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National Steel & Agro Industries Ltd.

BSE: 513179 Sector: Metals & Mining
BSE 00:00 | 26 Feb 3.76 0.17






NSE 00:00 | 26 Feb 3.65 0.15






OPEN 3.75
VOLUME 13162
52-Week high 5.56
52-Week low 1.27
Mkt Cap.(Rs cr) 17
Buy Price 3.76
Buy Qty 3005.00
Sell Price 3.75
Sell Qty 207.00
OPEN 3.75
CLOSE 3.59
VOLUME 13162
52-Week high 5.56
52-Week low 1.27
Mkt Cap.(Rs cr) 17
Buy Price 3.76
Buy Qty 3005.00
Sell Price 3.75
Sell Qty 207.00

National Steel & Agro Industries Ltd. (NATNLSTEEL) - Director Report

Company director report

Dear Members

Your Directors hereby present the Thirty Third Annual Report on the business andoperations of the Company along with the Audited Statement of Accounts for the FinancialYear ended 31st March 2019.

PARTICULARS Year ended 31.03.2019 Year ended 31.03.2018
Revenue from Operations 108172 424190
Earning Before Interest Tax Depreciation and Amortisation (EBITDA) (13118) (4007)
Finance Cost 14705 13417
Depreciation 4890 4952
Profit/(Loss) Before Tax (PBT) (32713) (22376)
Provision for :-
Income Tax/Adjusted for earlier years (Net) 35 92
Deferred Tax (Assets)/Liabilities (8634) (8179)
Profit / (Loss) After Tax (PAT) (24044) (14289)


During the year (2018-19) under review on account of discontinuation of Agro BusinessDivision Company's revenue has come down to 108172 Lacs from 424190 Lacs for theprevious year (2017-18).

The Loss Before Tax has been 32713 Lacs (22376 Lacs in the previous year) and LossAfter tax is 24044 Lacs (14289 Lacs in the previous year).

During the year under review on account of changes in the government policies of agrobusiness company has incurred huge losses including non-realization of debts.Accordingly it has been decided to suspend the Agro Business Division and made Provisionfor doubtful debtors in the Books of Accounts. On account of non-realization of debts intime working capital cycle of the company has disturbed and Letter of Credits (LC)established by the banks has remains un-paid. Accordingly company's account has beenclassified as "Non Performing Asset" (NPA) by the bankers and Working Capitalfacilities has been freezed.

On account of freezing of working capital facilities by the banks procurement of rawmaterial for steel processing facility has taken a hit and capacity remains underutilizedwhich led to further losses to the company.

To overcome the situation Board of Directors has initiated various steps whichincludes rationalization of man power close down of various branch offices utilizationof manufacturing facility (partial capacity for Job Work) etc. Also company is indiscussions with lender/banks for settlement/restructuring of its' Account.

Company is hopeful that all the corrective steps taken and proposed settlement/restructuring of debts company will come out of the problem very soon.


Management Discussion and Analysis forming part of this report as required underRegulation 34 of Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 {hereinafter referred as SEBI (LODR)Regulations 2015} is attached separately to this Report.


During the year the Company does not propose to transfer any amount to the anyReserve.


In view of losses the Board has decided not to recommend any dividend on Equity Sharesand preference shares for the year under review.

As specified in Ind – AS No 33 Company has made provision of dividend @ 4% p.a.on 5501022 Preference Shares for the Financial Year 2018-19 as deemed financial charges.


During the year under review Mr. Ashutosh Upadhyay was appointed on 2nd May2018 as Independent Director. Further Mr. Rajesh Nema Mr. Ashutosh Upadhyay and Ms.Neha Singhania Independent Directors of the Company have resigned w.e.f. close ofworking hour on 19th January 2019 21st January 2019 and 19th March 2019 respectivelyciting personal reason. The Board has extended its gratitude to Mr. Rajesh Nema Mr.Ashutosh Upadhyay and Ms. Neha Singhania for their association dedication and commitmenttowards Company as Independent Directors.

Further Mr. Rajesh Nema and Mr. Ashutosh Upadhyay were appointed w.e.f 13thMay 2019 and Mrs. Ankita Sethi was appointed w.e.f 30th May 2019 asIndependent Directors of the Company.

Independent Directors have given declaration that they meet the criteria ofindependence as provided in the Section 149 of the Companies Act 2013.

Mr. Nagalingam Goli – Managing Director of the Company has resigned w.e.f. closeof working hours on 31st March 2019 as his tenure was coming to an end on 31stMarch 2019. The Board has extended its gratitude to Mr. Goli for his support and guidancegiven to the company during his tenure.

During the year under review Mr. Mahesh Jain Chief Financial Officer of the Companyhas resigned w.e.f 2nd April 2018. Mr. Vikas Rungta was appointed as ChiefFinancial Officer w.e.f 2nd May 2018 who resigned from his office w.e.f. 14thNovember 2018. Mr. Manoj Khetan was appointed as Chief Financial Officer of the Companyw.e.f 14th November 2018.

Further Mr. Pankaj Gupta Company Secretary & Compliance Officer of the Companyhas resigned w.e.f 10th April 2018 and Mr. Anurag Gangrade was appointed asCompany Secretary and compliance officer of the Company w.e.f 2nd May 2018.


Pursuant to the provisions of Section 152 of the Companies Act 2013 Mr. SantoshShahra Executive Chairman of the Company retires by rotation and being eligible offershimself for reappointment.


Pursuant to the applicable provisions of the Companies Act 2013 and SEBI (LODR)Regulations 2015 the Board has carried out an annual performance evaluation of its ownperformance its Committees and the Directors. The manner in which the evaluation has beencarried out explained in the Corporate Governance Report.


The Audit Committee comprises of below mentioned directors and their attendance was asunder:

Name Category
Mr. Rajesh Nema Chairman* Independent Director
Ms. Neha Singhania** Independent Director
Mr. Nagalingam Goli*** Executive Director

* Mr. Rajesh Nema Independent Director ceased as Chairman of Audit Committee w.e.f.closing working hours of 19th January 2019.

** Ms. Neha Singhania Independent Director ceased as member of Audit Committee w.e.f.closing working hours of 19th March 2019.

*** Mr. Nagalingam Goli Managing Director ceased as member of Audit Committee w.e.f.closing working hours of 31st March 2019.

There are no recommendations of the audit committee which have not been accepted by theboard during the year under review.

Details of terms of reference of Audit Committee and meetings of Audit Committee heldduring the year under review have been given in Corporate Governance Report.


The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Director(s) Senior Management Personneland their remuneration. The Nomination and Remuneration Policy is available at theCompany's website.

The composition of the Nomination & Remuneration Committee was in compliance withthe requirements of the provisions of Section 178 of the Companies Act 2013 and ofRegulation 19 of the SEBI (LODR) Regulations 2015 except as mentioned in corporategovernance report of the Company.


During the year under review 7 (seven) Board Meetings were held on 2nd May2018 29th June 2018 14th August 2018 24th August2018 30th August 2018 14th November 2018 and 28thFebruary 2019. The details of the Board Meetings are given in the Corporate GovernanceReport. The gap between two meetings did not exceed one hundred and twenty days asprovided under the Companies Act 2013 and SEBI (LODR) Regulations 2015.


Pursuant to the provisions of Section 134 of the Companies Act 2013 your Directorsconfirm that:

a) in the preparation of the annual accounts for the financial year ended 31stMarch 2019 the applicable accounting standards had been followed along with properexplanation relating to material departures if any;

b) the accounting policies had been selected and applied consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the financial year ended 31st March2019 and of the loss of the Company for that period;

c) proper and sufficient care had been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) the annual accounts had been prepared on a going concern basis;

e) internal financial controls to be followed by the Company had been laid down andthese controls are adequate and were operating effectively; and

f) proper systems to ensure compliance with the provisions of all applicable laws werein place and were adequate and operating effectively.


The transactions entered into with all the related parties during the year under reviewwere on arm's length basis and in the ordinary course of business.

All Related Party Transactions were placed before the Audit Committee and the Board ofDirectors pursuant to applicable provisions of SEBI (LODR) Regulations 2015 &Companies Act 2013. Prior omnibus approval of the Audit Committee has been obtained forthe transactions which were repetitive in nature. The transactions entered into pursuantto the omnibus approval so granted are audited and a statement giving details of allrelated party transactions is placed before the Audit Committee and the Board ofDirectors. The policy on Related Party Transactions as approved by the Board is availableat the Company's website.

Details of Related Party Transactions are given in "Annexure-A."


The Board has constituted a Risk Management Committee to assess risks in the operationsof business of the Company to mitigate and minimise risks assessed periodic monitoringof risks and other matters to be delegated to the Committee by the Board from time totime.

Following are the members of the Committee :

1. Mr. Santosh Shahra : Chairman
2. Mr. Nagalingam Goli* : Member

*Mr. Nagalingam Goli - Executive Director of the Company have resigned w.e.f. close ofworking hours on 31st March 2019.


As part of its initiatives under "Corporate Social Responsibility" (CSR) theCompany has spent 2.16 Lacs for CSR Activities during the year under review.

The Report on CSR Activities as required under Companies (Corporate SocialResponsibility Policy) Rules 2014 is set out as "Annexure-B" forming part ofthis report.


(a) Statutory Auditors :

The Equity Shareholders of the Company in their Twenty Eight Annual General Meetingheld on 6th September 2014 had accorded their approval pursuant to theprovisions of Sections 139 and other applicable provisions of Companies Act 2013 andRules made there under to appoint Gupta Saharia & Co. Chartered Accountants (FRN No.103446W) as the Statutory Auditor of the Company for the period of five years commencingfrom the conclusion of Twenty Eight Annual General Meeting until the conclusion of ThirtyThird Annual General Meeting.

Any qualification reservation or adverse remark or disclaimer in the Auditors' Reportto the Members read alongwith notes to the accounts are self explanatory needs no furtherclarification or explanation.

(b) Cost Auditors :

Pursuant to the provisions of Section 148 and other applicable provisions of theCompanies Act 2013 the Board of your Company had appointed M. Goyal & Co. CostAccountants (FRN No. 000051) as the Cost Auditor of the Company for the financial year2018-19. The Cost Audit Report with Annexure shall be submitted along with fullinformation and explanation on every reservation or qualification contained therein ifany to the Central Government within stipulated time period.

The Cost Audit Report for the financial year ended 31st March 2018 wasfiled with the Central Government (Ministry of Corporate Affairs) vide SRN H15491871.

(c) Secretarial Auditor :

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hadappointed Mr. Ashish Garg Company Secretary in Practice (FCS 5181/CP 4423) to undertakethe Secretarial Audit of the Company.

The Secretarial Audit Report is annexed herewith as "Annexure-C". TheSecretarial Audit Report does not contain any qualification reservation or adverse remarkor disclaimer except as under:

i. In respect of appointment of Independent Director and Woman Director; the Companyhas appointed Mr. Rajesh Nema and Mr. Ashutosh Upadhyay as Independent Director w.e.f. 13thMay 2019 and Ms. Ankita Sethi as Woman Independent Director w.e.f. 30thMay 2019.

ii. Owing to the resignation of all independent directors meeting of independentdirectors could not be convened during the year.

iii. In respect of composition and meeting of Audit committee Nomination &Remuneration Committee and Stakeholder Relationship Committee; all the mandatorycommittees of the company has been duly constituted after the appointment of IndependentDirectors.

iv. In respect of non submission of Financial Results on time for the Financial Yearended 31st March 2018 and for the quarter ended 30 June 2018 and for thequarter ended 31st December 2018; the Company has submitted the results withsome delay and also paid fine imposed on the Company by the exchanges.

V. In respect of shifting of company script to Z group from B group by the StockExchange on non-payment of penalty. Since the company has paid the penalty the StockExchange the script again shifted to B group.

vi. With respect to SEBI ex-parte ad-interim order dated May 24 2016 SEBI has issued anotice dated 6th February 2019 called upon to show cause as to why suitabledirections as may be appropriate under Sections 11(1) 11(4) & 11B of SEBI Act 1992should not be passed against the Company. The Company has submitted detailed reply ofabovementioned show cause on 22nd April 2019.

vii. In respect of notices received u/s 13(2) of Securitisation and Reconstruction offinancial Assets and Enforcement of Security Interest Act 2002 from the Lender Banks; theCompany has submitted reply on the same and also adopting legal course.

viii. In respect of GST matter; the Company has taken legal opinion from its GSTconsultant and is in co-ordination with GST department and further the Company is adoptinglegal course to close the matter.The Company is confident that the matter will be closedsatisfactorily.

ix. Some of the parties have filed Applications/Petitions under Insolvency andBankruptcy Code 2016 with National Company Law Tribunal/ National Company Law AppellateTribunal for recovery of its' alleged dues. The Company is taking necessary legal recourseto defend the same.


The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as"Annexure-D".


The details forming part of the extract of the Annual Return in form MGT-9 is annexedas "Annexure-E". The annual return referred under section 92(3) of the Act isavailable at


Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the Notes to the Financial Statements and arewithin the limits.


The Company does not have any joint venture subsidiary or associate company during theyear.


The Company has adopted policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to the Company's Policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of accounting records and the timely preparation of financial disclosures.

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. These are routinely tested and certified by Statutory aswell as Internal Auditor. Significant audit observations and corrective action arereported to the Audit Committee.

The concerned executives monitors and evaluates the efficacy and adequacy of internalcontrol system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company. Based on the report of internalaudit function process owners undertake corrective action in their respective areas andthereby strengthen the controls. Significant audit observations and corrective actionsthereon are presented to the Audit Committee.


Your Company has formulated a mechanism called "Vigil Mechanism/ Whistle BlowerPolicy" for directors and employees to report to the management instances ofunethical behavior actual or suspected fraud or violation of the Company's Code ofConduct and provided a framework to protect employees wishing to raise a concern aboutserious irregularities within the Company.

The policy permits all the directors and employees to report their concerns to theCompetent Authority Executive Chairman /Managing Director of the Company and if theWhistle Blower believes that there is a conflict of interest between the CompetentAuthority and the Whistle Blower he/she may send his/her protected disclosure directly tothe Chairman of the Audit Committee.

The policy with the designation and address of the Competent Authority ExecutiveChairman/Managing Director of the Company and Chairman of the Audit Committee has beencommunicated to the employees by uploading the same on the website of the Company.


Your Company did not accept any deposit from the Public during the year under review.


Your Company's Fixed Assets have been adequately insured.


Your Company has been particular in implementing and complying with the norms ofCorporate Governance and complying all the mandatory requirements as specified inRegulations 17 to 27 clause (b) to (i) of sub-regulation (2) of Regulation 46 andparagraph C D and E of Schedule V of the SEBI (LODR) Regulations 2015. A detailed reporton Corporate Governance along with Certificate from Practicing Company Secretary thereonis attached separately to this Report.


In terms of the provisions of Section 197(12) of the Companies Act 2013 read with Rule5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 astatement showing the names and other particulars of the employees as specified in thesaid rules are provided in "Annexure-F" forming part of this report.


Your Directors state that during the year under review there was no complaintfiled/pending pursuant to the provisions of "Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013".

The Company has complied with the Constitution of Internal Compliant Committee underSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.


Except the followings there is no material change and commitment has taken place fromApril 2018 to March 2019: i) Suspension of Agro Business Division. ii) Lenders/bank hasclassified company's Accounts as Non Performing Assets (NPA).


Following are the significant and material orders during the year under review:

1. An award had been passed against the company in the matter of Arbitration atHongkong initiated by Smart Timing Steel Ltd (STSL). STSL got the award confirmed fromHigh Court of Mumbai. The company has preferred a review petition against the said order.Simultaneously STSL filed a petition under Insolvency and Bankruptcy Code 2016 (IBC)before National Company Law Tribunal (NCLT) Mumbai which was dismissed by NCLT. STSL haspreferred an appeal before National Company Law Appellant Tribunal Delhi (NCLAT) againstthe order of NCLT which is pending for hearing.

2. The company had drawn power from MPPKVVCL through meter installed at its factorypremises situated at Village Sejwaya Ghatabillod Dist. Dhar which was meant for exportof power. MPPKVVCL had been raising bills for the said meter after recording of consumedunits in regular billing cycle which were duly honored by the company. However MPPKVVCLraised a demand retrospectively through assessment order for the period from May 2009 toMay 2016 amounting to Rs. 61.73 Crores comprising of Rs. 23.88 Crores for Maximum Demand(MD) charges and Tariff Minimum (TMM) charges and Rs. 37.85 Crores as Penalty on theground that company was not authorized to draw power through the meter meant for export.The company had after the deposition of Rs. 30.27 crores to MPPKVVCL challenged thequantum of assessment order by filing writ petition in the High Court of Madhya Pradeshwherein court by its order dated 22.10.2018 has exempted the amount of penalty of Rs.37.85 Crores. MPPKVVCL has filed a review petition against the said order which is pendingfor final order.


The Board of Directors take this opportunity to express their gratitude to the CentralGovernment State Government and Local Authorities Financial Institutions BanksCustomers Dealers Vendors and all the stakeholders for their continued cooperation andsupport to your Company.

The Board of Directors wishes to express its appreciation to all the employees of theCompany for their contribution to the operations of the Company.

The Board specially thank to the shareholders for their continued confidence and faithin the Company.

For and on behalf of the Board of Directors
Place : Indore Santosh Shahra
Date : 30th May 2019 Executive Chairman