Dear Members,
Your Directors are pleased to present their 50th Annual Report on the
affairs of the Company together with the Audited Financial Statements for the year ended
31st March, 2023.
1. FINANCIAL RESULTS:
The summarised financial results for the year vis-a-vis the previous year are as
follows:
|
|
(Rs. in crores) |
| Particulars |
31.03.2023 |
31.03.2022 |
| Revenue from Operations |
6,342.86 |
5,958.55 |
| Other Income |
22.07 |
6.28 |
| Total Income |
6,364.93 |
5,964.83 |
| Operating Expenses |
5,560.91 |
4,658.85 |
| EBIDTA |
804.02 |
1,305.98 |
| Finance Costs |
453.02 |
458.63 |
| Depreciation and Amortisation Expenses |
265.71 |
260.99 |
| Exceptional Items |
51.19 |
(1,724.50) |
| Profit/(Loss) before tax |
34.10 |
2,310.85 |
| Tax Expenses |
(192.77) |
63.57 |
| Profit/(Loss) after Tax carried to Balance Sheet |
226.87 |
2,247.28 |
Your Company has not carried any amount to reserves, the amount of Profit after tax of
Rs. 226.87 crores has been carried to Balance Sheet and adjusted against retained
earnings.
2. DIVIDEND:
Due to accumulated past losses, your Directors do not recommend any dividend on the
Equity Shares of the Company for the financial year 2022-23.
3. CHANGE IN NATURE OF BUSINESS OF COMPANY:
There is no change in the nature of business of your Company during the year.
4. MANAGEMENT DISCUSSION AND ANALYSIS:
The Management Discussion and Analysis Report for the year, as stipulated under the
Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015 (the "Listing Regulations") is presented in a separate section
forming part of this Annual Report.
5. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
SUBSEQUENT TO THE CLOSE OF THE FINANCIAL YEAR TILL THE DATE OF THIS REPORT:
No material changes and commitments have occurred subsequent to the close of the
financial year till the date of this Report which may affect the financial position of the
Company.
6. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
During the financial year 2022-23, following were the changes in the Board of Directors
and Key Managerial Personnels (KMPs) of the Company:
Change in Director & KMP due to cessation/resignation:
i) Dr. Suranjan Sinha (DIN: 09461995), ceased as an Independent Director of the Company
due to completion of his term on 16th January, 2023.
ii) Shri Pramod Kumar Bhardwaj (DIN: 03451077), ceased as an Executive Director &
Chief Financial Officer (CFO) of the Company due to completion of his term on 24th
February, 2023.
iii) Shri Vikash Kumar Agarwal resigned and ceased to be the Company Secretary &
Compliance Officer of the Company effective from 13th January, 2023.
Change in Director & KMP due to appointment:
i) Shri Arvind Jayaswal (DIN: 00249864) re-appointed as Managing Director & CEO
(Foundry Division) of the Company for the further period of 3 (Three) years w.e.f. 1st
January, 2023.
ii) Shri Ramesh Jayaswal (DIN: 00249947) re-appointed as JointManaging Director&CEO
(Steel Plant Division) of the Company for the further period of 3 (Three) years w.e.f. 1st
January, 2023.
iii) Shri Kapil Shroff appointed as CFO of the Company w.e.f. 25th February,
2023.
The Members at the 49th Annual General Meeting of the Company consented to
the continuation of appointment of Shri Rajendraprasad Shriniwas Mohanka (DIN: 00235850)
as an Independent Director of the Company beyond attending the age of 75 years for the
remaining term up to 26th July, 2023.
Further, the Board of Directors of the Company on the recommendation of Nomination and
Remuneration Committee, recommended for the approval of Members at the ensuing Annual
General Meeting, the re-appointment of Shri Rajendraprasad Mohanka (DIN: 00235850) as an
Independent Director of the Company for the second term of 5 (Five) years w.e.f. 27th
July, 2023.
In accordance with the provisions of the Companies Act, 2013 and the Articles of
Association of the Company, Shri Arvind Jayaswal (DIN: 00249864), Managing Director &
Chief Executive Officer (CEO), Foundry Division and Shri Ramesh Jayaswal (DIN: 00249947),
Joint Managing Director & Chief Executive Officer (CEO), Steel Plant Division of the
Company are liable to retire by rotation at the ensuing Annual General Meeting and being
eligible have offered themselves for re-appointment.
The necessary resolutions for re-appointment of Shri Arvind Jayaswal, Shri Ramesh
Jayaswal and Shri Rajendraprasad Mohanka along with the brief profile and other related
information seeking re-appointment forms part of the Notice convening the ensuing Annual
General Meeting.
After the end of financial year, upon recommendation of the Nomination and Remuneration
Committee of the Company, the Board of Director in their meeting held on 15th
April, 2023 had appointed Shri Ashish Srivastava (Membership No. A20141) as the Company
Secretary & Compliance Officer of the Company.
The Company has received declarations from all the Independent Directors of the Company
confirming that they meet the criteria of independence as prescribed both under Section
149 (6) of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015.
In the opinion of the Board, all the Independent Directors are persons of high repute,
integrity and possess the relevant expertise and experience in their respective fields.
Key Managerial Personnel
In terms of the provisions of Section 203 of the Companies Act, 2013, during the
financial year the Company had following whole-time Key Managerial Personnel:
i) Shri Arvind Jayaswal (DIN: 00249864), Managing Director and CEO (Foundry Division);
ii) Shri Ramesh Jayaswal (DIN: 00249947), Joint Managing Director and CEO (Steel Plant
Division);
iii) Shri Megh Pal Singh (DIN: 02635073), Executive Director (Steel) and COO (Steel
Plant Division);
iv) Shri Pramod Kumar Bhardwaj (DIN: 03451077), Executive Director & CFO (Up to 24th
February, 2023);
v) Shri Kapil Shroff, CFO (effective from 25th February, 2023);
vi) Shri Vikash Kumar Agarwal, Company Secretary & Compliance Officer (Up to 13th
January, 2023).
Board Evaluation
In terms of the requirement of the Companies Act, 2013 and Listing Regulations, the
Board carried out an annual evaluation of its own performance. Board Committees,
individual Directors including the Independent Directors and the Chairman of the Company
on the basis of the criteria of Board Evaluation devised by the Company with the aim to
improve the effectiveness of the Board and the Committees.
The performance evaluation of the Board and its Committees focused on various factors,
including their functions, responsibilities, competencies, strategy, risk identification
and control, diversity and nature of the business. A comprehensive questionnaire was
circulated to Board Members, covering multiple aspects of the Boards functioning,
culture, execution of duties, professional obligations and governance.
The questionnaire aimed to assess Directors knowledge, independence in decisionmaking,
involvement in business planning, constructive engagement with colleagues and
understanding of the Companys environment and its risk profile. Additionally, the
Chairman of the Board and/or Executive Directors was evaluated based on leadership,
co-ordination and steering skills.
During the year, formal evaluation of performance of Directors including Independent
Directors, the Board and its Committees was made by the Independent Directors and the
Nomination and Remuneration Committee in their respective meetings and the evaluation
result was placed before the Board for its information and consideration.
The appointment/ re-appointment/ continuation of Directors on the Board is based on the
outcome of evaluation process.
Remuneration Policy
Pursuant to Section 178(3) of the Companies Act, 2013, the Nomination and Remuneration
Committee constituted under the provisions of Section 178(1) of the Companies Act, 2013,
recommended to the Board of Directors of the Company, a Policy on Directors appointment
and remuneration, including, criteria for determining qualifications, positive attributes,
independence of a Director and other matters. The extract of the said Policy is covered in
Corporate Governance Report which forms part of this Annual Report.
Meetings
During the year 4 (Four) Board Meetings and 4 (Four) Audit Committee Meetings were
convened and held, the details of which are given in the Corporate Governance Report. The
intervening gap between the Meetings was within the period prescribed under the Companies
Act, 2013/ SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Related Party Transactions
During the year, all related party transactions that were entered were on an arms
length basis and were in the ordinary course of business. There were no materially
significant related party transactions made by the Company with Promoters, Directors, Key
Managerial Personnels or other designated persons which may have a potential conflict with
the interest of the Company at large.
Pursuant to the provision of applicable Listing Regulations, all related party
transactions are placed before the Audit Committee for approval as per the Regulation 23
of Listing Regulations. Prior omnibus approval of the Audit Committee has been obtained
for transactions which are foreseen and repetitive in nature. A statement providing
details of all related party transactions is presented to the Audit Committee and the
Board of Directors on a quarterly basis.
The policy on Related Party Transactions duly approved by the Board on the
recommendation of the Audit Committee has been posted on the Companys website and can be
accessed at the link: https://www.necoindia.com/pdf/ Policv%20on%20Related%20Pa
rtv%20Transa ctions.pdf.
7. CORPORATE SOCIAL RESPONSIBILITY:
As part of its initiatives under "Corporate Social Responsibility" (CSR), the
Company has undertaken projects and programmes in the a reassuchas Healthcare, Sanitation,
Provision of Safe Drinking Water, Mitigate malnutrition. Promotion of Education and
Imparting Training, Women Empowerment, Promotion of Traditional Art and Culture,
Environmental Sustainability, Development of Rural Sports, Programmes and Training for
development and upliftment of rural masses especially women, youths and girls and
Development of Infrastructural facilities in rural areas.
The Companys CSR Policy is available on the website of the Company and it is available
at https://www.necoindia.com/ imaaes/investor/corporate-aovernance/Corporate-Social-
Responsiblitv-Policv-1.pdf
During the financial year 2022-23, the Company Spent Rs. 377.63 lakhs against the CSR
budget of Rs. 218.78 lakhs.
The Annual Report on CSR activities is attached as "Annexure A" and
forms part of this report.
8. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information on conservation of energy, technology absorption and foreign exchange
earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with
Rule 8 of the Companies (Accounts) Rules, 2014, is attached as "Annexure B" and
forms part of this report.
9. SUBSIDIARY COMPANY AND ASSOCIATE COMPANY:
During the year, the Company did not have any Subsidiary Company. Further, Statement in
respect of Maa Usha Urja Limited, an Associate Company under Section 129 of the Companies
Act, 2013, read with Rule 5 of the Companies (Accounts) Rules, 2014 in Form AOC-1, is
attached as "Annexure C"and forms part of this report.
The Company has formulated a Policy for determining material subsidiaries and the
said Policy has been posted on the website of the Company and is available at: https://www.necoindia.com/imaaes/investor/corporate-
qovernance/Policv-on-Material-Subsidiaries.pdf
10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
Details of Loans, Guarantees and Investments covered under the provisions of Section
186 of the Companies Act, 2013 are given in the notes to the Financial Statements.
11. CORPORATE GOVERNANCE REPORT:
The report on Corporate Governance as stipulated under Regulation 34 (3) read with
Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
along with the requisite certificate from the Practicing Company Secretary confirming
compliance with the conditions of Corporate Governance is appended and forms part of this
Annual report.
12. RISK MANAGEMENT:
The Board of Directors had constituted Risk Management Committee to assist the Board
with regard to the identification, evaluation and mitigation of strategic, operational,
external environment and cyber security risks and in fulfilling its corporate governance
oversight responsibilities and to develop policy for actions associated to mitigate the
risks. The Committee is responsible for reviewing the risk management plan and ensuring
its effectiveness. The major risks identified by the businesses and functions are
systematically addressed through mitigating actions on a continual basis. The updated risk
management policy of the Company is available on the website of the Company atthe link: https://www.necoindia.
com/pdf/Risk-Manaaement-Policv.pdf
13. VIGIL MECHANISM / WHISTLE-BLOWER POLICY:
The Company has established a Vigil Mechanism/ Whistle-Blower Policy that enables the
Directors and Employees to report genuine concerns. The Vigil Mechanism provides for
(a) adequate safeguards against victimisation of persons who use the Vigil Mechanism;
and
(b) direct access to the Chairperson of the Audit Committee of the Board of Directors
of the Company in appropriate or exceptional cases. Details of the Vigil Mechanism/
Whistle-Blower Policy are made available on the website of the Company at: https://www.necoindia.com/pdf/Viail-
Mechanism-Whistle-Blower-Policv.pdf and have also been provided in the Corporate
Governance Report forming part of this Annual Report.
14. DIRECTORS RESPONSIBILITY STATEMENT:
As required under Section 134 (3) (c) of the Companies Act, 2013, your Directors
confirm and state:
a) that in the preparation of the annual financial statements for the year ended 31st
March, 2023, the applicable accounting standards have been followed along with proper
explanation relating to material departures, if any;
b) that such accounting policies as mentioned in Note 1 of the Notes to the Financial
Statements have been selected and applied consistently and judgements and estimates have
been made that are reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company as at 31st March, 2023 and of the profitand loss of
the Company for the year ended on that date;
c) that proper and sufficient care has been taken for the maintenance of adequate
accounting records in accordance with the provisions of the Companies Act, 2013 for
safeguarding the assets of the Company and for preventing and detecting fraud and other
irregularities;
d) that the annual financial statements have been prepared on a going concern basis;
e) that proper internal financial controls have been in place and that the internal
financial controls are adequate and have been operating effectively;
f) that systems to ensure compliance with the provisions of all applicable laws have
been in place and are adequate and operating effectively.
15. INTERNAL FINANCIAL CONTROL SYSTEMS:
The Company has formulated its SOPs & Policies related to Internal Financial
Control over Financial Reporting. There are sufficient controls and checks and balances
established for all the material transactions. The Company has also fixed process flows
for all the transactions. The Company has also designed strong Management Information
System (MIS) for proactive controls and monitoring.
The Company has in place adequate internal financial controls with reference to
Financial Statements. During the year, such controls were operating effectively.
16. ANNUAL RETURN:
In accordance with the provisions of Section 92(3) read with Section 134(3)(a) of the
Companies Act, 2013 and Rules framed thereunder, an Annual Return in the prescribed format
for the financial year 2022-23 is available on the website of the Company at https://www.necoindia.com/
financial-results-annual-reports-annual-returns.php
17. STATUTORY AUDITORS AND THEIR REPORT:
The Statutory Auditors M/s. Chaturvedi and Shah LLP, Chartered Accountants, Mumbai hold
office for the period of 5 years from the Annual General Meeting (AGM) held on 30th
December, 2021.
The Auditors Report on the financial statements of the Company for the year ended 31st
March, 2023 is self- explanatory and with unmodified opinion.
The Statutory Auditors Report for the financial year 2022-23 does not contain any
qualification, reservation, or adverse remark. However, the Statutory Auditors have placed
emphasis on certain matters in the audit report related to the attachment of properties of
the Company. These matters are self-explanatory and have been adequately disclosed in Note
no. 2.07 of the financial statements. The Report is enclosed with the financial statements
in this Annual Report.
18. COST AUDITOR:
In accordance with Section 148 of the Companies Act, 2013, the Company maintains cost
records as required and a Cost Accountant conducts an audit of these records.
The Board of Directors of the Company on the recommendation of the Audit Committee, at
its meeting held on 23,d May, 2023 has re-appointed M/s. Manisha &
Associates, Cost Accountants, Nagpur (FRN. 000321), as the Cost Auditors of the Company,
to conduct the audit of the Cost Accounting records for the financial year 2023-24 on the
remuneration of Rs.1,75,000/- (Rupees One Lakhs Seventy-Five Thousand Only) for Cost Audit
and Rs. 9,000/- (Rupees Nine Thousand Only) for XBRL documents preparation plus applicable
taxes and reimbursement of out-of-pocket expenses at actuals.
As required under Section 148 (3) of the Companies Act, 2013 read with Rule 14 of the
Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors
is to be ratified by the Shareholders. Therefore, the Board of Directors recommend the
remuneration payable to M/s. Manisha & Associates, Cost Auditors for the financial
year 2023-24 for the ratification by the Members at the ensuing Annual General Meeting.
19. SECRETARIAL AUDITOR AND THEIR REPORT:
In accordance with Section 204 of the Companies Act, 2013, the Company is required to
submit alongwith its Boards report, a Secretarial Audit Report, given in the prescribed
form, by a Company Secretary in practice.
The Board of Directors of the Company on the recommendation of the Audit Committee, at
its meeting held on 23,d May, 2023 has re-appointed M/s. R. A. Daga and Co.,
Company Secretaries, Nagpur (FCS No: 5522 C. P. No.: 5073) to conduct the Secretarial
Audit for the financial year 2023-24.
The Secretarial Audit Report for the financial year ended 31st March, 2023
in Form MR-3 is attached as "Annexure D" and forms part of this Report.
The Secretarial Audit Report does not contain any qualification, reservation or adverse
remark.
20. REPORTING OF FRAUD BY AUDITORS:
The Statutory Auditors, Cost Auditors and Secretarial Auditors have not reported any
instances of frauds committed in the Company by its officers or employees to the Audit
Committee under Section 143(12) of the Companies Act, 2013, the details of which need to
be mentioned in this Report.
21. PARTICULARS OF EMPLOYEES:
The information required pursuantto Section 197(12) of the Companies Act, 2013 read
with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 as amended in respect of employees of the Company forming part of Boards Report is
given in "Annexure E" to this Report.
22. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:
No significant or material orders were passed by the Regulators or Courts or Tribunal
which impact the going concern status and Companys operations in future. Flowever, the
other significant and material orders passed by the Regulators/Courts/Tribunals have been
covered under the point - Projects and Impairment of Non- Operational Assets under the
Management Discussion and Analysis Report which forms part of this Annual Report.
23. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDERTHE INSOLVENCY AND
BANKRUPTCY CODE, 2016:
During the year, the Flonble NCLT, Mumbai Bench, Court- 11 by its Order dated 9th
February, 2023, has dismissed the Petition filed by M/s Abhiruchi Vision Private Limited
(AVPL) against the Company under Section 7 of the Insolvency and Bankruptcy Code, 2016
(IBC) claiming an alleged amount of Rs. 437.60 crores (Principal amount of Rs.104.44
crores plus accrued interest @ 18.00% p.a.).
On an Appeal filed by AVPL against the Order of Flonble NCLT, Mumbai Bench, Court-ll,
under Section 61 of the IBC before the Flonble NCLAT, New Delhi, the Flonble NCLAT, New
Delhi, by its Order dated 4th July, 2023, held that "there is no merit in
the Appeal filed by AVPL and hence the Appeal is dismissed".
24. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT:
As per the amendment to Regulation 34(2)(f) of the Listing Regulations, 2015 and the
National Guidelines on Responsible Business Conduct (NGRBC) issued by the Ministry of
Corporate Affairs, Government of India, the top one thousand listed companies (by market
capitalisation) are required to prepare and present a Business Responsibility and
Sustainability Report (BRSR) to stakeholders. This replaces the previous Business
Responsibility Report (BRR) and follows internationally accepted reporting frameworks on
environmental, social and governance (ESG) Reporting. This Report enable the shareholders
to have an insight into environmental, social and governance initiative of the Company.
The BRSR requires listed entities to disclose their performance against the nine
principles of the NGBRC, with reporting divided into essential and leadership indicators.
Essential indicators are mandatory to report, while reporting leadership indicators is
voluntary. Your Company has reported both on essential and leadership indicators.
The BRSR describing the initiatives taken by the Company from an environmental, social
and governance perspective, in the format as specified by the Securities and Exchange
Board of India, forms a part of this report.
25. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION AND REDRESSAL) ACT, 2013:
As per the requirements of the Sexual Harassment of Women at the Workplace (Prevention,
Prohibition and Redressal) Act, 2013 (POSH), the Company has placed adequate mechanism to
provide safe and congenial working environment to all female employees.
The Company has constituted location wise Internal Complaints Committees (ICC) to
redress the complaints of female workers. The ICCs are composed of internal Members and
an external Member who has extensive experience in the field. During the year, no cases
have been filed pursuant to the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013.
26. GENERAL:
Your Directors state that during the year:
i. The Company has no deposits covered under Chapter V of the Companies Act, 2013.
ii. The Company has complied with the applicable Secretarial Standards under the
Companies Act, 2013.
iii. The Dividend Distribution Policy of the Company is available on the Companys
website and can be accessed at https://necoindia.com/imaaes/investor/
corporate-aovernance/Dividend-Distribution-Policv. pdf
27. ACKNOWLEDGEMENTS:
Your Directors place on record, their sincere appreciation and gratitude for all the
co-operation extended by Government Agencies, Lenders, Business Associates and
Shareholders. The Directors also record their appreciation for the dedicated services
rendered by all the Executive Staff and Workers of the Company at all levels in all units
and for their valuable contribution in the working of the Company.
|
For and on behalf of Board of Directors |
|
Arvind Jayaswal |
Ramesh Jayaswal |
| Place: Nagpur |
Managing Director |
Joint Managing Director |
| Date: 14th August, 2023 |
(DIN: 00249864) |
(DIN: 00249947) |
+91-9892691696
