Mar 31, 2023
The directors have pleasure in presenting the Thirtieth Annual Report of your Company together with the Audited Financial Statements for the year ended March 31,2023.
FINANCIAL HIGHLIGHTS / RESULTS
Your directors take pleasure in presenting the 30th Annual Report on the business and operations of your Company along with the financial statements for the year ended 31 March, 2023.
(Rs. in Lacs) |
||
Financial Results |
2022-2023 |
2021-2022 |
Total Income |
109,677.52 |
100,233.60 |
Profit / (Loss) before Tax |
2199.90 |
6,585.67 |
Less : Tax Expenses |
||
Current Tax |
500.00 |
453.10 |
Deferred Tax (Charge)/ Credit |
167.99 |
1,055.14 |
Profit After Tax |
1531.90 |
5,077.42 |
Less : Prior Period Expenses |
- |
-- |
Net Profit/(Loss) for the year |
1531.90 |
5,077.42 |
Add: Other Comprehensive Income |
(19.14) |
(8.43) |
Total Comprehensive Income for the year |
(19.14) |
(8.43) |
Surplus Brought Forward from last balance sheet |
8076.42 |
2,999.00 |
Add: Earlier Year Adjustment (Tax) |
- |
- |
Less: Adjustment for net carrying amount of tangible fixed assets |
- |
- |
Balance at the end of the year (excluding comprehensive income) |
9608.32 |
8,076.42 |
INDIAN ACCOUNTING STANDARD (IND AS)
In accordance with the notification issued by the Ministry of Corporate Affairs (MCA), your Company has complied with the new Accounting Standards, IND AS in preparation of financial statements under Indian Accounting Standards (Ind AS) prescribed under section 1 33 of the Companies Act 2013 read with rule 3 of the Companies (Indian Accounting Standards Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016 with effect
from 1st April 2016. Ind AS has replaced the existing Indian GAAP prescribed under section 133 of the Companies Act, 2013, read with rule 7 of Companies (Accounts) Rules, 2014.
Accordingly, the Company has adopted Indian Accounting Standard (âInd ASâ) with effect from 1st April 2016 with the transition date of 1st April 2015 and the financial Statements for the year ended 31st March 2023 has been prepared in accordance with Ind AS.
RESULTS OF OPERATIONS & STATE OF AFFAIRS OF THE COMPANY
Gross Turnover including other incomes for the year 2023 was stood at '' 1096.78 Lakhs which was around 9.42 % upward side in comparison to fiscal 2022. During the year the company initiated the trading of steel products and installation of new rolling mill and achieved a trading turnover of '' 7333.24 lakhs against '' 145.66 lakhs for last fiscal 2022. Your company continues with its focus on quality and strength of its products. Your Company has initiated steps to explore new markets in addition to developing existing ones.
The Company has produced 166075.280 metric tonnes (MT) and 177956.000 MT of M S Billets & Sponge Iron respectively in FY 2022-23, the same is increased by 15.41 % & (- 10.42%) respectively in comparison to the previous year. The company has installed a new rolling mill having an installed
capacity of 38 TPH within a existing facility located at Budhakata unit, in Odisha. The company is in the growth path by utilizing the better capacity installed.
The Companyâs sustained efforts towards back-end cost control, efficiency improvement measures, supported the insulation and limited the impact on the profitability margins. The Companyâs ability to better utilisation of capacities will help derive better margins out of the businesses. The outlook of each business has been discussed in detail in the âManagement Discussion & Analysisâ which forms a part of this Annual Report.
The production of steel product during the year under report, compared to the previous year is given below.
Item |
Production (Qty in MT) |
Turnover (Qty in MT) |
||
Years ended 31st March, 2023 |
Years ended 31st March, 2022 |
Years ended 31st March, 2023 |
Years ended 31st March, 2022 |
|
Sponge Iron |
1,77,956 |
1,98,663 |
44,356 |
75,456 |
MS Ingot/ Billet |
1,66,075 |
1,43,894 |
59,174 |
43,974 |
Long and Flat Products |
1,01,410 |
1,07,715 |
1,01,599 |
1,09,469 |
FY 2022-23 was a year of two halves. The first half witnessed high volatility in raw material costs, especially coking coal and energy, aggravated by supply chain bottlenecks. A series of aggressive interest rates hikes by major central banks to rein in runaway inflation dampened steel demand, leading to inventory build-up and softening steel prices. However, the third and fourth quarters saw improved sentiment with easing inflation and raw material costs, coupled with the reopening of China post its stringent âZero COVIDâ policy.
India too experienced high inflation for some time. Steel spreads came under pressure due to higher coking coal and other input costs. The imposition of export duty on steel in May 2022 made Indian steel uncompetitive in global markets while cheaper steel from overseas made its way into the country, putting pricing pressure on domestic steelmakers. However, buoyant steel demand in India throughout the year provided some respite. The withdrawal of export duty in November 2022 opened up opportunities to tap the overseas markets, though global demand remained a bit subdued.
India is forecasted to become a $10 trillion economy by 2033, growing almost three times. As India accelerates its growth trajectory in its ânation buildingâ phase, steel demand is expected to see a step up. The National Steel Policy envisages Indiaâs installed crude steel capacity at 300 MTPA by 2030-31. Scan Steelâs is striving to align with this progress.
India is the second-largest producer and consumer of crude steel globally with an installed capacity of ~160 MTPA at present. To meet the growing demand, the National Steel Policy (2017) envisages the countryâs steel capacity to grow to ~300 MTPA by FY 2030-31. Further, Indiaâs per capita finished steel consumption is significantly below the global average, which suggests a buoyant demand outlook. Near-term challenges exist especially in overseas markets, the longterm growth story of Indian steel remains intact with an estimated 8-10 MnT annual incremental growth in domestic consumption.
The Indian automotive industry has evolved over the past decade to emerge as one of the fastest-growing markets in the world. With steel accounting for the majority of raw material content in vehicles and the highest safety ratings becoming a top consideration in buying decisions, demand for Advanced High-Strength Steel (AHSS) has been steadily rising in India. Further, with high-tensile strength and optimal formability, AHSS enables a low-cost solution, compared to aluminium and carbon fibre, to achieve 5-star safety ratings.
According to a NITI Aayog report, India is likely to be the worldâs manufacturing hub for low-emission steel by 2030 and pave the way for wider adoption globally. Traditional coal-based production methods such as blast furnace/basic oxygen furnace and electric arc furnace (EAF) are being replaced with technologies like DRI and gas turbine generators
The fourth industrial revolution, Industry 4.0 is underway, and the steel industry is also witnessing the increased deployment of artificial intelligence (AI), Industrial IoT, AR/VR, and machine learning, among others, into everyday practices to make manufacturing smarter, safer, and more efficient.
As we forge ahead, guided by our unwavering commitment to excellence and sustainability, we remain steadfast in our pursuit of contributing to the growth and development of the Indian economy. We will continue to embrace innovation, pursue responsible business practices, and create value for all our stakeholders.
The Company has a Well-organized Marketing Department We have around very good market share in Odisha and also catering to outside states. We are in the process of expanding our market plan in India by appointment of Dealers at other major cities across India. We also directly sell to the Customers through our Marketing staffs and agents.
Scan Steelsâs commitment to excellence in Health, safety, and the environment is one of the companyâs core values. The company complies with the Laws and Regulations first, then goes beyond the mandate to keep our planet safe for future generations. We firmly believe that sustainable waste management practises are essential for safeguarding the planetâs future. Minimising the environmental impact of our operations assumes the utmost priority. We remain committed to reducing our environmental footprint and fostering a cleaner, greener, and more sustainable future for all.
As the world moves to a low-carbon economy, it will always remain a challenge to decouple growth from emissions in a hard-to-abate sector like ours. We are dedicated to preventing and
mitigating air pollution by enhancing the efficiency of our operations and reducing emissions. We strictly adhere to emission regulations, ensuring our emissions remain within legal limits, and continually strive to surpass these standards.
As a responsible organisation, we understand the significance of nurturing a safe and pristine environment and safeguarding the invaluable ecosystems that support us. Following a proactive approach, we have embraced innovation, adopted the best available technologies, and implemented operational changes to mitigate long-term environmental risks and promote sustainability. Further, we remain focused on reducing our emission intensities through the establishment of a robust environment management system and conscious efforts by prioritising actions such as energy transition towards renewable energy, adoption and promotion of efficiency improvements in energy consumption, process optimisation, increased use of available scraps, and supporting circularity through better resource management, Planting more and more trees, efficiently managing water resources, and minimising waste generation. Dedicated to advancing on the path of decarbonization guided by well-defined targets. We strive to be recognised for promoting sustainable practises in our industry.
Climate change is a global phenomenon with far-reaching consequences for various sectors, including steel. Rising temperatures, extreme weather events, and shifting climate patterns pose significant challenges to steel production and its environmental impact. Being part of the steel industry, we are cognizant of this. As the need to combat climate change becomes more urgent, the steel industry is facing increasing pressure to reduce its carbon footprint, adopt cleaner technologies, and embrace sustainable practises. Balancing the demand for steel with
the imperative to mitigate climate change poses a critical challenge as well as an opportunity for the future sustainability of the industry. The shift towards sustainable energy sources is a global phenomenon that is gaining momentum. It presents a major opportunity for businesses that have traditionally relied on non-renewable energy sources to rethink their energy mix and plan for the future. With the rising cost of energy and the growing demand for a better standard of living, companies must take measures to ensure they can access affordable and sustainable energy to power their operations.
As a heavy industry, steel manufacturing involves a complex series of processes that produce significant amounts of noise, dust, fumes, smoke, and odours, all of which have the potential to affect local communities. As a responsible steel maker with a decided focus on sustainability, we proactively contribute to worldwide efforts to address climate change. We have developed a strong roadmap for reducing our carbon footprints, setting well-defined targets, and measuring our progress. We are committed to reducing our carbon footprint by adopting energy-efficient technologies that minimise our overall energy consumption. In addition, we are actively working towards incorporating renewable energy sources into our energy mix. By doing so, we are not only reducing our impact on the environment but also conserving valuable resources.
The competitive business environment in which the Company operates makes innovation imperative for success of the business. Recognizing the need to improve, expand and innovate, the Company is concentrating efforts on research and development of alternate materials and new products.
The Company has started working on the technology roadmap that aligns with itâs vision of becoming a leader among the innovation driven
organizations. Venturing into new market areas is another focus area for research and development and accordingly, a number of new product developments have been targeted. R&D continues to help the Company in its drive to become more sustainable and more environmentally friendly.
For the F.Y 22-23 your Board of Directors has not recommended any dividend on equity shares as well as on preference shares as your company has installed a new rolling mill having 38TPH capacity towards business expansion at a cost of Rs. 3339.94 lakhs out of own fund.
In terms of Regulation 34(2)(e) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a report on the Management Discussion and Analysis covering prospects is provided as a separate section in this Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed report on the Management Discussion & Analysis as required in terms of the SEBI Listing Regulations is provided as a separate section in the Annual Report.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND
Your Company did not recommend any dividend therefore there were no such funds which were required to be transferred to Investor Education and Protection Fund (IEPF).
During the financial year 2022-23, no amount has been transferred to reserve account.
CONSOLIDATED FINANCIAL STATEMENT
As per the definition in the Companies Act, 2013 (âthe Actâ) and Ind AS - 110 on Consolidated
Financial Statements read with Ind AS - 28 on Investment in Associates and Ind AS-31 Interest in Joint Venture, the company does not have any investment in the Subsidiary Company, Joint Ventures Company or any other Associates Company therefore the Consolidation of Financial Statements is not applicable.
DETAILS OF SUBSIDIARY/JOINT VENTURES/ ASSOCIATE COMPANIES
The Company does not have any Subsidiary, Associates and Joint venture Companies there by; there are no details to be provided under [Rule 8 of the Companies (Accounts) Rules, 201 4]. Read with section 129 (3) of the Companies Act, 2013.during the year under review, no company has become or ceased as subsidiary, associate or joint venture companies.
FIXED DEPOSITS COVERED UNDER CHAPTER V OF THE COMPANIES ACT, 2013
Pursuant to Section 73, 74 & 76 Rule 8(5)(v) of Companies (Accounts) Rules, 2014. The details relating to deposits, covered under Chapter V of the Act are as follows: -
a. accepted during the year - ''Nil
b. remained unpaid or unclaimed as at the end of the year -Nil
c. whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved -
i. at the beginning of the year - Nil
ii. maximum during the year - Nil
iii. at the end of the year - Nil
There was No default in repayment of deposits or payment of interest thereon during the year by Company and accordingly No details to be provided by the Company in this regard.
The details of deposits which are not in compliance with the requirements of Chapter V of the Act -
Your Company has not accepted any deposits which are not in Compliance with the requirement of Chapter V of the Act.
CHANGE IN THE NATURE OF BUSINESS, IF ANY
During the year under review, there are no changes in the nature of business. The Company is continuing into the Steel Manufacturing Business.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS.
INTERNAL CONTROL SYSTEMS AND AUDIT OVERVIEW
The Company has in place adequate internal financial controls with reference to financial statements, commensurate with the size and nature of its business, forms an integral part of the Companyâs corporate governance policies.
The Company has a proper and adequate system of internal control commensurate with the size and nature of its business. Internal control systems are integral to the Companyâs corporate governance policy.
Some of the significant features of internal control systems include:
⢠Documenting of policies, guidelines, authorities and approval procedures, encompassing the Companyâs all primary functions.
⢠Ensuring complete compliance with laws, regulations, standards and internal procedures and systems.
⢠De-risking the Companyâs assets/resources and protecting them from any loss.
⢠Ensuring the accounting systemâs integrity proper and authorised recording and reporting of all transactions.
⢠Preparing and monitoring of annual budgets for all operating and service functions.
⢠Ensuring the reliability of all financial and operational information.
⢠Forming an Audit committee of the Board of Directors, comprising majority of Independent Directors. The Audit Committee regularly reviews audit plans, significant audit findings, adequacy of internal controls, and compliance with accounting standards and so on.
⢠Forming a comprehensive Information Security Policy and continuous up-gradation of IT Systems.
As per the Regulation 9A - Institutional Mechanism
for Prevention of Insider trading via Notification
31.12.2018 SEBI (Prohibition of Insider Trading)
(Amendment) Regulation, 2018 below mentioned
points also included in internal controls:
a) all employees who have access to unpublished price sensitive information are identified as designated employee;
b) all the unpublished price sensitive information shall be identified and its confidentiality shall be maintained as per the requirements of these regulations;
c) adequate restrictions shall be placed on communication or procurement of unpublished price sensitive information as required by these regulations;
d) lists of all employees and other persons with whom unpublished price sensitive information is shared shall be maintained and confidentiality agreements shall be signed or notice shall be served to all such employees and persons;
e) all other relevant requirements specified under these regulations shall be complied with;
f) periodic process review to evaluate effectiveness of such internal controls.
The internal control systems and procedures are designed to assist in the identification and management of risks, the procedure-led verification of all compliance as well as an enhanced control consciousness.
The Company has a strong internal audit department reporting to the Audit Committee comprising Directors and Independent Directors who are experts in their field. The scope of work, authority and resources of Internal Audit (IA) are regularly reviewed by the Audit Committee and its work is supported by the services of M/s. Dalaniya & Associates, the Internal Auditor of the Company.
The Company continued to implement their suggestions and recommendations to improve the control environment. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Internal Auditors findings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations.
Through IA function the Board obtains the assurance it requires to ensure that risks to the business are properly identified, evaluated and managed. IA also provides assurance to the Board on the effectiveness of relevant internal controls.
Audit plan and execution
Internal Audit department has prepared a risk-based Audit Plan. The frequency of audit is decided by risk ratings of areas functions. The audit plan is carried out by the internal team. The audit plan is reviewed periodically to include areas which have assumed significant importance in line with the emerging industry trend and the aggressive growth of the Company.
In addition, the audit committee also places reliance on internal customer feedback and other external events for inclusion of areas into the audit plan.
As per Section 134 (5) (e) of the Companies Act 2013, the Directors have an overall responsibility for ensuring that the Company has implemented robust systems and framework of internal financial controls. This provides the Directors with reasonable assurance regarding the adequacy and operating effectiveness of controls with regards to reporting, operational and compliance risks. To enable them to meet these responsibilities, the Company has devised appropriate systems and framework including proper delegation of authority, policies and procedures, effective IT systems aligned to business requirements, risk based internal audit framework, risk management framework and whistle blower mechanism.
The Audit Committee regularly reviews the internal control system to ensure that it remains effective and aligned with the business requirements. Where weaknesses are identified as a result of the reviews, new procedures are put in place to strengthen controls. These are in turn reviewed at regular intervals.
The Company has developed a framework for designing and assessing effectiveness of internal controls over financial reporting and Financial Statements and has already laid down entity level policies and process level standard operating procedures.
The entity level policies comprise anti-fraud policies (code of conduct, including conflict of interest, confidentiality and whistle-blower policy) and other policies (organization structure, roles and responsibilities, insider trading policies and code of conduct, HR policy, related party policy, prevention of sexual harassment policy, IT security policy, business continuity and disaster recovery
plan and treasury risk management policy). The Company has also prepared Standard Operating Practices (SOP) for each of its processes of revenue to receive, procure to pay, hire to retire, finance and accounts, fixed assets, treasury, inventory, manufacturing operations, and administrative expenses.
Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and during the year, such controls were tested and no reportable material weakness in the design or operation were observed and such systems were adequate and operating effectively.
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal, statutory and secretarial auditors and external consultants, including the audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by management and the relevant board committees, including the audit committee, the Board is of the opinion that the Companyâs internal financial controls were adequate and effective during FY 2023.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
SEBI carried out amendments to the SEBI (LODR) Regulations, 2015 (SEBI Listing Regulations) vide the SEBI (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2021 wherein certain amendments into force from April 1, 2022 while remaining would come into force from April 1, 2023.
Regulation 23(1) and (4) states that all RPTs with an aggregate value exceeding '' 1,000 crores or 10% of annual consolidated turnover of the Company as per the last audited financial statements of the Company, whichever is lower, shall be treated as Material Related Party Transaction (MRPTs) and shall require approval of shareholders by means of an ordinary
resolution. The provisions of Regulations 23(4) requiring approval of the shareholders are not applicable for the RPTs entered into between a holding company and its wholly owned subsidiary and RPT transactions entered into between two wholly-owned subsidiaries of the listed holding company, whose accounts are consolidated with such holding company and placed before the shareholders at the general meeting for approval.
The said limits are applicable, even if the transactions are in the ordinary course of business of the concerned company and at an armâs length basis. The amended Regulation 2(1)(zc) of the SEBI Listing Regulations has also enhanced the definition of related party transactions which now includes a transaction involving a transfer of resources, services or obligations between a listed entity or any of its subsidiaries on one hand and a related party of the listed entity or any of its subsidiaries on the other hand, regardless of whether a price is charged or not.
Accordingly, RPTs of the Company and RPTs of the subsidiary entities exceeding the threshold of '' 1,000 crores or 10% of annual consolidated turnover of the Company as per the last audited financial statements of the Company, whichever is lower, shall require approval of the Shareholders of the Company with effect from April 1, 2022.
(Note: Company has no subsidiaries hence provisions related to subsidiary companies are not applicable.)
All contracts / arrangements / transactions entered by the Company during the financial year with related parties referred to in Section 188 (1) of the Companies Act, 2013 read with SEBI Listing Regulations were approved by Audit Committee and were in the ordinary course of business and on an armâs length basis and Detail of which is furnished in the Annexure âAâ in Form AOC-2 attached with this Report in compliance with Section 134 (3) (h) read with188 (2) of the Companies Act, 2013.
Further, there are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee (read with SEBI LODR 3rd amendment Reg. 2021) as also the Board for approval.
The Company has developed an Internal Guide on Related Party Transactions Manual and prescribed, Standard Operating Procedures for purpose of identification and monitoring of such transactions. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.
Moreover, on the recommendations of the Audit Committee, your Board time to time revised the Policy on Related Party Transactions to incorporate the regulatory amendments to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with provisions of the Companies Act, 2013.The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Companyâs website at https://scansteels.com/policies-and-code/- Investor Relations Segment.
The Policy intends to ensure that proper reporting; approval and disclosure processes are in place for all transactions between the Company and Related Parties. This Policy specifically deals with the review and approval of Related Party Transactions keeping in mind the potential or actual conflicts of interest that may arise because of entering into these transactions.
All Related Party Transactions are placed before the Audit Committee for review and approval (read with SEBI LODR 3rd amendment Reg. 2021). All Related Party Transactions are subjected to independent review by a reputed accounting firm
to establish compliance with the requirements of Related Party Transactions under the Companies Act, 2013 and Regulation 23 of the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 201 5. Your directors draw attention of the members to Note No. 32 to the financial statement which sets out related party disclosures.
Your company is having status of ISO 9001, ISO 14001 and ISO 18001 certification, which is internationally recognized for the production, quality control and Environmental as well as OHSAS respectively.
During the year, the rating of the company has been re-affirmed to IVR BBB /Negative Outlook (IVR Triple B Plus with Negative Outlook) for Long Term Debt and Fund Based Facilities and IVR A2 (IVR A Two) for Short Term Non-Fund based Facilities from Informerics Valuation and Rating Pvt Ltd.
The Ratings derives strength from the experienced promoters and management team, long track record and established presence in the steel making, diversified product portfolio, growth in scale of operation along with moderate capital structure and debt protection metrics.
AUTHORITY TO DETERMINE MATERIALITY OF AN EVENT AND DISCLOSURE OF THE SAME TO STOCK EXCHANGE UNDER REGUALTION 30(5) OF SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGAULTION, 2015
Mr. Ankur Madaan, Whole- Time Director, of the Company, and Mr. Prabir Kumar Das, Company Secretary and Compliance Officer of the Company and Mr. Gobinda Chandra Nayak, Chief Financial Officer of the Company authorized by the Board for the purpose of determining the materiality of an
event or information, in terms with the Companyâs Policy on disclosure of material event / information and archival policy to comply with the Provisions of Regulation 30 (5) of the SEBI ( Listing Obligations and Disclosure Requirements) Regulations, 2015 and they are jointly and severally authorized to make necessary disclosure to stock exchanges regarding the same on behalf of the Company.
The âSHRISTIIâ brand for its TMT bars is well accepted in the market in varied segments and sectors with wide customer base.
For us, the central focus of all our marketing and branding efforts is the customer. There is a strong emphasis on expanding our presence across various sectors and elevating the brandâs worth through carefully crafted marketing initiatives that aim to increase awareness and consideration. Our marketing strategy aligns seamlessly with our organisational objective of emerging as the one of the leading producer in the market, specialising in premium products that provide exceptional value to our customers.
The Assets of the company are adequately insured against the loss of fire, riot, earthquake, loss of profit etc, and other risk which is considered by management, in addition to this coverage, a statutory public liability insurance policy has been taken by the company for providing coverage against the public liability arising out of industrial accidents for employees working in plants.
Customers are valuable aspects of our business. We organise customer meetings and events from time to time to interact with our customers, recognise their needs, and hold satisfaction surveys to get their valuable feedback. We also keep in touch with them through Customer visits, phone calls, emails, and meetings. We focus
on Timely delivery, a wide range of high-quality products that meet customer requirements at Competitive pricing, and post-sales support. We emphasise areas like Easy availability through a large distribution network, Value-added products, Offerings based on solutions, Sustainable and low-carbon steel, Human rights and safety, warranties, and quality assurances.
During the year, the company has availed a term loan in the tune of '' 30 Lakhs from the lenders towards purchase of vehicle & equipment.
BANKERS AND CONSORTIUM ARRANGEMENT
The Company has a consortium arrangement with its bankers with State Bank of India and Punjab National Bank. The State Bank of India is the lead bank. This consortium arrangement is well defined and takes care of the companyâs credit facility requirements from time to time. The consortium meetings are held quarterly on a regular basis, and they also visit the companyâs plant from time to time as per their requirements.
At Scan Steel, health and safety continue to be of the utmost priority. We strive to maintain a secure, safe, and healthy environment for our workforce, partners, and the communities we serve. We have established strong safety systems that ensure the well-being of our workforce. These systems are designed to identify and mitigate risks. We constantly strive to achieve our ultimate goal of zero harm, zero major incidents, and zero injuries. With effective leadership, robust systems, and a competent workforce, we aspire to be recognised as one of the safest organisations in the coming years, where the implementation of the âhighest standards of safety leads to the greatest levels of productivity.
The company is unwavering in its policy that ââsafety of persons overrides all production targets, which
drives all employees to continuously break new ground in safety management for the benefit of the people, property, environment, and communities in which Scan Steels operates. Our dedicated measures include conducting a Risk Assessment, identifying significant environmental aspects of all manufacturing plants, and signing a commitment to Responsible care.
The greatest emphasis is given to safety measures aimed at minimising accidents and incidents. With this backdrop, the overall safety performance of the Company improved, and the Company reported no fatalities during the year. Good safety performance is being rewarded.
For us, cybersecurity is a top priority. As we embed digitalization into our operations, our business is more susceptible to cyber threats. We have meticulously devised ways through which we can protect our business and our stakeholders through various vulnerability and breach assessments, keeping ourselves updated as per industry best practises. This is overseen by the Risk Management Board Committee.
HUMAN RESOURCE DEVELOPMENT AND PERSONNEL
The Companyâs Human Resources (HR) management practices ensure fair and reasonable process that are compliant with regulatory and governance requirements. Processes that endured the uncertainty of the last two-Three years and utilised it as a competitive advantage to enable continuous progress. The company has been given much emphasis on Human Resources Development and thus has been well recognized in the steel industrial for sound Human Resources Management.
Safety, diversity, inclusion, and overall employee growth are the important values of the organisational culture. Over a period of time, we
have built and nurtured a dedicated and excellent workforce and also recruiting new people in order to meet the revival plans of the company. The Company has emerged as a true national firm with cosmopolitan atmosphere.
The companyâs HR polices and remuneration practices aim to attract and retain top talent, thus supporting the Companyâs long-term strategy and driving a sustainable performance. Finding, retaining and developing the right talent has always been a core strategy in order to maintain high-productivity and a value-driven organisational culture. We also believe in Women Empowerment and encourage women employees to come forward and take a lead. The HR policy is well aligned to effectively suit its expanding business horizons and future manpower requirement.
We continued to focus on building, nurturing and retaining a talented workforce during the year. This has been achieved by continuously stressing upon training & development, empowerment and aids them with tools that help in continuously learning and the development of new skills and creating a compelling work environment and maintaining well-structured reward & recognition mechanism. Company is committed to the welfare of its people and their families and to improve the quality of their life by providing the required facilities. During the year under the review, industrial relations at all units of the Company continued to be cordial and peaceful.
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility is the continuing commitment by the business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large. As a part of its policy for corporate social responsibility, the Company is associated with charitable and social activities and Thereby playing a pro-active role in the socioeconomic
growth. In structuring its efforts to the various aspects of Corporate Social Responsibilities, the Company takes in to account guidelines and statements issued by stakeholders and other regulatory bodies.
The management has adopted corporate social responsibility (CSR) well at par with its business, with the objective of creating wealth in the community with focus on education, health, animal welfare, water and society. Social welfare, community development, economic and environmental responsibilities are at the core of the CSR of the Company.
The Corporate Social Responsibility Committee (CSR Committee) Composition and Terms of reference of which is detailed in the Corporate Governance Part of this Annual Report, has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board.
The key philosophy of all CSR initiatives of the Company is guided by three core commitments of Scale, Impact and Sustainability.
The Company has identified Following focus areas of engagement:
⢠Rural Transformation: Creating sustainable livelihood solutions, Infrastructure support for rural development, addressing poverty.
⢠Animal Welfare: Aim to address material issues for each livestock industry. disease prevention and veterinary treatment, appropriate shelter, management, nutrition, humane handling, and humane Slaughter.
⢠Health: Affordable solutions for healthcare through improved access, awareness and health seeking behaviour. Eradicating hunger, poverty and malnutrition, promoting preventive health care and making available safe drinking water.
⢠Education: Access to quality education, promoting education including special education to poor children in rural area. Improving literacy amongst the children, women, elderly and the differently abled, training and skill enhancement, career guidance, Specially in Nearby Villages where the Plants of the Company Located.
⢠Environment: Environmental sustainability, ecological balance, conservation of natural resources.
⢠Water: The Company makes affordable solution for water crises in the local area.
The Company would also undertake other need-based initiatives in compliance with Schedule VII to the Act as amended.
The CSR activities are monitored by internal / CSR Committee. As per the CSR policy, progress of the CSR activities is reviewed periodically or as and when needed by the Board-level CSR Committee, as well as by the management at the sites. Also, The Company through its Board and the CSR Committee follows a comprehensive approach to deliver socially inclusive and holistic interventions that help create equitable opportunities for the underprivileged and contribute to nation building.
The disclosures required to be made as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 or Details of CSR expenditure spent During the financial year 2022-23 by the Company is annexed to this report as Annexure âBâ.
Pursuant to the Companies (Corporate Social Responsibilities Policy) Amendment Rules, 2021, Company has adopted a revised CSR policy in line with the above amendment. The policy has been approved by the Companyâs Board of Directors and the same is available on the website of the Company at https://scansteels.com/wp-content/uploads/2023/06/CSR-POLICIES.pdf
The Companyâs robust risk management framework identifies and evaluates business risks and opportunities. The Company recognizes that these risks need to be managed and mitigated to protect its shareholders and other stakeholderâs interest, to achieve its business objectives and enable sustainable growth. The risk frame work is aimed at effectively mitigating the Companyâs various business and operational risks, through strategic actions. Risk management is embedded in our critical business activities, functions and processes.
The risks are reviewed for the change in the nature and extent of the major risks identified since the last assessment. It also provides control measures for risks and future action plans. Pursuant to the requirement of Regulation 21 of the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015, the Company has constituted a sub-committee of Directors to oversee Enterprise Risk Management Framework to ensure execution of decided strategies with focus on action and monitoring risks arising out of unintended consequences of decisions or actions and related to performance, operations, compliance, incidents, processes, systems and transactions are managed appropriately.
The Audit Committee has additional oversight in the area of financial risks, controls and Internal Audit reviews. The Company believes that the overall risk exposure of present and future risks remains within risk capacity.
The Companyâs risk intelligent culture enabled it to manage the uncertainties in an unprecedented business environment during the year under review. âScenario-based risk assessmentâ is facilitated across the company in any uncertain circumstances. Further, business decisions were pivoted to achieve cash neutrality in operations by reducing spend, managing working capital and reducing capital expenditures.
Implementation of focussed risk mitigation strategies along with improvement in the domestic macro environment has improved the Companyâs risk profile in the financial year 2022-23. Despite the challenges posed by the competitive environment, the company has tried to maintain its liquidity position and has adequate resources to service the debt.
The Company continues to be vigilant specifically after pandemic situation to proactively manage risks, as they emerge in financial year 202324. Health and safety of employees and the communities in the vicinity of our operations, continues to be the top-most priority for the Company, whilst simultaneously ensuring continuity of our business operations.
The Company had developed and Implemented a Risk Management Policy which was reviewed and approved by the Committee and Board, which can be accessed on the website of the Company at https://scansteels.com/wp-content/
uploads/2022/08/RISK-MANAGEMENT-POLICY..pdf Investor Relations Segment.
Transparency is the cornerstone of your Companyâs philosophy and all requirements of Corporate Governance are adhered to both in letter and spirit. The Board is conscious of its inherent responsibility to disclose timely and accurate information on the Companyâs operations, performance, material corporate events as well as on the leadership and governance matters relating to the Company. All the Committees of the Board of Directors meets at regular intervals as required in terms of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and Companies Act. 2013. Your Board of Directors has taken all necessary steps to ensure compliance with all statutory requirements. The Directors and Key Management Personnel of your Company have complied with the approved
âCode of Ethics for Board of Directors and Senior Executivesâ of the Company.
The Report on Corporate Governance as required under the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 forms part of this Annual Report. The Auditorsâ Certificate on compliance with Corporate Governance requirements is also attached to Directors Report as Annexure âHâ. Further as required under Regulation 17(8) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, a certificate from the Whole- Time Director & CFO is being annexed with this Annual Report.
SHARE CAPITALISSUED/SUBSCRIBED/PAID UP CAPITAL
The authorized share capital of the Company is '' 70,00,00,000/- (Rupees Seventy Crores only) divided into 5,50,00,000 (Five Crore Fifty Lacs) equity shares of '' 10/- (Rupees Ten) each and 1,50,00,000 (One Crore Fifty Lacs only) Noncumulative Redeemable Preference Share of '' 10/- (Rupees Ten) each.
The paid-up equity share capital as on March 31, 2023 and as on date is '' 52,35,22,950 (Fifty Two Crore Thirty Five Lakhs Twenty Two Thousand Nine Fifty) divided into 5,23,52,295 (Five Crore Twenty Three Lakhs Fifty Two Thousand Two Hundred Ninety Five) fully paid up Equity Shares of '' 10/-(Rupees Ten Only) each and the preference share capital is '' 12,84,96,050/- (Twelve Crore Eighty Four Lacs Ninety Six Thousand Fifty) divided into 1,28,49,605 (One crore Twenty Eight Lacs Forty Nine Thousand Six Hundred Five only) fully paid up NCRPS of '' 10/- (Rupees Ten) each.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
⢠In accordance with the provisions of Section 152 of the Companies Act, 2013 and in terms of the Articles of Association of the Company, Mr. Praveen Kumar Patro (DIN: 02469361), retires by rotation at the forthcoming Annual
General Meeting and being eligible, offers himself for re-appointment.
Mr. Praveen Patro is not related to any of the Directors of the Company. Brief resume and nature of his expertise in specific functional areas are provided in Corporate Governance Report. Names of companies in which he holds directorships and memberships/ chairmanships of Board Committees and his shareholding and other information of the concerned director(s), in terms of the Regulation 36 (3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with Secretarial Standard on General Meetings (âSS-2â) is provided under the explanatory statement as an annexure in the notice convening the forthcoming Annual General Meeting.
Suitable resolution(s) for appointment / reappointment of Director(s), as referred above, will be placed for approval of the members in the forthcoming Annual General Meeting, The Board of Directors recommends his re-appointment.
⢠During the year under review (2022-2023) (at the 29th Annual General Meeting of the Company) Mr. Praveen Kumar Patro (DIN: 02469361) was appointed as an Executive Director of the Company designated as Director - Project, for a second term of 5 (five) consecutive years with effect from 30th May 2023 to 29th May 2028
In terms of the Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, read with Amendment Rules from time to time, all Independent Directors of the Company have enrolled themselves on the Independent Directors Databank and have cleared the online proficiency self-assessment test within the specified timeline unless exempted under the aforesaid Rules.
None of the Directors are disqualified under Section 164[2) of the Companies Act, 2013. During the year, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, and reimbursement of expenses incurred by them for the purpose of attending meetings of the Company. Further, there were no changes in the Key Managerial Personnel of the Company during the year under review.
The following policies of the Company are attached herewith marked as ANNEXURE âCâ and ANNEXURE âDâ: a) Policy for selection of Directors and determining Directorâs independence; and b) Nomination and Remuneration Policy.
KEY MANAGERIAL PERSONNEL
Mr. Ankur Madaan, Whole Time Director, Mr. Prabir Kumar Das, President & Company Secretary and Mr. Gobinda Chandra Nayak, Chief Financial Officer are the Key Managerial Personnel of your company in accordance with the provision of Section 2[51) and 203 of the companyâs act,
2013 read with Companies [Appointment and Remuneration of Managerial Personnel) Rules,
2014 read with SEBI [LODR) Regulations, 2015. During the year under review, there has been no change in Key Managerial Personnel.
Companyâs policy of appointment and remuneration for directors, KMP and other employees including criteria for determining qualifications, positive attributes, directorâs independence (read with Sections 178 (1) (3) (4))
The Nomination and Remuneration Committee works with the Board to determine the appropriate characteristics, skills and experience for the Board as a whole and its individual members with the objective of having a Board with diverse backgrounds and experience in business, government, education and public service. Characteristics expected of all Directors
include independence, integrity, high personal and professional ethics, sound business judgment, ability to participate constructively in deliberations and willingness to exercise authority in a collective manner.
The current policy is to have a balanced mix of executive and non-executive Independent Directors to maintain the independence of the Board, and separate its functions of governance and management. As at March 31, 2023 the Board of Directors comprises 6 Directors, of which 4 are non-executive, including one women director. The number of Independent Directors is 3, which is one half of the total number of Directors.
The Companyâs Policy relating to appointment of Directors, payment of Managerial remuneration, Directorsâ qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178[3) of the Companies Act, 201 3 is furnished in Annexure âCâ and is attached to this report.
Further, Nomination and Remuneration Policy for Directors, Key Managerial Personnel and other employees is furnished in Annexure âDâ and is attached to this report. During the year under review, there were no substantive changes in the Policy except to align the Policy with amendments made to applicable laws.
Declaration by Independent Director(s)
As required under section 149[7) of the Companies Act, 2013, The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence and / or to qualify themselves to be appointed as an Independent Directors as prescribed both under Section 149 [6) of the Companies Actâ 2013 and Regulation 16[1) [b) read with Regulation 25 of the SEBI [Listing Obligations and Disclosure Requirements) Regulations, 2015, The Board considered the
independence of each of the Independent Directors in terms of the above provisions and is of the view that they fulfill/meet the criteria of independence. The declarations are put up on the website of the Company at https://scansteels.com/wp-content/uploads/2023/05/DECLARATION-BY-ID-1496.pdf - Investor Relations Segment.
In the opinion of the Board, there has been no change in the circumstances which may affect their status as independent directors of the Company and the Board is satisfied of the integrity, expertise, and experience (including proficiency in terms of Section 150(1) of the Act and applicable rules thereunder) of all Independent Directors on the Board. Further, in terms of Section 150 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 201 4, as amended, Independent Directors of the Company have included their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs.
Familliarisation Programme for Independent Directors.
All New Independent Directors (IDs) whenever inducted into the Board are given an orientation. Presentations are made by Executive Directors (EDs) and Senior Management giving an overview of our operations, to familiarize the new IDs with the Companyâs business operations. The new IDs are given an orientation on our products, group structure, Board constitution and Procedures, matters reserved for the Board, and our major risks and risk management strategy. Visits to Plant and Factory locations are organized for the IDs to enable them to understand the business better.
The company familiarises the New and Existing Independent Directors of the Company from time to time with their roles, rights, responsibilities in the company, nature of the industry in which the company operates, business model of the company, etc. and also, by updating them about
latest amendments in Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and other Laws related to Company. Details of Same are put up on the website of the Company at https://scansteels. com/wp-content/uploads/2023/06/DETAILS-OF-FAMILIARISATION-PROGRAMMES.pdf -
Investor Relations Segment.
Separate Independent Director Meeting
In term of requirements of Schedule IV of the Companies Act, 201 3 and Regulation 25 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate meeting of the independent directors (âAnnual ID meetingâ) was convened on 31st January, 2023 and All the Independent Directors were present at the said Meeting.
The Independent Directors at the meeting reviewed the following:
a. Performance of Non-Independent Directors and the Board as a whole;
b. Performance of the Chairman of the Company,
taking into account the views of Executive Directors and Non-Executive Directors; and
c. Assess the quality, quantity and timeliness of
flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
Post the Annual ID meeting, the collective feedback of each of the Independent Directors was discussed by the Chairperson of the Nomination Remuneration Committee with the Board covering performance of the Board as a whole, performance of the non-independent directors and performance of the Board Chairman. In addition to formal meetings, interactions outside the Board meetings also take place between the Chairman and Independent Directors.
Pursuant to Regulation 17(10) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, and in compliance with the Section 134(3) (p) Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which include criteria for performance evaluation of the non-executive directors and executive directors.
The Board carried out an annual performance evaluation of its own performance, the individual Directors, as well as the evaluation of the working of the Committees of the Board pursuant to the provisions of the Act and SEBI Listing Regulations. The performance evaluation of the Chairman, Whole- Time Director and the Non- Independent Directors was carried out by Independent Directors. The performance evaluation of the Independent Directors was carried out by the entire Board in compliance with the Companies Act, 2013. The performance evaluation of all the Directors/ its committees and / or Board as a whole was also carried out by the Nomination and Remuneration Committee and NRC also review its implementation and compliance. Details of the same are given in the Report on Corporate Governance annexed hereto.
The Chairman of the Board had one-on-one meetings with the IDs. The Chairperson of the Nomination and Remuneration Committee (NRC) held separate discussions with each of the Directors of the Company and obtained their feedback on overall Board effectiveness as well as on each of the other Directors. These meetings were intended to obtain Directorsâ inputs on effectiveness of the Board/ Committee processes.
While evaluating the performance and effectiveness of the Board, various aspects of the Boardâs functioning such as adequacy of the composition and structure and quality of the Board,
time devoted by the Board to Companyâs longterm strategic issues, quality and transparency of Board discussions, execution and performance of specific duties, obligations and governance and effectiveness of board processes, information and functioning were taken into consideration. Committee performance was evaluated by the Board on the basis of their effectiveness in carrying out respective mandates, and after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc..
A separate exercise was carried out to evaluate the performance of Independent Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution to Board deliberations, independence of judgment, safeguarding the interest of the Company and focus on creation of shareholders value, ability to guide the Company in key matters, attendance at meetings, etc. The Executive Directors were evaluated on parameters such as strategy implementation, leadership skills, quality, quantity and timeliness of the information flow to the Board, etc.
The Board considered and discussed the inputs received from the Directors. Further, the IDs at their meeting reviewed the performance of nonIndependent Directors, Board as a whole and Chairman of the Board after taking into account views of Executive Directors and Non-Executive Directors.
The Directors expressed their satisfaction with the evaluation process.
The evaluation process endorsed the Board Membersâ confidence in the ethical standards of the Company, the resilience of the Board and Management in navigating the Company during challenging times, cohesiveness amongst the Board Members, constructive relationship between the Board and the Management and the openness of the Management in sharing strategic
information to enable the Board Members to discharge their responsibilities.
The Detailed Policy on Performance Evaluation of Independent Directors, Board, Committees and other individual Directors can be accessed from the website of the Company at https://scansteels. com/wp-content/uploads/2 016/06/ PERFORMANCE-EVALUATION-POLICY-FOR-BOD. pdf - Investor Relations Segment.
Based on the recommendations of the NRC, the Board has approved the Remuneration Policy for Directors, Key Managerial Personnel (KMPsâ) and all other employees of the Company. As part of the policy, the Company strives to ensure that:
⢠the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;
⢠relationship between remuneration and performance is clear and meets appropriate performance benchmarks; and
⢠remuneration to Directors, KMPs and Senior Management involves a balance between fixed and incentive pay, reflecting short, medium and long-term performance objectives appropriate to the working of the Company and its goals.
The following disclosures have been mentioned in detail under the heading âCorporate Governanceâ, part of this Annual Report: â
(i) all elements of remuneration package such as salary, benefits, etc., of all the directors;
(ii) details of fixed component and performance linked incentives along with the performance criteria;
(iii) service contracts, notice period, severance fees;
(iv) Stock option details, if any, and whether the same has been issued at a discount as well as
the period over which accrued and over which exercisable.
CODE OF INDEPENDENT DIRECTORS -SCHEDULE - IV
The Board has considered Code of Independent Directors as prescribed in Schedule IV of the Companies Act, 2013. The code is a guide to professional conduct for independent directorsâ adherence to these standards by independent directors and fulfillment of their responsibility in a professional and faithful manner will promote confidence of the investment community and regulators.
The broad items for code for independent directors are:
(i) Guidelines for Professional conduct.
(ii) Role and Functions.
(iii) Duties
(iv) Manner and process of appointment.
(v) Re-appointment on the basis of report of performance evaluation.
(vi) Resignation or Removal.
(vii) At least one Separate meeting of Independent Directors in a year without attendance of non independent directors or members of management.
(viii) Evaluation mechanism of Independent Directors by entire Board of Directors.
The Detailed Code of Conduct of Independent Directors of the Company and Code of Conduct for Board of Directors and Senior Management of the Company can be accessed on the website of the Company at www.scansteels.com - Investor Relations Segment.
Board diversity is the breadth of perspective, not the mere of various diverse traits that will benefit the organization. The Company believes
that a diverse Board will enhance the quality of the decision made by the Board by utilizing the different thoughts, perspectives, skills, qualifications, experience, knowledge, region and industry experience, cultural and geographical background, age, ethnicity, race, and gender, etc. of the Board members necessary for achieving sustainable and balanced development. The Board Diversity Policy has been adopted by the Company and sets out its approach to diversity. The Board Diversity Policy is available on the website of the Company viz. https://scansteels. com/wp-content/uploads/2022/12/POLICY-ON-BOARD-DIVERSITY.pdf
SCAN STEELSâS CODE OF CONDUCT FOR THE PREVENTION OF INSIDER TRADING
The Board of Directors has adopted the Insider Trading Policy in accordance with the requirements of the SEBI (Prohibition of Insider Trading) Regulations, 2015.
The Insider Trading Policy of the Company lays down guidelines and procedures to be followed, and disclosures to be made while dealing with shares of the Company. As well as the consequences of violation. The Policies/Code has been formulated to regulate, monitor and ensure reporting of deals by employees and to maintain the highest ethical standards of dealing in Company Securities.
The Code of Conduct to Regulate, Monitor and Report Trading by Designated Persons and their Immediate Relatives in terms of Regulation 9 of the SEBI (Prohibition of Insider Trading), Regulations, 2015, Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information formulated in terms of Regulation 8 of the SEBI (Prohibition of Insider Trading), Regulations, 2015, Policies and Procedural for inquiry in case of leak of Unpublished Price Sensitive Information, or Suspected Leak of Unpublished Price Sensitive Information in terms of Regulation 9A the SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2O18, and
Vigil Mechanism / Whistle Blower Policy in terms of Regulation 9A of the SEBI (Prohibition of Insider Trading), Regulations, 2015 is available on our website at https://scansteels.com/ssl-policies/ - Investor Relations Segment.
COMPLIANCE WITH CODE OF ETHICS FOR BOARD OF DIRECTORS AND SENIOR EXECUTIVES
All Directors and Senior Management Personnel have affirmed Compliance with the Code of Ethics for Board of Directors and Senior Executives. A Declaration to that effect is attached with The Corporate Governance Report.
The Directors state that applicable Secretarial Standards, i.e., SS-1 and SS-2, relating to âMeetings of the Board of Directorsâ and âGeneral Meetingsâ, respectively, have been duly followed by the Company.
DIRECTORS RESPONSIBILITY STATEMENT
Directorsâ Responsibility Statement Based on the framework of internal financial controls and compliance system established and maintained by the Company, work performed by the internal, statutory, cost, and secretarial auditors and including audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Companyâs internal financial controls were adequate and effective during financial year 202223.
Accordingly, Pursuant to the requirements under section 134(3)(c) and 134(5) of the Companies Act, 2013, your directors hereby state and confirm that â
a) In the preparation of the annual accounts for the year ended March 31, 2023, the applicable accounting standards read with
requirements set out under Schedule III to the Act (as amended from time to time) have been followed and there are no material departures from the same;
b) The directors 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 as at March 31, 2023 and of the profit and loss of the company for the year ended on that date;
c) The directors had taken proper and sufficient care 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) The directors had prepared the annual accounts on a going concern basis; and
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.
AUDITORS AND AUDITORâS REPORTSTATUTORY AUDITORS
At the Companyâs 21st AGM held on 30.12.2014, M/s. SRB & Associates (Firmâs Registration No. 310009E), Chartered Accountants, Bhubaneswar, were appointed as the Statutory Auditors of the Company for a term of 5 years to hold office from the conclusion of the 21st Annual General Meeting until the conclusion of the 26th Annual General Meeting of the Company.
The Board of Directors at its meeting held on 30th May, 2019 had recommended the re-appointment of M/s. SRB & Associates, Chartered Accountants, Bhubaneswar, for the Second Term and they were re-appointed with Memberâs approval soughed at the 26th AGM for the second term of 5 (five) consecutive financial years i.e., up to 2023-24. And CA K P Swain, CP No 306323, Chartered Accountant has been authorized as an auditor on behalf of the firm to conduct the audit as per the Act.
In terms of the provisions relating to statutory auditors forming part of the Companies Amendment Act, 2017, notified on May 7, 2018, ratification of appointment of Statutory Auditors at every AGM is no more a legal requirement. Accordingly, the Notice convening the ensuing AGM does not carry any resolution on ratification of appointment of Statutory Auditors.
Statutory Auditors continue to satisfy the criteria provided in section 141 of the Companies Act, 13 read with Cos. (Audit &Auditors) Rules, 2014 including any statutory modification or reenactment thereof for the time being in force.
No frauds have been reported by the Auditors under Section 143 (12) of the Companies Act, 2013 requiring disclosure in the Board Report as per section 134(3)(ca) of the Act..
Auditors did not emphasis on any matter on which directors were required to give any explanation; hence, no details regarding the same are to be provided. all other observations made by the Statutory Auditors in their report for the financial year ended 31 st March 2023 read with the explanatory notes therein are self-explanatory and therefore, do not call for any further explanation or comments from the Board under Section 134(3) of the Companies Act, 2013. The Auditorâs Report for the year under review does not contain any qualification, reservation, adverse remark, or disclaimer.
Pursuant to Section 148 [1) of the Companies Act, 2013 read with the Companies (Cost Records and Audit), Amendment Rules 2014, your Company is required to maintain cost records as specified by the Central Government and accordingly such accounts and records are made and maintained.
Pursuant to Section 148(2) of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Company is also required to get its cost accounting records audited by a Cost Auditor Accordingly, the Board at its meeting held on May 13, 2023 has on the recommendation of the Audit Committee, reappointed M/s. Ray, Nayak & Associates, Partner CMA. Chaitanya Kumar Ray, Cost Accountants, having office at MIG-26, Manorama Estate, Rasulgarh, Bhubaneswar - 751010 [Odisha), as the Cost Auditors of the Company to conduct the audit of the cost accounting records of the Company for the financial year 2023-24 on a remuneration of '' 55,000/- plus service tax as applicable and reimbursement of actual travel and out of pocket expenses.
M/s. Ray, Nayak & Associates have vast experience in the field of cost audit and have been conducting the audit of the cost records of the Company for the past several years.
The remuneration is subject to the ratification of the members in terms of Section 148 read with Rule 14 of the Companies [Audit and Auditors) Rules, 201 4 and is accordingly placed for your ratification.
The Cost Audit Report for the financial year ended 31st March, 2022 was filed in XBRL mode on 22nd September, 2022.
SECRETARIAL AUDITORS AND AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act, 2013, and the Companies
[Appointment and Remuneration of Managerial Personnel) Rules, 201 4, the Company had appointed M/s. Amarendra Mohapatra & Associates., a firm of Company Secretaries in Practice, to undertake the Secretarial Audit of the Company for the FY 2022 - 23. The Report of the Secretarial Audit carried out by M/s. Amarendra Mohapatra & Associates is annexed herewith as Annexure âEâ.
The Board at its meeting held on May 13, 2023, has re-appointed M/s. Amarendra Mohapatra & Associates, Prop. CS. Amarendra Mohapatra, a Practicing Company Secretary [CP No- 14901) having office at House No. 56/1, MIG II, Phase I, Chandrasekharpur Housing Board Colony CS. Pur, Bhubaneswar, Odisha - 751016, as Secretarial Auditor, of the Company for F.Y. 2023-24 to undertake the Secretarial Audit of the Company Pursuant to the provisions of Section 204 of the Companies Act, 201 3 read with Rule 9 of the Companies [Appointment and Remuneration of Managerial Personnel) Rules, 201 4, and Regulation 24A of SEBI [Listing Obligations and Disclosure Requirements) Regulations, 2015.
During the period under review, the Company has complied with the applicable Secretarial Standards notified by the Institute of Company Secretaries of India.
Further, The Company has also undertaken an audit for the FY 2022- 23 Pursuant to SEBI Circular No. CIR/CFD/CMD1/27/201 9 dated February 8, 2019 for all applicable compliances as per the Securities and Exchange Board of India Regulations and Circular/ Guidelines issued thereunder.
The company has received Annual Secretarial Compliance Report issued by M/s. Amarendra Mohapatra & Associates, Prop. CS. Amarendra Mohapatra, Practicing Company Secretary for the Year ended on 31st March, 2023 which was duly filed with Bombay Stock Exchange Limited. The
same can be accessed at https://scansteels. com/wp-content/uploads/2023/05/ MARCH-2023.pdf
The Annual Secretarial Compliance Report and Secretarial Audit report contains No observation or qualification requiring explanation or comments or action to be taken by the Board under Section 134(3)(f)(ii) of the Companies Act, 2013.
on the recommendation of the Audit Committee, The Board at its meeting held on 25th August, 2023 has appointed M/s. P.A. & Associates; Chartered Accountants, having office at - 2nd Floor, Balaji Towers, G.M. Collage Road, Sambalpur - 768001 (Odisha), PAN No. of the Firm - AAFFP2414G, ICAI Registration No. 313085E, as an Internal Auditor of the Company for the financial year 2023-24. pursuant to Section 138 of the Companies Act, 2013 read with Rule No. 13 of the Companies (Accounts) Rules, 2014.
Audit Committee is constituted as per Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with Section 177 of the Companies Act, 2013. Composition of Audit Committee is as per Section 177 (8) of Companies Act, 2013. The Prime Objective of the Committee is to monitor and provide effective supervision of the Management âs financial reporting process, to ensure accurate and timely disclosures, with the highest levels of transparency, integrity and quality of financial reporting and to review matters related to SEBI (Prohibition of Insider Trading), Regulations, 2015.
Audit Committee, comprises Majority of Independent Directors. The Audit Committee oversees the Companyâs financial reporting process, approves related-party transactions and regularly reviews financial statements, changes in accounting policies and practices if any, audit plans, significant audit findings, adequacy of internal
controls, compliance with accounting standards, appointment of statutory auditors among others. Composition, Terms of reference and Details of Meeting of the Committee is explained in Detail in the Corporate Governance Part of this Annual Report.
There was no recommendation as such in the Financial Year 2022-2023 from the Audit Committee which was not accepted by the Board.
In pursuance of Section 177(9) of the Companies Act, 2013 and Regulation 22 read with Regulation 4(2)(d)(iv) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, Vigil Mechanism has been Constituted for directors and employees to report genuine concerns and Audit committee shall oversee the vigil mechanism through the committee and provide adequate safeguards against victimization of employees and directors who availed of the vigil mechanism and have a direct access to the chairman of the audit committee in exceptional case. In case of repeated frivolous complaints being filed by the director or an employee the audit committee may take suitable action including reprimand if necessary.
Further, Vigil Mechanism / Whistle Blower Policy in terms of Regulation 9A of the SEBI (Prohibition of Insider Trading), Regulations, 2015, can be accessed from our website at https://scansteels. com/wp-content/uploads/2023/01/SCAN-STEELS-LIMITED-WB-OR-VM-POLICY.pdf - Investor Relations Segment.
CONSTITUTION OF STAKEHOLDERS RELATIONSHIP COMMITTEE
The Board has constituted a Stakeholders Relationship Committee According to 178 (5) of the Companies Act 2013 and Regulation 20 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The SR
Committee is primarily responsible to review all matters connected with the Companyâs transfer of securities and redressal of shareholdersâ / investorsâ / security holdersâ complaints.
Composition and Terms of Reference of the SR Committee is Detailed in Corporate Governance Report Part of this Annual Report.
NOMINATION AND REMUNERATION COMMITTEE
The Board has set up a Nomination and Remuneration Committee In compliance with Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This Committee is responsible for making Policy pursuant to Proviso to Section 178 (3) & (4) read with Rules made there under and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and / or recommending to the Board, the remuneration package of Directors, KMP & other employees, including their annual increment and commission if any, after reviewing their performance and also to decide the Criteria for determining appointment Qualifications, Positive attributes, and Independence of a Director.
The Details Regarding the Composition of the Committee, Meetings held and Terms Of reference etc.. is Detailed in Corporate Governance Report Part of this Annual Report. And the Detailed Nomination and Remuneration Policy is attached as Annexure âDâ to this Report.
CONSTITUTION OF CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
we understand that sustainable growth can only be achieved when our communities flourish. In our pursuit of driving meaningful change, we have prioritised key areas such as education, healthcare, Rural Infrastructural Development environmental sustainability, Empower communities with sustainable livelihoods and more.
In View of the above The Board has Constituted Corporate Social Responsibility Committee to Comply the Section 1 35 of the Companies Act, 2013. Corporate Social Responsibility Committee formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate a list of CSR projects or programmes which a Company plans to undertake while also recommending the amount of expenditure to be incurred on each of the activities and to monitor the CSR policy of the Company from time to time. Composition and Terms of Reference of the Committee is Detailed in Corporate Governance Report Part of this Annual Report.
DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.
The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under.
Further, 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.
Your directors state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
In compliance with Section 108 of the Companies Act, 2013, Rule 20 of the Companies (Management and Administration) Rules, 2014, as substituted by the Companies (Management and Administration) Amendment Rules, 2015 and Regulation 44 of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, the company is pleased to provide members facility to exercise their votes for all the resolutions detailed in the Notice of the 30th Annual Report of the company and the business may be transacted through e-voting. The company has engaged the services of Central Depository Services Limited (CDSL) as the authorized agency to provide the e-voting facility.
The Company continues to remain listed with Bombay Stock Exchange Limited and annual listing fee for the same has been paid.
DISCLOSURESNUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
During the year, Twelve Board Meeting were convened and held, details of the meetings of the Board and various Committees of your Company are set out in the Corporate Governance Report which forms part of this Annual Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and Regulation 17 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Pursuant to Section 92(3) read with section 134(3)(a) of the Companies Act, 2013, copies of the Annual Return of the Company prepared in accordance with Section 92(1) of the Act read with Rule 11 & 12 of the Companies (Management and Administration) Rules, 2014 are placed on the website of the Company and are accessible at the web-link: https://scansteels.com/wp-content/ uploads/2023/07/MARCH-2023-1.pdf
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
There were no loans, made by the Company under Section 186 of the Companies Act, 2013 during the year under review also no loans were given to any firms or companies in which Directors are interested. However, the company has made investment in quoted securities as a long-term investment and the details of the investments covered under the provisions of section 1 86 of the companyâs act, 2013 are given in the financial statements.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The details of conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure âFâ and is attached to this report.
PARTICULARS OF EMPLOYEES (RULE 5(2), AND 5(3)) AND MANAGERIAL REMUNERATION (RULE 5(1)) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014, AND UNDER SECTION 197(12) OF THE ACT
The total number of employees as on 31st March, 2023 stood at 2002.
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) 5(2) and 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are provided in the Annexure âGâ in this Report.
MATERIAL CHANGES AND COMMITMENTS, IF ANY, 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
In term of Section 134[3)[l) of the Companies Act, 2013, no material changes and commitments have occurred after the close of the year till the date of this Report, which could affect the financial position of the Company.
Your directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
i. Issue of equity shares with differential rights as to dividend, voting or otherwise.
ii. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.
iii. No significant or material orders were passed by the Courts or Tribunals which impact the going concern status and Companyâs operations in future.
iv. There is No Revision of Financial Statement or Board Report Adopted by the Company, thereby there is no Disclosures to be made by the Company u/s 131 of the Companies Act, 2013 for Voluntary Revision of Financial Statement.
v. Your Company has No Holding or Subsidiary Company and thereby, Whole time Director of the Company do not receive any commission or remuneration from the same. Accordingly, there are no Details to be provided by the Company pursuant to Section 197 [14) of the Companies Act, 2013.
Your directors wish to place on record their gratitude for the valuable guidance and support rendered by the Government of India, various State Government departments, Financial Institutions, Banks and various stakeholders, such as, shareholders, customers and suppliers, among others. The Directors also commend the continuing commitment and dedication of the employees at all levels, which has been critical for the Companyâs success. The Directors look forward to their continued support in future.
Mar 31, 2018
Dear Shareholders,
The Directors have pleasure in presenting the Twenty Fifth Annual Report of your Company together with the Audited Financial Statements for the year ended March 31, 2018.
FINANCIAL HIGHLIGHTS / RESULTS
The Directors take pleasure in presenting the 25th Annual Report on the business and operations of your Company along with the financial statements for the year ended 31 March, 2018.
(Rs. In Lacs)
2017-2018 |
2016-2017 |
|
Gross Turnover and other Income |
51,973.51 |
42,024.03 |
Profit / [Loss] before Tax |
549.20 |
[1,493.34] |
Less : Tax Expenses |
||
Current Tax |
132.94 |
- |
Deferred Tax [Charge]/ Credit |
613.05 |
[3,12.77] |
Profit After Tax |
[196.78] |
[1,180.57] |
Less : Prior Period Expenses |
- |
- |
Net Profit/[Loss] for the year |
[196.78] |
[1,180.57] |
Add: Other Comprehensive Income |
[18.32] |
13.96 |
Total Comprehensive Income for the year |
[215.10] |
[1166.61] |
Surplus Brought Forward from last balance sheet |
[575.23] |
600.21 |
Add: Earlier Year Adjustment [Tax] |
- |
5.13 |
Less: Adjustment for net carrying amount of tangible fixed assets |
- |
- |
Balance at the end of the year [excluding comprehensive income] |
[772.01] |
[575.23] |
INDIAN ACCOUNTING STANDARD (IND AS)
In accordance with the notification issued by the Ministry of Corporate Affairs [MCA], your Company has complied with the new Accounting Standards, IND AS in preparation of financial statements under Indian Accounting Standards [Ind AS] prescribed under section 133 of the Companies Act 2013 read with rule 3 of the Companies [Indian Accounting Standards Rules, 2015 and Companies [Indian Accounting Standards] Amendment Rules, 2016 with effect from 1st April 2016. Ind AS has replaced the existing Indian GAAP prescribed under section 133 of the Companies Act, 2013, read with rule 7 of Companies [Accounts] Rules, 2014.
Accordingly the Company has adopted Indian Accounting Standard [âInd ASâ] with effect from 1st April 2016 with the transition date of 1st April 2015 and the financial Statements for the year ended 31st March 2018 has been prepared in accordance with Ind AS.
RESULTS OF OPERATIONS & STATE OF AFFAIRS OF THE COMPANY
The gross turnover from manufacturing operation and including of other income , the company has achieved Rs.51,973.51 Lacs which is incremental income of Rs.42,024.03 Lacs as compared to corresponding period of last fiscal . There is an enhancement of about 24% in gross sales and other income due to incremental quantity movement as compared to last fiscal. The net Loss after tax was Rs.1.96 crore as compared to previous year loss of Rs.11.81 crores. The reason of Loss is unprecedented movement in realization price of the finished product of the company.
The Company produced 68957.080 tonnes [MT] of TMT Rods in FY 2017-18, increased by 10.25% in compare to the previous year and sold 69281.020MT, increased by 6.72% in compare to previous year.
The Companyâs sustained efforts towards backend cost control, new product launches and efficiency improvement measures, supported the insulation and limited the impact on the profitability margins. The Companyâs ability to better utilise capacities and product range will help derive better margins out of the businesses. The outlook of each business has been discussed in detail in the âManagement Discussion & Analysisâ which forms a part of this Annual Report.
PRODUCTION & TURNOVER / SALES
The production of steel product during the year under report, compared to the previous year is given below.
Item |
Production |
(Qty in MT) |
Turnover (Qty in MT) |
|
Years ended |
Years ended |
Years ended |
Years ended |
|
31st March, 2018 |
31st March, 2017 |
31st March, 2018 |
31st March, 2017 |
|
Sponge Iron |
151785.000 |
148179.120 |
86436.580 |
105152.170 |
MS Ingot/ Billet |
76395.000 |
68767.000 |
17379.440 |
7865.760 |
Long and Flat Products |
68957.080 |
62542.000 |
69281.020 |
64919.270 |
OUTLOOK
The outlook for its margins and profitability for this business depends on overall economic outlook. This company is likely to benefit most from an upturn in the business cycle, given its scale of operations and its competitive cost positions. Today, it is truly a market-driven company, making innovative changes and technological improvements, leaving no stone, unturned in fulfilling dreams of its founding fathers, tuning every activity to meet the subtle demands of its customers.
MARKETING ARRANGEMENT
The Company has a Well-organized Marketing Department We have around very good market share in Odisha and also catering to outside states. We are in the process expanding our market plan in India by appointment of Dealers at other major cities across India. We also directly sell to the Customers through our Marketing staffs and agents.
ENVIRONMENT
The Company aims to be the benchmark for environmental stewardship in Steel Industry by focusing on climate change mitigation and reducing its resource footprint. Given the nature of the business and the industry that we operate in, the Company recognises its impact on the environment and is conscious of its duty towards safeguarding the environment. The Company is committed to responsible use and protection of the natural environment through conservation and sustainable practices. The Company focuses on operational excellence aimed at resource efficiency through a âPrevent, Minimise, Recover, Reuse and Recycleâ hierarchical approach to reducing its ecological footprint.
RESEARCH AND DEVELOPMENT
The competitive business environment in which the Company operates makes innovation imperative for success of the business. Recognizing the need to improve, expand and innovate, the Company is concentrating efforts on research and development of alternate materials and new products.
The Company has started working on the technology roadmap that aligns with itâs vision of becoming a leader among the innovation driven organizations. Venturing into new market areas is another focus area for research and development and accordingly, a number of new product developments have been targeted.
DIVIDEND
In view of the losses incurred during the FY 2017-18, your Board of Directors has not recommended any dividend on equity shares as well as on preference shares.
PROSPECTS
In terms of Regulation 34[2][e] of the SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015, a report on the Management Discussion and Analysis covering prospects is provided as a separate section in the Annual Report.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND
Your Company did not recommend any dividend therefore there were no such funds which were required to be transferred to Investor Education and Protection Fund [IEPF].
TRANSFER TO RESERVE
During the financial year 2017-18, no amount has been transferred to reserve account. There is a loss of Rs. [772.02] Lacs in retained earning accounts is to be carried forward to next year.
CONSOLIDATED FINANCIAL STATEMENT
As per the definition in the Companies Act, 2013 [âthe Actâ] and Ind AS - 110 on Consolidated Financial Statements read with Ind AS - 28 on Investment in Associates and Ind AS-31 Interest in Joint Venture, the company does not have any investment in the Subsidiary Company, Joint Ventures Company or any other Associates
Company therefore the Consolidation of Financial Statements is not applicable.
DETAILS OF SUBSIDIARY/JOINT VENTURES/ ASSOCIATE COMPANIES
The Company does not have any Subsidiary, Associates and Joint venture Companies there by; there are no details to be provided under [Rule 8 of the Companies [Accounts] Rules, 2014]. Read with section 129 [3] of the Companies Act, 2013.during the year under review, no company has become or ceased as subsidiary, associate or joint venture companies.
FIXED DEPOSITS COVERED UNDER CHAPTER V OF THE COMPANIES ACT, 2013
Pursuant to Section 73, 74 & 76 Rule 8[5][v] of Companies [Accounts] Rules, 2014. The details relating to deposits, covered under Chapter V of the Act are as follows:-
a. accepted during the year - ''Nil
b. remained unpaid or unclaimed as at the end of the year -Nil
c. whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved -
i. at the beginning of the year - Nil
ii. maximum during the year - Nil
iii. at the end of the year - Nil
There was No default in repayment of deposits or payment of interest thereon during the year by Company and accordingly No details to be provided by the Company in this regard.
The details of deposits which are not in compliance with the requirements of Chapter V of the Act -
Your Company has not accepted any deposits which are not in Compliance with the requirement of Chapter V of the Act.
CHANGE IN THE NATURE OF BUSINESS, IF ANY
During the year under review, there are no changes in the nature of business. The Company is continuing into the Steel Manufacturing Business.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS.
INTERNAL CONTROL SYSTEMS AND AUDIT OVERVIEW
The Company has in place adequate internal financial controls with reference to financial statements, commensurate with the size and nature of its business, forms an integral part of the Companyâs corporate governance policies.
INTERNAL CONTROL
The Company has a proper and adequate system of internal control commensurate with the size and nature of its business. Internal control systems are integral to the Companyâs corporate governance policy.
Some of the significant features of internal control systems include:
- Documenting of policies, guidelines, authorities and approval procedures, encompassing the Companyâs all primary functions.
- Deploying of an ERP system which covers most of its operations and is supported by a defined on-line authorization protocol.
- Ensuring complete compliance with laws, regulations, standards and internal procedures and systems.
- De-risking the Companyâs assets/resources and protecting them from any loss.
- Ensuring the accounting systemâs integrity proper and authorised recording and reporting of all transactions.
- Preparing and monitoring of annual budgets for all operating and service functions.
- Ensuring the reliability of all financial and operational information.
- Forming an Audit committee of the Board of Directors, comprising Independent Directors. The Audit Committee regularly reviews audit plans, significant audit findings, adequacy of internal controls, and compliance with accounting standards and so on.
- Forming a comprehensive Information Security Policy and continuous up-gradation of IT Systems.
The internal control systems and procedures are designed to assist in the identification and management of risks, the procedure-led verification of all compliance as well as an enhanced control consciousness.
INTERNAL AUDIT
The Company has a strong internal audit department reporting to the Audit Committee comprising Directors and Independent Directors who are experts in their field. The scope of work, authority and resources of Internal Audit [IA] are regularly reviewed by the Audit Committee and its work is supported by the services of M/s. GRC & Associates, the Internal Auditor of the Company.
The Company continued to implement their suggestions and recommendations to improve the control environment. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Internal Auditors findings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations.
Through IA function the Board obtains the assurance it requires to ensure that risks to the business are properly identified, evaluated and managed. IA also provides assurance to the Board on the effectiveness of relevant internal controls.
Audit plan and execution
Internal Audit department has prepared a risk-based Audit Plan. The frequency of audit is decided by risk ratings of areas functions. The audit plan is carried out by the internal team. The audit plan is reviewed periodically to include areas which have assumed significant importance in line with the emerging industry trend and the aggressive growth of the Company.
In addition, the audit committee also places reliance on internal customer feedback and other external events for inclusion of areas into the audit plan.
INTERNAL FINANCIAL CONTROLS
As per Section 134 [5] [e] of the Companies Act 2013, the Directors have an overall responsibility for ensuring that the Company has implemented robust systems and framework of internal financial controls. This provides the Directors with reasonable assurance regarding the adequacy and operating effectiveness of controls with regards to reporting, operational and compliance risks. To enable them to meet these responsibilities, the Company has devised appropriate systems and framework including proper delegation of authority, policies and procedures, effective IT systems aligned to business requirements, risk based internal audit framework, risk management framework and whistle blower mechanism.
The Audit Committee regularly reviews the internal control system to ensure that it remains effective and aligned with the business requirements. Where weaknesses are identified as a result of the reviews, new procedures are put in place to strengthen controls. These are in turn reviewed at regular intervals.
The Company has developed a framework for designing and assessing effectiveness of internal controls over financial reporting & financial statements and has already laid down entity level policies and process level standard operating procedures.
The entity level policies comprise anti-fraud policies [code of conduct, including conflict of interest, confidentiality and whistle-blower policy] and other policies [organization structure, roles and responsibilities, insider trading policy, HR policy, related party policy, prevention of sexual harassment policy, IT security policy, business continuity and disaster recovery plan and treasury risk management policy]. The Company has also prepared Standard Operating Practices [SOP] for each of its processes of revenue to receive, procure to pay, hire to retire, finance and accounts, fixed assets, treasury, inventory, manufacturing operations, and administrative expenses.
Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and During the year, such controls were tested and no reportable material weakness in the design or operation were observed and such systems were adequate and operating effectively.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
All contracts / arrangements / transactions entered by the Company during the financial year with related parties referred to in Section 188 [1] of the Companies Act, 2013 were in the ordinary course of business and on an armâs length basis and Detail of which is furnished in the Annexure âAâ in Form AOC-2 attached with this Report in compliance with Section 134 [3] [h] read with188 [2] of the Companies Act, 2013.
Further, there are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee as also the Board for approval.
The Company has developed an Internal Guide on Related Party Transactions Manual and prescribed, Standard Operating Procedures for purpose of identification and monitoring of such transactions. none of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.
Moreover, on the recommendations of the Audit Committee, your Board had revised the Policy on Related Party Transactions in accordance with Securities and Exchange Board of India [Listing Obligations and Disclosure Requirements] Regulations, 2015 and as per the amended provisions of the Companies Act, 2013.The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Companyâs website at www.scansteels. com - Investor Relations Segment. The Policy intends to ensure that proper reporting; approval and disclosure processes are in place for all transactions between the Company and Related Parties. This Policy specifically deals with the review and approval of Related Party Transactions keeping in mind the potential or actual conflicts of interest that may arise because of entering into these transactions. All Related Party Transactions are placed before the Audit Committee for review and approval. All Related Party Transactions are subjected to independent review by a reputed accounting firm to establish compliance with the requirements of Related Party Transactions under the Companies Act, 2013 and Regulation 23 of the Securities and Exchange Board of India [Listing Obligation and Disclosure Requirements] Regulations, 2015.
Your Directors draw attention of the members to Note 30 to the financial statement which sets out related party disclosures.
ISO 9002 CERTIFICATION
Your company is having status of ISO 9001, ISO 14001 and ISO 18001 certification, which is internationally recognized for the production, quality control and Environmental as well as OHSAS respectively.
CREDIT RATING
During the year, the credit rating for long term debt/facilities/FD have not been rated due to Non Performing Asset [NPA] declared by Banks/ lenders.
AUTHORITY TO DETERMINE MATERIALITY OF AN EVENT AND DISCLOSURE OF THE SAME TO STOCK EXCHANGE UNDER REGUALTION 30(5) OF SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGAULTION, 2015
Mr. Ankur Madaan, Whole- Time Director, of the Company, and Mr. Prabir Kumar Das, Company Secretary and Compliance Officer of the Company and Mr. Gobinda Chandra Nayak, Chief Financial Officer of the Company authorized by the Board for the purpose of determining the materiality of an event or information, in terms with the Companyâs Policy on disclosure of material event / information and archival policy to comply with the Provisions of Regulation 30 [5] of the SEBI [ Listing Obligations and Disclosure Requirements] Regulations, 201 5 and they are jointly and severally authorized to make necessary disclosure to stock exchanges regarding the same on behalf of the Company.
BRANDING INITIATIVE
The âSHRISTIIâ brand for its TMT bars are well accepted in the market in varied segments and sectors with wide customer base.
INSURANCE
The Assets of the company are adequately insured against the loss of fire, riot, earthquake, loss of profit etc, and other risk which is considered by management, In addition to this coverage, a statutory public liability insurance policy has been taken to cover by the company for providing against the public liability arising out of industrial accidents for employees working in plants.
CUSTOMER RELATIONSHIP
The Company endeavors to develop and sustain long-term value-creating partnerships with our customers and channel partners through a wide range of product offerings, innovative services and unique solutions.
FINANCE
During the year, the lead banker State Bank of India has approved the restructuring proposal and has executed all related documents for restructuring of the facility and has filed with the Ministry of Corporate Affairs towards creation/ modification of charges in its favour. The State Bank of India has recovered all the scheduled repayments along with overdue [till the date of recovery] as per proposal approved vide letter dated March 17, 2018. Other members to the consortium are in the process of up gradation of the account.
BANKERS AND CONSORTIUM ARRANGEMENT
The Company has consortium arrangement of their bankers with State Bank of India as Lead Bank. This consortium arrangement is well defined and takes care of companyâs credit facilities requirement from time to time. The consortium meetings hold quarterly in regular basis and also visit companyâs plant from time to time as per their requirement.
SAFETY
The company has continued to scale up safety performance at all locations. Safety measures have been strengthened and employees are being trained to think on hazards/risks associated with their job. Systems have been established to make employees responsible and accountable for safety. Good safety performance is being rewarded. While Safety has been included as a corporate value, the main objective is to achieve better standard of safety in the shortest possible time.
HUMAN RESOURCE DEVELOPMENT AND PERSONNEL
The company has been given much emphasis on Human Resources Development and thus has been well recognized in the steel industrial for sound Human Resources Management. Over a period of time, we have built and nurtured a dedicated and excellent workforce and also recruiting new people in order to meet the revival plans of the company. The Company has emerged as a true national firm with cosmopolitan atmosphere.
The companyâs HR polices and process is as well aligned to effectively suit its expanding business horizons and future manpower requirement. This has been achieved by continuously stressing upon training & development, empowerment and creating a compelling work environment and maintaining well structured reward & recognition mechanism. Company is committed to the welfare of its people and their families and to improve the quality of their life by providing the required facilities. During the year under the review, industrial relations at all units of the Company continued to be cordial and peaceful.
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility is the continuing commitment by the business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large. As a part of its policy for corporate social responsibility, the Company is associated with charitable and social activities and thereby playing a pro-active role in the socioeconomic growth. In structuring its efforts to the various aspects of Corporate Social Responsibilities, the Company takes account guidelines and statements issued by stakeholders and other regulatory bodies.
The management has adopted corporate social responsibility [CSR] well at par with its business, with the objective of creating wealth in the community with focus on education, health, water and society. Social welfare, community development, economic and environmental responsibilities are at the core of the CSR of the Company.
The Corporate Social Responsibility Committee [CSR Committee] Composition and Terms of reference of which is detailed in the Corporate Governance Part of this Annual Report, has formulated and recommended to the Board, a Corporate Social Responsibility Policy [CSR Policy] indicating the activities to be undertaken by the Company, which has been approved by the Board.
The key philosophy of all CSR initiatives of the Company is guided by three core commitments of Scale, Impact and Sustainability.
The Company has identified six focus areas of engagement which are as under:
- Rural Transformation: Creating sustainable livelihood solutions, addressing poverty, hunger and malnutrition.
- Health: Affordable solutions for healthcare through improved access, awareness and health seeking behavior.
- Education: Access to quality education, training and skill enhancement.
- Environment: Environmental sustainability, ecological balance, conservation of natural resources.
- Water: The Company makes affordable solution for water crises in the local area within the factory.
The Company would also undertake other need based initiatives in compliance with Schedule VII to the Act.
The disclosures required to be made as per Rule 9 of Companies [Corporate Social Responsibility Policy] Rules, 2014 is annexed to this report as Annexure âBâ.
The CSR Policy of the Company is available on the companyâs website at www.scansteels.com -Investor Relations Segment.
RISK MANAGEMENT
The Companyâs robust risk management framework identifies and evaluates business risks and opportunities. The Company recognizes that these risks need to be managed and mitigated to protect its shareholders and other stakeholderâs interest, to achieve its business objectives and enable sustainable growth. The risk frame work is aimed at effectively mitigating the Companyâs various business and operational risks, through strategic actions. Risk management is embedded in our critical business activities, functions and processes. The risks are reviewed for the change in the nature and extent of the major risks identified since the last assessment. It also provides control measures for risks and future action plans. Pursuant to the requirement of Regulation 21 of the Securities and Exchange Board of India [Listing Obligation and Disclosure Requirements] Regulations, 2015, the Company has constituted a sub-committee of Directors to oversee Enterprise Risk Management Framework to ensure execution of decided strategies with focus on action and monitoring risks arising out of unintended consequences of decisions or actions and related to performance, operations, compliance, incidents, processes, systems and transactions are managed appropriately. The Company believes that the overall risk exposure of present and future risks remains within risk capacity.
A Risk Management Policy was reviewed and approved by the Committee and which can be accessed on the website of the Company at www. scansteels.com - Investor Relations Segment.
GOODS AND SERVICES TAX (GST)
The introduction of Goods and Services Tax [GST] is a very significant step in the field of indirect tax reforms in India. By amalgamating a large number of Central and State taxes into a single tax, it would mitigate cascading or double taxation in a major way and pave the way for a common national market. The transition to GST scenario is a major change process and the Company has established a dedicated team to evaluate the impact analysis and carry out changes to the business process & IT systems as per the GST framework.
CORPORATE GOVERNANCE
Transparency is the cornerstone of your Companyâs philosophy and all requirements of Corporate Governance are adhered to both in letter and spirit. All the Committees of the Board of Directors meets at regular intervals as required in terms of SEBI [Listing Obligations & Disclosure Requirements] Regulations, 2015 and Companies Act. 2013. Your Board of Directors has taken all necessary steps to ensure compliance with all statutory requirements. The Directors and Key Management Personnel of your Company have complied with the approved âCode of Ethics for Board of Directors and Senior Executivesâ of the Company.
The Report on Corporate Governance as required under the SEBI [Listing Obligations & Disclosure Requirements] Regulations, 2015 forms part of this Annual Report. The Auditorsâ Certificate on compliance with Corporate Governance requirements is also attached to Directors Report as Annexure âIâ. Further as required under Regulation 1 7[8] of SEBI [Listing Obligations & Disclosure Requirements] Regulations, 2015, a certificate from the Whole- Time Director & CFO is being annexed with this Annual Report.
SHARE CAPITAL
ISSUED/SUBSCRIBED/PAID UP CAPITAL
The authorized share capital of the Company is Rs.70,00,00,000/- [Rupees Seventy Crores only] divided into 5,50,00,000 [Five Crore Fifty Lacs] equity shares of Rs.10/- [Rupees Ten] each and 1,50,00,000 [One Crore Fifty Lacs only] Non-cumulative Redeemable Preference Share of Rs.10/- [Rupees Ten] each.
On 04.04.2017 the allottee[s] had exercised their right to convert 8,00,000 warrants into equity shares of Rs.10/- each out of total allotted to them. Accordingly, During the Year under review the company has allotted 8,00,000 Equity Shares of Rs.10 / - each on Conversion of Warrants in to Equity Shares.
There were No outstanding Warrants of the company as on March 31, 2018 which was to be convertible into equity shares.
The paid-up equity share capital as on March 31, 2018 and as on date is Rs.52,35,22,950 [Fifty Two Crore Thirty Five Lakhs Twenty Two Thousand Nine Fifty] divided into 5,23,52,295 [Five Crore Twenty Three Lakhs Fifty Two Thousand Two Hundred Ninety Five] fully paid up Equity Shares of Rs.10/- [Rupees Ten Only] each and the preference share capital is Rs.12,84,96,050/- [Twelve Crore Eighty Four Lacs Ninety Six Thousand Fifty] divided into 1 ,28,49,605 [One crore Twenty Eight Lacs Forty Nine Thousand Six Hundred Five only] fully paid up NCRPS of Rs.10/- [Rupees Ten] each.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
- In accordance with the provisions of Section 152 of the Companies Act, 2013 and in terms of the Articles of Association of the Company, Mr. Rajesh Gadodia [DIN: 00574465], retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment.
The proposal regarding the re-appointment of the aforesaid Director is placed for your approval. The Board of Directors recommends his re-appointment.
- Mr. Praveen Kumar Patro [DIN: 02469361], was appointed as an Additional Director and designated as the Executive Director [Director-Project] w. e. f. 30/05/2018. Mr. Praveen Kumar Patro shall hold office till the date of the forthcoming Annual General Meeting [AGM].
Your company has received a notice under section 160 of the companies act, 2013 from a member, signifying his intension to propose the name of Mr. Praveen Kumar Patro for appointment as a director of the company in the forthcoming Annual General Meeting.
Suitable resolution[s] for appointment / reappointment of Director[s], as referred above, will be placed for approval of the members in the forthcoming Annual General Meeting. The brief resume and other information of the concerned director[s], in terms of the Regulation 26[4] and 36 [3] of SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015 have been detailed as an annexure in the notice convening the forthcoming Annual General Meeting.
During the year, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, and reimbursement of expenses incurred by them for the purpose of attending meetings of the Company.
KEY MANAGERIAL PERSONNEL
Mr. Ankur Madaan, Whole Time Director, Mr. Prabir Kumar Das, President & Company Secretary and Mr. Gobinda Chandra Nayak, Chief Financial Officer are the Key Managerial Personnel of your company in accordance with the provision of Section 2[51] and 203 of the companies act, 2013 read with Companies [Appointment and Remuneration of Managerial Personnel] Rules, 2014 read with SEBI [LODR] Regulations, 2015.
Companyâs policy of appointment and remuneration for directors, KMP and other employees including criteria for determining qualifications, positive attributes, directorâs independence (read with Sections 178 (1) (3) (4))
The Nomination and Remuneration Committee works with the Board to determine the appropriate characteristics, skills and experience for the Board as a whole and its individual members with the objective of having a Board with diverse backgrounds and experience in business, government, education and public service. Characteristics expected of all Directors include independence, integrity, high personal and professional ethics, sound business judgment, ability to participate constructively in deliberations and willingness to exercise authority in a collective manner.
The current policy is to have a balanced mix of executive and non-executive Independent Directors to maintain the independence of the Board, and separate its functions of governance and management.
The Companyâs Policy relating to appointment of Directors, payment of Managerial remuneration, Directorsâ qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178[3] of the Companies Act, 2013 is furnished in Annexure âCâ and is attached to this report.
Further, Nomination and Remuneration Policy for Directors, Key Managerial Personnel and other employees is furnished in Annexure âDâ and is attached to this report.
Declaration by Independent Director(s)
As required under section 149[7] of the Companies Act, 2013, The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence and / or to qualify themselves to be appointed as Independent Directors as prescribed both under Section 149 [6] of the Companies Actâ 2013 and Regulation 25 of the SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015 , The Board considered the independence of each of the Independent Directors in terms of the above provisions and is of the view that they fulfill/meet the criteria of independence. And the declarations are put up on the website of the Company at www. scansteels.com - Investor Relations Segment.
Familliarisation Programme for Independent Directors.
All New Independent Directors [IDs] whenever inducted into the Board are given an orientation. Presentations are made by Executive Directors [EDs] and Senior Management giving an overview of our operations, to familiarize the new IDs with the Companyâs business operations. The new IDs are given an orientation on our products, group structure, Board constitution and Procedures, matters reserved for the Board, and our major risks and risk management strategy. Visits to Plant and Factory locations are organized for the IDs to enable them to understand the business better.
The company familiarises the New and Existing Independent Directors of the Company from time to time with their roles, rights, responsibilities in the company, nature of the industry in which the company operates, business model of the company, etc.. and also by updating them about latest amendments in Companies Act, 2013 and SEBI [Listing Obligations and Disclosure Requirements] Regulations, 201 5. Details of Same are put up on the website of the Company at www.scansteels.com - Investor Relations Segment.
Separate Independent Director Meeting
In term of requirements of Schedule IV of the Companies Act, 201 3 and Regulation 25 of Securities and Exchange Board of India [Listing Obligations and Disclosure Requirements] Regulations, 2015, a separate meeting of the independent directors [âAnnual ID meetingâ] was convened on 1 4th February, 201 8 and All the Independent Directors were present at the said Meeting.
The Independent Directors at the meeting reviewed the following:
a. Performance of Non-Independent Directors and the Board as a whole;
b. Performance of the Chairman of the Company, taking into account the views of Executive Directors and Non-Executive Directors; and
c. Assess the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
Post the Annual ID meeting, the collective feedback of each of the Independent Directors was discussed by the Chairperson of the Nomination Remuneration Committee with the Board covering performance of the Board as a whole, performance of the non-independent directors and performance of the Board Chairman. In addition to formal meetings, interactions outside the Board meetings also take place between the Chairman and Independent Directors.
BOARD ANNUAL EVALUATION
Pursuant to Regulation 1 7[1 0] of SEBI [Listing Obligations & Disclosure Requirements] Regulations, 2015, and In compliance with the Section 1 34[3] [p] Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which include criteria for performance evaluation of the non-executive directors and executive directors.
The Board carried out an annual performance evaluation of its own performance, the individual Directors ,as well as the evaluation of the working of the Committees of the Board. The performance evaluation of the Chairman, Whole- Time Director and the Non- Independent Directors was carried out by Independent Directors. The performance evaluation of the Independent Directors was carried out by the entire Board in compliance with the Companies Act, 2013. The performance evaluation of all the Directors was also carried out by the Nomination and Remuneration Committee. Details of the same are given in the Report on Corporate Governance annexed hereto.
The Chairman of the Board had one-on-one meetings with the IDs. The Chairperson of the Nomination and Remuneration Committee [NRC] held separate discussions with each of the Directors of the Company and obtained their feedback on overall Board effectiveness as well as on each of the other Directors. These meetings were intended to obtain Directorsâ inputs on effectiveness of the Board/ Committee processes.
While evaluating the performance and effectiveness of the Board, various aspects of the Boardâs functioning such as adequacy of the composition and quality of the Board, time devoted by the Board to Companyâs long-term strategic issues, quality and transparency of Board discussions, execution and performance of specific duties, obligations and governance were taken into consideration. Committee performance was evaluated on the basis of their effectiveness in carrying out respective mandates. A separate exercise was carried out to evaluate the performance of Independent Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution to Board deliberations, independence of judgment, safeguarding the interest of the Company and focus on creation of shareholders value, ability to guide the Company in key matters, attendance at meetings, etc. The Executive Directors were evaluated on parameters such as strategy implementation, leadership skills, quality, quantity and timeliness of the information flow to the Board, etc.
The Board considered and discussed the inputs received from the Directors. Further, the IDs at their meeting reviewed the performance of non Independent Directors, Board as a whole and Chairman of the Board after taking into account views of Executive Directors and Non-Executive Directors.
The Directors expressed their satisfaction with the evaluation process.
The evaluation process endorsed the Board Membersâ confidence in the ethical standards of the Company, the resilience of the Board and Management in navigating the Company during challenging times, cohesiveness amongst the Board Members, constructive relationship between the Board and the Management and the openness of the Management in sharing strategic information to enable the Board Members to discharge their responsibilities.
The Detailed Policy on Performance Evaluation of Independent Directors, Board, Committees and other individual Directors can be accessed from the website of the Company at www.scansteels. com - Investor Relations Segment.
MANAGERIAL REMUNERATION:
Based on the recommendations of the NRC, the Board has approved the Remuneration Policy for Directors, Key Managerial Personnel [âKMPsâ] and all other employees of the Company. As part of the policy, the Company strives to ensure that:
- the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;
- relationship between remuneration and performance is clear and meets appropriate performance benchmarks; and
- remuneration to Directors, KMPs and Senior Management involves a balance between fixed and incentive pay, reflecting short, medium and long-term performance objectives appropriate to the working of the Company and its goals.
The following disclosures have been mentioned in detail under the heading âCorporate Governanceâ, part of this Annual Report:â
[i] all elements of remuneration package such as salary, benefits, etc., of all the directors;
[ii] details of fixed component and performance linked incentives along with the performance criteria;
[iii] service contracts, notice period, severance fees;
[iv] Stock option details, if any, and whether the same has been issued at a discount as well as the period over which accrued and over which exercisable.
CODE OF INDEPENDENT DIRECTORS -SCHEDULE - IV
The Board has considered Code of Independent Directors as prescribed in Schedule IV of the Companies Act, 2013. The code is a guide to professional conduct for independent directorsâ adherence to these standards by independent directors and fulfillment of their responsibility in a professional and faithful manner will promote confidence of the investment community and regulators.
The broad items for code for independent directors are:
[i] Guidelines for Professional conduct.
[ii] Role and Functions.
[iii] Duties
[iv] Manner and process of appointment.
[v] Re-appointment on the basis of report of performance evaluation.
[vi] Resignation or Removal.
[vii] At least one Separate meeting of Independent Directors in a year without attendance of non independent directors or members of management.
[viii]Evaluation mechanism of Independent Directors by entire Board of Directors.
The Detailed Code of Conduct of Independent Directors of the Company and Code of Conduct for Board of Directors and Senior Management of the Company can be accessed on the website of the Company at www.scansteels.com - Investor Relations Segment.
SCAN STEELSâS CODE OF CONDUCT FOR THE PREVENTION OF INSIDER TRADING
The Board of Directors has adopted the Insider Trading Policy in accordance with the requirements of the SEBI [Prohibition of Insider Trading] Regulations, 2015.
The Insider Trading Policy of the Company lays down guidelines and procedures to be followed, and disclosures to be made while dealing with shares of the Company. As well as the consequences of violation. The Policy has been formulated to regulate, monitor and ensure reporting of deals by employees and to maintain the highest ethical standards of dealing in Company Securities.
The Insider Trading Policy of the Company covering code of Practices and procedures for fair disclosures of unpublished price sensitive information and code of conduct for the prevention of insider trading is available on our website at www. scansteels.com - Investor Relations Segment.
COMPLIANCE WITH CODE OF ETHICS FOR BOARD OF DIRECTORS AND SENIOR EXECUTIVES
All Directors and Senior Management Personnel have affirmed Compliance with the Code of Ethics for Board of Directors and Senior Executives. A Declaration to that effect is attached with the Corporate Governance Report.
SECRETARIAL STANDARDS
The Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to âMeetings of the Board of Directorsâ and âGeneral Meetingsâ, respectively, have been duly followed by the Company.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirements under section 134[3][c] and 134[5] of the Companies Act, 2013, your directors hereby state and confirm that â
a] In the preparation of the annual accounts for the year ended March 31, 2018, the applicable accounting standards read with requirements set out under Schedule III to the Act have been followed and there are no material departures from the same;
b] The directors 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 as at March 31, 2018 and of the profit and loss of the company for the year ended on that date;
c] The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this 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; and
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.
AUDITORS AND AUDITORâS REPORT
STATUTORY AUDITORS
The Auditors, M/s. SRB & Associates, Chartered Accountant [Firmâs Registration No. 310009E] [SRB] of Bhubaneswar, were appointed with your approval at the 21 st AGM for a period of five years to hold such office till the conclusion of the 26th AGM.
The Company has received necessary consent and certificates under Section 1 39 from the above Auditors to the effect that they satisfied the criteria provided in section 141 of the Companies Act, 2013 read with Cos. [Audit &Auditors] Rules, 2014 including any statutory modification or reenactment thereof for the time being in force.
No frauds have been reported by the Auditors under Section 1 43 [1 2] of the Companies Act, 2013 requiring disclosure in the Board Report.
AUDITORSâ REPORT
Explanation to Auditorâs emphasis of matter:
Auditors have in their report drawn attention to Note No. 40 to the financial statements which describes the approval of the restructuring arrangement by the lead bankers State Bank of India and about recognition of interest cost of other members.
In the opinion of the Board, The companyâs funding has been funded through consortium member banks. The leader State Bank of India along with other member banks have classified the asset as Non-performing Assets in their books of account in previous year. During the year, the lead banker State Bank of India has approved the restructuring proposal and has executed all related documents for restructuring of the facility and has filed with the Ministry of Corporate Affairs towards creation/ modification of charges in its favour. The State Bank of India has recovered all the scheduled repayments alongwith overdues [till the date of recovery] as per proposal approved vide letter dated March 17 , 2018. The interest component of Rs.16.92 crores, from the date of NPA to the cut off date i.e March 31, 2017 has been converted to FITL and same has been charged to current yearâs financial statement. Other members to the consortium are in the process of restructuring as at the end of reporting date.
Further, the company has provided interest cost on borrowings for all the member banks except IDBI Bank Limited for the FY 2017-18 as per interest rate approved by the lead banker i.e State Bank of India. IDBI Bank Limited has recalled the loan vide letter dated October 31, 2017 for which no interest has been provided for.
Auditors have in their report drawn attention to Note No- 41 to the financial statements which describes on steps taken by the company for transition to the Ind AS compliances.
In the opinion of the Board , The company has implemented / adopted the following policies and procedures for accounting:
Componentization: As per prevailing practice, company componentized fixed assets as detailed in the Invoice. It does not have a separate componentization policy. Accordingly, components identified [ as mentioned above ] are also depreciated based on the useful lives prescribed under Schedule-II [ of the Companies Act. ] for the main asset.
Steps : The company is in the process of identification of the major components significant to the total cost of the asset accordingly necessary requirements to be complied.
Stores and Spares : The company on purchases of stores and spares, if it relates to an item of PPE, the same are capitalized on the date of issue, and which are issued for revenue expenditure purpose, are charged to Profit & Loss Account on the date of consumption.
Steps : The company is in the process of identifying the doubtful debtors to make provision for impairment to be recognized as per the Expected Credit Loss Method.
Except of the emphasis of matters mentioned above all other observations made by the Statutory Auditors in their report for the financial year ended 31st March 2018 read with the explanatory notes therein are self-explanatory and therefore, do not call for any further explanation or comments from the Board under Section 134[3] of the Companies Act, 2013.
COST AUDITORS
Pursuant to Section 148 [2] of the Companies Act, 2013 read with the Companies [Cost Records and Audit], Amendment Rules 2014, your Company is required to get its cost accounting records audited by Cost Auditor.
Accordingly, the Board at its meeting held on May 30, 201 8 has on the recommendation of the Audit Committee, re-appointed M/s. Ray, Nayak & Associates, Partner CMA. Chaitanya Kumar Ray, Cost Accountants, having office at MIG-26, Manorama Estate, Rasulgarh, Bhubaneswar - 751010 [Odisha], as the Cost Auditors of the Company to conduct the audit of the cost accounting records of the Company for the financial year 2018-19 on a remuneration of Rs.45,000/- plus service tax as applicable and reimbursement of actual travel and out of pocket expenses.
The remuneration is subject to the ratification of the members in terms of Section 148 read with Rule 1 4 of the Companies [Audit and Auditors] Rules, 2014 and is accordingly placed for your ratification.
Pursuant to section 148[1] of the companies act, 2013, The company has maintained the cost accounts and records.
The Cost Audit Report for the financial year ended 31st March, 2017 was filed in XBRL mode on 7th August, 2017.
SECRETARIAL AUDITORS AND AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies [Appointment and Remuneration of Managerial Personnel] Rules, 201 4, the Company had appointed M/s. K.K.Giri & Associates, a Practicing Company Secretary [CP No-14459] having office at Plot No-215[I], 2nd floor, District Centre, Chandrasekharpur, Bhubaneswar - 75101 6 to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit carried out is annexed herewith as Annexure âEâ.
The report does not contain any observation or qualification requiring explanation or comments from the Board under Section 134[3][f][ii] of the Companies Act, 2013.
The Board at its meeting held on May 30, 2018, has re-appointed M/s. K.K.Giri & Associates, a Practicing Company Secretary [CP No-14459] having office at Plot No-215[I], 2nd floor, District Centre, Chandrasekharpur, Bhubaneswar -751016, as Secretarial Auditor, for conducting Secretarial Audit of the Company for F.Y. 2018-19.
AUDIT COMMITTEE.
Audit Committee is constituted as per Regulation 18 of the SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015 read with Section 1 77 of the Companies Act, 201 3. Composition of Audit Committee is as per Section 177 [8] of Companies Act, 2013. The Prime Objective of the Committee is to monitor and provide effective supervision of the Managementâs financial reporting process, to ensure accurate and timely disclosures, with the highest levels of transparency, integrity and quality of financial reporting.
Composition and Terms of reference of the Committee is explained in Detail in the Corporate Governance Part of this Annual Report.
There was no recommendation as such in the Financial Year 201 7-201 8 from the Audit Committee which was not accepted by the Board.
VIGIL MECHNISM
In pursuance of Section 177[9] of the Companies Act, 2013 and Regulation 22 read with Regulation 4[2][d][iv] of Securities and Exchange Board of India [Listing Obligations and Disclosure Requirements] Regulations, 2015 , Vigil Mechanism has been Constituted for directors and employees to report genuine concerns and Audit committee shall oversee the vigil mechanism through the committee and provide adequate safeguards against victimization of employees and directors who availed of the vigil mechanism and have a direct access to the chairman of the audit committee in exceptional case.
In case of repeated frivolous complaints being filed by the director or an employee the audit committee may take suitable action including reprimand if necessary.
CONSTITUTION OF STAKEHOLDERS RELATIONSHIP COMMITTEE
The Board has constituted a Stakeholders Relationship Committee According to 1 78 [5] of the Companies Act 2013 and Regulation 20 of the SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015. The SR Committee is primarily responsible to review all matters connected with the Companyâs transfer of securities and redressal of shareholdersâ / investorsâ / security holdersâ complaints.
Composition and Terms of Reference of the SR Committee is Detailed in Corporate Governance Report Part of this Annual Report.
NOMINATION AND REMUNERATION COMMITTEE
The Board has set up a Nomination and Remuneration Committee In compliance with Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015. This Committee is responsible for making Policy pursuant to Proviso to Section 1 78 [3] & [4] read with Rules made there under and Securities and Exchange Board of India [Listing Obligations and Disclosure Requirements] Regulations, 2015 and / or recommending to the Board, the remuneration package of Directors, KMP & other employees, including their annual increment and commission after reviewing their performance and also to decide the Criteria for determining appointment Qualifications, Positive attributes, and Independence of a Director.
The Details Regarding the Composition of the Committee, Meetings held and Terms Of reference etc.. is Detailed in Corporate Governance Report Part of this Annual Report. And the Detailed Nomination and Remuneration Policy is attached as Annexure âDâ to this Report.
CONSTITUTION OF CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
Scan Steelsâs commitment towards excellence in Health, Safety and Environment is one of the companyâs core values by complying with the Laws and Regulations first, and then going beyond the mandate to keep our planet safe for future generations. Minimizing the environment impact of our operations assumes utmost priority.
The company is unwavering in its policy of ââsafety of persons overrides all production targetsââ which drives all employees to continuously break new grounds in safety management for the benefit of the people, property, environment and the communities in which Scan Steels operate. Our dedicated measures by conducting the Risk Assessment, Identification of significant environment aspects of all manufacturing plants and signatory commitment of Responsible Care, Greatest emphasis is given to safety measures for minimizing accidents and incidents.
In View of the above The Board has Constituted Corporate Social Responsibility Committee to Comply the Section 1 35 of the Companies Act, 2013. Composition and Terms of Reference of which is Detailed in Corporate Governance Report Part of this Annual Report.
DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.
The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace [Prevention, Prohibition and Redressal] Act, 2013 and the Rules there under.
Your Directors state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace [Prevention, Prohibition and Redressal] Act, 2013.
E-VOTING FACILITY AT AGM
In compliance with Section 1 08 of the Companies Act, 2013, Rule 20 of the Companies [Management and Administration] Rules, 2014, as substituted by the Companies [Management and Administration] Amendment Rules, 2015 and Regulation 44 of the SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015, the company is pleased to provide members facility to exercise their votes for all the resolutions detailed in the Notice of the 25th Annual Report of the company and the business may be transacted through e-voting. The company has engaged the services of Central Depository Services Limited [CDSL] as the authorized agency to provide the e-voting facility.
LISTING ON STOCK EXCHANGE
The Company continues to remain listed with Bombay Stock Exchange Limited and annual listing fee for the same has been paid.
DISCLOSURES
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
During the year, Six Board Meeting were convened and held, details of the meetings of the Board and various Committees of your Company are set out in the Corporate Governance Report which forms part of this Annual Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and Regulation 1 7 of the Securities and Exchange Board of India [Listing Obligations and Disclosure Requirements] Regulations, 2015.
EXTRACT OF THE ANNUAL RETURN
The extracts of Annual Return pursuant to the provisions of Section 92[3] read with Rule 12 of the Companies [Management and administration] Rules, 2014 and Section 134[3][a] of Companies Act, 2013 is furnished in Form No. MGT-9 as Annexure âFâ and is attached to this Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
There were no loans, made by the Company under Section 186 of the Companies Act, 2013 during the year under review. However the company has given the corporate guarantee and made investment in quoted securities as a long term investments and the details of the guarantees and investments covered under the provisions of section 186 of the companies act, 2013 are given in the financial statements.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The details of conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 [3][m] of the Companies Act, 2013 read with Rule 8[3] of the Companies [Accounts] Rules, 2014 is furnished in Annexure âGâ and is attached to this report.
PARTICULARS OF EMPLOYEES (RULE 5(2), AND 5(3)) AND MANAGERIAL REMUNERATION ( RULE 5(1) ) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014 , AND UNDER SECTION 197(12) OF THE ACT
The total number of employees as on 31st March, 2018 stood at 1489.
Disclosures pertaining to remuneration and other details as required under Section 197[12] of the Act read with Rule 5[1], 5[2] and 5 [3] of the Companies [Appointment and Remuneration of Managerial Personnel] Rules, 2014, are provided in the Annexure âHâ in this Report.
MATERIAL CHANGES AND COMMITMENTS, IF ANY, 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
In term of Section 134[3][l] of the Companies Act, 2013, no material changes and commitments have occurred after the close of the year till the date of this Report, which could affect the financial position of the Company.
GENERAL
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
1. Issue of equity shares with differential rights as to dividend, voting or otherwise.
2. Issue of shares [including sweat equity shares] to employees of the Company under any scheme.
3. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companyâs operations in future.
4. There is No Revision of Financial Statement or Board Report Adopted by the Company, thereby there is no Disclosures to be made by the Company u/s 131 of the Companies Act, 2013 for Voluntary Revision of Financial Statement.
5. Your Company has No Holding or Subsidiary Company and thereby, Whole time Director of the Company do not receive any commission or remuneration from the same. Accordingly there is no Details to be Provided by the Company pursuant to Section 197 [14] of the Companies Act, 2013.
ACKNOWLEDGEMENTS
Your Directors wish to place on record their gratitude for the valuable guidance and support rendered by the Government of India, various State Government departments, Financial Institutions, Banks and various stakeholders, such as, shareholders, customers and suppliers, among others. The Directors also commend the continuing commitment and dedication of the employees at all levels, which has been critical for the Companyâs success. The Directors look forward to their continued support in future.
Place: Bhubaneswar FOR AND ON BEHALF OF THE BOARD
Date: 30th May, 2018 Ankur Madaan, Whole- Time Director
(DIN:07002199)
Runvijay Singh, Director
(DIN: 02239382)
Mar 31, 2016
Dear Share owners,
The Directors have pleasure in presenting the Twenty Third Annual Report of your Company together with the Audited Financial Statements for the year ended March 31,2016.
FINANCIAL HIGHLIGHTS/RESULTS
Your Directors take pleasure in presenting the 23rd Annual Report on the business and operations of your Company along with the financial statements for the year ended 31 March, 2016.
(Rs. In Lacs)
2015-2016 |
2014-2015 |
|
Net Turnover and other Income |
35,422.83 |
44,966.04 |
Profit / (Loss) before Tax |
(3202.68) |
536.68 |
Less : Tax Expenses |
||
Current Tax |
- |
(110.77) |
Deferred Tax (Charge)/ Credit |
(173.98) |
(157.58) |
Profit After Tax |
(3376.66) |
268.33 |
Less : Prior Period Expenses |
- |
- |
Net Profit for the year |
(3376.66) |
268.33 |
Surplus Brought Forward from last balance sheet |
68.73 |
(71.13) |
Add: Earlier Year Adjustment (Tax) |
94.92 |
- |
Less: Adjustment for net carrying amount of tangible fixed assets |
- |
(128.48) |
Balance at the end of the year |
(3213.01) |
68.73 |
RESULTS OF OPERATIONS & STATE OF AFFAIRS OF THE COMPANY
The gross turnover and net turnover for the year under review was Rs.387.34 crores and Rs.353.09 crores, respectively, and showed a decline of 21.60% and 21.11%, respectively. The net Loss after tax was Rs.33.77 crores as compared to previous year Profit Rs.2.68 crore. The reason of Loss is several unfavorable developments during the last couple of fiscal, including raw material, price fluctuations and availability issues, as well as the burden of high steel imports but, we are striving to give better result in future years.
The Company produced 49,025 tonnes (MT) of TMT Rods in FY 2015-16, down by 18.76% in compare to the previous year and sold 46,611.00 MT, decreased by 21.65% in compare to previous year. The reason of lower of production is because of decrease in sales due to sluggish economical conditions of the country resulting lower demand and low price of finished products and cheaper import of Steels products into India.
The Company''s sustained efforts towards back-end cost control, new product launches and efficiency improvement measures, supported the insulation and limited the impact on the profitability margins. The Company''s ability to better utilize capacities and product range will help derive better margins out of the businesses. The outlook of each business has been discussed in detail in the ''Management Discussion & Analysis'' which forms a part of this Annual Report.
PRODUCTION & TURNOVER/SALES
The production of steel product during the year under report, compared to the previous year is given below.
Item |
Production (Qty in MT) |
Turnover (Qty in MT) |
||
Years ended 31st March, 2016 |
Years ended 31stMarch, 2015 |
Years ended 31st March, 2016 |
Years ended 31 March, 2015 |
|
Sponge Iron |
133529.280 |
125342.000 |
98,638.27 |
80503.570 |
MS Ingot/ Billet |
39648.000 |
67856.000 |
5,410.65 |
6589.550 |
Long and Flat Products |
49025.500 |
60350.000 |
46,611.94 |
59490.480 |
NEW PROJECTS AND EXPANSION
Your company has emerged as a flourishing and dexterous steel enterprise because of its ability to cope with the changing steel scenario and to contribute to the growth of steel production where the country is aiming to increase the crude steel production to 300 Million tons by 2025-26 from currently 70 Million tones of production. For which your company has obtained necessary clearances from appropriate authorities. The upcoming project compositions are as enumerated below:-
Sr. No. |
Unit |
Product |
Rated Capacity |
Annual Production in TPA |
1. |
DRI Kiln |
Sponge Iron |
2 X 500 TPD |
3,00,000 |
2. |
Blast furnace 175 M3 |
HM/Pig Iron |
350 TPD |
122,500 Hot Metal /36,750 Pig Iron |
3. |
Iron Ore Crusher |
Sized Iron Ore |
50TPH/ 1000TPD |
3,00,000 |
4. |
Captive Power Plant |
Power |
30 MW (20 MW WHRB 4 MW BF Gas based (TRT) 6 MW AFBC) |
- |
5. |
Coal Washery |
Washed Coal (65 %) Middlings (30%) Rejects (5%) |
40 TPH/800 TPD |
2,40,000 (Coal Input) |
6. |
SMS - Induction Furnace - Elec. Arc Furnace - Ladle Refining Furnace - Continues Casting M/c. |
Billets |
2x30T 1x30 T 1x4 Strand |
3,11,040 |
7. |
Pellet Plant |
Iron Ore Pellet |
4,000 TPD |
12,00,000 |
8. |
Submerged Arc Furnace |
Silico Management |
2x 7.5 MVA |
10,200 |
9. |
Rolling Mill-1 |
TMT Rods/ Bars |
1 x 38 TPH |
2,00,000 |
10. |
Rolling Mill-2 |
Structural Steel |
1 x 38 TPH |
2,00,000 |
11. |
Galvanizing Plant |
Galvanized Product |
20 TPH |
1,08,000 |
12. |
Fly Ash Bricks Unit |
Fly Ash Bricks |
4x42 TPD |
50,400 |
13. |
Oxygen Plant |
Oxygen |
4800Nm3/hr |
622 Mn. Nm3/year |
GREENFIELDPROJECT
The process of land acquisition work for our project at Gangajal, Budhakata, Sundargarh, Odisha is in progress. Discussion with concerned authorities for allotment of land has been initiated. The environmental clearances for this proposed project has been obtained from the appropriate authorities.
OUTLOOK
Currently, the Steels business account for nearly 100% of its revenues. The outlook for its margins and profitability for this business depends on overall economic outlook. This company is likely to benefit most from an upturn in the business cycle, given its scale of operations and its competitive cost positions. Today, it is truly a market-driven company, making innovative changes and technological improvements, leaving no stone, unturned in fulfilling dreams of its founding fathers, tuning every activity to meet the subtle demands of its customers.
MARKETING ARRANGEMENT
The Company has a Well-organized Marketing Department We have around 50 % market share in Odisha and also catering to outside states. We are in the process expanding our market plan in India by appointment of Dealers at other major cities across India. We also directly sell to the Customers through our Marketing staffs and agents.
DIVIDEND
In view of the losses incurred during the FY 2015-16, your Board of Directors has not recommended any dividend on equity shares as well as on preference shares.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND
Your Company did not recommended any dividend therefore there were no such funds which were required to be transferred to Investor Education and Protection Fund (IEPF).
TRANSFERTORESERVE
During the financial year 2015-16, the company has not transfer any amount to the reserve. the Company is maintaining a balance of Rs. 1344.12 Lacs in General Reserve, Rs. 61.01 Lacs in Capital Reserve, Rs. 493.71 Lacs in Amalgamation adjustment reserve and a debit balance of Rs. 3213.01 Lacs is retained in the Profit and Loss Statement.
CONSOLIDATEDFINANCIALSTATEMENT
As per the definition in the Companies Act, 2013 ("the Act") and Accounting Standard (AS) - 21 on Consolidated Financial Statements read with AS - 23 on Accounting for Investments, the company does not have any investment in the Subsidiary Company, Joint Ventures Company or any other Associates Company therefore the Consolidation of Financial Statements is not applicable.
DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES
The Company does not have any Subsidiary, Associates and Joint venture Companies there by; there are no details to be provided under [Rule 8 of the Companies (Accounts) Rules, 2014]. Read with section 129 (3) of the Companies Act, 2013.during the year under review, no company has become or ceased as subsidiary, associate or joint venture companies.
FIXED DEPOSITS COVERED UNDER CHAPTER V OF THE COMPANIES ACT, 2013
Pursuant to Section 73, 74 & 76 Rule 8(5)(v) of Companies (Accounts) Rules, 2014. The details relating to deposits, covered under Chapter V of the Act are as follows:-
a. accepted during the year-Rs. 3,85,28,000/-
b. remained unpaid or unclaimed as at the end of the year-Rs. 2000/
c. whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved
I. at the beginning of the year-Nil
ii. maximum during the year-Nil
iii. at the end of the year-Nil
There was No default in repayment of deposits or payment of interest thereon during the year by Company and accordingly No details to be provided by the Company in this regard.
The details of deposits which are not in compliance with the requirements of Chapter V of the Act
Your Company has not accepted any deposits which are not in Compliance with the requirement of Chapter V of the Act.
CHANGE IN THE NATURE OF BUSINESS, IF ANY
Company is in to Steel Manufacturing Business and also expended its business activities into Derivatives market.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIALSTATEMENTS.
INTERNALCONTROLSYSTEMSANDAUDITOVERVIEW
The Company has in place adequate internal financial controls with reference to financial statements, commensurate with the size and nature of its business, forms an integral part of the Company''s corporate governance policies.
INTERNALCONTROL
The Company has a proper and adequate system of internal control commensurate with the size and nature of its business. Internal control systems are integral to the Company''s corporate governance policy. Some of the significant features of internal control systems includes:
- Documenting of policies, guidelines, authorities and approval procedures, encompassing the Company''s all primary functions.
- Deploying of an ERP system which covers most of its operations and is supported by a defined online authorization protocol.
- Ensuring complete compliance with laws, regulations, standards and internal procedures and systems.
- De-risking the Company''s assets/resources and protecting them from any loss.
- Ensuring the accounting system''s integrity proper and authorized recording and reporting of all transactions.
- Preparing and monitoring of annual budgets for all operating and service functions.
- Ensuring the reliability of all financial and operational information.
- Forming an Audit committee of the Board of Directors, comprising Independent Directors. The Audit Committee regularly reviews audit plans, significant audit findings, adequacy of internal controls, and compliance with accounting standards and so on.
- Forming a comprehensive Information Security Policy and continuous up-gradation of IT Systems.
The internal control systems and procedures are designed to assist in the identification and management of risks, the procedure-led verification of all compliance as well as an enhanced control consciousness.
INTERNALAUDIT
The Company has a strong internal audit department reporting to the Audit Committee comprising Independent Directors who are experts in their field. The scope of work, authority and resources of Internal Audit (IA) are regularly reviewed by the Audit Committee and its work is supported by the services of M/s GRC & Associates, the Internal Auditor of the Company.
The Company continued to implement their suggestions and recommendations to improve the control environment. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Internal Auditors findings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations.
Through IA function the Board obtains the assurance it requires to ensure that risks to the business are properly identified, evaluated and managed. IA also provides assurance to the Board on the effectiveness of relevant internal controls.
INTERNAL FINANCIAL CONTROLS
As per Section 134 (5) (e) of the Companies Act 2013, the Directors have an overall responsibility for ensuring that the Company has implemented robust systems and framework of internal financial controls. This provides the Directors with reasonable assurance regarding the adequacy and operating effectiveness of controls with regards to reporting, operational and compliance risks. To enable them to meet these responsibilities, the Company has devised appropriate systems and framework including proper delegation of authority, policies and procedures, effective IT systems aligned to business requirements, risk based internal audit framework, risk management framework and whistle blower mechanism.
The Audit Committee regularly reviews the internal control system to ensure that it remains effective and aligned with the business requirements. Where weaknesses are identified as a result of the reviews, new procedures are put in place to strengthen controls. These are in turn reviewed at regular intervals.
The Company has developed a framework for designing and assessing effectiveness of internal controls over financial reporting and has already laid down entity level policies and process level standard operating procedures.
The entity level policies comprise anti-fraud policies (code of conduct, including conflict of interest, confidentiality and whistle-blower policy) and other policies (organization structure, roles and responsibilities, insider trading policy, HR policy, related party policy, prevention of sexual harassment policy, IT security policy, business continuity and disaster recovery plan and treasury risk management policy). The Company has also prepared Standard Operating Practices (SOP) for each of its processes of revenue to receive, procure to pay, hire to retire, finance and accounts, fixed assets, treasury, inventory, manufacturing operations, and administrative expenses.
Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and During the year, such controls were tested and no reportable material weakness in the design or operation were observed and such systems were adequate and operating effectively.
INDIAN ACCOUNTING STANDARD (INDAS)
As per the roadmap announced by the Ministry of Corporate affairs, the Company will comply with the new Accounting Standards, IND AS in preparation of its financial statements for accounting periods beginning on April 1, 2016, along with the comparatives for the period ending March 31,2016.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATEDPARTIES:
All contracts / arrangements / transactions entered by the Company during the financial year with related parties referred to in Section 188 (1) of the Companies Act, 2013 were in the ordinary course of business and on an arm''s length basis and Detail of which is furnished in the Annexure ''A'' in Form AOC-2 attached with this Report in compliance with Section 134 (3) (h) read with188 (2) of the Companies Act, 2013.
Further, there are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a quarterly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are subject to internal audit and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis.
The Company has developed an Internal Guide on Related Party Transactions Manual and prescribed, Standard Operating Procedures for purpose of identification and monitoring of such transactions. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.
Moreover, on the recommendations of the Audit Committee, your Board had revised the Policy on Related Party Transactions in accordance with Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and as per the amended provisions of the Companies Act, 2013.The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company''s website at www.scansteels.com - Investor Relations Segment.
Your Directors draw attention of the members to Note No. 2 (iii) to the financial statement which sets out related party disclosures.
ISO 9002 CERTIFICATION
Your company is having status of ISO 9001, ISO 14001 and ISO 18001 certification, which is internationally recognized for the production, quality control and Environmental as well as OHSAS respectively.
CREDITRATING
During the year, the credit rating for long term debt/facilities/FD by CARE has been downgraded to "CARE-D" and the short term bank facilities has also been downgraded to "CARE -D"
The downward rating actions were driven on account of Sharp fall in steel Prices due to excessive import from China at predatory prices affecting the operating performance of the company during the year and Stressed Liquidity Position of the Company has triggered a review of Scan Steel''s credit rating by CARE.
AUTHORITYTO DETERMINE MATERIALITY OF AN EVENT AND DISCLOSURE OF THE SAME TO STOCK EXCHANGE UNDER REGULATION 30(5) OF SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATION, 2015
Mr. Ankur Madaan, Whole- Time Director, of the Company, and Mr. Prabir Kumar Das, Company Secretary and Compliance Officer of the Company and Mr. Gobinda Chandra Nayak, Chief Financial Officer of the Company authorized by the Board for the purpose of determining the materiality of an event or information, in terms with the Company''s Policy on disclosure of material event / information and archival policy to comply with the Provisions of Regulation 30 (5) of the SEBI ( Listing Obligations and Disclosure Requirements) Regulations, 2015 and they are jointly and severally authorized to make necessary disclosure to stock exchanges regarding the same on behalf of the Company.
BRANDINGINITIATIVE
The "SHRISTII" brand for its TMT bars are well accepted in the market in varied segments and sectors with wide customer base.
INSURANCE
The Assets of the company are adequately insured against the loss of fire, riot, earthquake, loss of profit etc, and other risk which is considered by management, In addition to this coverage, a statutory public liability insurance policy has been taken to cover by the company for providing against the public liability arising out of industrial accidents for employees working in plants.
INDUSTRIAL RELATIONS AND PERSONNEL
Your Company attaches great importance to human resource. Over a period of time, we have built and nurtured a dedicated and excellent workforce and also recruiting new people in order to meet the revival plans of the company. The processes for attracting, retaining and rewarding talent are well laid down and the systems are transparent to identify and reward performers. Company is committed to the welfare of its people and their families and to improve the quality of their life by providing the required facilities. The Company recognizes the importance and contribution of its people towards achieving the common goal. During the year under the review, industrial relations at all units of the Company continued to be cordial and peaceful.
FINANCE
During the year the company has faced finance crises and could not met financial commitment in time reason being liquidity problems arose due to sluggish economical conditions of the country resulting lower demand and low price of finished products and cheaper import of Steels products into India.
The banker State Bank of India, being leader of Consortium has treated its lending facilities to the company as non-performing on 28th November, 2015. The insufficient cash flow due to drastic reduction in prices of steel products, cheaper imports into India & slowdown of global economy, being the reasons for non honoring commitments to the bank.
BANKERS AND CONSORTIUM ARRANGEMENT
The Company has consortium arrangement of their bankers with State Bank of India as Lead Bank. This consortium arrangement is well defined and take care of company''s term loan and working capital requirement from time to time. The consortium members meet regularly at company office quarterly and also visit company''s plant from time to time.
SAFETY
The company has continued to scale up safety performance at all locations. Safety measures have been strengthened and employees are being trained to think on hazards/risks associated with their job. Systems have been established to make employees responsible and accountable for safety. Good safety performance is being rewarded. While Safety has been included as a corporate value, the main objective is to achieve better standard of safety in the shortest possible time.
HUMAN RESOURCE DEVELOPMENT
The company has been given much emphasis on Human Resources Development and thus has been well recognized in the steel industrial for sound Human Resources Management. The Company has emerged as a true national firm with cosmopolitan atmosphere.
The company''s HR polices and process is as well aligned to effectively suit its expanding business horizons and future manpower requirement. This has been achieved by continuously stressing upon training & development, empowerment and creating a compelling work environment and maintaining well structured reward & recognition mechanism. Company is committed to the welfare of its people and their families and to improve the quality of their life by providing the required facilities.
CORPORATESOCIALRESPONSIBILITY
Corporate Social Responsibility is the continuing commitment by the business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large. As a part of its policy for corporate social responsibility, the Company is associated with charitable and social activities and thereby playing a pro-active role in the socioeconomic growth. In structuring its efforts to the various aspects of Corporate Social Responsibilities, the Company takes account guidelines and statements issued by stakeholders and other regulatory bodies.
The management has adopted corporate social responsibility (CSR) well at par with its business with the objective of creating wealth in the community with focus on education, health, water and society. Social welfare, community development, economic and environmental responsibilities are at the core of the CSR of the Company.
The Corporate Social Responsibility Committee (CSR Committee) Composition and Terms of reference of which is detailed in the Corporate Governance Part of this Annual Report, has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board.
The key philosophy of all CSR initiatives of the Company is guided by three core commitments of Scale, Impact and sustainability.
The Company has identified six focus areas of engagement which are as under:
- Rural Transformation: Creating sustainable livelihood solutions, addressing poverty, hunger and malnutrition.
- Health: Affordable solutions for healthcare through improved access, awareness and health seeking behavior.
- Education: Access to quality education, training and skill enhancement.
- Environment: Environmental sustainability, ecological balance, conservation of natural resources.
The Company would also undertake other need based initiatives in compliance with Schedule VII to the Act.
The disclosures required to be made as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed to this report as Annexure ''B''.
The CSR Policy of the Company is available on the company''s website at www.scansteels.com - Investor Relations Segment.
SHARE CAPITAL
ISSUED/SUBSCRIBED/PAIDUPCAPITAL
Pursuant to allotment of 4453330 Equity Shares of Rs. 10 / - each on Conversion of Warrants in to Equity Shares, Issued, Subscribed and Paid-up Share Capital of the Company shall stand Increased from Rs. 44,35,23,000 (Forty Four Crore Thirty Five Lakhs Twenty Three Thousand) divided into 4,43,52,300 (Four Crore Forty Three Lakhs Fifty Two Thousand Three Hundred ) Equity Shares of Rs.10/- (Rupees Ten) to Rs. 48,80,56,300 (Forty Eight Crore Eighty Lakhs Fifty Six Thousand Three Hundred) divided into 4,88,05,630 (Four Crore Eighty Eight Lakhs Five Thousand Six Hundred Thirty ) Equity Shares of Rs.10/- (Rupees Ten).
The authorized share capital of the Company is Rs. 70,00,00,000/- (Rupees Seventy Crores only) divided into 5,50,00,000 (Five Crore Fifty Lacs) equity shares of Rs. 10/- (Rupees Ten) each and 1,50,00,000 (One Crore Fifty Lacs only) Non-cumulative Redeemable Preference Share ofRs. 10/- (Rupees Ten) each.
The paid-up equity share capital as on March 31, 2016 was Rs.48,80,56,300 (Forty Eight Crore Eighty Lakhs Fifty Six Thousand Three Hundred) divided into 4,88,05,630 (Four Crore Eighty Eight Lakhs Five Thousand Six Hundred Thirty ) fully paid up Equity Shares of Rs.10/-(Rupees Ten Only) each and the preference share capital was Rs.12,84,96,050/- (Twelve Crore Eighty Four Lacs Ninety Six Thousand Fifty) divided into 1,28,49,605 (One crore Twenty Eight Lacs Forty Nine Thousand Six Hundred Five only) fully paid up NCRPS of Rs.10/- (Rupees Ten) each.
During the year under review, the company has issued and allotted 80,00,000 (Eighty Lakhs Only) Warrants Convertible in to Equity Shares of face value of Rs. 10.00 (Rupees Ten) each at a premium of Rs. 40/- (Rupees Forty) each). Further the allottees had exercised their right to convert 44,53,330 warrants into equity shares of Rs. 10/each out of total allotted to them.
The aggregate outstanding amount of Warrants of the company as on March 31, 2016 was Rs. 4,43,33,500/representing 35,46,670 warrants convertible into equity shares.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
- In accordance with the provisions of Section 152 of the Companies Act, 2013 and in terms of the Articles of Association of the Company, Mr. Ankur Madaan (DIN:07002199), retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment.
The proposal regarding the re-appointment of the aforesaid Director is placed for your approval. The Board of Directors recommends his re-appointment.
- Mr. Rajesh Gadodia, (DIN 00574465) has been elected as Non-executive chairman of the company w.e.f. 24.05.2016 in the board meeting upon the recommendation received from the Nomination and Remuneration Committee of the Board. He ceased to be KMP (Managing Director) of the company w.e.f 24.05.2016.
- Mr. Ankur Madaan (DIN:07002199),who was appointed as Whole- Time Director of the Company w.e.f 24.05.2016 by the Board based on the recommendation received from the Nomination and Remuneration Committee Company for a period of Five year with effect from 24/05/ 2016 subject to approval of shareholders of the Company at the ensuing Annual General Meeting.
- Mr. Runvijay Singh (DIN 02239382), was appointed as an Additional Director and designated as the Executive Director w. e. f. 24/05/2016. Mr. Runvijay Singh shall hold office till the date of the forthcoming Annual General Meeting (AGM). Your company has received a notice under section 160 of the companies act, 2013 from a member, signifying his intension to propose the name of Mr. Runvijay Singh for appointment as a director of the company.
- Mr. Punit Kedia (DIN 07501851) who was appointed as an Additional Director w.e.f. 24/05/2016 in the category of Independent Director and who will hold office till the date of the forthcoming Annual General Meeting (AGM). Your company has received a notice under section 160 of the companies act, 2013 from a member of the company, signifying his intension to propose the name of Mr. Punit Kedia for appointment as an Independent Director of the company. Pursuant to section 149 and other applicable provisions of the Companies Act, 2013 your directors are seeking appointment of Mr. Punit Kedia as Independent Director to hold office for five consecutive years for a term up to the conclusion of the 28th Annual General Meeting of the company and his office shall not be liable to retire by rotation."
- Mr. Nimish Gadodia (DIN 01258815), resigned from the post of director of the company w. e. f. 16/12/2015. Your directors would like to record their deep sense of appreciation for the enormous contributions made by him during his tenure.
Suitable resolutions for appointment / reappointment of Directors, as referred above, will be placed for approval of the members in the forthcoming Annual General Meeting. The brief resume and other information of the concerned directors, in terms of the Regulation 36 (3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 have been detailed as an annexure in the notice convening the forthcoming Annual General Meeting.
Your Company has received from the Independent Directors Certificate of Independence, as enumerated in section 149(6) of the Companies Act, 2013.
KEY MANAGERIAL PERSONNEL
Mr. Ankur Madaan, Whole Time Director, Mr. Prabir Kumar Das, Company Secretary & Compliance office and Mr. Gobinda Chandra Nayak, Chief Financial Officer are the Key Managerial Personnel of your company in accordance with the provision of Section 2(51) and 203 of the companies act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 read with SEBI (LODR) Regulations, 2015.
Company''s policy of appointment and remuneration for directors, KMP and other employees including criteria for determining qualifications, positive attributes, director''s independence (read with Sections 178 (1) (3) (4) The Nomination and Remuneration Committee works with the Board to determine the appropriate characteristics, skills and experience for the Board as a whole and its individual members with the objective of having a Board with diverse backgrounds and experience in business, government, education and public service. Characteristics expected of all Directors include independence, integrity, high personal and professional ethics, sound business judgment, ability to participate constructively in deliberations and willingness to exercise authority in a collective manner.
The Company''s Policy relating to appointment of Directors, payment of Managerial remuneration, Directors'' qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is furnished in Annexure ''C'' and is attached to this report.
Further, Nomination and Remuneration Policy for Directors, Key Managerial Personnel and other employees is furnished in Annexure ''D'' and is attached to this report.
Declaration by an Independent Director(s)
As required under section 149(7) of the Companies Act, 2013, The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence and / or to qualify themselves to be appointed as Independent Directors as prescribed both under Section 149 (6) of the Companies Act'' 2013 and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 , The Board considered the independence of each of the Independent Directors in terms of the above provisions and is of the view that they fulfill/meet the criteria of independence. and the declarations are put up on the website of the Company at www.scansteels.com - Investor Relations Segment.
Familiarization Programme for Independent Directors.
All New Independent Directors (IDs) inducted into the Board are given an orientation. Presentations are made by Executive Directors (EDs) and Senior Management giving an overview of our operations, to familiarize the new IDs with the Company''s business operations. The new IDs are given an orientation on our products, group structure, Board constitution and Procedures, matters reserved for the Board, and our major risks and risk management strategy.
The company familiarizes the Independent Directors of the Company with their roles, rights, responsibilities in the company, nature of the industry in which the company operates, business model of the company, etc and related matters are put up on the website of the Company at www.scansteels.com - Investor Relations Segment.
Separate Independent Director Meeting
In term of requirements of Schedule IV of the Companies Act, 2013 and Regulation 25 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate meeting of the independent directors ("Annual ID meeting") was convened on 05th March, 2016 and All the Independent Directors were present at the said Meeting.
The Independent Directors at the meeting reviewed the following:
a. Performance of Non-Independent Directors and the Board as a whole;
b. Performance of the Chairman of the Company, taking into account the views of Executive Directors and Non-Executive Directors; and
c. Assess the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
Post the Annual ID meeting, the collective feedback of each of the Independent Directors was discussed by the Chairperson of the Nomination Remuneration Committee with the Board covering performance of the Board as a whole, performance of the no independent directors and performance of the Board Chairman.
In addition to formal meetings, interactions outside the Board meetings also take place between the Chairman and Independent Directors.
BOARD ANNUAL EVALUATION
Pursuant to Regulation 17(10) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, and In compliance with the Section 134(3) (p) Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which include criteria for performance evaluation of the non-executive directors and executive directors.
The Board carried out an annual performance evaluation of its own performance, the individual Directors as well as the working of the Committees of the Board. The performance evaluation of the Independent Directors was carried out by the entire Board in compliance with Schedule IV to the Companies Act, 2013. The performance evaluation of the Chairman, Whole- Time Director and the Non- Independent Directors was carried out by Independent Directors. Details of the same are given in the Report on Corporate Governance annexed hereto.
The Chairperson of the Nomination and Remuneration Committee (NRC) held separate discussions with each of the Directors of the Company and obtained their feedback on overall board effectiveness as well as on each of the other Directors.
While evaluating the performance and effectiveness of the Board, various aspects of the Board''s functioning such as adequacy of the composition and quality of the Board, time devoted by the Board to Company''s long-term strategic issues, quality and transparency of Board discussions, execution and performance of specific duties, obligations and governance were taken into consideration. Committee performance was evaluated on the basis of their effectiveness in carrying out respective mandates. A separate exercise was carried out to evaluate the performance of Independent Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution to Board deliberations, independence of judgment, safeguarding the interest of the Company and focus on creation of shareholders value, ability to guide the Company in key matters, attendance at meetings, etc. The Executive Directors were evaluated on parameters such as strategy implementation, leadership skills, quality, quantity and timeliness of the information flow to the Board, etc.
The Directors expressed their satisfaction with the evaluation process.
The Detailed Policy on Performance Evaluation of Independent Directors, Board, Committees and other individual Directors can be accessed from the website of the Company at www.scansteels.com - Investor Relations Segment.
MANAGERIALREMUNERATION:
The following disclosures have been mentioned in detail under the heading "Corporate Governance", part of this Annual Report:â
(i) all elements of remuneration package such as salary, benefits, bonuses, stock options, pension, etc., of all the directors;
(ii) details of fixed component and performance linked incentives along with the performance criteria;
(iii) service contracts, notice period, severance fees;
(iv) Stock option details, if any, and whether the same has been issued at a discount as well as the period over which accrued and over which exercisable.
CODEOFINDEPENDENTDIRECTORS-SCHEDULE-IV
The Board has considered Code of Independent Directors as prescribed in Schedule IV of the Companies Act, 2013. The code is a guide to professional conduct for independent directors'' adherence to these standards by independent directors and fulfillment of their responsibility in a professional and faithful manner will promote confidence of the investment community and regulators.
The broad items for code for independent directors are: (I) Guidelines for Professional conduct.
(ii) Role and Functions.
(iii) Duties
(iv) Manner and process of appointment.
(v) Re-appointment on the basis of report of performance evaluation.
(vi) Resignation or Removal.
(vii) At least one Separate meeting of Independent Directors in a year without attendance of non independent directors or members of management.
(viii) Evaluation mechanism of Independent Directors by entire Board of Directors.
The Detailed Code of Conduct of Independent Directors of the Company and Code of Conduct for Board of Directors and Senior Management of the Company can be accessed on the website of the Company at www.scansteels.com - Investor Relations Segment.
SCAN STEEL''S CODE OF CONDUCT FOR THE PREVENTION OF INSIDERTRADING
The Board of Directors has adopted the Insider Trading Policy in accordance with the requirements of the SEBI (Prohibition of Insider Trading) Regulations, 2015. The Insider Trading Policy of the Company lays down guidelines and procedures to be followed, and disclosures to be made while dealing with shares of the Company. as well as the consequences of violation. The Policy has been formulated to regulate, monitor and ensure reporting of deals by employees and to maintain the highest ethical standards of dealing in Company Securities.
The Insider Trading Policy of the Company covering code of Practices and procedures for fair disclosures of unpublished price sensitive information and code of conduct for the prevention of insider trading, is available on our website at www.scansteels.com - Investor Relations Segment.
COMPLIANCE WITH CODE OF ETHICS FOR BOARD OF DIRECTORSANDSENIOREXECUTIVES
All Directors and Senior Management Personnel have affirmed Compliance with the Code of Ethics for Board of Directors and Senior Executives. A Declaration to that effect is attached with the Corporate Governance
Report.
DIRECTORS RESPONSIBILITYSTATEMENT
Pursuant to the requirements under section 134(3)(c) and 134(5) of the Companies Act, 2013, your directors hereby state and confirm that â
a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
b) The directors 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 as at March 31, 2016 and of the profit and loss of the company for the year ended on that date;
c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this 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; and
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.
AUDITORS ANDAUDITOR''S REPORT STATUTORY AUDITORS
The Auditors, M/s. SRB & Associates, Chartered Accountant (Firm''s Registration No. 310009E) (SRB) of Bhubaneswar, were appointed with your approval at the 21st AGM for a period of five years to hold such office till the conclusion of the 26th AGM.
In terms of the first proviso to section 139 of the companies act, 2013, the appointment of the Auditors shall be placed for ratification at every annual general meeting. Accordingly , The Board, on the recommendation of the Audit Committee, has recommended for the ratification of the Members the appointment of SRB from the conclusion of the ensuing AGM till the conclusion of the 24th AGM. Appropriate resolution for the purpose is appearing in the Notice convening the 23rd AGM of the Company.
The Company has received necessary consent and certificates under Section 139 from the above Auditors to the effect that they satisfied the criteria provided in section 141 of the Companies Act, 2013 read with Cos. (Audit& Auditors) Rules, 2014.
No frauds have been reported by the Auditors under Section 143 (12) of the Companies Act, 2013 requiring disclosure in the Board Report.
AUDITORS'' REPORT
Explanation to Auditor''s emphasis of matter:
Auditors have in their report drawn attention to Note No. 2 (vi) to the financial statements regarding default of company on repayment of debts to consortium lenders In the opinion of the Board, The banker State Bank of India, being leader of Consortium has treated its lending facilities to the company as non-performing on 28th November, 2015. The insufficient cash flow due to drastic reduction in prices of steel products, cheaper imports into India & slowdown of global economy, being the reasons for non honoring commitments to the bank. As a result interest component on such loan of Rs. 80.00.00.000 has not been provided in the financial statement for the period from 20th December 2015 to 31st March,2016 which has impact on the profitability for the year under reporting, the said figure not being determinable as of now. Further, in relation to this one more banker has classified the lending facilities of Rs. 5.84.00.000 as non-performing as per their communication letter subsequent to balance sheet date and before signing of the financial report.
Auditors have in their report drawn attention to Note No. 2 (xi) to the financial statements regarding reduction in value of inventory amountingRs.78,42,86,306/-
In the opinion of the Board, This denotes the reduction in value of inventory held for day to day operation as raw materials, finished goods, semi-finished goods and trading goods of the company. The reduction in value of stock arose due to sharp decline in finished goods price mainly arose on account of cheaper import of steel into India and fall in international raw material prices. During this slowdown of economy, the company has suffered a lot. The company has calculated reduction value amounting to Rs. 78,42,86,306 which has been treated as non-current assets in the audited financial statement for the year under review. The board of directors has decided to amortize this amount in the subsequent years by charging to profit & loss account on proportionate basic.
Except of the emphasis of matters mentioned above all other observations made by the Statutory Auditors in their report for the financial year ended 31st March 2016 read with the explanatory notes therein are self-explanatory and therefore, do not call for any further explanation or comments from the Board under Section 134(3) of the Companies Act, 2013.
COSTAUDITORS
Pursuant to Section 148 (2) of the Companies Act, 2013 read with the Companies (Cost Records and Audit), Amendment Rules 2014, your Company is required to get its cost accounting records audited by Cost Auditor.
Accordingly, the Board at its meeting held on May 24, 2016 has on the recommendation of the Audit Committee, re-appointed M/s. Ray, Nayak & Associates, Partner CMA. Chaitanya Kumar Ray, Cost Accountants, having office at MIG-26, Manorama Estate, Rasulgarh, Bhubaneswar-751010 (Odisha), as the Cost Auditors of the Company to conduct the audit of the cost accounting records of the Company for the financial year 2016-17 on a remuneration of Rs.30,000/- plus service tax as applicable and reimbursement of actual travel and out of pocket expenses.
The remuneration is subject to the ratification of the members in terms of Section 148 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014 and is accordingly placed for your ratification.
The Cost Auditor submitted their Cost Audit Reports for the financial year 2015-2016 to the Board and the report does not contain any qualification, reservation or adverse remark.
SECRETARIAL AUDITORS AND AUDIT REPORT
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 had appointed M/s. K.K.Giri & Associates, a Practicing Company Secretary (CP No-14459) having office at MIG 9/11 Arya Vihar Sailashree Vihar, Bhubaneswar - 751021 to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit carried out is annexed herewith as Annexure "E".
The report does not contain any observation or qualification requiring explanation or comments from the Board under Section 134(3) of the Companies Act, 2013.
The Board at its meeting held on August 20, 2016, has reappointed M/s. K.K.Giri & Associates, a Practicing Company Secretary (CP No-14459) having office at MIG 9/11 Arya Vihar Sailashree Vihar, Bhubaneswar -751021, as Secretarial Auditor, for conducting Secretarial Audit of the Company for FY 2016-17.
AUDITCOMMITTEE.
Audit Committee is constituted as per Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with Section 177 of the Companies Act, 2013. Composition of Audit Committee is as per Section 177 (8) of Companies Act, 2013. the Prime Objective of the Committee is to monitor and provide effective supervision of the Management''s financial reporting process, to ensure accurate and timely disclosures, with the highest levels of transparency, integrity and quality of financial reporting.
Composition and Terms of reference of the Committee is explained in Detail in the Corporate Governance Part of this Annual Report.
There was no recommendation as such in the Financial Year 2015-2016 from the Audit Committee which was not accepted by the Board.
VIGILMECHANISM
In pursuance of Section 177(9) of the Companies Act, 2013 and Regulation 22 read with Regulation 4(2)(d)(iv) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 , Vigil Mechanism has been Constituted for directors and employees to report genuine concerns and Audit committee shall oversee the vigil mechanism through the committee and provide adequate safeguards against victimization of employees and directors who availed of the vigil mechanism and have a direct access to the chairman of the audit committee in exceptional case.
In case of repeated frivolous complaints being filed by the director or an employee the audit committee may take suitable action including reprimand if necessary.
CONSTITUTION OF STAKEHOLDERS RELATIONSHIP COMMITTEE
The Board has constituted a Stakeholders Relationship Committee According to 178 (5) of the Companies Act 2013 and Regulation 20 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The SR Committee is primarily responsible to review all matters connected with the Company''s transfer of securities and redressal of shareholders'' / investors'' / security holders'' complaints. The Committee also monitors the implementation and compliance with the Company''s Code of Conduct for prohibition of Insider Trading.
Composition and Terms of Reference of the SR Committee is Detailed in Corporate Governance Report Part of this Annual Report.
NOMINATION AND REMUNERATION COMMITTEE
The Board has set up a Nomination and Remuneration Committee In compliance with Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This Committee is responsible for making Policy pursuant to Proviso to Section 178 (3) & (4) read with Rules made there under and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and / or recommending to the Board, the remuneration package Directors, KMP & other employees, including their annual increment and commission after reviewing their performance and also to decide the Criteria for determining appointment Qualifications, Positive attributes, and Independence of a Director
The Details Regarding the Composition of the Committee, Meetings held and Terms Of reference etc.. is Detailed in Corporate Governance Report Part of this Annual Report. And the Detailed Nomination and Remuneration Policy is attached as Annexure ''D'' to this Report.
CONSTITUTION OF CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
Scan Steels''s commitment towards excellence in Health, Safety and Environment is one of the company''s core values by complying with the Laws and Regulations first, and then going beyond the mandate to keep our planet safe for future generations. Minimizing the environment impact of our operations assumes utmost priority.
The company is unwavering in its policy of ''''safety of persons overrides all production targets'''' which drives all employees to continuously break new grounds in safety management for the benefit of the people, property, environment and the communities in which Scan Steels operates. Our dedicated measures by conducting the Risk Assessment, Identification of significant environment aspects of all manufacturing plants and signatory commitment of Responsible Care, Greatest emphasis is given to safety measures for minimizing accidents and incidents.
In View of the above The Board has Constituted Corporate Social Responsibility Committee to Comply the Section 135 of the Companies Act, 2013. Composition and Terms of Reference of which is Detailed in Corporate Governance Report Part of this Annual Report.
RISKMANAGEMENT
During the year, your Directors have constituted a Risk Management Committee in Compliance with Companies Act, 2013 and Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 which has been entrusted with the responsibility to assist the Board in (a) Overseeing and approving the Company''s enterprise wide risk management framework; and (b) Overseeing that all the risks that the organization faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks. A Risk Management Policy was reviewed and approved by the Committee and which can be accessed on the website of the Company at www.scansteels.com - Investor Relations Segment.
The Company manages monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. The Company''s management systems, organizational structures, processes, standards, code of conduct and behaviors together form the Scan Steels Management System that governs how the Group conducts the business of the Company and manages associated risks.
The Company has introduced several improvements to Integrated Enterprise Risk Management, Internal Controls Management and Assurance Frameworks and processes to drive a common integrated view of risks, optimal risk mitigation responses and efficient management of internal control and assurance activities. This integration is enabled by all three being fully aligned across Group wide Risk Management, Internal Control and Internal Audit methodologies and processes.
RE-CONSTITUTION OF VARIOUS BOARD COMMITTEE
Pursuant to Re- Composition of Board , Various Committees of the Company has been Re-constituted in compliance with Applicable Provisions of Companies Act, 2013 and Regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, with Inclusion and Exclusion of New Members of the
Committee in the Board Meeting Held on 24/05/2016. Composition and Terms of reference of the Committees is explained in Detail in the Corporate Governance Part of this Annual Report.
DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.
The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under.
Your Directors state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
CORPORATE GOVERNANCE
Transparency is the cornerstone of your Company''s philosophy and all requirements of Corporate Governance are adhered to both in letter and spirit. All the Committees of the Board of Directors meets at regular intervals as required in terms of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. Your Board of Directors has taken all necessary steps to ensure compliance with all statutory requirements. The Directors and Key Management Personnel of your Company have complied with the approved ''Code of Ethics for Board of Directors and Senior Executives'' of the Company.
The Report on Corporate Governance as required under the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 forms part of this Annual Report. The Auditors'' Certificate on compliance with Corporate Governance requirements is also attached to Corporate Governance''s Report. Further as required under Regulation 17(8) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, a certificate from the Whole- Time Director & CFO is being annexed with this Report.
MANAGEMENT DISCUSSION ANDANALYSIS
In terms of the provisions of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management''s Discussion and Analysis Report for the year under review, is presented in a separate section forming part of the Annual Report.
E-VOTING FACILITYAT AGM
In compliance with Section 108 of the Companies Act, 2013, Rule 20 of the Companies (Management and Administration) Rules, 2014, as substituted by the Companies (Management and Administration) Amendment Rules, 2015 and Regulation 44 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the company is pleased to provide members facility to exercise their votes for all the resolutions detailed in the Notice of the 23rd Annual Report of the company and the business may be transacted through e-voting. The company has engaged the services of Central Depository Services Limited (CDSL) as the authorized agency to provide the e-voting facility.
LISTING ON STOCK EXCHANGE
The Company continues to remain listed with Bombay Stock Exchange Limited and annual listing fee for the same has been paid.
LISTINGAGREEMENT
The Securities and Exchange Board of India (SEBI), on September 2, 2015, issued SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the aim to consolidate and streamline the provisions of the Listing Agreement for different segments of capital markets to ensure better enforceability. The said regulations were effective from December 1, 2015. Accordingly, all listed entities were required to enter in to the Listing Agreement within Six Months from the effective date. The Company entered into Listing Agreement with BSE Limited w.e.f 08.02.2016.
INDUSTRIALRELATIONS
During the year under review, your Company had cordial and harmonious industrial relations at all levels of the Organization.
DISCLOSURES NUMBER OF MEETINGS OFTHE BOARD OF DIRECTORS
During the year, Thirteen Board Meeting were convened and held, details of the meetings of the Board and various Committees of your Company are set out in the Corporate Governance Report which forms part of this Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and Regulation 17 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
EXTRACT OF THEANNUAL RETURN
The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration ) Rules, 2014 and Section 134(3)(a) of Companies Act, 2013 is furnished in Annexure ''F'' and is attached to this Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
There were no loans and guarantees made by the Company under Section 186 of the Companies Act, 2013 during the year under review. However the company has made the investment in quoted securities as a long term investments and the details of the investments covered under the provisions of section 186 o f the companies Act 2013 are given in the financial statements.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The details of conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure ''G'' and is attached to this report.
PARTICULARS OF EMPLOYEES (RULE 5(2), AND 5(3)) AND MANAGERIAL REMUNERATION ( RULE 5(1) ) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES,
2014, AND UNDERSECTION 197(12) OFTHEACT
The total number of employees as on 31st March, 2016 stood at 686.
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1), 5(2) and 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are provided in the Annexure ''H'' in this Report.
MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THEEND OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
In term of Section 134(3)(l) of the Companies Act, 2013, no material changes and commitments have occurred after the close of the year till the date of this Report, which could affect the financial position of the Company.
GENERAL
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
1. Issue of equity shares with differential rights as to dividend, voting or otherwise.
2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this Report.
3. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.
4. There is No Revision of Financial Statement or Board Report Adopted by the Company, thereby there is no Disclosures to be made by the Company u/s 131 of the Companies Act, 2013 for Voluntary Revision of Financial Statement.
5. Your Company has No Holding or Subsidiary Company and thereby, Whole time Director of the Company do not receive any commission or remuneration from the same. Accordingly there is no Details to be Provided by the Company pursuant to Section 197 (14) of the Companies Act, 2013.
Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal)Act, 2013.
ACKNOWLEDGEMENTS
Your Directors wish to place on record their gratitude for the valuable guidance and support rendered by the Government of India, various State Government departments, Financial Institutions, Banks and various stakeholders, such as, shareholders, customers and suppliers, among others. The Directors also commend the continuing commitment and dedication of the employees at all levels, which has been critical for the Company''s success. The Directors look forward to their continued support in future.
FOR AND ON BEHALF OF THE BOARD
Ankur Madaan
Whole- Time Director
(DIN:07002199)
Place: Mumbai Runvijay Singh, Director
Date: 20th August, 2016 (DIN: 02239382)
Mar 31, 2015
Dear Shareowners,
The Directors have pleasure in presenting the Twenty Second Annual
Report of your Company together with the Audited Financial Statements
for the year ended March 31, 2015.
FINANCIAL HIGHLIGHTS / RESULTS
Your Directors take pleasure in presenting the 22nd Annual Report on
the business and operations of your Company along with the financial
statements for the year ended 31 March, 2015.
(Rs. In Lacs)
2014-2015 2013-2014
Net Turnover and other Income 44,966.04 42,456.31
Profit before Tax 536.68 (1,824.97)
Less : Tax Expenses
Current Tax (110.77) -
Deferred Tax (Charge)/ Credit (157.58) (93.71)
Profit After Tax 268.33 (1,918.68)
Less : Prior Period Expenses - -
Net Profit for the year 268.33 (1,918.68)
Surplus Brought Forward from last balance (71.13) 1,875.15
sheet
Earlier Year Adjustment (Tax) - (27.61)
Adjustment for net carrying amount of (128.48) -
tangible fixed assets
Balance at the end of the year 68.72 (71.13)
RESULTS OF OPERATIONS & STATE OF AFFAIRS OF THE COMPANY
The gross turnover and net turnover for the year under review was Rs.
494.03 crores and Rs. 447.55 crores, respectively, and showed a growth
of 6.07% and 5.75%, respectively. The net profit after tax was Rs. 2.68
crores as compared to previous year loss Rs. 19.18 crores. The
remarkable reduction in loss figure is appreciation shows better result
would come in future years.
The Company produced 60,350 tonnes (MT) of TMT Rods in FY 2014-15, up
27% over the previous year. Its steel sales touched 66080.030 MT,
increasing by 45.53% year on year. The Company took several initiatives
during the last financial year that helped in achieving and
consolidating growth in production and sales volumes. It commissioned
new facilities to enrich product mix, leverage the export demand,
diversify its inputs sourcing strategy and strengthen market
penetration through branded and value added special products.
The Company's sustained efforts towards back-end cost control, new
product launches and efficiency improvement measures, supported the
insulation and limited the impact on the profitability margins. The
Company's ability to better utilise capacities and product range will
help derive better margins out of the businesses. The outlook of each
business has been discussed in detail in the 'Management Discussion &
Analysis' which forms a part of this Annual Report.
PRODUCTION & TURNOVER / SALES
The production of steel product during the year under report, compared
to the previous year is given below.
Item Production (Qty in MT)
Years ended Years ended 31st
31st March, 2015 March, 2014
Sponge Iron 125342.000 1,40150.00
MS Ingot/ Billet 67856.000 46284.00
Long and Flat Products 60350.000 47482.00
Item Turnover (Qty in MT)
Years ended Years ended 31st
31st March, 2015 March, 2014
Sponge Iron 80503.570 107464.600
MS Ingot/Billet 6589.550 -
Long and Flat Products 59490.480 45406.55
NEW PROJECTS AND EXPANSION
Your company has emerged as a flourishing and dexterous steel
enterprise because of its ability to cope with the changing steel
scenario and to contribute to the growth of steel production where the
country is aiming to increase the crude steel production to 300 Million
tons by 2025-26 from cur- rently 70 Million tones of production. For
which your company has obtained necessary clearances from appropriate
authorities. The upcoming project compositions are as enumerated
below:-
Sr. Unit Product
No.
1. DRI Kiln Sponge Iron
2. Blast furnace 175 M HM/Pig Iron
3. Iron Ore Crusher Sized Iron Ore
4. Captive Power Plant Power
5. Coal Washery Washed Coal (65 %)
Middlings (30%)
Rejects (5%)
Sr. Unit Rated Capacity Annual
No. Production in
TPA
1. DRI Kiln 2 X 500 TPD_ 3,00,000
2. Blast furnace175M 350 TPD 122,500 Hot Metal
/36,750 Pig Iron
3. Iron Ore Crusher 50 TPH/ 1000TPD 3,00,000
4. Captive Power Plant 30 MW (20 MW
WHRB
4 MW BF Gas
based (TRT)
6 MW AFBC)
5. Coal Washwery 40 TPH/800 TPD 2,40,000
(Coal Input)
Sr. Unit Product
No.
6. SMS
- Induction Furnace Billets
- Elec. Arc Furnace
- Ladle Refining Furnace
- Continues Casting
M/c.
7. Pellet Plant Iron Ore
Pellet
8. Submerged Silico Management
Arc Furnace
9. Rolling Mill-1 TMT Rods/
Bars
10. Rolling Mill-2 Structural .Steel
11. Galvanizing Plant Galvanized Product
12. Fly Ash Bricks Unit Fly Ash Bricks
13. Oxygen Plant Oxygen
Sr. Unit Rated Capacity Annual Production
No. in TPA
6. SMS
Induction furnace
Elec.Arc furnace 2x30 T 3,11,040
Ladle Refining Furnace 1x30 T
Continues Casting 1x4 Strand
M/C
7. Pellet Plant 4,000 TPD 12,00,000
8. Submerged 2x 7.5 MVA 10,200
Arc Furnace
9. Rolling Mill-1 1 x 38 TPH 2,00,000
10. Rolling Mill-2 1 x 38 TPH 2,00,000
11. Galvanizing Plant 20 TPH 108,000
12. Fly Ash Bricks Unit 4x42 TPD 50,400
13. Oxygen Plant 4800 Nm³/hr 622 Mn.
Nm/year
GREENFIELD PROJECT
The process of land acquisition work for our project at Gangajal,
Budhakata, Sundargarh, Odisha is in progress. Discussion with concerned
authorities for allotment of land has been initiated. The environmental
clearances for this proposed project has been obtained from the
appropriate authori- ties.
OUTLOOK
Currently, the Steels business account for nearly 100% of its revenues.
The outlook for its margins and profitability for this business depends
on overall economic outlook. This company is likely to benefit most
from an upturn in the business cycle, given its scale of operations and
its competitive cost positions. Today, it is truly a market-driven
company, making innovative changes and techno- logical improvements,
leaving no stone, unturned in fulfilling dreams of its founding
fathers, tuning every activity to meet the subtle demands of its
customers.
MARKETING ARRANGEMENT
The Company has a Well-organized Marketing Department We have around 50
% market share in Odisha and also catering to outside markets like
Bangalore, Hyderabad, Ghaziabad, Raigarh, Raipur, Goa and Kanpur. We
are in the process expanding our market plan in India by appointment of
Dealers at other major cities across India. We also directly sell to
the Customers through our Market- ing staffs and agents.
DIVIDEND
During the year the Company was successful in reducing the losses
accumulated during the past few years, however the Company does not
have any surplus profits yet. Therefore your directors have expressed
inability to recommend dividend for the financial year ending on 31st
March, 2015.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND
Your Company did not recommended any dividend therefore there were no
such funds which were required to be transferred to Investor Education
and Protection Fund (IEPF).
TRANSFER TO RESERVE
During the financial year 2014-15, the Company is maintaining a balance
of Rs. 1344.12 Lacs in General Reserve, Rs. 59.23 Lacs in Capital
Reserve and Rs. 493.71 Lacs in Amalgamation adjust- ment reserve. An
amount of Rs. 68.72 Lacs is proposed to be retained in the surplus.
CONSOLIDATED FINANCIAL STATEMENT
As per the definition in the Companies Act, 2013 ("the Act") and
Accounting Standard (AS) - 21 on Consolidated Financial Statements read
with AS - 23 on Accounting for Investments, the company does not have
any investment in the Subsidiary Company, Joint Ventures Company or any
other Associates Company therefore the Consolidation of Financial
Statements is not applicable.
DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES
The Company does not have any Subsidiary, Associates and Joint venture
Companies there by; there are no details to be provided under [Rule 8
of the Companies (Accounts) Rules, 2014]. Read with section 129 (3) of
the Companies Act, 2013.during the year under review, no company has
become or ceased as subsidiary, associate or joint venture companies.
FIXED DEPOSITS COVERED UNDER CHAPTER V OF THE COMPANIES ACT, 2013
Pursuant to Section 73, 74 & 76 Rule 8(5)(v) of Companies (Accounts)
Rules, 2014. The details relating to deposits, covered under Chapter V
of the Act are as follows:-
a. accepted during the year - Rs. 4,39,35,000/-
b. remained unpaid or unclaimed as at the end of the year - Rs.
2,77,602
c. whether there has been any default in repayment of deposits or
payment of interest thereon during the year and if so, number of such
cases and the total amount involved -
i. at the beginning of the year - Nil
ii. maximum during the year - Nil
iii. at the end of the year - Nil
There was No default in repayment of deposits or payment of interest
thereon during the year by Company and accordingly No details to be
provided by the Company in this regard.
The details of deposits which are not in compliance with the
requirements of Chapter V of the Act -
Your Company has not accepted any deposits which are not in Compliance
with the requirement of Chapter V of the Act.
CHANGE IN THE NATURE OF BUSINESS, IF ANY
The Company was in to Infrastructural Development, but Pursuant to
Scheme of Merger of M/s. Scan Steels Limited with M/s. Clarus
Infrastructure Realties Limited which was approved by the High Court of
Bombay vide its order dated May 11, 2012 and High Court of Orissa vide
its order dated 25th February, 2014 and the scheme of amalgamation
became effective upon filing of form INC-28 with Registrar of
Companies, Maharashtra on 12th August, 2014 Company is now in to Steel
Manufacturing Business.
Further, the consent of members for alteration in main object has been
obtained through postal ballot and the results of the postal ballot has
been announced on 11th August, 2015. The company is now expanding its
business activities into Derivatives market .
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REF-
ERENCE TO THE FINANCIAL STATEMENTS.
INTERNAL CONTROL SYSTEMS AND AUDIT OVERVIEW
The Company has in place adequate internal financial controls with
reference to financial state- ments, commensurate with the size and
nature of its business, forms an integral part of the Company's
corporate governance policies.
INTERNAL CONTROL
The Company has a proper and adequate system of internal control
commensurate with the size and nature of its business. Internal control
systems are integral to the Company's corporate governance policy. Some
of the significant features of internal control systems includes:
- Documenting of policies, guidelines, authorities and approval
procedures, encompassing the Company's all primary functions.
- Deploying of an ERP system which covers most of its operations and is
supported by a defined on-line authorization protocol.
- Ensuring complete compliance with laws, regulations, standards and
internal procedures and systems.
- De-risking the Company's assets/resources and protecting them from
any loss.
- Ensuring the accounting system's integrity proper and authorised
recording and reporting of all transactions.
- Preparing and monitoring of annual budgets for all operating and
service functions.
- Ensuring the reliability of all financial and operational
information.
- Forming an Audit committee of the Board of Directors, comprising
Independent Directors. The Audit Committee regularly reviews audit
plans, significant audit findings, adequacy of internal controls, and
compliance with accounting standards and so on.
- Forming a comprehensive Information Security Policy and continuous
up-gradation of IT Systems.
The internal control systems and procedures are designed to assist in
the identification and management of risks, the procedure-led
verification of all compliance as well as an enhanced control con-
sciousness.
INTERNAL AUDIT
The Company has a strong internal audit department reporting to the
Audit Committee comprising Independent Directors who are experts in
their field. The scope of work, authority and resources of Internal
Audit (IA) are regularly reviewed by the Audit Committee and its work
is supported by the services of M / s GRC & Associates, the Internal
Auditor of the Company.
The Company continued to implement their suggestions and
recommendations to improve the control environment. Their scope of
work includes review of processes for safeguarding the assets of the
Company, review of operational efficiency, effectiveness of systems and
processes, and assessing the internal control strengths in all areas.
Internal Auditors findings are discussed with the process owners and
suitable corrective actions taken as per the directions of Audit
Committee on an ongoing basis to improve efficiency in operations.
Through IA function the Board obtains the assurance it requires to
ensure that risks to the business are properly identified, evaluated
and managed. IA also provides assurance to the Board on the
effectiveness of relevant internal controls.
INTERNAL FINANCIAL CONTROLS
As per Section 134 (5) (e) of the Companies Act 2013, the Directors
have an overall responsibility for ensuring that the Company has
implemented robust systems and framework of internal financial
controls. This provides the Directors with reasonable assurance
regarding the adequacy and operating effectiveness of controls with
regards to reporting, operational and compliance risks. To enable them
to meet these responsibilities, the Company has devised appropriate
systems and framework including proper delegation of authority,
policies and procedures, effective IT systems aligned to business
requirements, risk based internal audit framework, risk management
framework and whistle blower mechanism.
The Audit Committee regularly reviews the internal control system to
ensure that it remains effective and aligned with the business
requirements. Where weaknesses are identified as a result of the
reviews, new procedures are put in place to strengthen controls. These
are in turn reviewed at regular intervals.
The Company has developed a framework for designing and assessing
effectiveness of internal controls over financial reporting and has
already laid down entity level policies and process level standard
operating procedures.
The entity level policies comprise anti-fraud policies (code of
conduct, including conflict of interest, confidentiality and
whistle-blower policy) and other policies (organization structure,
roles and responsibilities, insider trading policy, HR policy, related
party policy, prevention of sexual harassment policy, IT security
policy, business continuity and disaster recovery plan and treasury
risk management policy). The Company has also prepared Standard
Operating Practices (SOP) for each of its processes of revenue to
receive, procure to pay, hire to retire, finance and accounts, fixed
assets, treasury, inventory, manufacturing operations, and
administrative expenses.
Directors had devised proper systems to ensure compliance with the
provisions of all applicable laws and During the year, such controls
were tested and no reportable material weakness in the design or
operation were observed and such systems were adequate and operating
effectively.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
All contracts / arrangements / transactions entered by the Company
during the financial year with related parties were in the ordinary
course of business and on an arm's length basis and Detail of which is
furnished in the Annexure 'A' in Form AOC-2 attached with this Report.
Even though approval of the Shareholders not required under the
provisions of the Companies Act, 2013 for transactions which are in the
ordinary course of the Company's business and are at arm's length
basis, but in terms of the Securities and Exchange Board of India
Circular No. CIR/CFD/ POLICY CELL/2/2014 dated 17 April 2014 and the
revised Clause 49 of the Listing Agreement, to be effective from
October 1, 2014, the monetary limit of the transaction may exceed the
limits as pro- vided under Section 188 of the Companies Act, 2013 and
revised Clause 49 of the Listing Agreement. Therefore, approval of the
Shareholders is received by the Company in terms of Section 188 of the
Companies Act, 2013 read with the applicable rules as well as the
proposed Clause 49 of the Listing Agreement, at an Extra Ordinary
General Meeting held on 26th March, 2015, for Purchase/ Sale of Raw
Material and Finished Goods, on arm's length basis, for an aggregate
amount not exceeding the limit as set out in the resolution.
Further, there are no materially significant related party transactions
made by the Company with Promoters, Directors, Key Managerial Personnel
or other designated persons which may have a potential conflict with
the interest of the Company at large. All Related Party Transactions
are placed before the Audit Committee as also the Board for approval.
Prior omnibus approval of the Audit Committee is obtained on a
quarterly basis for the transactions which are of a foreseen and
repetitive nature. The transactions entered into pursuant to the
omnibus approval so granted are subject to internal audit and a
statement giving details of all related party transactions is placed
before the Audit Committee and the Board of Directors for their
approval on a quarterly basis. The Company has developed an Internal
Guide on Related Party Transactions Manual and prescribed, Standard
Operating Procedures for purpose of identification and monitoring of
such transactions. The policy on Related Party Transactions as
approved by the Board is uploaded on the Company's website. None of the
Directors has any pecuniary relationships or transactions vis-Ã -vis the
Company.
The Policy on materiality of related party transactions and dealing
with related party transactions as approved by the Board may be
accessed on the Company's website at the link: http://
www.scansteels.com/?page_id=2823
Your Directors draw attention of the members to Note No. 2 to the
financial statement which sets out related party disclosures.
ISO CERTIFICATION
Your company is having a status of ISO 9001, ISO 14001 and ISO 18001
certification, which is internationally recognized for the production,
quality control and Environmental as well as OHSAS respectively.
CREDIT RATING
CARE has reaffirmed "CARE B '" (Single B Plus) rating to the long term
bank facilities of your Company. Fixed Deposits are also rated "CARE
B " (Single B Plus). The rating reaffirmed to the short-term bank
facilities of your Company is " CARE A4 " (A Four Plus).
BRANDING INITIATIVE
The "SHRISTII" brand for its TMT bars are well accepted in the market
in varied segments and sectors with wide customer base.
INSURANCE
The Assets of the company are adequately insured against the loss of
fire, riot, earthquake, loss of profit etc, and other risk which is
considered by management, In addition to this coverage, a statu- tory
public liability insurance policy has been taken to cover by the
company for providing against the public liability arising out of
industrial accidents for employees working in plants.
INDUSTRIAL RELATIONS AND PERSONNEL
Your Company attaches great importance to human resource. Over a period
of time, we have built and nurtured a dedicated and excellent workforce
and also recruiting new people in order to meet the revival plans of
the company. The processes for attracting, retaining and rewarding
talent are well laid down and the systems are transparent to identify
and reward performers. Company is committed to the welfare of its
people and their families and to improve the quality of their life by
providing the required facilities. The Company recognizes the
importance and contribution of its people towards achieving the common
goal. During the year under the review, industrial relations at all
units of the Company continued to be cordial and peaceful.
FINANCE
During the year all the finance commitment were met in time. Liquidity
throughout the year was quite comfortable. The company has no unpaid or
unclaimed deposit at the end of the year.
BANKERS AND CONSORTIUM ARRANGEMENT
The Company has consortium arrangement of their bankers with State Bank
of India as Lead Bank. This consortium arrangement is well defined and
take care of company's term loan and working capital requirement from
time to time. The consortium members meet regularly at company office
quarterly and also visit company's plant from time to time.
SAFETY
The company has continued to scale up safety performance at all
locations. Safety measures have been strengthened and employees are
being trained to think on hazards/risks associated with their job.
Systems have been established to make employees responsible and
accountable for safety. Good safety performance is being rewarded.
While Safety has been included as a corporate value, the main objective
is to achieve better standard of safety in the shortest possible time.
HUMAN RESOURCE DEVELOPMENT
The company has been given much emphasis on Human Resources Development
and thus has been well recognized in the steel industrial for sound
Human Resources Management. The Company has emerged as a true national
firm with cosmopolitan atmosphere. The company's HR polices and process
is as well aligned to effectively suit its expanding business horizons
and future manpower requirement. This has been achieved by continuously
stressing upon training & development, empowerment and creating a
compelling work environment and maintaining well structured re- ward &
recognition mechanism. Company is committed to the welfare of its
people and their families and to improve the quality of their life by
providing the required facilities.
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility is the continuing commitment by the
business to behave ethically and contribute to economic development
while improving the quality of life of the workforce and their families
as well as of the local community and society at large. As a part of
its policy for corporate social responsibility, the Company is
associated with charitable and social activities and thereby playing a
pro-active role in the socioeconomic growth. In structuring its efforts
to the various aspects of Corporate Social Responsibilities, the
Company takes account guidelines and statements issued by stakeholders
and other regulatory bodies.
The management has adopted corporate social responsibility (CSR) well
at par with its business with the objective of creating wealth in the
community with focus on education, heath, water and society. Social
welfare, community development, economic and environmental
responsibilities are at the core of the CSR of the Company.
The Corporate Social Responsibility Committee (CSR Committee)
Composition and Terms of refer- ence of which is detailed in the
Corporate Governance Part of this Annual Report. has formulated and
recommended to the Board, a Corporate Social Responsibility Policy (CSR
Policy) indicating the activities to be undertaken by the Company,
which has been approved by the Board.
The key philosophy of all CSR initiatives of the Company is guided by
three core commitments of Scale, Impact and Sustainability.
The Company has identified six focus areas of engagement which are as
under:
- Rural Transformation: Creating sustainable livelihood solutions,
addressing poverty, hun- ger and malnutrition.
- Health: Affordable solutions for healthcare through improved access,
awareness and health seeking behavior.
- Education: Access to quality education, training and skill
enhancement.
- Environment: Environmental sustainability, ecological balance,
conservation of natural re- sources.
- Protection of National Heritage, Art and Culture: Protection and
promotion of India's art, culture and heritage.
The Company would also undertake other need based initiatives in
compliance with Schedule VII to the Act.
The disclosures required to be made as per Rule 9 of Companies
(Corporate Social Responsibility Policy) Rules, 2014 is annexed to this
report as Annexure 'B'.
The CSR Policy of the Company is available on the company's website and
may be accessed at http:/ / www.scansteels.com/? page_id=2823
SHARE CAPITAL
INCREASE IN AUTHORISED SHARE CAPITAL
The Company has increased its authorized share capital from Rs.
58,00,00,000/- (Rupees Fifty Eight Crore only) divided into 5,80,00,000
(Five Crore Eighty Lacs) equity shares of Rs. 10/- (Rupees Ten) each to
Rs. 70,00,00,000/- (Rupees Seventy Crores only) divided into
7,00,00,000 (Seven Crore) equity shares of Rs. 10/- (Rupees Ten) each,
through ordinary resolution passed by the members in the previous AGM
held on 30th December, 2014.
RE-CLASSIFICATION OF AUTHORIZED SHARE CAPITAL
In order to facilitate the issue and Allotment Non-cumulative
Redeemable Preference Shares (NCRPS), The company had re-classified its
Authorised Share Capital from Rs. 70,00,00,000/- (Rupees Seventy
Crores only) divided into 7,00,00,000 (Seven Crore) equity shares of
Rs. 10/- (Rupees Ten) each to Rs. 70,00,00,000/- (Rupees Seventy Crores
only) divided into 5,50,00,000 (Five Crore Fifty Lacs) equity shares of
Rs. 10/- (Rupees Ten) each and 1,50,00,000 (One Crore Fifty Lacs only)
Non- cumulative Redeemable Preference Share of Rs. 10/- (Rupees Ten)
each, after members approval through Postal Ballot, results announced
on 11th August, 2015 and accordingly, the capital Clause of Memorandum
of Association of the Company is amended.
ISSUED/SUBSCRIBED/PAID UP CAPITAL
To meet the Working Capital requirements and long term funds for
modernization & renovation of the existing plant, your Company raised
funds through preferential issue of equity shares.
Pursuant to Preferential Allotment Issued, Subscribed and Paid-up Share
Capital of the Company shall stand Increased from Rs. 37,80,03,000/-
(Rupees Thirty Seven Crore Eighty Lakhs Three Thou- sand Only) divided
into 37,800,300 (Three Crore Seventy Eight Lakhs Three Hundred) Equity
Shares of Rs. 10/- (Rupees Ten) to Rs. 44,35,23,000 (Forty Four Crore
Thirty Five Lakhs Twenty Three Thousand) divided into 4,43,52,300 (Four
Crore Forty Three Lakhs Fifty Two Thousand Three Hundred ) Equity
Shares of Rs. 10/- (Rupees Ten).
Further to this the company has also issued and allotted 1,28,49,605
Non-cumulative Redeemable Preference Shares ("NCRPS") of Rs. 10/-
(Rupees Ten) each at a premium of Rs. 30/- (Rupees Thirty) per NCRPS
for an aggregate amount of Rs. 51,39,84,200/- (Rupees Fifty One Crore
Thirty Nine Lacs Eighty Four Thousand Two Hundred Only), at a Rate of
Dividend - 1 % p.a., after members approval through Postal Ballot,
results announced on 11th August, 2015.
Accordingly, the Company's paid-up equity share capital remained at Rs.
44,35,23,000 (Forty Four Crore Thirty Five Lakhs Twenty Three Thousand)
divided into 4,43,52,300 (Four Crore Forty Three Lakhs Fifty Two
Thousand Three Hundred) fully paid up Equity Shares of Rs. 10/- (Rupees
Ten Only) each and the preference share capital is Rs. 12,84,96,050/-
(Twelve Crore Eighty Four Lacs Ninety Six Thousand Fifty) divided into
1,28,49,605 (One crore Twenty Eight Lacs Forty Nine Thou- sand Six
Hundred Five only) fully paid up NCRPS of Rs. 10/- (Rupees Ten) each.
ALTERATION IN THE OBJECT CLAUSE OF THE COMPANY
The Directors of your Company have been considering various proposals
to diversify its business portfolio and growing opportunities, the
company is planning to enter into certain new business ventures. The
Board of Directors in its meeting held on 3rd July, 2015, proposed to
carry on the business of merchant, broker, sub-broker of all type of
commodities and/ or goods and deal in future and option and in other
derivatives in commodity exchange of India including trading in shares,
derivatives, currencies and readymade garments including yarns, fabrics
of wool, poplin, cotton, jute, silk, rayon, nylon and other natural,
synthetics, and/or fibrous substance etc.
As mentioned in above Company has altered its object clause of the
Company in order to include aforementioned New Objectives in the Main
Object and said Alteration of Memorandum of Association was approved
by the Members through Postal Ballot and results has been announced on
11th August, 2015
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act,
2013 and in terms of the Articles of Association of the Company, Mr.
Rajesh Gadodia, Managing Director (DIN 00574465), retires by rotation
at the forthcoming Annual General Meeting and being eligible, offers
himself for re-appointment.
The proposal regarding the re-appointment of the aforesaid Director is
placed for your approval. The Board of Directors recommend his
re-appointment. The brief resume and other information of the concerned
directors, in terms of the provisions of clause 49 of the Listing
Agreement with stock exchange have been detailed in the notice
convening the forthcoming Annual General Meeting.
Mr. R. P. Singh (DIN 03411893) has been resigned and ceased to be
Director w. e. f. 28/01/2015. The Board placed on record appreciation
of his service to the Company and look forward for his continuance
support in future.
During the years under review, the Board based on the recommendation
received from the Nomination and Remuneration Committee had posposed
the name of Smt. Denjani Sahu as Independent Director and The members
approved the appointment of Mrs. Debjani Sahu (DIN: 02674022) as
Independent woman directors of the company at the extra Ordinary
General Meeting held on 26th March, 2015, who is not liable to retire
by rotation.
Mr. Gobinda Chandra Nayak had been appointed as, Chief Financial
Officer with effect from 14th November, 2014.
Mr. Prabir Das had been appointed as, Company Secretary & Compliance
Officer with effect from 14th March, 2014 .
Company's policy of appointment and remuneration for directors, KMP and
other employees including criteria for determining qualifications,
positive attributes, director's independence (read with Sections 178
(1) (3) (4)
The Nomination and Remuneration Committee works with the Board to
determine the appropriate characteristics, skills and experience for
the Board as a whole and its individual members with the objective of
having a Board with diverse backgrounds and experience in business,
government, education and public service. Characteristics expected of
all Directors include independence, integrity, high personal and
professional ethics, sound business judgment, ability to participate
constructively in deliberations and willingness to exercise authority
in a collective manner.
The Company's Policy relating to appointment of Directors, payment of
Managerial remuneration, Directors' qualifications, positive
attributes, independence of Directors and other related matters as
provided under Section 178(3) of the Companies Act, 2013 is furnished
in Annexure 'C and is attached to this report.
Further, Nomination and Remuneration Policy for Directors, Key
Managerial Personnel and other employees 2013 is furnished in Annexure
'D' and is attached to this report.
Declaration by an Independent Director(s)
As required under section 149(7) of the Companies Act, 2013, The
Company has received declarations from all the Independent Directors
of the Company confirming that they meet the criteria of independence
and / or to qualify themselves to be appointed as Independent Directors
as pre- scribed both under Section 149 (6) of the Companies Act' 2013
and Clause 49 of the Listing Agree- ment with the Stock Exchanges and
the declarations are put up on the website of the Company at the link:
http://www.scansteels.com/ ?page_id=2823
Familliarisation Programme for Independent Directors.
All New Independent Directors (IDs) inducted into the Board are given
an orientation. Presentations are made by Executive Directors (EDs) and
Senior Management giving an overview of our operations, to
familiarize the new IDs with the Company's business operations. The new
IDs are given an orientation on our products, group structure, Board
constitution and Procedures, matters reserved for the Board, and our
major risks and risk management strategy.
The company familiarises the Independent Directors of the Company with
their roles, rights, responsibilities in the company, nature of the
industry in which the company operates, business model of the company,
etc and related matters are put up on the website of the Company at the
link: http:// www.scansteels.com/?page_id=2823
Separate Independent Director Meeting
A separate meeting of the independent directors ("Annual ID meeting")
was convened on 28th March, 2015, which reviewed the performance of the
Board (as a whole), the non-independent directors and the Chairman.
Post the Annual ID meeting, the collective feedback of each of the
Independent Directors was discussed by the Chairperson of the
Nomination Remuneration Committee with the Board covering performance
of the Board as a whole, performance of the non-independent directors
and performance of the Board Chairman.
BOARD ANNUAL EVALUATION
In compliance with the Section 134(3) (p) Company has devised a Policy
for performance evaluation of Independent Directors, Board, Committees
and other individual Directors which includes criteria for performance
evaluation of the non-executive directors and executive directors.
The Board carried out an annual performance evaluation of its own
performance, the individual Directors as well as the working of the
Committees of the Board. The performance evaluation of the Independent
Directors was carried out by the entire Board. The performance
evaluation of the Chair- man and the Non- Independent Directors was
carried out by Independent Directors. Details of the same are given in
the Report on Corporate Governance annexed hereto.
The Chairperson of the Nomination and Remuneration Committee (NRC) held
separate discussions with each of the Directors of the Company and
obtained their feedback on overall Board effectiveness as well as on
each of the other Directors.
The Detailed Policy on Performance Evaluation of Independent Directors,
Board, Committees and other individual Directors can be accessed from
the website of the Company at the link: http://
www.scansteels.com/?page_id=2823
MANAGERIAL REMUNERATION:
The following disclosures have been mentioned in detailed under the
heading "Corporate Governance", part of this Annual Report : Â
(i) all elements of remuneration package such as salary, benefits,
bonuses, stock options, pension, etc., of all the directors;
(ii) details of fixed component and performance linked incentives along
with the performance criteria;
(iii) service contracts, notice period, severance fees;
(iv) Stock option details, if any, and whether the same has been issued
at a discount as well as the period over which accrued and over which
exercisable.
CODE OF INDEPENDENT DIRECTORS - SCHEDULE - IV
The Board has considered Code of Independent Directors as prescribed in
Schedule IV of the Companies Act, 2013. The code is a guide to
professional conduct for independent directors' adherence to these
standards by independent directors and fulfillment of their
responsibility in a professional and faithful manner will promote
confidence of the investment community and regulators.
The broad items for code for independent directors are:
(i) Guidelines for Professional conduct.
(ii) Role and Functions.
(iii) Duties
(iv) Manner and process of appointment.
(v) Re-appointment on the basis of report of performance evaluation.
(vi) Resignation or Removal.
(vii) At least one Separate meeting of Independent Directors in a year
without attendance of non independent directors or members of
management.
(viii) Evaluation mechanism of Independent Directors by entire Board of
Directors.
The Detailed Code of Conduct of Independent Directors of the Company
and Code of Conduct for Board of Directors and Senior Management of the
Company can be accessed on the website of the Company at the link:
http://www.scansteels.com/?page_id=2823
KEY MANAGERIAL PERSONNEL
In compliance with the provisions of Section 203 of the Companies Act,
2013 and the requirement of Listing Agreement, the Company has
appointed Mr. Rajesh Gadodia as Managing Director, Mr. Prabir Kumar
Das, Company secretary & Compliance officer and Mr. Gobinda Chandra
Nayak, Chief Financial Officer (CFO) of the company.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirements under section 134(3)(c) and 134(5) of the
Companies Act, 2013, your directors hereby state and confirm that Â
a) In the preparation of the annual accounts, the applicable accounting
standards had been followed along with proper explanation relating to
material departures;
b) The directors 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 as at March 31, 2015 and of the profit and loss of the
company for the year ended on that date;
c) The directors had taken proper and sufficient care for the
maintenance of adequate account- ing records in accordance with the
provisions of this 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; and
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.
AUDITORS AND AUDITOR'S REPORT
Statutory Auditors
M/s. SRB & Associates, Chartered Accountant (Firm's Registration No.
310009E) of Bhubaneswar were appointed as Statutory Auditors for a
period of five consecutive year in the 21st Annual General Meeting held
on 30th December, 2014 and hold office till the conclusion of 26th
Annual General Meeting.
In terms of Section 139(1) of the Companies Act, 2013, the appointment
of statutory auditors to hold the office from the conclusion of the
21st AGM until the conclusion of 26th AGM , placed for your
ratification.
The Company has received necessary consent and certificates under
Section 139 from the above Auditors to the effect that they satisfied
the criteria provided in section 141 of the Companies Act, 2013 read
with Cos. (Audit &Auditors) Rules, 2014.
AUDITORS' REPORT
The observations made by the Statutory Auditors in their report for the
financial year ended 31st March 2015 read with the explanatory notes
therein are self-explanatory and therefore, do not call for any further
explanation or comments from the Board under Section 134(3) of the
Companies Act, 2013. The Auditors' Report does not contain any
qualification, reservation or adverse remark.
COST AUDITORS
Pursuant to the provisions of Section 148 (3) of the Companies Act,
2013 and Rule 14 of the Companies (Audit and Auditors) Rules, 2014,
the Board has re-appointed M/s. Ray, Nayak & Associates, Partner CMA.
Chaitanya Kumar Ray, Cost Accountants, having office at MIG-26,
Manorama Estate, Rasulgarh, Bhubaneswar - 751010 (Odisha), as the Cost
Auditors of the Company to conduct an audit of the cost records
maintained by the Company for the financial year 2015-2016 on a
remuneration of Rs. 30,000/- plus service tax as applicable and
reimbursement of actual travel and out of pocket expenses. The
remuneration is subject to the ratification of the members in terms of
Section 148 read with Rule 14 of the Companies (Audit and Auditors)
Rules, 2014 and is accordingly placed for your ratification.
The Cost Auditor submitted their Cost Audit Reports for the Financial
year 2014-2015 to the Board and The report does not contain any
qualification, reservation or adverse remark.
SECRETARIAL AUDITORS AND AUDIT REPORT
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 had appointed M/s. D P Associates,
a Practicing Company Secretary (CP No-6828) having office at 774,
Jayadev Vihar, Lane-3, Bhubaneswar - 751013 to undertake the
Secretarial Audit of the Company. The Report of the Secretarial Audit
carried out is annexed herewith as Annexure "E". The report does not
contain any observation or qualification requiring explanation or
comments from the Board under Section 134(3) of the Companies Act,
2013.
The Board at its meeting held on August 31, 2015, has reappointed M/s.
D P Associates, a Practicing Company Secretary (CP No-6828), as
Secretarial Auditor, for conducting Secretarial Audit of the Company
for FY 2015-16.
AUDIT COMMITTEE.
Audit Committee is constituted as per provision of Clause 49 of the
Listing Agreement with the Stock Exchange read with Section 177 of the
Companies Act, 2013. Composition of Audit Committee as per Section 177
(8) of Companies Act, 2013, the Prime Objective of the Committee is to
monitor and provide effective supervision of the Management's financial
reporting process, to ensure accurate and timely disclosures, with the
highest levels of transparency, integrity and quality of financial
reporting.
Composition and Terms of reference of the Committee is explained in
Detail in the Corporate Governance Part of this Annual Report.
There was no recommendation as such in the Financial Year 2014-2015
from the Audit Committee which was not accepted by the Board.
VIGIL MECHNISM
In pursuance of Section 177(9) of the Companies Act, 2013 Vigil
Mechanism has been Constituted for directors and employees to report
genuine concerns and Audit committee shall oversee the vigil mechanism
through the committee and provide adequate safeguards against
victimization of employees and directors who availed of the vigil
mechanism and have a direct access to the chairman of the audit
committee in exceptional case.
In case of repeated frivolous complaints being filed by the director or
an employee the audit commit- tee may take suitable action including
reprimand if necessary.
CONSTITUTION OF STAKEHOLDERS RELATIONSHIP COMMITTEE
The Board has constituted a Stakeholders Relationship Committee
According to 178 (5) of the Companies Act 2013. The SR Committee is
primarily responsible to review all matters connected with the
Company's transfer of securities and redressal of shareholders' /
investors' / security holders' complaints. The Committee also monitors
the implementation and compliance with the Company's Code of Conduct
for prohibition of Insider Trading.
Composition and Terms of Reference of the SR Committee is Detailed in
Corporate Governance Report Part of this Annual Report.
CONSTITUTION OF CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
Scan Steels's commitment towards excellence in Health, Safety and
Environment is one of the company's core values by complying with the
Laws and Regulations first, and then going beyond the mandate to keep
our planet safe for future generations. Minimizing the environment
impact of our operations assumes utmost priority.
The company is unwavering in its policy of ''safety of persons
overrides all production targets'' which drives all employees to
continuously break new grounds in safety management for the benefit of
the people, property, environment and the communities in which Scan
Steels operates. Our dedicated measures by conducting the Risk
Assessment, Identification of significant environment aspects of all
manufacturing plants and signatory commitment of Responsible Care,
Greatest emphasis is given to safety measures for minimizing
accidents and incidents.
In View of the above The Board has Constituted Corporate Social
Responsibility Committee to Com- ply the Section 135 of the Companies
Act, 2013. Composition and Terms of Reference of which is Detailed in
Corporate Governance Report Part of this Annual Report.
NOMINATION AND REMUNERATION COMMITTEE
The Board has set up a Nomination and Remuneration Committee. This
Committee is responsible for making Policy pursuant to Proviso to
Section 178 (3) & (4) and / or recommending to the Board, the
remuneration package Directors, KMP & other employees, including their
annual increment and commission after reviewing their performance and
also to decide the Criteria for determining appointment
Qualifications, Positive attributes, and Independence of a Director
The Details Regarding the Composition of the Committee, Meetings held
and Terms Of reference etc.. is Detailed in Corporate Governance
Report Part of this Annual Report. And the Detailed Nomination and
Remuneration Policy is attached as Annexure 'D' to this Report.
DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PRE-
VENTION, PROHIBITION AND REDRESSAL) ACT, 2013.
The Company has zero tolerance towards sexual harassment at the
workplace and has adopted a policy on prevention, prohibition and
redressal of sexual harassment at workplace in line with the provisions
of the Sexual Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013 and the Rules thereunder.
Your Directors state that during the year under review, there were no
cases filed pursuant to the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013.
CORPORATE GOVERNANCE REPORT
The Company is committed to maintain the highest standards of corporate
governance and adhere to the corporate governance requirements set out
by SEBI. The Company has also implemented several best corporate
governance practices as prevalent globally.
Pursuant to Clause 49 of the Listing Agreements with the Stock
Exchanges, Corporate Governance Report and the Managing Director's and
Auditors' Certificate regarding compliance of conditions of Corporate
Governance are made part of the Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS
Management's Discussion and Analysis Report for the year under review,
as stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges in India, is presented in a separate section forming part of
the Annual Report.
E-VOTING FACILITY AT AGM
In compliance with the provisions of the Clause - 35B of the Listing
Agreement read with Section 108 of the Companies Act, 2013 and the Rule
20 of the Companies (Management and Administration) Rules, 2014, the
company is pleased to provide members facility to exercise their votes
for all the resolutions detailed in the Notice of the 22nd Annual
Report of the company and the business may be transacted through
e-voting. The company has engaged the services of Central Depository
Ser- vices Limited (CDSL) as the authorized agency to provide the
e-voting facility.
RISK MANAGEMENT
During the year, your Directors have constituted a Risk Management
Committee which has been entrusted with the responsibility to assist
the Board in (a) Overseeing and approving the Company's enterprise wide
risk management framework; and (b) Overseeing that all the risks that
the organization faces such as strategic, financial, credit, market,
liquidity, security, property, IT, legal, regulatory, reputational
and other risks have been identified and assessed and there is an
adequate risk management infrastructure in place capable of addressing
those risks. A Risk Management Policy was reviewed and approved by the
Committee.
The Company manages monitors and reports on the principal risks and
uncertainties that can impact its ability to achieve its strategic
objectives. The Company's management systems, organisational
structures, processes, standards, code of conduct and behaviors
together form the Scan Steels Management System that governs how the
Group conducts the business of the Company and manages associated
risks.
The Company has introduced several improvements to Integrated
Enterprise Risk Management, Internal Controls Management and Assurance
Frameworks and processes to drive a common inte- grated view of risks,
optimal risk mitigation responses and efficient management of internal
control and assurance activities. This integration is enabled by all
three being fully aligned across Group wide Risk Management, Internal
Control and Internal Audit methodologies and processes.
LISTING ON STOCK EXCHANGE
The Company continues to remain listed with Bombay Stock Exchange
Limited and annual listing fee for the same has been paid.
INDUSTRIAL RELATIONS
During the year under review, your Company had cordial and harmonious
industrial relations at all levels of the Organization.
DISCLOSURES
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
During the year, Ten Board Meeting were convened and held, the details
of which are given in the Corporate Governance Report part of this
Annual Report. The Intervening gap between the meetings was within the
period prescribed under the Companies Act, 2013.
EXTRACT OF THE ANNUAL RETURN
The extracts of Annual Return pursuant to the provisions of Section 92
read with Rule 12 of the Companies (Management and administration )
Rules, 2014 and Section 134(3)(a) of Companies Act, 2013 is furnished
in Annexure 'F' and is attached to this Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
There were no loans, guarantees or investments made by the Company
under Section 186 of the Companies Act, 2013 during the year under
review and hence the reporting under the said provision is not
applicable to the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARN-
INGS AND OUTGO
The details of conservation of energy, technology absorption, foreign
exchange earnings and outgo as required under Section 134 (3)(m) of the
Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts)
Rules, 2014 is furnished in Annexure 'G and is attached to this report.
PARTICULARS OF EMPLOYEES (RULE 5(2), AND 5(3)) AND MANAGERIAL REMUNERA-
TION ( RULE 5(1) ) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF
MANA- GERIAL PERSONNEL) RULES, 2014 , AND UNDER SECTION 197(12) OF THE
ACT
Disclosures pertaining to remuneration and other details as required
under Section 197(12) of the Act read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Person- nel) Rules, 2014,
are provided in the Annexure 'H' in this Report.
During the year under review there were no employees receiving
remuneration of or in excess of limits prescribed as per the provisions
of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and
5(3) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014.
MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSI-
TION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINAN-
CIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND
THE DATE OF THE REPORT
In term of Section 134(3)(l) of the Companies Act, 2013, no material
changes and commitments have occurred after the close of the year till
the date of this Report, which could affect the financial position of
the Company.
GENERAL
Your Directors state that no disclosure or reporting is required in
respect of the following items as there were no transactions on these
items during the year under review:
1. Issue of equity shares with differential rights as to dividend,
voting or otherwise.
2. Issue of shares (including sweat equity shares) to employees of the
Company under any scheme save and except ESOS referred to in this
Report.
3. No significant or material orders were passed by the Regulators or
Courts or Tribunals which impact the going concern status and Company's
operations in future.
4. There is No Revision of Financial Statement or Board Report Adopted
by the Company, thereby there is no Disclosures to be made by the
Company u/s 131 of the Companies Act, 2013 for Voluntary Revision of
Financial Statement.
5. Your Company has No Holding or Subsidiary Company and thereby,
neither managing Director nor Whole time Director of the Company
received any commission or remuneration from the same. Accordingly
there is no Details to be Provided by the Company pursuant to Section
197 (14) of the Companies Act, 2013.
Your Directors further state that during the year under review, there
were no cases filed pursuant to the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013.
ACKNOWLEDGEMENTS
Your Directors wish to place on record their gratitude for the valuable
guidance and support rendered by the Government of India, various
State Government departments, Financial Institutions, Banks and various
stakeholders, such as, shareholders, customers and suppliers, among
others. The Directors also commend the continuing commitment and
dedication of the employees at all levels, which has been critical for
the Company's success. The Directors look forward to their continued
support in future.
FOR AND ON BEHALF OF THE BOARD
Rajesh Gadodia , Managing Director
(DIN: 00574465)
Date : 31st August, 2015 Nimish Gadodia, Director
Place: Mumbai (DIN: 01258815)
Mar 31, 2014
Dear Members,
FINANCIAL HIGHLIGHTS Rs.in Lacs
2013-2014 2012-2013
Net Turnover and other Income 42,456.31 42,753.73
Profit before Tax (1,824.97) (5,220.02)
Less : Tax Expenses
Current Tax - -
Deferred Tax (Charge)/ Credit (93.71) (216.16)
Profit After Tax (1,918.68) (5,436.18)
Less : Prior Period Expenses
Net Profit for the year (1,918.68) (5,436.18)
Surplus Brought Forward from last
balance sheet 1,875.15 7,311.33
Earlier Year Adjustment (Tax) (27.61) -
Surplus Carried forward (71.13) 1,875.15
Note: Scheme of Merger became effective on filling of High Court Order
with Registrar of Companies on 12th August, 2014, Hence the effect of
merger has been given in the books of accounts and therefore the
figures of operation are consolidated figures of the Transferor company
as well as transferee company and not comparable with previous year
directors report.
OPERATIONS:
The company has achieved a Net Turnover & Other Income of ? 42456.31
lakhs during the year which is lower by less than 1% in comparison to
previous year''s turnover & other income figures. But the company is
able to restrict the net loss for the year to ? 1918.68 lakh only in
comparison to previous year''s net loss of ? 5436.18 lakh. The
remarkable reduction in loss figure is appreciation shows better result
would come in future years .
PRODUCTION & TURNOVER
The production of steel product during the year under report, compared
to the previous year is given below.
Item Production (Qty in MT) Turnover (Qty in MT)
Years ended Years ended Years ended Years ended
31st March 31st March 31st March 31st March
2014 2013 2014 2013
Sponge Iron 140150.00 131157.00 107464.600 94592.470
MS Ingot/Billet 46284.00 41523.00 - -
Long and Flat
Products 47482.00 54240.00 45406.55 54108.40
NEW PROJECTS AND EXPANSION
Your company has emerged as a flourishing and dexterous steel
enterprise because of its ability to cope with the changing steel
scenario and to contribute to the growth of steel production where the
country is aiming to increase the crude steel production to 300 Million
tones by 2025-26 from currently 70 Million tones of production. For
which your company has obtained necessary clearances from appropriate
authorities. The upcoming project compositions are as enumerated
below:-
S.l. Unit Product Rated Capacity
No.
1. DRI Kiln Sponge Iron 2 X 500 TPD
2. Blast furnace 175 M3 HM/Pig Iron 350 TPD/
3. Iron Ore Crusher Sized Iron Ore 50 TPH/1000TPD
4 Captive Power Plant Power 30 MW (20 MW WHRB
4 MW BF Gas based
(TRT)
6 MW AFBC)
5 Coal Washery Washed Coal (65 %) 40TPH/800TPD
Middlings (30%)
Rejects (5%)
6 SMS
. Induction Furnace Billets
. Elec. Arc Furnace 2 x30 T
. Ladle Refining Furnace 1x30 T
.Continues Casting M/c. 1x4 Strand
7 Pellet Plant Iron Ore 4,000 TPD
Pellet
8 Submerged Silico Management 2x 7.5 MVA
Arc Furnace
9 Rolling Mill-1 TMT Rods/ 1 x 38 TPH
Bars
10. Rolling Mill-2 Structural .Steel 1 x 38 TPH
11. Galvanizing Plant Galvanized Product 20 TPH
12. Fly Ash Bricks Unit Fly Ash Bricks 4x42 TPD
13. Oxygen Plant Oxygen 4800 Nm³/hr
Unit Annual Production in TPA
DRI Kiln 3,00,000
Blast furnace 175 M3 122,500 Hot Metal /36,750 Pig Iron
Iron Ore Crusher 3,00,000
Captive Power Plant -
Coal Washery 2,40,000 (Coal Input)
SMS.
Induction Furnace 3,11,040
. Elec. Arc Furnace
. Ladle Refining Furnace
. Continues Casting M/c.
Pellet Plant 12,00,000
Submerged Arc Furnace 10,200
Rolling Mill-1 2,00,000
Rolling Mill-2 2,00,000
Galvanizing Plant 1.08,000
Fly Ash Bricks Unit 50,400
Oxygen Plant 622 Mn. Nm³/year
GREENFIELD PROJECT
The process of land acquisition work for our project at Gangajal,
Budhakata, Sundargarh, Odisha is in progress. Further, the Company will
signed MoUs for setting up Greenfield projects very shortly with Govt.
of Odisha. Discussion with concerned authorities for allotment of
land, has been initiated. The environmental clearances for this
proposed project has been obtained from the appropriate authorities.
OUTLOOK
Currently, the Steels business account for nearly 100% of its revenues.
The outlook for its margins and profitability for this business depends
on overall economic outlook. This company is likely to benefit most
from an upturn in the business cycle, given its scale of operations and
its competitive cost positions. Today, it is truly a market-driven
company, making innovative changes and technological improvements,
leaving no stone, unturned in fulfilling dreams of its founding
fathers, tuning every activity to meet the subtle demands of its
customers.
MARKETING ARRANGEMENT
The Company has a Well-organized Marketing Department We have around 80
% market share in Odisha and also catering to outside markets like
Bangalore, Hyderabad, Ghaziabad, Raigarh, Raipur, Goa and Kanpur. We
are in the process expanding our market plan in India by appointment of
Dealers at other major cities across India. We also directly sell to
the Customers through our Marketing staffs and agents
DIVIDEND
During the year the Company was successful to reduce the losses
accumulated during the past few years, however the Company does not
have surplus profits yet. Therefore your directors have expressed
inability to recommend dividend for the financial year.
DEPOSITS
Your Company has accepted fixed deposits in term of Section 58A of the
Companies Act, 1956. As on March 31, 2014, fixed deposits from the
public and shareholders stood at Rs. 1029.12 Lacs which is not due for
repayment as on 31.03.2014. There was no overdue deposits as on that
date. The company discontinued the acceptance of FD w.e.f. April 1,
2014 to comply with the provisions of Companies Act, 2013 which is
inter-alia provides for shareholders approval, appointment of deposits
trustee and other requirements. The company seeks the approval of the
shareholders to continue accepting / renewing FD in the ensuing AGM,
subject to compliance with the statutory requirements.
ISO 9002 CERTIFICATION
Your company is having status of ISO 9002 certification, which is
internationally recognized for the production, quality, control and
other qualities.
CREDIT RATING
The Company has obtained credit rating from CARE for the financial year
2013.
BRANDING INITIATIVE
The "SHRISTII" brand for its TMT bars are well accepted in the market
in varied segments and sectors with wide customer base.
INSURANCE
The Assets of the company are adequately insured against the loss of
fire, riot, earthquake, loss of profit etc, and other risk which is
considered by management, In addition to this coverage, a statutory
public liability insurance policy has been taken to cover by the
company for providing against the public liability arising out of
industrial accidents for employees working in plants.
INDUSTRIAL RELATIONS AND PERSONNEL
Your Company attaches great importance to human resource. Over a period
of time, we have built and nurtured a dedicated and excellent workforce
and also recruiting new people in order to meet the revival plans of
the company. The processes for attracting, retaining and rewarding
talent are well laid down and the systems are transparent to identify
and reward performers. Company is committed to the welfare of its
people and their families and to improve the quality of their life by
providing the required facilities. The Company recognizes the
importance and contribution of its people towards achieving the common
goal. During the year under the review, industrial relations at all
units of the Company continued to be cordial and peaceful.
FINANCE
During the year all the finance commitment were met in time. Liquidity
throughout the year was quite comfortable. The company has no unpaid or
unclaimed deposit at the end of the year.
BANKERS AND CONSORTIUM ARRANGEMENT
The Company has consortium arrangement of their bankers with State Bank
of India as Lead Bank. This consortium arrangement is well defined and
take care of company''s term loan and working capital requirement from
time to time. The consortium members meet regularly at company office
quarterly and also visit company''s plant from time to time.
SAFETY
The company has continued to scale up safety performance at all
locations. Safety measures have been strengthened and employees are
being trained to think on hazards/risks associated with their job.
Systems have been established to make employees responsible and
accountable for safety. Good safety performance is being rewarded.
While Safety has been included as a corporate value, the main objective
is to achieve better standard of safety in the shortest possible time.
HUMAN RESOURCE DEVELOPMENT
The company has been given much emphasis on Human Resources Development
and thus has been well recognized in the steel industrial for sound
Human Resources Management. The Company has emerged as a true national
firm with cosmopolitan atmosphere. The company''s HR polices and process
is as well aligned to effectively suit its expanding business horizons
and future manpower requirement. This has been achieved by
continuously stressing upon training & development, empowerment and
creating a compelling work environment and maintaining well structured
reward & recognition mechanism. Company is committed to the welfare of
its people and their families and to improve the quality of their life
by providing the required facilities.
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility is the continuing commitment by the
business to behave ethically and contribute to economic development
while improving the quality of life of the workforce and their families
as well as of the local community and society at large. As a part of
its policy for corporate social responsibility, the Company is
associated with charitable and social activities and thereby playing a
pro-active role in the socioeconomic growth. In structuring its efforts
to the various aspects of Corporate Social Responsibilities, the
Company takes account guidelines and statements issued by stakeholders
and other regulatory bodies.
The management has adopted corporate social responsibility (CSR) well
at par with its business with the objective of creating wealth in the
community with focus on education, heath, water and society. Social
welfare, community development, economic and environmental
responsibilities are at the core of the CSR of the Company.
INCREASE IN THE AUTHORISED SHARE CAPITAL
Pursuant to Scheme of Merger the Authorised Share Capital of the Scan
Steels Limited (formerly M/s. Clarus Infrastructure Realties Limited)
the Transferee Company. 18,000,000 equity shares of Rs.10/- each got
Combined with Authorised Share Capital of the Company Transferor
Company (M/s. Scan Steels Limited) 40,000,000 equity shares of Rs.10/-
each results in Combined Authorised Capital of 58,000,000 equity shares
of Rs. 10/- each.
The Company has also proposed to increased authorized share capital of
the company from Rs. 58,00,00,000/- divided in to 5,80,00,000 equity
shares of Rs. 10/- each to Rs. 70,00,00,000/- divided into 7,00,00,000
(Seven Crore) equity shares of Rs. 10/- (Rupee Ten only) each, ranking
pari passu with the existing equity shares of the company.
ISSUED/SUBSCRIBED/ PAID UP CAPITAL :
Pursuant to Scheme of Merger Issued, Subscribed and Paid-up Share
Capital of the Company shall stand Increased from Rs. 178,003,000 /-
(Rupees Seventeen Crore Eighty Lakhs and Three Hundred Only) divided
into 17,800,300 (One Crore Seventy Eighty Lakhs Three Hundred Only )
fully paid up Equity Shares of Rs. 10/- (Rupees Ten Only) each, to Rs.
378,003,000/- (Rupees Thirty Seven Crore Eighty Lakhs Three Thousand
Only) divided into 37,800,300 (Three Crore Seventy Eight Lakhs three
Hundred ) Equity Shares of Rs. 10/- (Rupees Ten Only).
ALLOTMENT OF SHARES
Pursuant to Scheme of Merger for every 10 Equity Shares of Rs.10/-(Rupees
Ten only) each held by Shareholders in M/s. Scan Steels Limited, 8.03
Equity Share of Rs. 10/- (Rupees Ten Only) each credited as fully paid-up
in the Equity Share Capital of the M/s. Clarus Infrastructure Realties
Limited As mentioned in above ratio M/s. Clarus Infrastructure Realties
Limited shall issue total 20,000,000 (Two Crore ) Equity Shares of
Rs.10/- each aggregating Rs. 200,000,000 /- (Rupees Twenty Crore Only) to
the shareholders of M/s. Scan Steels Limited
MERGER UPDATES
High Court of Bombay vide its order dated May 11, 2012 has approved the
scheme of merger of M/s. Scan Steels Limited with M/s. Clarus
Infrastructure Realties Limited and High Court of Orissa vide its order
dated 25th February, 2014 has approved the same. the scheme of
amalgamation became effective upon filing of form INC-28 with Registrar
of Companies, Maharashtra on 12th August, 2014.
CHANGE OF NAME :
Pursuant to Scheme of Merger the Name of the Company has been changed
to M/s. Scan Steels Limited w.e.f 26th September, 2014.
DIRECTORS
a) Mr. Rajesh Gadodia (DIN 00574465), was appointed as an Additional
Director designated as the Executive Director with effect from 14th
March, 2014. Mr. Rajesh Gadodia will hold office till the date of the
forthcoming Annual General Meeting (AGM) and notice has been received
from a Member proposing the candidature of Mr. Rajesh Gadodia for
being appointed as a Director of the Company.
Further, Mr. Rajesh Gadodia was appointed by Board of Directors as a
Managing Director of the Company for a period of Five year with effect
from 24/10/ 2014 subject to approval of shareholders of the Company at
the ensuing Annual General Meeting.
b) Mr. Nimish Gadodia(DIN 01258815), was appointed as an Additional
Director designated as the Executive Director with effect from 14th
March, 2014. Mr. Nimish Gadodia will hold office till the date of the
forthcoming Annual General Meeting (AGM) and notice has been received
from a Member proposing the candidature of Mr. Nimish Gadodia for being
appointed as a Director of the Company.
c) Mr. Ajit Kesri (DIN 02401536), was appointed as an Additional
Director designated as the Non Executive Director with effect from 14th
March, 2014 has resigned and ceased to be Director w. e. f.
24/10/2014. The Board placed on record appreciation of his service to
the Company and look forward for his continuance support in future.
d) Mr. Akhilesh Vijaychand Jain (DIN 00027658) has resigned and ceased
to be Director w. e. f. 24/10/2014. The Board placed on record
appreciation of his service to the Company and look forward for his
continuance support in future.
e) Mr. Manakchand Jeevraj Jain (DIN 00292028) has resigned and ceased
to be Director w. e. f. 24/10/2014. The Board placed on record
appreciation of his service to the Company and look forward for his
continuance support in future.
f) Mr. Harsh Jain(DIN 02457584) has resigned and ceased to be Director
w. e. f. 24/10/2014. The Board placed on record appreciation of his
service to the Company and look forward for his continuance support in
future.
g) Mr. Ankur Madaan(DIN 07002199) and Mr. Vinay Goyal (DIN 07002206)
who were appointed as an Additional Director w.e.f. 24//10/2014 and
designated as the Independent Director and they will hold office till
the date of the forthcoming Annual General Meeting (AGM) and notice has
been received from members proposing their candidature for being
appointed as a Independent directors of the company, pursuant to
section 149 and other applicable provisions of the Companies Act, 2013
your directors are seeking appointment of Mr. Ankur Madaan and Mr.
Vinay Goyal as Independent Director to hold office for five consecutive
years for a term up to the conclusion of the 26th Annual General
Meeting of the company and their office shall not be liable to retire
by rotation."
h) Mr. Nimish Gadodia(DIN 01258815), was appointed as an Additional
Director designated as the Executive Director with effect from 14th
March, 2014. Mr. Nimish Gadodia will hold office till the date of the
forthcoming Annual General Meeting (AGM) and notice has been received
from a Member proposing the candidature of Mr. Nimish Gadodia for
being appointed as a Director of the Company.
i) Mr. Ramendra Pratap Singh (DIN
03411893) , was appointed as an Additional Director and designated as
the Executive Director w. e. f. 24/10/2014. Mr. Ramendra Pratap Singh
will hold office till the date of the forthcoming Annual General
Meeting (AGM) and notice has been received from a Member proposing
the candidature of Mr. Ramendra Pratap Singh for being appointed as a
Director of the Company.
j) Mr. Gobinda Chandra Nayak, appointed as Chief Financial Officer of
the Company in compliance with the listing agreement and provisions of
Section 203 of the Companies Act, 2013 read with Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014.
k) Mr. Prabir Kumar Das, appointed as Company Secretary and Compliance
officer of the Company in compliance with the listing agreement and
provisions of Section 203 of the Companies Act, 2013 read with
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 .
Suitable resolutions for appointment / reappointment of Directors, as
referred above, will be placed for approval of the members in the
forthcoming Annual General Meeting. The brief resume and other
information of the concerned directors, in terms of the provisions of
clause 49 of the Listing Agreement with stock exchange have been
detailed in the notice convening the forthcoming Annual General
Meeting.
Your Company has received from the Independent Directors Certificate of
Independence, as enumerated in section 149(6) of the Companies Act,
2013.
CODE OF INDEPENDENT DIRECTORS - SCHEDULE - IV
The Board has considered Code of Independent Directors as prescribed in
Schedule IV of the Companies Act, 2013. The code is a guide to
professional conduct for independent directors adherence to these
standards by independent directors and fulfillment of their
responsibility in a professional and faithful manner will promote
confidence of the investment community and regulators.
The broad items for code for independent directors are :
(i) Guidelines for Professional conduct.
(ii) Role and Functions.
(iii) Duties
(iv) Manner and process of appointment.
(v) Re-appointment on the basis of report of performance evaluation.
(vi) Resignation or Removal.
(vii) Atleast one Separate meeting of Independent Directors in a year
without attendance of non independent directors or members of
management.
(viii) Evaluation mechanism of Independent Directors
by entire Board of Directors.
KEY MANAGERIAL PERSONNEL
In compliance with the provisions of Section 203 of the Companies Act,
2013 and the requirement of Listing Agreement, the Company has
appointed Mr. Rajesh Gadodia as Managing Director, Mr. Prabir Kumar
Das, Company secretary & Compliance officer and Mr. Gobinda Chandra
Nayak, Chief Financial Officer (CFO) of the company.
SHIFTING OF REGISTERED OFFICE:
The company has transferred its Registered Office from 7/A, 2nd Floor,
Beaumoon Chambers, N.M. Road, Fort, Mumbai 400001 ,Maharashtra to
Office No. 104-105, E- Square Subhash Road, Opp. Havmor Ice Cream,,
Vile Parle (E), Mumbai  400057 with effect from 15/06/2014.
DIRECTORS RESPONSIBILITY STATEMENT
In terms of Section 217 (2AA) of the Companies Act, 1956, your
director''s state:
a) That in the preparation of the annual accounts for the year ended
31st March 2014; the applicable accounting standards have been followed
along with proper explanation relating to material departures, if any.
b) That directors have 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 as at 31st March 2014
and of the loss of the Company for the year ended on that date.
c) That the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities.
d) That the annual accounts have been prepared on a going concern
basis.
AUDITORS
The Retiring auditors M/s. Motilal &
Associates., Chartered Accountants (Firm''s Registration No. 106584W),
Mumbai, retire at the ensuing Annual General Meeting and have expressed
their unwillingness to be reappointed for a further term due to their
preoccupation of work.
The company has received necessary consent and certificates under
Section 139 of the Companies Act, 2013 from M/s. SRB & Associates,
Chartered Accountant (Firm''s Registration No. 310009E) of Bhubaneswar
for the appointment as statutory auditors of the company to audit the
accounts of the company for the five consecutive financial years i.e.
up to 2018-19 subject to ratification by members at every AGM. to the
effect that their appointment, if made, shall be in accordance with the
conditions specified therein and they satisfies the Criteria as
prescribed in Section 141 of the Companies Act, 2013.
In view of the above, M/s. SRB & Associates, being eligible for
appointment and based on the recommendation of the Audit Committee, the
Board of Directors has, at its meeting held on 14th November, 2014,
proposed the appointment of M/s. SRB & Associates as the statutory
auditors of the Company to hold office for the five consecutive year
from the conclusion of this Annual General Meeting until the conclusion
of 26th Annual General Meeting (subject to ratification of their
appointment at every Annual General Meeting), at such remuneration plus
service tax, out-of-pocket, travelling and living expenses, etc., as
may be mutually agreed between the Board of Directors of the Company or
committee thereof and the Auditors."
The Auditors'' Report and notes on Accounts are self explanatory and
therefore do not call for any further explanation.
COST AUDITORS
In pursuance of Section 148 of the Companies Act, 2013 and Rule 14 of
the Companies (Audit and Auditors) Rules, 2014, M/s. Ray, Nayak &
Associates, Partner CMA. Chaitanya Kumar Ray, Cost Accountants having
office at MIG- 26, Manorama Estate, Rasulgarh, Bhubaneswar  751010
(Odisha), has been appointed as Cost Auditors of the Company to carry
out the Audit of the Company''s Cost Records for the financial year
2014-2015.
RE-CONSTITUTION OF AUDIT COMMITTEE
Pursuant to Scheme of Merger between Scan Steels Limited ("the Company"
or "SSL") and Clarus Infrastructure Realties Limited) ("CIRL"), and as
per provision of Clause 49 of the Listing Agreement with the Stock
Exchange read with Section 177 of the Companies Act, 2013. Audit
Committee is Re-Constituted in the Board Meeting Held on 24/10/2014.
Composition and Terms of reference of the Committee is explained in
Detail in the Corporate Governance Part of this Annual Report.
VIGIL MECHANISM
In pursuance of Section 177(9) of the Companies Act, 2013 Vigil
Mechanism has been Constituted for directors and employees to report
genuine concerns and Audit committee shall oversee the vigil mechanism
through the committee and provide adequate safeguards against
victimization of employees and directors who availed of the vigil
mechanism and have a direct access to the chairman of the audit
committee in exceptional case.
In case of repeated frivolous complaints being filed by the director or
an employee the audit committee may take suitable action including
reprimand if necessary.
CONSTITUTION OF STAKEHOLDERS RELATIONSHIP COMMITTEE
The Board has already constituted the Shareholders and Investors
Grievance Committee. But According to 178 (5) of the Companies Act
2013, the company is required to constitute a Stakeholders Relationship
Committee.
In view of the above provision, the company has changed the name of the
Shareholders and Investors Grievance Committee to Stakeholders
Relationship Committee. Further, the membership of the company has
also changed in light of the above provisions. Composition and Terms
of Reference of which is Detailed in Corporate Governance Report Part
of this Annual Report.
CONSTITUTION OF CORPORATE SOCIAL RESPONSIBILIT Y COMMITTEE
Scan Steels''s commitment towards excellence in Health, Safety and
Environment is one of the company''s core values by complying with the
Laws and Regulations first, and then going beyond the mandate to keep
our planet safe for future generations. Minimizing the environment
impact of our operations assumes utmost priority.
The company is unwavering in its policy of ''''safety of persons
overrides all production targets'''' which drives all employees to
continuously break new grounds in safety management for the benefit of
the people, property, environment and the communities in which Scan
Steels operates. Our dedicated measures by conducting the Risk
Assessment, Identification of significant environment aspects of all
manufacturing plants and signatory commitment of Responsible Care,
Greatest emphasis is given to safety measures for minimizing accidents
and incidents.
In View of the above The Board has Constituted Corporate Social
Responsibility Committee to Comply the Section 135 of the Companies Act
2013 in the Board Meeting Held on 24/10/2014. Composition of which is
Detailed in Corporate Governance Report Part of this Annual Report.
CORPORATE GOVERNANCE REPORT
Pursuant to Clause 49 of the Listing Agreements with the Stock
Exchanges, a Corporate Governance Report and the Managing Director''s
and Auditors'' Certificate regarding compliance of conditions of
Corporate Governance are made part of the Annual Report.
MANAGEMENT RESPONSIBILITY
Management''s Discussion and Analysis Report for the year under review,
as stipulated under Clause  49 of the Listing Agreement with the Stock
Exchanges in India, is presented in a separate section forming part of
the Annual Report.
EXTENSION OF ANNUAL GENERAL MEETING
Company has decided in its Board Meeting Held on 30/08/2014 to make an
application to the Registrar of Companies for extension of
time for holding the 21st Annual General Meeting on or before December
31, 2014 i.e extension for a period of 3 months" from 1st October 2014
to 31st December 2014 on the grounds that scheme of merger/
amalgamation is pending and ROC Mumbai on Application made by company
dated 12/09/2014 requesting for Extension of AGM had approved for
Extension of AGM for the Year ended March 31, 2014, Up to December 30,
2014 vide there Approval Letter Dated 23/09/2014.
LISTING ON STOCK EXCHANGE
The Company continues to remain listed with Bombay Stock Exchange
Limited and annual listing fee for the same has been paid.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Details of the energy conservation and research and development
activities undertaken by Scan Steels Limited along with the information
in accordance with the provisions of Section 217(1)(e) of the companies
act, 1956 read with the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rule, 1988, are provided as an annexure
to the Directors'' Report.
INDUSTRIAL RELATIONS
During the year under review, your Company had cordial and harmonious
industrial relations at all levels of the Organization.
PARTICULARS OF EMPLOYEES
During the year under review there were no employees receiving
remuneration of or in excess of limits prescribed as per the provisions
of Section 217 (2A) of the Companies Act, 1956 read with the Companies
(Particulars of Employees) Rules, 1975.
ACKNOWLEDGEMENTS
Your Directors wish to place on record their gratitude for the valuable
guidance and support rendered by the Government of India, various State
Government departments, Financial Institutions, Banks and various
stakeholders, such as, shareholders, customers and suppliers, among
others. The Directors also commend the continuing commitment and
dedication of the employees at all levels, which has been critical for
the Company''s success. The Directors look forward to their continued
support in future.
For and on behalf of the Board of
Scan Steels Limited
Sd/-
Rajesh Gadodia,
Managing Director
(DIN: 00574465)
Date: 14th November, 2014 Sd/-
Nimish Gadodia,
Director
Place: Rajgangpur (DIN: 01258815)
Mar 31, 2013
To, The Members of Clarus Infrastructure and Realties Limited
The Directors have pleasure in presenting the 20th Annual Report of the
Company together with the Audited Statements of Accounts for the year
ended 31st March, 2013.
FINANCIAL HIGHLIGHTS
(Rs. in Lakhs)
Particulars 2012-2013 2011-2012
Total Income 1606.21 7372.70
Less : Total Expenditure 1872.68 7757.00
Profit / (Loss) before Tax (266.47) (384.30)
Tax Expenses 0.04 0.66
Profit / (Loss) for the year (266.43) (383.64)
DIVIDEND
Due to losses, the Directors do not recommended any dividend for the
financial year under review.
DEPOSITS
The Company has not accepted any Fixed Deposits within the meaning of
Section 58A of the Companies Act, 1956 and the rules made there under
during the year under review.
MERGER UPDATES
High Court of Bombay vide its order dated May 11, 2011 has approved the
scheme of merger of M/s. Scan Steels Limited with M/s. Clarus
Infrastructure Realities Limited, however approval from High Court of
Orissa is still to be obtained.
DIRECTORS
Mr. Akhilesh Jain, who retires by rotation and being eligible, offers
himself for re - appointment.
DIRECTORS RESPONSIBILITY STATEMENT
In terms of Section 217 (2AA) of the Companies Act, 1956, your
director''s state:
a) That in the preparation of the annual accounts for the year ended
31st March 2013; the applicable accounting standards have been followed
along with proper explanation relating to material departures, if any.
b) That directors have 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 as at 31st March 2013
and of the loss of the Company for the year ended on that date.
c) That the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities.
d) That the annual accounts have been prepared on a going concern
basis.
AUDITORS
M/s. Tushar Parekh and Co., Chartered Accountants, Mumbai the Statutory
Auditor''s of the company will retire at the conclusion of ensuing
Annual General Meeting and unwilling for re-appointment. M/s. Motilal &
Associates Chartered Accountant, Mumbai has given their consent to act
as an auditor, if appointed in the forth coming Annual General Meeting.
CORPORATE GOVERNANCE REPORT
A report on Corporate Governance has been provided in the Annual
Report. Certificate from Practising Company Secretary form an annexure
to this report.
LISTING ON STOCK EXCHANGE
The Company continues to remain listed with Bombay Stock Exchange
Limited and annual listing fee for the same has been paid.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Details with regards to conservation of energy, technology absorption,
foreign exchange earnings and outgo, in accordance with the Companies
(Disclosure of particulars in the Report of Board of Directors) Rules,
1988 are not applicable to the Company.
INDUSTRIAL RELATIONS
During the year under review, your Company had cordial and harmonious
industrial relations at all levels of the Organization.
PARTICULARS OF EMPLOYEES
During the year under review there were no employees receiving
remuneration of or in excess of limits prescribed as per the provisions
of Section 217 (2A) of the Companies Act, 1956 read with the Companies
(Particulars of Employees) Rules, 1975.
ACKNOWLEDGEMENTS
The Directors are grateful to all the stakeholders including the
customers, bankers, suppliers and employees of the Company for their
co-operation and assistance during the year.
For and on behalf of the Board
Place : Mumbai Manakchand Jain Harsh Jain
Date : August 13, 2013 (Director) (Director)
Mar 31, 2012
To, The Members of Clarus Infrastructure and Realties Limited
The Directors have pleasure in presenting the 19th Annual Report of
the Company together with the Audited Statements of Accounts for the
year ended 31st March, 2012.
FINANCIAL HIGHLIGHTS (Rs. in Lakhs)
Particulars 2011-2012 2010-2011
Total Income 7372.70 4704.52
Less : Total Expenditure 7757.00 4976.94
Profit / (Loss) before Tax (384.30) (272.42)
Tax Expenses
Deferred Tax - 0.03
Excess Provision for Tax 0.66 0.04
Profit/(Loss) for the year
from continuing operations (383.64) (272.49)
PMPENP
Due to acumulated losses, the Directors regret their inability to
recommend any dividend for the financial year under review.
DEPOSITS
The Company has not accepted any Fixed Deposits within the meaning of
Section 58A of the Companies Act, 1956 and the rules made there under
during the year under review.
MERGER UPDATES
The Hon'ble High Court of Bombay vide its order dated May 11, 2012
has approved the scheme of merger of M/s. Scan Steels Limited with M/s.
Clarus Infrastructure Realities Limited, however approval from High
Court of Orissa is still to be obtained.
DIRECTORS
There is no change in the constitution of the Board of Directors of the
Company. During the year under Reviewed.
In terms of the provision of companies Act, 1956 and Article of
Association of the Company, Mr. Manakchand Jain, who retires by
rotation and being eligible, offers himself for re - appointment.
DIRECTORS RESPONSIBILITY STATEMENT
In terms of Section 217 (2AA) of the Companies Act, 1956, your director
s state:
a) That in the preparation of the annual accounts for the year ended
31st March 2012; the applicable accounting standards have been followed
along with proper explanation relating to material departures, if any.
b) That directors have 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 as at 31st March 2012
and of the loss of the Company for the year ended on that date.
c) That the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities.
d) That the annual accounts have been prepared on a going concern
basis.
AUDITORS
M/s. Tushar Parekh and Co., Chartered Accountants, Mumbai will retire
at the conclusion of the ensuing Annual General Meeting and are
eligible for reappointment.
AUDITORS REPORT
In respect of observation made by the Auditors in their Report, your
Directors wish to state that the respective notes to the accounts are
self-explanatory, and do not call for any further comments.
CORPORATE GOVERNANCE REPORT
A separate report on corporate governance along with Auditor s
certificate on its compliance is attached to this report.
LISTING ON STOCK EXCHANGE
The Company continues to remain listed with Bombay Stock Exchange
Limited and annual listing fee for the same has been paid.
PARTICULARS OF EMPLOYEES
During the year under review there were no employees receiving
remuneration of or in excess of limits prescribed as per the provisions
of Section 217 (2A) of the Companies Act, 1956 read with the Companies
(Particulars of Employees) Rules, 1975.
CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION. FOREIGN EXCHANGE
EARNINGS AND OUTGO
Details with regards to conservation of energy, technology absorption,
foreign exchange earnings and outgo, in accordance with the Companies
(Disclosure of particulars in the Report of Board of Directors) Rules,
1988 are not applicable to the Company.
INDUSTRIAL RELATIONS
During the year under review, your Company had cordial and harmonious
industrial relations at all levels of the Organization.
ACKNOWLEDGEMENT
The Directors are grateful to all the stakeholders including the
customers, bankers, suppliers and employees of the Company for their
co-operation and assistance during the year.
For and on behalf of the Board
Place : Mumbai Manakchand Jain Harsh Jain
Date : November 1, 2012 (Director) (Director)
Mar 31, 2010
The Directors are pleased to present the 17lh Annual Report of the
Company together with the Audited Financial Statements for the year
ended 31st March, 2010. SUMMARISED FINANCIAL RESULTS:
1. FINANCIAL RESULTS:
(Rs. in Lacs)
Particulars Year ended Year ended
31.3.2010 31.3.2009
Profit/(Loss) before Interest and
Depreciation 418.65 (265.64)
Less: Interest 10.00 0.04
Depreciation 0.22 0.22
Profit/ (Loss) before tax 408.44 (265.9)
Tax Provision 73.68 (3.77)
Profit/ (Loss) after tax 334.67 (262.20)
Balance brought forward from previous year (520.12) (257.92)
Balance carried forward (185.45) (520.12)
2. THE YEAR UNDER REVIEW
In view of new stable government and its growth oriented policies the
market during the year 2009- 2010 bounced back and the company
witnessed a substantial growth rate with a profit before tax of 408.44
Lakhs as compared to the high loss of 265.9 Lakhs during the previous
year.
3. MERGER
Your directors considered the proposition of a scheme of arrangement
with M/S Scan Steel Limited . Under this .scheme of arrangement Scan
Steel Limited a renowned steel company mainly into re-rolling, Iron bar
and having an integrated Steel Plant located at Rajgangpur, Orissa
decided to merge with your company. The Networth of the company is more
than Rs. 180 Cr. The Board based on the method of Networth valuation
decided to amalagmate both the companies in the near future subject to
your approval and compliance of other statutory permissions,
After this merger the netwoth of the mergered company will be more than
Rs 200Cr. The member will immensely benefit out of this scheme of
arrangement. Today in the steel industry scan steel has a name to
trust.
4. ENERGY.TECHNOLOGYANDFOREIGNEXCHANGE:
As required by the Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988 the relevant information pertaining
to conservation of energy, technology absorption, foreign exchange
earnings and outgo are as follows:
A) CONSERVATION OF ENERGY: The Company continues its policy of
encouraging energy conservation measures. The regular review of energy
consumption and the systems installed to control utilization of energy
is undertaken.
B) RESERCH DEVELOPMENT ACTIVITIES: Continuous efforts are being made to
improve reliability and quality through in-house R&D efforts.
C) TECHNOLOGY ABSORPTION: The Company is equipped with technologies to
meet the present requirements.
D) FOREIGN EXCHANGE EARNINGS & OUTGO: NIL
5. FIXED DEPOSITS
The Company neither has accepted nor renewed any fixed deposit during
the year under review.
6. CORPORATE GOVERNANCE:
Your Company is committed to good Corporate Governance Practices. Being
a value driven organization, the companys good corporate governance
practices and the disclosures are need based duly complied with the
statutory and the regulatory requirements of the Companies Act, 1956,
together with all the regulations of the Listing Agreement and all the
others applicable laws. The Companys Corporate Governance policies and
the practices are also in accordance with the Clause 49 of the Listing
Agreement
7. DIRECTORS
Shri Akhilesh Jain is liable to retire by rotation at the forthcoming
Annual General Meeting and being eligible, offers himself for re -
appointment.
8. DIVIDEND
In view of the carry forward losses incurred in the earlier years, the
board regrets its inability to declare any dividend for the year under
review.
9. AUDITORS REPORT
Relevant notes on accounts are self-explanatory and are as per Annexure
to the Auditors Report.
10. PERSONNEL
The Company has not paid any remuneration attracting the provisions
(Particulars of Employees) Rules, 1975 read along with section 217(2A)
of the Companies Act, 1956. Hence no information is required to be
appended to this report in this regard.
11. AUDITORS
The retiring Auditors M/s. Tushar Parekh & Associates., Chartered
Accountants, Mumbai, hold office till the conclusion of this Annual
General Meeting. They have furnished a certificate to the effect that
the proposed re-appointment, if made, will be in accordance with the
limits specified U/s. 224(1 B) of the Companies Act, 1956.
12. HUMAN RESOURCES
Your Directors would like to place on record their deep appreciation of
all employees for rendering quality services to every constituent of
the company.
13. DIRECTORSRESPONSIBILITY STATEMENT
Pursuant to the requirement under section 217(2AA) of the Companies
Act, 1956, with respect to Directors Responsibility Statement, it is
hereby confirmed:
(i) That in the preparation of the accounts for the financial year
ended 31s1 March, 2010, the applicable accounting standards have been
followed along with proper explanation relating to material departures;
(ii) That the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that were
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 the year under review;
(iii) That the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
(iv) That the Directors have prepared the accounts for the financial
year ended 31st March 2010 on a going concern basis.
14. ACKNOWLEDGEMENTS
Your Directors convey their sincere thanks to the Government, Banks,
Shareholders and customers for their continued support extended to the
company at all times.
The Directors further express their deep appreciation to all employees
for commendable teamwork, high degree of professionalism and
enthusiastic effort displayed by them during the year
On behalf of the Board of Directors.
Place: Mumbai Manakchand Jain Harsh Jain
Dated : 13,th August, 2010 DIRECTOR DIRECTOR