Rs. 247.16 cr) and (ii) Unpaid freight payable by WLC / WCPL for an amount of US$ 9.02 million (Rs. 59.83 cr). Further the company has also claimed a set-off for unpaid corporate guarantee commission for an amount of US$ 42.32 million (Rs. 280.72 cr) and AU$ 16.26 million (Rs. 82.60 cr) filed against WLC and WCPL in its Statement of Claim SC 2014 / 339422 joined to these proceedings.

The matter is pending before the Supreme Court of New South Wales, Australia. The management is confident of the outcome of the case in favour of the company and is expected to recover some amount from them and does not expect any liability on the Company.

On 27th August, 2013 Jindal Steel Power Ltd (JSPL) had entered into a coal purchase agreement with the Company & Gujarat NRE Mineral Resource Ltd. (GNMRL) now known as Bharat NRE Coke Ltd. (since merged) (which was amended further on 12th September, 2013) for sale and supply of 65000 MT of washed NRE Australian hard coking coal to JSPL between 1st September, 2013 and 31st March, 2014 after washing the unwashed coking coal at the washeries of the Company. As per the terms of the purchase agreement, JSPL had made an advance payment of Rs. 39 crores to the Company. The advance secured by pledge of 1 crore shares of Bharat NRE Coke Ltd. each held by the Company and GNMRL.

Subsequent to the agreement, the management control of WLC & WCPL, which was originally with the Company, was taken over by the Jindal group and consequently, no shipment of coal was made available to the Company and hence no supply could be made under the agreement by the Company to JSPL.The dispute was referred to arbitration and the matter is presently pending.

The company and Siemens Limited ('Siemens') had entered into a contracts in 2008 for design, engineering, manufacture, supply and delivery at site of plant and equipment by Siemens of various structure, equipments, parts etc of electrical package and Steel Structures, Commissioning and Insurance spares of Turbine and Auxiliaries package for installation of 15MW power plants each for Phase 1 and Phase 2 at Dharwad and 15 MW power plant at Bhachau adjacent to the existing coke plants of the Company. Some disputes arose between the parties and Siemens had instituted against the company a winding-up proceeding before the Hon'ble High Court at Calcutta and an arbitration proceeding before an arbitral tribunal. The matters are presently pending and the management does not envisage any material impact on its operation / performance out of these proceedings.

On 11th January 2016 National Pension System (NPS) Trust has filed a winding-up petition against the company before the Hon'ble High Court at Calcutta claiming Rs. 16.72 crores plus interest for non-payment of principal and interest amount of matured debentures of the company purchased by NPS from secondary market. The matter is presently pending before the said Hon'ble Court.

Since 2007, the company had entered into long term charter party agreements with various ship owners for multiple vessels for import of coal and export of its coke cargoes across the world. However, owing to sluggish conditions in the commodities market in last few years, the shipping industry faced the similar fate and could not revive thereafter. This has led to defaults and breach in performance under those charter party agreements. However, the company is in regular contact with its counterparties to manage and mitigate the risks in the best possible manner.

4. Scheme of Compromise and Arrangement:

On 5th October 2015, the Board of Directors of the Company had approved a Scheme of Compromise and Arrangement between the Company and its Creditors as mentioned in the Scheme, under the provisions of Sec 391 to 394 of the Companies Act, 1956, with 31st December, 2015 being the appointed date of the Scheme. On receipt of the approvals from the National Stock Exchange of India Ltd (NSE) and BSE Ltd (BSE), the aforesaid Scheme was filed with the Hon'ble High Court at Calcutta and the said Hon'ble Court vide its order dated 17th Feb 2016 had directed to convene a meeting of the creditors. Upon receipt of some observations from the creditors, the company has filed a modified scheme before the said Hon'ble Court which is currently pending for further directions

5. a The indicators of impairment listed in paragraph 8 to 10 of Accounting Standard (AS)- 28 “Impairment of assets” issued by ICAI have been examined by the management and on such examination, it has been found that none of the indicators are present in the case of the Company’s assets . A formal estimate of the recoverable amount has not been made, as there is no indication of a potential impairment loss.

b In the opinion of Board of Directors and to the best of their knowledge and belief, the value on realization of Current Assets, Loans and advances in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet.

6. The Company has allotted 3,31,85,000 Equity Shares of Rs.10 each, at par, to ICICI Bank Ltd pursuant to request received from ICICI Bank Ltd, Offshore Banking Unit, regarding allotment of equity shares of the Company equivalent to USD 5 million against liability towards corporate guarantee provided by the Company for loans taken by the Australian company Gujarat NRE Pty Ltd. and the same has been duly provided during the year.

7. The company held 8,60,92,966 shares as investment in Wollongong Coal Limited (“WLC”). These shares were transferred to the account of the receivers appointed by the Federal Court of Australia vide order dated 7th August 2013 in the matter of Coeclerici Asia Pte Limited (“Coeclerici”). The trading in the shares of WLC stands suspended since 31st May 2015. As such the company has claimed from Coeclerici the value of these shares as at the date of transfer of such shares to the receiver.”

8. There are no amounts due and outstanding to be credited to Investors Education and Protection Fund as at 31st March 2016.

9. Remittance in Foreign Currency on account of Dividend:

The Company has paid dividend in respect of shares held by Non-resident on repatriation basis. This inter-alia includes portfolio investment and direct investment, where the amount is also credited to Non-Resident External Account (NRE A/c). The exact amount of dividend remitted in foreign currency cannot be ascertained. The total amount remitted in this respect is given herein below:

10. The scheme under section 391 to 394 of the Companies Act 1956 for amalgamation of NRE Metcoke Limited and Bajrang Bali Coke Industries Limited with the Company has been approved by the Hon’ble Calcutta High Court on 21st January' 2016 and the financial results for the year ended 31st March 2016 include financials of both these companies. Accordingly, the previous year figures may not be comparable.

11. Previous year's figure have been regrouped/reclassified wherever necessary to correspond with the current year's classification/disclosure.