Financial Performance Highlights

  • Gross Sales: ₹46,666.07 lakhs (FY26) vs ₹41,691.38 lakhs (FY25), increase of 11.93%
  • Net Profit/(Loss): Loss of ₹1,596.89 lakhs (FY26) vs Profit of ₹14,879.22 lakhs (FY25)
  • Loss Attribution: Mainly due to disposal of charged assets pursuant to enforcement of charge by lender (Shree Balaji Steel and Metal Private Limited) owing to inability to repay outstanding debt
  • Current Ratio: Current liabilities exceed current assets by ₹10,912.66 lakhs as of March 31, 2026
  • Net Worth: Negative ₹2,706.47 lakhs as of March 31, 2026

Exceptional Items

  • Asset Write-offs: ₹309.24 lakhs (right-of-use assets)
  • Balances Written Off: ₹1,685.90 lakhs
  • Total Exceptional Items Impact: ₹1,223.25 lakhs (net)

Asset Disposal and Lender Settlement

The company disposed of charged assets in favor of Shree Balaji Steel and Metal Private Limited due to enforcement of charge for non-repayment of debt. The disposal was approved by shareholders in AGM held on September 17, 2025, though auditors noted this was not in terms of applicable SEBI LODR regulations.

Future Outlook and Strategic Shift

  • Transferring assets to lenders in compliance with Award dated November 24, 2025 to reduce debt liability
  • Entering trading business in iron, metals, steel and related products to diversify revenue streams
  • Proposal to alter Objects Clause of Memorandum of Association subject to shareholder approval via special resolution

Capital Structure

  • Equity Share Capital: Unchanged at ₹3,613.95 lakhs (36,139,488 shares of ₹10 each)
  • Reserves: Negative retained earnings of ₹6,320.42 lakhs
  • No Dividend: Not recommended due to inadequate profits

Debt Position

  • Secured Borrowings: ₹15,210.26 lakhs (including ₹8,492.38 lakhs from Essenn Investments Private Limited in default)
  • Unsecured Borrowings: ₹6,038.41 lakhs (without confirmations from lenders)
  • Lease Liabilities: ₹11,300.71 lakhs (non-current ₹9,340.42 lakhs, current ₹1,960.29 lakhs)

Auditor Qualifications

Statutory auditors MNRS & Associates issued qualified opinion with following key observations:

1. Lack of Confirmations: Trade receivables ₹513.36 lakhs, trade payables ₹185.54 lakhs, security deposits ₹171.95 lakhs, advances from customers ₹98.00 lakhs, advances to suppliers ₹885.68 lakhs

2. Unsecured Borrowings: ₹6,038.41 lakhs without confirmations or loan agreements

3. Investments: ₹308.66 lakhs not fair valued as required by Ind AS 109

4. MSMED Compliance: No system to identify MSME suppliers

5. SEBI LODR Non-compliance: Asset disposal approval not in terms of applicable regulations

Board and Committee Meetings

  • Board Meetings: 6 meetings held during FY26
  • Audit Committee: 5 meetings held
  • Independent Directors Meeting: 1 meeting held

Director Changes

  • Resignation: Ms. Kusum Naruka (Independent Director) resigned effective June 3, 2026
  • Appointment: Ms. Palak Jindal appointed as Independent Director effective August 8, 2026

Regulatory and Legal Matters

Insolvency Proceedings

1. M/s Bhushan Power and Steel Limited [C.P. (IB) Cuttack Bench – 34/2024]: Application filed under Section 7 of IBC, dismissed on August 5, 2026 (post year-end)

2. M/s M N Corporation [C.P. (IB) – 15/2026]: Application filed on February 6, 2026, pending before NCLT Cuttack Bench

Enforcement Directorate Actions

Received three Provisional Attachment Orders from Directorate of Enforcement under Section 5(1) of Prevention of Money Laundering Act, 2002:

  • Order Nos.: 15/2026 (June 25, 2026), 17/2026 (July 8, 2026), 21/2026 (August 7, 2026)
  • Total Value: ₹28.40 crore
  • Assets Attached: Immovable properties valued at ₹1.11 crore in company's name + equity shares representing 43.62% of paid-up capital held by certain shareholders
  • Status: Provisional, subject to confirmation by Adjudicating Authority

Other Contingent Liabilities

  • Income Tax Matters: ₹763.45 lakhs under dispute
  • Other Claims: ₹1,899.28 lakhs not acknowledged as debt

Internal Financial Controls

Auditors reported material weaknesses in internal financial controls resulting in qualified opinion on internal financial controls.

Related Party Transactions

Transactions with related parties were at arm's length and in ordinary course of business. Total remuneration to KMPs/directors: ₹62.10 lakhs.

AGM Details

  • 34th AGM Date: October 30, 2026 at 1:00 PM through VC/OAVM
  • Business Items: Adoption of financial statements, director appointments, remuneration ratification, MOA alteration for trading business
  • Book Closure: October 23-30, 2026

Material Subsequent Events

1. Asset transfer to lenders pursuant to arbitration award

2. Provisional attachment orders from Enforcement Directorate

3. Dismissal of one insolvency application (Bhushan Power)

4. Settlement agreement with financial creditor on May 15, 2026

Going Concern Assumption

Despite current liabilities exceeding current assets and negative net worth, management believes company can continue as going concern based on repayment plans and sub-judice nature of enforcement actions.

#Tags: #NovaIronSteel #SEBIDisclosure #RegulatoryCompliance #FinancialResults #LegalProceedings #Negative