Nova Iron & Steel Ltd has re-appointed M/s J.K. Kabra & Company as its Cost Auditor for the financial year 2026-27. The appointment is subject to the ratification of remuneration by members at the upcoming Annual General Meeting.

The Board of Directors approved this decision during their meeting held on September 28, 2026. The term of appointment extends from April 1, 2026, to March 31, 2027. This update follows the company's earlier announcement regarding the scheduling of its 34th AGM for October 30, 2026.

Governance and Audit Updates

The Board also recommended the re-appointment of Hardev Chand Verma as a Non-Executive, Non-Independent Director. Verma is liable to retire by rotation, and his continuation as director upon attaining the age of 75 years was sanctioned. Additionally, alterations to Clause III(A) of the Memorandum of Association were approved, subject to shareholder approval.

M/s J.K. Kabra & Company is a firm of Practising Cost Accountants based in Delhi. The firm offers services including cost audit, certifications, setting up costing systems, and cost consultancy across diverse industries.

The board meeting commenced at 4:00 pm and concluded at 5:00 pm. The company filed this outcome with the Bombay Stock Exchange pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Nova Iron & Steel reported a net profit of ₹85.87 lakh for the quarter ended June 30, 2026, marking a turnaround from a net loss of ₹192.24 lakh in the same period last year. The positive bottom line was driven by exceptional items, including a significant gain on lease termination, as the company continues its transition from manufacturing to trading operations.

The Board of Directors approved the unaudited financial results on September 11, 2026, with the extract published in national and regional dailies on September 13, 2026, in compliance with SEBI Listing Regulations. Statutory auditors MNRS & Associates issued a qualified opinion, citing unascertained interest costs and material uncertainties regarding the company's going concern status due to pending insolvency proceedings.

Financial Performance

Revenue from operations stood at ₹6,766.16 lakh in Q1FY27, a decline compared to ₹46,792.13 lakh in Q1FY26. This contraction reflects the cessation of manufacturing activities, which were discontinued in April 2026 following the termination of license agreements for plant and machinery. Consequently, the company has commenced dealing in steel and allied products as a trader.

Total expenses fell significantly, contributing to a pre-tax loss of ₹224.73 lakh in Q1FY27, down from a pre-tax loss of ₹2,213.61 lakh in the prior year. The improvement in pre-tax figures was primarily due to lower depreciation and finance costs associated with the scaled-down operations. However, the company incurred an operating loss before exceptional items.

What the Numbers Show

The reported net profit is largely non-operational. Exceptional items contributed a net gain of ₹310.62 lakh, comprising a ₹302.29 lakh gain on lease termination, ₹5.98 lakh from asset disposal, and ₹2.35 lakh in written-back balances. Without these one-time gains, the company would have posted a pre-tax loss of ₹224.75 lakh. This divergence highlights that the core trading business remains unprofitable, with the bottom line buoyed entirely by the derecognition of liabilities associated with the ceased manufacturing unit.

Regulatory and Legal Updates

The auditors highlighted significant risks in their review report:

• Going Concern: Material uncertainty exists due to pending applications under the Insolvency and Bankruptcy Code (IBC), 2016, and provisional attachment orders by the Directorate of Enforcement.
• Asset Transfer: Capital work-in-progress was transferred to Ess Enn Investments Pvt. Ltd. in June 2026 due to non-repayment of dues.
• Litigation: An application under Section 7 of the IBC filed by MN Corporation is pending before the NCLT Cuttack. A settlement agreement was signed in May 2026 with partial payment made.
• Enforcement Actions: Three provisional attachment orders aggregating ₹28.40 crore were received under the Prevention of Money Laundering Act, 2002, related to an investigation into Bhushan Power & Steel Limited. The company is contesting these matters.

The management maintains that the financial results are prepared on a going concern basis, citing ongoing repayment efforts and the shift to trading activities.