Tulsyan NEC Ltd Directors Report.

Dear Members,

Your Directors take immense pleasure in presenting 73rd Boards Report of your Company along with the Balance Sheet, Statement of Profit and Loss and Statement of Cash Flow for the financial year ended March 31,2020.


The highlights of the financial results for the year are given below:

(Rs. In Lakhs)



Particulars FY 2020 FY 2019 FY 2020 FY 2019
Total Revenue 73,664.53 84,911.64 75,095.22 84,341.77
Total Expenses 96,268.99 1,06,930.16 97,133.93 1,05,756.74
Profit before tax including exceptional items (22,604.46) (22,259.28) (22,038.71) (21,732.34)
Tax Expenses Current Tax - - - 167.46
Deferred Tax - - (117.83) 45.41
Profit After tax (22,604.46) (22,259.28) (21,920.88) (21,945.21)
Proposed Dividend and tax thereon - - - -
Transfer to General Reserve - - - -
Earnings per Basic (153.63) (151.28) (148.98) (149.16)
Share Diluted (152.63) (151.28) (148.98) (149.16)


For most of FY 2019-20, the global steel industry faced a number of challenges and the impact of the slowing economy was felt in the global steel sector. Making matters worse, the COVID-19 outbreak in early 2020 brought global economic activities to a near standstill as nationwide lockdowns and social distancing norms were imposed to contain the spread in the affected countries. Due to this, during the year under review, the turnover of the Company decreased from Rs.84,911.64 lakhs to Rs.73,664.54 lakhs which is 13.25 % decline compared to the turnover of the previous year and the Loss after tax increased from Rs.22,259.28 lakhs to Rs.22,469.60 lakhs.

Global crude steel production reached 1,870 MnT in 2019, registering a more modest growth of 3.4% in 2019 against 4.6% in 2018. The Indian steel sector registered a stark easing of growth to 1.8% in 2019 compared to 7.7% growth in the previous year. Domestic steel prices declined sharply in FY 2019-20 (-15% year-on-year, on average) due to weak demand from key industries including automobile, construction, and consumer durables. Overcapacity in China also played a role in the softness in steel prices last year.

Some of other recent Government initiatives in steel sector are as follows:

• Government introduced Steel Scrap Recycling Policy to reduce import.

• An export duty of 30 per cent has been levied on iron ore (lumps and fines) to ensure supply to domestic steel industry.

• Government of Indias focus on infrastructure and restarting road projects is aiding the demand for steel. Also, further likely acceleration in rural economy and infrastructure is expected to lead to growth in demand for steel.

• The Union Cabinet, Government of India approved the National Steel Policy (NSP) 2017, as it intends to create a globally competitive steel industry in India. NSP 2017 envisages 300 million tonnes (MT) steel-making capacity and 160 kgs per capita steel consumption by 2030-31.

• The Ministry of Steel is facilitating setting up of an industry driven Steel Research and Technology Mission of India (SRTMI) in association with the public and private sector steel companies to spearhead research and development activities in the iron and steel industry at an initial corpus of Rs 200 crore (US$ 30 million).

• The Government of India raised import duty on most steel items twice, each time by 2.5 per cent and imposed measures including anti-dumping and safeguard duties on iron and steel items.

The power plant operations of the Company was also slightly impacted by prolonged rainy season and good rainfall which led to reduction in demand in agriculture sector and reduction in cooling requirement in domestic and commercial sectors. The power generation of the Company reduced from 452644000 KWH to 440150000 KWH in the FY 2019-20. However, the turnover showed a marginal increase of 0.58% due to increase in average realisation price compared to the previous year despite reduction by 2.25% in volume. The Synthetic Division also showed decline in turnover due to the global economic slowdown from December 2019 and the turnover showed a decline of 7.94% compared to the previous year.


Overall, the industrial relations in all our manufacturing units are harmonious and cordial in nature. Your Company strictly believes that maintaining cordial industrial relations is the key to progress of the firm, individuals, management, industry and nation.


The Company has not changed its nature of business in any manner during the financial year under review.


The Company has incurred loss during the year under review and hence the Directors have not recommended any payment as dividend to its shareholders.


The detailed capital structure of the Company as on 31-3-2020 is as follows:

a. Authorized Share Capital: The Authorized Share Capital of the Company is Rs. 36,00,00,000/- (Rupees Thirty Six Crores only) divided into 1.60.00. 000 Equity Shares of Rs. 10/- each and 2.00. 00.000 6% Non-Convertible Redeemable Preference Shares of Rs. 10/- each.

b. Issued and Subscribed Share Capital: The Issued & Subscribed Share Capital of the Company is Rs. 15,00,00,000/- (Rupees Fifteen Crores only) divided into 1,50,00,000 Equity Shares of Rs. 10/- each.

c. Paid-up Share Capital: The Paid-up Share Capital of the Company is Rs. 23,55,68,497/- (Rupees Twenty Three Crores Fifty Five Lakhs Sixty Eight Thousand Four Hundred and Ninety Seven only) divided into 1,45,06,790 Equity Shares of Rs. 10/- each, 1,96,989 Equity Shares of Rs. 6/- each (Partly Paid-up), 2,96,221 Equity Shares of Rs. 3/- each (Partly paid-up) and 88,43,000 6% Non-Convertible Redeemable Preference Shares of Rs. 10/- each.


Your Company proposes not to transfer any sum to Reserves of the Company.


During the year under review, the Company did not raise any funds which could be classified within the ambit of the term "Deposits" under Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 and Circulars as amended from time to time.


Details of Loans, Guarantees and Investments pursuant to the provisions of Section 186 of the Companies Act, 2013, for the financial year under review, are disclosed under the notes to Financial Statements forming part of this Annual Report.


The Company has a well-placed, proper and adequate internal control system, which ensures that all assets are safeguarded and protected and that the transactions are authorized, recorded and reported correctly. The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate. During the year under review, no material or serious observation has been received from the Internal Auditors of the Company for inefficiency or inadequacy of such controls.

The Board of Directors has appointed M/s. Sunil Ahuja and Associates, Chartered Accountants, as the Internal Auditors of the Company. The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the majority of the transactions in value terms. Independence of the audit and compliance is ensured by direct reporting of Internal Auditors to the Audit Committee of the Board. During the year, the Company continued to implement their suggestions and recommendations to improve the control environment.


There were no significant material changes and commitments, affecting the financial position of the Company which have occurred between the end of the Financial Year of the Company to which the Financial Statements relate and the date of the report.


As required under section 135 of the Companies Act, 2013, the CSR Policy was formulated by the CSR Committee and thereafter approved by the Board.

During the last three financial years, the Companys average net Profit after tax on Standalone basis is negative and hence the Company is not required to spend any amount on CSR activities. The Annual Report on Corporate Social Responsibility (CSR) Activities is enclosed as ‘Annexure-A to this Report.


We request all the shareholders to support the ‘Green Initiative of the Ministry of Corporate Affairs and the Companys continuance towards greener environment by enabling the service of the Annual Report, AGM Notice and other documents electronically to your email address registered with your Depository Participant/ Registrar and Share Transfer Agent.

We also request all the investors whose email id is not registered to take necessary steps to register their email id with the Depository Participant/ Registrar and Share Transfer Agent.


In terms of provisions of Regulation 34 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, (hereinafter referred to as Listing Regulations) the Management Discussion and Analysis Report for the year is given under separate section and forming part of the Annual Report.


Your Company is committed to maintain the highest standards of corporate governance. We believe in adherence to good corporate practices, implement policies and guidelines and develop a culture of the best management practices and compliance with the law coupled with the highest standards of integrity, transparency, accountability and ethics in all business matters to enhance and retain investor trust, long-term shareholder value and respect minority rights in all our business decisions.

In accordance with Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance along with the requisite certificate from the Practicing Company Secretary of the Company confirming compliance with the conditions of corporate governance as stipulated under SEBI Listing Regulations is given under separate section and forming part of the Annual Report.


None of the transactions with the related parties were in conflict with the Companys interest. The Companys major related party transactions are generally with its subsidiary companies.

During the year under review, the contracts or arrangements with related parties referred to under section 188 of Companies Act, 2013 were on arms length basis and in the ordinary course of business. Accordingly, the particulars of the transactions as prescribed in Form AOC - 2 pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 are disclosed herein as an ‘Annexure-B to this Report.


The Company has developed and implemented a risk management policy including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the Company. The Board and the Audit Committee periodically undertake a review of the major risks affecting the Companys business and suggests steps to be taken to control and mitigate the same.


The Vigil Mechanism as envisaged in the Companies Act, 2013, the rules prescribed thereunder and the SEBI Listing Regulations is implemented through the Companys Whistle Blower Policy to enable the Directors, employees and all stakeholders of the Company to report genuine concerns, to provide for adequate safeguards against victimisation of persons who use such mechanism and make provision for direct access to the Chairman of the Audit Committee.

Whistle Blower Policy of your Company is available on the Companys website and can be accessed therein.


Information as required to be given under section 134(3) (m) read with rule 8(3) of the Companies (Accounts) Rules, 2014 is provided under ‘Annexure-C forming part of this Report.


The information required under section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors and Employees of the Company is set out in ‘Annexure-D to this report.


The Company doesnt have any Joint Venture and Associate Companies. Further, pursuant to the provisions of Section 129(3) of the Companies Act, 2013, a statement containing the salient features of the financial statements of Subsidiaries in the prescribed Form AOC-1 is provided under ‘Annexure-E to this Report. The statement also provides the details of the performance of the Subsidiary Companies, financial positions of each of the subsidiaries and their contribution to the overall performance of the Company during the period under report.


The Extract of annual return in Form MGT-9 as per the provisions of Section 134(3)(a) and 92(3) of the Companies Act, 2013, is available on the website of the Company at www.tulsyannec.in.


No such significant and material orders have been passed by any regulators/ courts/ tribunals against the Company which will impact the going concern status and Companys operation in future.


a. Statutory Auditors & their Report

M/s. CNGSN & Associates LLP Chartered Accountants, Chennai, having LLP Identity Number: AAC-9402, having Firm ICAI Registration No: 004925S/S200036 were appointed as Statutory Auditors of the Company at the 70th AGM to hold the office till the 74th AGM.

During the financial year under review, there is no audit qualification in the Companys financial statements.

b. Reporting Of Frauds By Auditors

During the year under review, the Statutory Auditors has not reported any instances of fraud committed against the Company by its officers or employees, to the Audit Committee, under Section 143(12) of the Companies Act, 2013, the details of which would have been required to be mentioned in the Boards Report.

c. Cost Auditors

The Cost Records of the Company are maintained in accordance with the provisions of Section 148(1) of the Act as specified by the Central Government. The Cost Audit Report, for the financial year ended March 31, 2020, was filed with the Central Government within the prescribed time. The Board, on recommendation of the Audit Committee, had appointed Messrs Murthy & Co. LLP, Cost Accountants (Firm Registration Number S200001) as the Cost Auditors to conduct the audit of Companys cost records for the financial year ending on March 31,2021. The Cost Auditors have confirmed that their appointment is within the limits of Section 141(3) (g) of the Companies Act, 2013 and have also certified that they are free from any disqualifications specified under Section 141(3) and proviso to Section 148(3) read with Section 141(4) of the Companies Act, 2013. The Audit Committee has also received a certificate from the Cost Auditors certifying their independence and arms length relationship with the Company. In accordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, since the remuneration payable to the Cost Auditor for FY 2020-21 is required to be ratified by the members, the Board recommends the same for approval by members at the ensuing AGM.

d. Secretarial Auditors

Pursuant to the provisions of section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has engaged the services of M/s. M. Damodaran & Associates, LLP Company Secretaries in Practice, Chennai, to conduct the Secretarial Audit of the Company for the 12 months period ended on 31st March, 2020. The Secretarial Audit Report in Form MR-3 is attached as ‘Annexure-F, to this Report. The Secretarial Audit Report contains some observations as mentioned below:

Sl. No. Observations by Secretarial Auditors Managements Reply
1. As per regulation 33(3)(d) of SEBI (LODR) Regulations, 2015, the Company has not submitted annual audited consolidated financial results including audit report while submitting annual audited standalone financial results for the year ended 31.03.2019 with Stock exchange. It was not submitted as the auditors were not aware with new amendment being the 1st quarter of compliance under new amendment and will be submitted if any clarification received from the BSE.
2. There was a minor delay in submission of the financial results by the Company to the stock exchange for the quarter ended on 30th September, 2019 pursuant to Regulation 33(3) of SEBI (LODR) Regulations, 2015. Delay was due to some technical error in the BSE Listing site.
3. The Company has closed the trading window for declaration of the financial results under SEBI (PIT) Regulations, 2015 for the quarter ended 30.06.2019, 30.09.2019 & 31.12.2019 with some delay. The Company is suspended from trading. Therefore, the disclosure of trading window closure was given as per old SEBI (PIT) Regulations, 2015. However, later it was complied with.

Pursuant to the SEBI circular vide no. CIR/CFD/ CMD/1/27/2019 dated February 8, 2019, the Company has submitted the Annual Secretarial Compliance Report, issued by M/s. M. Damodaran & Associates, LLP, Practicing Company Secretaries, with the stock exchange where shares of the Company are listed.

e. Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI)

The Company is compliant with and has proper systems to ensure compliance under the provisions of the applicable Secretarial Standards issued by the Institute of Company Secretaries of India ("the ICSI").


Pursuant to the provisions of section 134(3)(c) read with Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

a) in the preparation of the annual accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

b) they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the Company for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.



a. Change in Board Constitution

During the year following changes were occurred in the Composition of the Board of Directors-

(i) Mrs. Antonisamy Axilium Jayamary (DIN: 07410090) was originally appointed as an Additional Director (Non-Executive and Independent) of the Company w.e.f. 10th September, 2019. Further, she was re-appointed as an Additional Director (Non-Executive and Independent) of the Company w.e.f 27.09.2020 by way of passing of a Circular Resolution by the Board of Directors of the Company upon recommendation of the Nomination and Remuneration Committee.

(ii) At the 72nd AGM held on 26th September, 2019,

• Mr. Sanjay Agarwalla (DIN: 00632864), Whole Time Director of the Company, who was retired from his office by rotation and being eligible offered himself for re-appointment, was re-appointed as a Director of the Company and is liable to retire by rotation.

• The appointment of Mr. Manogyanathan

Parthasarathy (DIN: 08277111) was regularized as an Independent Director (Non-Executive and Independent) of the Company, who was appointed as an Additional Director (Non-Executive and Independent) of the Company w.e.f. 13th November, 2018.

• Mr. Lalit Kumar Tulsyan (DIN: 00632823) was re-appointed as Managing Director designated as "Executive Chairman" of the Company for a further period of three years w.e.f. 12th July, 2019.

• Mr. Sanjay Tulsyan (DIN: 00632802) was re-appointed as Managing Director of the Company for a further period of three years w.e.f. 01st October, 2019.

• Mr. Sanjay Agarwalla (DIN: 00632864) was re-appointed as Whole-time Director of the Company for a further period of three years w.e.f. 22nd September, 2019.

(iii) Mrs. Preeti Garg (DIN: 03644985), Independent Director (Non-Executive and Independent) was resigned from the Board of the Company w.e.f. 14th November, 2019.

(iv) Mr. Chakkolath Ramachandran (DIN: 00050893), Independent Director (Non-Executive and Independent) was resigned from the Board of the Company w.e.f. 14th February, 2020.

b. Change in Key Managerial Personnel

No changes took place during the financial year under review.

c. Policy for Remuneration to Directors, KMP & Other Senior Management Personnel

The Companys current policy is to have an appropriate mix of Executive and Independent Directors to maintain the independence of the Board and separate its functions of governance and management.

For the purpose of selection of any Director, the Nomination and Remuneration Committee identifies persons of integrity who possess relevant expertise, experience and leadership qualities required for the position. The Committee also ensures that the incumbent fulfils such criteria with regard to qualifications, positive attributes, independence, age and other criteria as laid down under the Act, Listing Regulations or other applicable laws. The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy on the remuneration of Directors, Key Managerial Personnel and other Employees as required under sub-section (3) of Section 178 of the Companies Act, 2013.The policy of the Company on directors appointment and remuneration is uploaded on the Companys website and available at-

http: //tulsyannec.co.in/pdf/policy%20for%20 Remuneration%20to%20Directors%20and%20KMP.pdf

d. Declaration by Independent Directors

All Independent Directors of the Company have submitted the requisite declarations confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act read with Regulation 16 and 25(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Independent Directors have also confirmed that they have complied with Schedule IV of the Act and the Companys Code of Conduct. Independent Directors have also confirmed that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties. Further, the Independent Directors have also submitted their declaration in compliance with the provision of Rule 6(3) of Companies (Appointment and Qualification of Directors) Rules, 2014, which mandated the inclusion of an Independent Directors name in the data bank of Indian Institute of Corporate Affairs ("IICA") for a period of one year or five years or life time till they continues to hold the office of an independent director.

In the opinion of the Board, all the independent directors are persons of integrity, possesses relevant expertise and experience.

e. Familiarization Programme for Independent Directors

The Company has adopted policy of Familiarization Programme for Independent Directors.

f. Board Evaluation

Pursuant to the provisions of Section 134 of the Companies Act, 2013 and Regulation 19 of SEBI Listing Regulations, the Board has carried out the annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its various committees as per the criteria laid down by the Nomination and Remuneration Committee. A structured questionnaire was prepared after taking into consideration inputs received from the directors, covering various aspects of the Boards functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations, independence, governance, ethics and values, adherence to corporate governance norms, interpersonal relationships, attendance and contribution at meetings etc.

A separate exercise was carried out to evaluate the performance of individual directors including the Chairperson of the Board, who were evaluated on parameters such as participation and contribution by a director, commitment, including guidance provided to the senior management outside of Board / committee meetings, effective deployment of knowledge and expertise, effective management of relationship with various stakeholders, independence of behaviour and judgment etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairperson and Managing Director was carried out by the Independent Directors. The evaluation process has been explained in the corporate governance report. The Board reviewed the evaluation results as collated by the Nomination and Remuneration Committee.


The meetings of the Board are scheduled at regular intervals to discuss and decide on matters of business performance, policies, strategies and other matters of significance. The schedule of the meetings is circulated in advance, to ensure proper planning and effective participation. In certain exigencies, decisions of the Board are also accorded through circulation.

During the year, the Board met six times. The maximum interval between any two meetings did not exceed 120 days, as prescribed in the Companies Act, 2013. Detailed information regarding the meetings of the Board and its committees are included in the report on Corporate Governance, which forms part of the Annual Report.


The company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Company has constituted an Internal Complaints Committee to prevent and prohibit any form of sexual harassment at workplace and provide redressal for woman employees as required under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year, the members of Internal Complaints Committee met on 14th February 2020 and noted that there was no event affecting any of the women employees on account of any sexual harassment at the work place.


Pursuant to the provisions of Section 124(5) of the Companies Act, 2013 read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, all dividends which remains unpaid or unclaimed for a period of seven years from the date of their transfer to the unpaid dividend account are required to be transferred by the Company to the Investor Education and Protection Fund ("IEPF"), established by the Central Government. Further, as per IEPF Rules, the shares on which dividend has not been paid or claimed by the members for seven consecutive years or more shall also be transferred to the demat account of the IEPF Authority.

During the year, the Company has transferred unpaid and unclaimed dividends of the financial year 2011-12 and corresponding shares on which dividends were unclaimed for seven consecutive years were transferred as per requirements of the IEPF Rules. Detailed information regarding the amount of dividends and corresponding shares transferred to IEPF are included in the report on Corporate Governance, which forms part of the Annual Report.

The shareholders may note that there are no further unpaid or unclaimed dividend amounts/shares left with the Company for transfer to the IEPF Authority.


Our Companys shares are suspended from trading w.e.f. 29th November, 2016. All the revocation norms has been complied with by the Company. However, there should not be any difference between the Listed Capital and Issued Capital of the Company as per SEBI norms on revocation of suspension and in order to comply with this, the Management is taking all necessary steps and actions to uplift the suspension at earliest.


We place on record our appreciation for the committed services by every member of the Tulsyan family whose contribution was significant to the growth and success of the Company. We would like to thank all our shareholders, customers, suppliers, investors, bankers, financial institutions and other business associates, executives, staffs and workers at all levels for their continued support and encouragement during the year.

We also thank the Government of India and Government of Tamil Nadu, Ministry of Corporate Affairs, Central Board of Indirect Taxes and Customs, Income Tax Department, and all other regulatory agencies for their assistance and co-operation during the year and look forward to their continued support in the future.

By Order of the Board of Directors

For Tulsyan NEC Limited Sd/-

Lalit Kumar Tulsyan

Executive Chairman DIN:00632823

Place: Chennai

Date: 15-09-2020

Registered Office:

Apex Plaza, I Floor, New No.77,

Old No.3, Nungambakkam High Road Chennai-600034