Modern Steels Limited has recommended the appointment of M/s. Sanjeev Sharma & Associates, Chartered Accountants (Firm Registration No. 12326N), as its Statutory Auditors for a term of one year. The Board of Directors approved this recommendation on August 11, 2026, subject to shareholder approval at the forthcoming Annual General Meeting (AGM) scheduled for September 26, 2026. This appointment succeeds APT & Co LLP, whose current term concludes with the same AGM. The move coincides with the company’s Q1FY27 results, which reported a 56.5% year-on-year jump in net profit to ₹36 lakh, driven primarily by a rise in other income.

The appointment was made pursuant to Regulation 30 read with Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Board acted on the recommendation of the Audit Committee. M/s. Sanjeev Sharma & Associates will hold office from the conclusion of the 52nd Annual General Meeting until the conclusion of the 53rd Annual General Meeting in 2027. The firm, established in 1993, is registered with the Institute of Chartered Accountants of India (ICAI), Comptroller and Auditor General (C&AG), and Reserve Bank of India (RBI). It specializes in statutory, concurrent, revenue, stock, and internal audits, along with GST consultancy and tax advisory services.

Financial Performance Context

The governance update follows the approval of standalone unaudited financial results for the quarter ended June 30, 2026. Modern Steels reported a net profit of ₹36 lakh, up from ₹23 lakh in Q1FY26. This growth was underpinned by an increase in other income, which rose to ₹58 lakh from ₹47 lakh in the corresponding period. Total expenses declined slightly to ₹22 lakh from ₹24 lakh, reflecting controlled costs in employee benefits and other expenditures. Basic earnings per share (EPS) increased to ₹0.26 from ₹0.16.

Governance Changes

In addition to the auditor appointment, the Board approved several key governance changes pending shareholder ratification. Krishan Kumar Goyal was re-appointed as Chairman & Managing Director for a five-year term until the AGM in 2031. Dr. Surinder Kumar was appointed as a Non-Executive Independent Director for his first five-year term, effective August 11, 2026. Prof. Anupama Sharma was re-appointed as a Non-Executive Independent Director for her second five-year term. These appointments were based on recommendations from the Nomination and Remuneration Committee.

What the Numbers Show

The transition of statutory auditors aligns with standard regulatory rotation practices, ensuring independent oversight as the company manages its post-slump sale transition. With no active manufacturing operations, the reliance on other income for profitability remains a key structural characteristic. The appointment of a firm with extensive experience in banking and public sector audits may signal a focus on rigorous compliance and internal control mechanisms during this interim phase. Shareholders must vote to confirm these appointments at the AGM on September 26, 2026.

Modern Steels Limited returned to profitability in the financial year ended March 31, 2026, posting a net profit of ₹106 lakh compared to a loss of ₹444 lakh in the previous year. The company’s board approved the audited financial results for the fourth quarter and the full financial year on May 22, 2026. Revenue from operations for the quarter ended March 31, 2026, stood at ₹93 lakh, while total income for the year reached ₹549 lakh.

The company, which ceased manufacturing operations after selling its assets at Mandi Gobindgarh, currently earns commission income from other activities. Despite the lack of manufacturing, the financial statements were prepared on a going concern basis due to management’s future plans to start commercial activity. Total expenses for the year decreased to ₹295 lakh from ₹66,444 lakh in the prior year, significantly contributing to the turnaround.

Financial Performance

The turnaround was driven by a substantial reduction in expenses and other income. For the quarter ended March 31, 2026, the company reported a net profit of ₹10 lakh. Basic earnings per share (EPS) for the year improved to ₹0.77 from a loss of ₹3.23 per share in the previous year. The paid-up equity share capital remained unchanged at ₹1,440 lakh.

Key Financial Metrics (Amount in ₹ Lacs)

Assets and Liabilities

The company’s total assets as of March 31, 2026, stood at ₹1,987 lakh, slightly higher than ₹1,880 lakh in the previous year. Non-current assets included loans amounting to ₹1,328 lakh. Shareholders' funds increased to ₹1,889 lakh from ₹1,783 lakh in the prior year, driven by an increase in other equity to ₹449 lakh from ₹343 lakh.

Auditor’s Report

Statutory auditor APT & Co LLP issued an unmodified opinion on the standalone financial results. The report confirms that the results give a true and fair view in conformity with Indian Accounting Standards (Ind AS). The auditor noted that the provision for deferred tax assets was not recognized due to the absence of virtual certainty regarding sufficient future taxable income. The figures for the quarter ended March 31, 2026, are derived as balancing figures between the audited annual results and the reviewed year-to-date figures up to the third quarter.