To the Members of Scan Steels Limited,
The Board of Directors of Scan Steels Limited (‘Scan Steels' or ‘Company') is pleased to present the Thirty-first Annual Report, along with the financial statements of the Company, for the financial year ended March 31, 2024.
FINANCIAL HIGHLIGHTS / RESULTS
The financial highlights of the company, on standalone and consolidated basis, for the financial year ended March 31, 2024 is summarized below:
( n Lacs)
Financial results Standalone Consolidated
2023-2024 2022-2023 2023-2024 2022-2023
Total Income 96,743.05 109,677.52 96,743.05 -
Profit / (Loss) before Tax 2415.63 2199.90 2748.07 -
Less: Tax Expenses -
Current Tax 635.00 500.00 635.00 -
Deferred Tax (Charge)/ Credit 7.63 167.99 7.63 -
Profit After Tax 1773.01 1531.90 2105.44 -
Less: Prior Period Expenses - - - -
Net Profit/(Loss) for the year 1773.01 1531.90 2105.44 -
Add: Other Comprehensive Income 186.29 (19.14) 186.29 -
Total Comprehensive Income for the year 186.29 (19.14) 186.29 -
Surplus Brought Forward from last balance sheet 9608.32 8076.42 9608.32 -
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) 11381.33 9608.32 11713.77 -
* The financial highlights of the associate company are attached as Annexure II and forms part of this Annual report
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 April 1, 2016. Ind AS has replaced the existing Indian GAAP prescribed under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014.
Accordingly, the Company has adopted Indian Accounting Standard ("Ind AS") with effect from 1st April 2016 with the transition date of 1st April 2015 and the financial Statements for the year ended 31st March 2024 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 2024 stood at 96743.05 lakhs, which was around 11.79% downward in comparison to fiscal 2023. This year's operational revenue does not include the turnover of the Ballari unit due to the plant being given on a long-term lease basis with a monthly rental of 27 lakhs. During the year, the company initiated the trading of steel products and installed a re-rolling mill plant within the existing manufacturing complex unit II Budhakata location, which has a 2-lakh annual production capacity and achieved a trading turnover of 12850.40 lakhs against 733.24 lakhs for the last fiscal year 2023. Your company continues with its focus on the 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 1,73,701 metric tons (MT) and 1,28,640 MT of M.S. Billets and Sponge Iron, respectively, in FY 2023–24. The company has installed a new rolling mill with an installed capacity of 38 TPH within an existing facility located in Budhakata, Odisha. The company has achieved a remarkable level of 1,70,817 mt of production of TMT rebars compared to 1,01,410 mt for FY 2022–23, which is 68.44% incremental units. The company is on the growth path by utilizing its capacity better.
The company's sustained efforts towards back- end cost control and efficiency improvement measures supported the insulation and limited the impact on profitability margins. The company's ability to better utilize its capacities will help derive better margins from the business. The outlook of business has been discussed in detail in the ‘Management Discussion and Analysis' that forms 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, 2024 Years ended 31st March, 2023 Years ended 31st March, 2024 Years ended 31st March, 2023
Sponge Iron 1,28,640 1,77,956 - 44,356
MS Ingot/ Billet 1,73,701 1,66,075 8136 59,174
Long and Flat Products 1,70,817 1,01,410 1,60,637 1,01,599
*Unit IV–Ballari, - 582115, Karnataka given on lease after November, 2022 to Scan Energy & Power Ltd. as per Members approval accorded in 29th Annual general meeting held on 29th September, 2022 for its entire operational use in FY 23-24. That's why no production of sponge iron is included in turnover in the financial statements, and at the same time it is also not included in sales quantity.
OUTLOOK
The global economy, in CY2023, showed resilience despite geopolitical uncertainties, inflationary pressures, tighter monetary policies, sovereign debt concerns and sluggish trade. We expect infrastructure build, investments led by new technologies, and demographics of emerging markets to continue to drive global growth, estimated at 3.2% in CY2024, similar to CY2023.
The Indian economy maintained a steady momentum within the uneven global macro- economic landscape, supported by public spending on infrastructure and digitalisation, as well as reforms directed towards ease of doing business and incentivising new investment. In FY2023- 24, the Indian GDP has grown at 8.2%, which is substantially higher than the global benchmark.
The steel industry fundamentals reflected these macro conditions, with geopolitical concerns and moderating demand in China resulting in pressure on steel prices, while input costs have remained relatively elevated and environmental and regulatory costs continue to rise. At the same time, the Indian market stood out as robust infrastructure spending, resurgence in private sector investment and robust demand meant that the industry saw crude steel production growth of 13% over the previous fiscal. We expect this trend to continue, with domestic steel demand remaining buoyant in FY2024-25 on the back of expansion in economic activity, while pricing conditions might see periods of pressure driven by global economic trends and policy changes.
During FY2023-24, the steel industry faced an uneven global macro-economic landscape. China's transition from investment-led growth to consumption-led growth contributed to a reduced demand for steel, as the country's focus on heavy infrastructure investments seemed to taper. This was exacerbated by a sluggish real estate sector. The consequent overcapacity in China and higher exports brought about a downward
pressure on global steel prices. The expansion of steelmaking capacities in regional markets also intensified competition. Geopolitical tensions in Ukraine and the Middle East disrupted traditional supply chains. Raw material prices and other costs remained relatively elevated even as steel prices significantly softened, putting pressure on margins for steel producers.
Meanwhile, steel companies around the world, but especially in Europe and East Asia, have started to engage very deeply and invest significantly in finding solutions to reduce the carbon footprint of the industry and increasing circularity. These efforts are part of a trend towards broad energy transition and decarbonisation, but there is no one-size-fits-all solution
The industry will need to continue to create bespoke solutions specific to individual geographies, both in terms of new technology solutions and ways to optimise costs of green steel. In addition, such efforts at least in the near to medium-term will need to be supported by policy and public spending.
As India enters a multi-decade growth cycle, led by robust infrastructure and manufacturing sectors, the country's steel industry is faced with enormous opportunities. Scan Steels is a dedicated partner in this journey, committed to driving the nation's industrial and infrastructural development. Its integrated operations position the Company favourably to navigate steel cycles and seize existing and emerging opportunities. Given India's strong appetite for steel to drive infrastructure-led growth, scan Steels is aiming to expand its capacity, boosting the domestic steel industry while creating both direct and indirect employment opportunities and empowering local communities.
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 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.
ENVIRONMENT
Europe leads in policy development for adopting decarbonising processes and technologies across sectors, India is also following this trend and has increased its focus towards enhancing focus on sustainability. This shift encourages both private and public enterprises towards sustainability. The global emphasis on sustainability has influenced consumer preferences, favouring renewable energy and energy-efficient construction and transportation solutions. Consequently, the market is seeing increased demand for green alternatives. These trends highlight a universal move towards a more sustainable future.
Steel plays a crucial role in nation-building, but also contributes significantly to industrial CO2 emissions, accounting for 12% of India's total energy infrastructure CO2 emissions. We follow a precautionary approach towards minimising our negative impact on the environment. We have adopted advanced technologies and processes to ensure that steel continues to be the preferred material as we transition towards a low-carbon future. In pursuing our strategic objectives, we are committed to responsibly reducing our environmental footprint and positively influencing the lives of our employees and partners.
Climate change is one of the most pressing issues the world faces today, and the Company recognises its obligation to work towards mitigation of climate change related risks and strives to reduce its carbon footprint especially of steelmaking facilities across its geographies. The Scan Group believes that industry works best when it is in harmony with the environment. So, for a clean, green and healthy world, the company has started a new revolution at its plants with a multi-
pronged strategy for environment management and pollution control. Electrostatic precipitators, bag filters and other equipment have been installed to reduce pollution levels, while sustained efforts like a forestation campaign is filling the region around the plant with bush greens.
CLIMATE CHANGE
Climate change presents an unparalleled global challenge, posing a significant threat to humanity's future. This challenge, however, unfolds against the backdrop of India's rapid economic ascent. According to the National Steel Policy, India's economic engine is expected to surge, reaching a capacity of 300 MTPA by 2030, underscoring the scale and pace of our nation's development. Countries are addressing climate risk challenges by imposing restrictions on carbon emissions. Steel companies are outlining plans to transition to green steel production. There is a growing shift towards sustainable steel production methods, including the use of green hydrogen and carbon capture technologies.
At Scan Steels, all our business operations are underpinned by a singular guiding philosophy – minimising environmental footprint and promoting ecological well-being. The Company is committed to align with national commitments on climate change across its operating geographies and is working to mitigate climate change transition risk by various initiatives. We acknowledge the global challenge of climate change and have committed to reducing our emissions to contribute to its mitigation. Recognising the critical importance of nurturing a healthy environment, we have adopted a proactive approach. Through innovation, cutting- edge technologies, operational and cultural changes, we mitigate long-term environmental risks while promoting sustainability.
RESEARCH AND DEVELOPMENT
Over time, the steel industry has advanced significantly, particularly in technology and
modernisation.Today,technologicaladvancements have made steel manufacturing more time and cost-efficient. As development trends continue to rise, new technological innovations promise to further enhance the industry by increasing client satisfaction and reducing environmental impact.
Scan Steels recognises that investing in cutting- edge technology is crucial to seizing growth opportunities and addressing business challenges effectively. Scan Steels is committed to innovation, continually experimenting with, adopting, and scaling up new technologies.
R&D establishes the technical underpinnings essential for organisation's sustainability and enduring success. We strive to achieve this by fostering innovating thinking and continually enhancing products and processes. The company has started working on the technology roadmap that aligns with its vision of racing ahead among 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.
DIVIDEND
For the F.Y 23-24 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.
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 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).
TRANSFER TO RESERVE
During the financial year 2023-24, no amount has been transferred to reserve account.
CONSOLIDATED FINANCIAL STATEMENT
As per the definition in the Companies Act, 2013 ("the Act") 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 or joint venture company but has invested in the associate company; therefore, in terms of Section 129 (3) of the Companies Act, 2013 read with rule 6 of Companies (Accounts) Rules, 2014 and under Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred as "SEBI Listing Regulations") consolidation of financial statements is applicable, and the Audited Consolidated Financial Statements are provided in the financial statements part of this annual report.
DETAILS OF SUBSIDIARY/JOINT VENTURES/ ASSOCIATE COMPANIES
The company does not have and/or no company has become subsidiary or joint venture company during the year under review, but two body corporates and partnership firm have become associates during the year under review. The
associate body corporates and partnership firms engaged in the business of rental income of commercial property, manufacturing and trading of steel products, and carrying and transportation of goods, which makes logistic activities feasible for the company and helps in uninterrupted material movement, which in turn gives cost proposition benefits to our dealers. The investments are made in the associates for earning profits.
For FY 2023-24, the share of profit is Rs 332.44 lakhs, which is a marginal one for the year being the first year of investment. The management is in the opinion that the company shall earn a handsome profit in the future and the associates shall contribute a lot in the future.
The Company has, in accordance with provisions of Section 129(3) of the Companies Act, 2013 ("Act"), prepared consolidated financial statements of the Company and all its associates which forms part of the report. Further, as per rule 5 of Companies (Accounts) Rules, 2014, a statement containing the salient features of the financial statements of the Company's associates in Form AOC-1 is attached as Annexure I and
highlights of performance/Financial Position of associates companies during the period under review as required under [Rule 8 of the Companies (Accounts) Rules, 2014] Read with Section 129(3) of the Companies Act, 2013 and applicable rules thereunder is attached as Annexure II is forming part of the consolidated financial statements.
In accordance with the provisions of Section 136 of the Act and the amendments thereto, read with the SEBI LODR Regulations, the audited financial statements, including the consolidated financial statements and related information of the Company and financial statements of the Associate companies are available on the website of the Company at www.scansteels.com
No companies have ceased to be subsidiaries or joint ventures or associate companies during the FY 2023-24 hence no details regarding the same needs to be furnished.
The names of companies that have become associates as per Section 2(6) of the companies Act, 2013 during the year under review are as follows:
S.
No.
Name of the company
CIN/GLN/ PAN/LLPIN Address of the Company
1 RPSG Agro Commodity Pvt. Ltd.*
2 Shristi Resorts & Multiplex Pvt. Ltd.*
U15490OR2022PTC039159 Office No 400, 4th Floor, Forum Galleria
Mall, IDCO Commercial Estate, Civil Township, 7/8 Area, Civil Township, Sundergarh, Raurkela Industrial Township (, Orissa, India, 769004
U55101WB2005PTC139892 86 B/2 Topsia Road, Gajraj Chamber
2nd Floor,Flat No 2f & G, Kolkata,
Topsi a, West Bengal, India, 700046
3 RAR Ispat LLP* ABC-4445 Plt No Cc/2, Ground Floor, Civil
*w.e.f Quarter ended on 31st March, 2024.
Township, Rourkela - 4, Sundergarh, Raghunathapali, Orissa, India, 769004
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 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 include:
• Documenting of policies, guidelines, authorities and approval procedures, encompassing the Company's all primary functions.
• 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 majority of Independent Directors. The Audit Committee regularly reviews audit plans, significant audit findings, adequacy of internal controls, monitors implementation of audit recommendations 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 December 31st, 2018 SEBI (Prohibition of Insider Trading) (Amendment) Regulation, 2018 below mentioned points were 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.
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.
P.A. & Associates, Chartered Accountants,
(Odisha), PAN No. of the Firm: AAFFP2414G, ICAI Registration No. 313085E, 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
The internal audit department prepares a risk- based audit plan at the start of the year. 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.
These internal controls are reviewed by internal and statutory auditors every year. 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 Company's internal financial controls were adequate and effective during FY 2024.
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 onwards.
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 arm's 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. Further, any transaction between the Company or any of its subsidiaries on one hand, and any other person or entity on the other hand, the purpose and effect of which is to benefit a related party of the listed entity or any of its subsidiaries would be considered as RPTs regardless of whether a price has been charged.
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 onwards.
(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 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 (read with SEBI LODR (Third) 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. Moreover, on the recommendations of the Audit Committee, your Board from time to time has devised 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 Company's 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.
The Board has approved the criteria to grant omnibus approval by the Audit Committee. Prior omnibus approval is obtained for RPT that are of repetitive nature and entered in the ordinary course of business and are at arm's length. All
Related Party Transactions are placed before the Audit Committee for review and approval (read with SEBI LODR (Third) 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, 2015. None of the Executive Directors except payment of their remuneration and Independent Directors except payment of their sitting fees have any material pecuniary relationships or transactions vis-?-vis the company. Details of related party transactions entered into by the Company, in terms of Ind AS-24 have been disclosed in the note no. 30 to the standalone/consolidated financial statements forming part of this Report & Annual Accounts 2023-24.
ISO CERTIFICATION
Your company is having status of ISO 9001, ISO 14001 and ISO 45001, ISI 1786, IS 2062
& IS 2830 certification, which is internationally recognized for the production, quality control and Environmental as well as OHSAS respectively. Your company has retained its TS 16949 certifications for its quality management.
CREDIT RATING
During the year, the rating of the company has been re-affirmed to CRISIL BBB+/Stable Outlook (CRISIL Triple B Plus with Stable Outlook) for Long Term Debt and Fund Based Facilities and CRISIL A2+ (CRISIL A Two Plus) for Short Term Non-Fund based Facilities from CRISIL Ratings Limited.
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 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.
BRANDING INITIATIVE
The "SHRISTII" 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 brand's 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 producers in the market, specialising in premium products that provide exceptional value to our customers.
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 by the company for providing coverage against the public liability arising out of industrial accidents for employees working in plants.
CUSTOMER RELATIONSHIP
Customer expectations and steel demand are evolving, along with the channels for product and service delivery. India's rapid urbanisation necessitates faster construction, making modularisation crucial for shorter building times and enhanced aesthetics. Rising per capita income is boosting demand for consumer goods, white goods, and automobiles. Additionally, digital commerce is growing its influence in heavy industries. This shift towards digital platforms is reshaping how products and services are delivered in the steel sector. The integration of technology in construction and manufacturing is becoming increasingly important.
We believe that long-term collaborative relationships ensure strong market presence and retention in chosen segments. The company's offerings target the needs of its discerning customers, emphasizing quality and performance. We aim at serving our customers through strong brand(s), differentiated products, services, and solutions, engineering support, partnering for growth, and a reliable supply chain network. We are aiming to become the supplier of choice, delivering premium products and services, and creating value for our customers.
We recognise that effective stakeholder engagement is crucial to the sustainability and success of our operations. Engaging in meaningful dialogue with our diverse stakeholders, we gain a deep understanding of their needs and expectations. Regular and structured interactions provide us with actionable insights essential for refining our strategic planning processes. This continuous exchange enables us to make well- informed decisions and implement practices that address stakeholder concerns, reinforcing responsible business conduct. We also engage
through vendor meetings, vendor feedback mechanisms, holding meetings to connect with strategic suppliers, and also through other physical and digital means.
FINANCE
During the year under review, the company has raised from banks an amount of INR 1600 lakhs (previous year Nil) for working capital requirements and raised INR 77.72 lakhs (previous year INR 30 lakhs) from one of the non-banking financial corporations (NBFC) for meeting the requirement of vehicle and heavy earth moving equipment purchases. The disbursed amount is utilized for the purpose for which it is raised.
BANKERS AND CONSORTIUM ARRANGEMENT
The company has a consortium arrangement with its bankers, the 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 company's credit facility requirements from time to time. The consortium meetings are held quarterly on a regular basis, and they also visit the company's plant from time to time as per their requirements.
SAFETY
Scan Steels is committed to zero harm at the workplace and the community at large. As we expand operations, focus on safety becomes extremely important. We are dedicated to strengthening our processes and practices to achieve our goal of zero harm. goal we are steadily approaching by integrating advanced safety systems and fostering a culture of accountability.
We believe every individual deserves to return safely to their loved ones daily. That's why we're committed to fostering a culture where safety is integral to every task, decision, and interaction. Safety and health of its workforce is a key lever in Scan Steel's journey towards excellence. The implementation of lifesaving rules across
all facilities aims to increase mass awareness. Additionally, we continually review and improve the safety culture. We organize various training and health awareness sessions to reduce and control lifestyle diseases among the workforce.
We emphasize ensuring safety in operating sites so that the health and safety of communities are not compromised and sustain community outreach activities in areas where the company operates. Key safety initiatives include building safety leadership capability at all levels, leveraging digital tools and technology, strengthening deployment of contractor safety management standards, improving competency and capability for hazard identification and risk management, improving road safety across the company, excellence in process safety management, establishing industrial hygiene, and improving occupational health.
CYBER SECURITY
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 practices.
At Scan Steels, cybersecurity is pivotal in fortifying our digital infrastructure against evolving threats. Guided by a proactive strategy overseen by our Risk Management Board Committee, we ensure robust protection for our operations.
HUMAN RESOURCE DEVELOPMENT AND PERSONNEL
The company's human resources (HR) management practices ensure fair and reasonable processes that are compliant with regulatory and governance requirements. HR Management focuses on key areas like fair wages, a joint consultation system for working together,
self-supervised structures, robust reward and recognition schemes, opportunities for learning and growth, and a focus on employee well-being experience and engagement. Employees excel and find fulfilment in workplaces that prioritize purpose and maintain a strong organizational culture. A purpose-driven work environment emphasizes aligning employees' roles with meaningful goals and values. This approach fosters engagement, satisfaction, and commitment among employees, ultimately enhancing productivity and overall success within the organization. We continue with our efforts to increase our gender diversity, and efforts are channelled towards implementing policies and recruitment initiatives across the organisation.
Scan Steels continues to enhance its internal processes and initiatives aimed at fostering a culture of continuous improvement, prioritizing safety, ethics, environmental stewardship, and community welfare. We aim at fostering teamwork, nurturing talent, enhancing leadership capability, and acting with pace, pride, and passion.
Employee health, safety, and holistic well-being; attracting and retaining diverse talent; providing an inclusive and positive work environment; and local sourcing of labour are the important values of the organizational culture.
Scan Steels considers its human capital not just as part of its business but also as the foundation of its diverse business activities to achieve success. To ensure performance excellence at all levels, we emphasize retaining and grooming meritorious employees. The company is committed to cultivating a culture of excellence, deep stakeholder engagement, and agility.
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, Activities to improve livelihoods, and the lives of rural populations and rural areas.
• 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.
• Promoting Sports: Training and promoting local sports
The Company would also undertake other need- based initiatives in compliance with Schedule VII to the Act as amended. In the past few financial years, the Company has consistently increased the share of CSR expenditure.
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.
During FY 2023-24, the Company's actual CSR obligation was 90.80 Lakhs. The Company has spent 89.43 Lakhs towards CSR expenditure and the balance of 1.50 Lakhs (after rounding off) was deposited in an CSR Unspent account for
CSR spending in specified projects. 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 2023-24 by the Company is annexed to this report as Annexure ‘B'.
Pursuant to the Companies (Corporate Social Responsibilities Policy) Amendment Rules, 2021, Company has adopted a CSR policy in line with the above amendment. The policy has been approved by the Company's Board of Directors and the same is available on the website of the Company at https://scansteels.com/ssl-policies/
RISK MANAGEMENT
The Company's robust risk management framework identifies and evaluates business risks and opportunities. The Company recognises that the emerging and identified risks need to be managed and mitigated to protect its shareholders and other stakeholder's interest, achieve its business objective and enable sustainable growth. The risk frame work is aimed at effectively mitigating the Company's various business and operational risks, through strategic actions. Risk management is embedded in our critical business activities, functions and processes.
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 probability or impact thereof is reduced through tactical and executive management, policies, processes, inbuilt systems controls, MIS, internal audit reviews etc.
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 Risk Management team continuously scans the external and internal environment for developments which may throw up emerging risks for the organisation. The risk flags and risk insights are shared with the Senior Management for deep diving into emerging risk areas for the Company. The Company's risk intelligent culture enabled it to manage the uncertainties in an unprecedented business environment during the year under review. "Scenario-based risk assessment" 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 Company's risk profile in the financial year 2023-24. 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 to proactively manage risks, as they emerge in financial year 2024-25. Health and safety of employees and the communities in the vicinity of our operations, and Environment and Climate Change impacts continues to be the top-most priority for the Company, whilst simultaneously ensuring continuity of our business operations. All business decisions are aligned to the Scan Steels Code of Conduct. The long-term strategy of the Company is focused on generating profitable growth and sustainable cashflows that creates long-term stakeholder value.
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/ssl-policies/ - Investor Relations Segment.
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. The Company ensures that it evolves and follows the corporate governance guidelines and best practices diligently, not just to boost long-term shareholder value, but also to respect rights of the minority. The Board is conscious of its inherent responsibility to disclose timely and accurate information on the Company's 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 ‘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 Directors Report as Annexure ‘H'. 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.
VARIATION IN THE TERMS OF NON- CONVERTIBLE REDEEMABLE PREFERENCE SHARES (‘NCRPS') AND ISSUANCE AND ALLOTMENT OF 62,50,000 OPTIONALLY CONVERTIBLE REDEEMABLE PREFERENCE SHARE (‘OCRPS') ON PRIVATE PLACEMENT BASIS
The company had issued and allotted 1,28,49,605 non-convertible redeemable preference shares ("NCRPS") of 10/- (Rupees Ten) each at a premium of 30/- (Rupees Thirty) per NCRPS for an aggregate amount of 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. (non-cumulative, non- participating) on a private placement basis on August 12, 2015 (the allotment date of NCRPS) after members approval sought via postal ballot.
With an objective to retain funds in the company towards its long-term business objectives and to create value for the stakeholders, the management of the company intended to make changes in the existing terms of the non-convertible redeemable preference shares (NCRPS) holders so as to insert the option of making it convertible into optionally convertible redeemable preference shares (OCRPS) in part or full, based on the mutual consent of the NCRPS holders and the company from time to time, subject to receipt of all necessary approvals.
Upon discussion with NCRPS Holders, the NCRPS Holders had agreed to insert the option of "convertibility" to the existing terms of NCRPS issued to them, such that the said NCRPS would become convertible into equity shares in part or full, based on the mutual consent of the NCRPS holders and subject to receipt of all necessary approvals. Accordingly, During the year under review as approved by the board at their meeting held on 30th January, 2024, approval of the holders of NCRPS and also approval of the shareholders accorded in their meeting held on 27th February, 2024 the
company had altered terms of its 1,28,49,605 Non-Convertible Redeemable Preference Shares (NCRPS) allotted on a private placement basis on August 12, 2015 (the allotment date of NCRPS) and consequently, issued and allotted 62,50,000 (sixty-two lakh and fifty thousand) Optionally Convertible Redeemable Preference Shares (OCRPS) having a face value of Rs. 10/- each on a private placement basis/Preferential Basis to existing NCRPS Holders (promoter and other than promoter) vide Board Resolution dated 18th March, 2024, for consideration other than cash in lieu of the / against conversion of the same number of NCRPS held by them pursuant to BSE's in-principal approval granted via -(LOD/ PREF/TT/FIP/1410/2023-24) Dated March 13, 2024.
Each OCRPS was issued at 70.53/- (Rs. Seventy and Fifty-Three Paise) including the premium of
60.53/- (Rupees Sixty and Fifty-Three Paise) as per the valuation report obtained from the registered valuer in terms of Regulation 166A of SEBI ICDR Regulations. The optionally convertible redeemable preference shares ("OCRPS") were issued in exchange or in lieu of the same number of non-convertible redeemable preference shares ("NCRPS") to the existing NCRPS holders; hence, there was no cash consideration involved in this allotment.
The company vide Board Resolution dated 30th March, 2024 approved the revision in the conversion ratio of NCRPS into OCRPS as 1.6029….:1 (i.e., allotment of 1 OCRPS in exchange of 1.6029…. NCRPS of the Company) resulting into redemption of 1,00,18,466 nos. of NCRPS against the allotment of 62,50,000 nos. of OCRPS of the Company made vide board resolution dated 18th March, 2024.
Each OCRPS of 10 each shall be convertible into each equity share of 10 each of the Company in accordance with the provisions of Securities and Exchange Board of India (Issue of Capital and
Disclosure Requirements) Regulations, 2018, and other applicable Provisions if any, pursuant to exercise of conversion option by OCRPS holders against each such OCRPS, at any time on or before 11th August 2025. In case the option of conversion is not exercised by the OCRPS Holder within on or before 11th August, 2025 the OCRPS shall be redeemed out of the sources provided for under applicable provisions of law within 30 days from the end of the period available for conversion at a price not less than the price of 90/- (Rupees Ninety only) each OCRPS.
SHARE CAPITAL
INCREASE IN AUTHORISED SHARE CAPITAL
The company intended to alter the terms of existing non-convertible redeemable preference shares (NCRPS) such that the said NCRPS will have an option by which the same may become convertible preference shares, in part or full, based on the mutual consent of the NCRPS holders and the Company and subject to other necessary approvals, which in turn required the issuance and allotment of Optionally Convertible Redeemable Preference Shares (OCRPS).
Consequently, the company had Increased its Authorised Share Capital from 70,00,00,000/- (Rupees Seventy Crores only) divided into 5,50,00,000 (Five Crore Fifty Lakhs) equity shares of 10/- (Rupees Ten) each and 1,50,00,000 (One Crore Fifty Lakhs only) Non-cumulative Redeemable Preference Share of 10/- (Rupees Ten) each to 86,50,00,000/- (Rupees Eighty-six Crore and Fifty Lakhs) divided into 7,15,00,000 (Seven Crore Fifteen Lakhs) equity shares of
10/- (Rupees Ten) each and 87,50,000 (Eighty-seven Lakhs and Fifty Thousand only) Non- cumulative Redeemable Preference Share of
10/- (Rupees Ten) each and 62,50,000 (Sixty- Two Lakhs and Fifty Thousand) Non-cumulative Optionally Convertible Redeemable Preference Shares of 10/- (Rupees Ten) each. Pursuant to Members approval accorded in the Extra-
Ordinary General Meeting held on February 27th, 2024 and accordingly, the capital clause of the Memorandum of Association of the Company is amended.
The authorized share capital of the Company as on 31st March, 2024 is 86,50,00,000/- (Rupees Eighty-six Crore and Fifty Lakhs) divided into 7,15,00,000 (Seven Crore Fifteen Lakhs) equity shares of 10/- (Rupees Ten) each and 87,50,000 (Eighty-seven Lakhs and Fifty Thousand only) Non-cumulative Redeemable Preference Share of 10/- (Rupees Ten) each and 62,50,000 (Sixty-Two Lakhs and Fifty Thousand) Non-cumulative Optionally Convertible Redeemable Preference Shares of 10/- (Rupees Ten) each.
ISSUED/SUBSCRIBED/PAID UP CAPITAL
During the year under review, the company altered the terms of its existing non-convertible redeemable preference shares (NCRPS) by giving a convertible option to NCRPS holders such that the said NCRPS would become convertible into equity shares in part or full, based on the mutual consent of the NCRPS holders and pursuant to Members approval sought in the Extra Ordinary General Meeting held on 27th February, 2024, and by taking all other necessary approvals in this regard, Consequently, the board of directors allotted 62,50,000 (sixty-two lakh and fifty thousand) Optionally Convertible Redeemable Preference Shares (OCRPS) having a face value of Rs. 10/- each on a private placement basis/Preferential Basis to existing NCRPS Holders (promoter and other than promoter) vide Board Resolution dated 18th March, 2024, for consideration other than cash in lieu of the / against conversion of the same number of NCRPS held by them pursuant to BSE's in-principal approval granted via -(LOD/ PREF/TT/FIP/1410/2023-24) Dated March 13, 2024.
Accordingly, The paid-up equity share capital as on March 31, 2024 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
90,811,390/- (Ninety Crore Eighty One Lacs One Thousand Three Hundred Ninety) divided into 62,50,000 (Sixty Two Lacs Fifty Thousand only) fully paid up Optionally Convertible Redeemable Preference Shares of 10/- (Rupees Ten) each. and 28,31,139 (Twenty-Eight Lacs Thirty-One Thousand One Hundred and Thirty-Nine) fully paid up Non-Convertible Redeemable Preference Shares 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. Rajesh Gadodia (DIN: 00574465), retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment. Mr. Rajesh Gadodia, is not related to any of the Directors of the Company.
• Pursuant to the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company (Board) in terms of Section 161 of the Act and in terms of the company's Articles of Association at its meeting held on August 24th, 2024, subject to the approval of the members by way of special resolution at the ensuing AGM of the Company, appointed Mr. Gagan Jalan (DIN: 09523622) as an Additional Director in the category of Non-Executive Independent Director of the Company, for a First Term of five consecutive years with effect from August 24th, 2024. Further, in the opinion of the Board, Mr. Gagan Jalan is a person of high integrity, expertise,
and experience and qualifies to be appointed as an independent director of the company.
Pursuant to the provisions of Section 149 of the Act, Mr. Gagan Jalan, have submitted declaration that he meets the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations").
Mr. Gagan Jalan, is not related to any of the Directors of the Company. There have been no circumstances affecting his status as an independent director of the Company. Mr. Gagan Jalan has also cleared online proficiency self-assessment test in terms of the Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014. Mr. Gagan Jalan is not debarred from holding the office of Director by virtue of any SEBI order or any other such authority.
Your company has received a notice under section 160 of the company's act, 2013 from a member, signifying his intension to propose the name of Mr. Gagan Jalan, for appointment as an Independent Director of the company at the 31st Annual General Meeting.
Suitable resolution(s) for appointment or reappointment of director(s), as referred to above, will be placed for approval of the members in the forthcoming annual general meeting. The Board of Directors recommends their appointment / re-appointment. Brief resume and nature of their expertise in specific functional areas are provided in Corporate Governance Report. Names of companies in which they hold directorships and memberships/ chairmanships of Board Committees and their 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 ("SS-2") is provided under the explanatory statement as an annexure in the notice convening the forthcoming Annual General Meeting.
• During the year under review (FY 2023- 2024) The Board of Directors, on the recommendation of the Nomination and Remuneration Committee, had appointed Ms. Konika Poddar (DIN 10435224) as an additional director (non-executive independent Woman director) at its meeting held on January 30, 2024 pursuant to Section 161 of the Act and in terms of Company's Articles of Association., to hold office for a first term of five consecutive years commencing from January 30, 2024 to January 29, 2029. which was approved by Members at the Extra Ordinary General Meeting of the Company held on 27th February, 2024 Consequently, she became Member of the Audit Committee, Nomination and Remuneration Committee, Stake Holders Relationship Committee, and Corporate Social Responsibility Committee.
• During the year under review (FY 2023- 2024), Mr. Shravan Kumar Agrawal (DIN 09139761) Non-Executive Independent Director of the Company, on his resignation due to pre-occupation of work and other personal commitment, ceased to be an Independent Director of the Company with effect from close of business hours on 30th January, 2024, Consequently, he will also be stepping down as the Member of the Audit Committee, Nomination and Remuneration Committee, Stake Holders Relationship Committee, and Corporate Social Responsibility Committee. there were no other material reasons for resignation other than those provided by the Director. The Board placed on record appreciation of his service to the Company
and look forward for his continuance support in future.
• Further, between Year End date 31st March 2024 and the Date of Director Report, Mrs. Debjani Sahu, (DIN: 02674022) (Non- Executive Independent Woman Director), on her resignation due to pre-occupation of work and other personal commitment, ceased to be an Independent Woman Director of the Company with effect from close of business hours on August 24th, 2024, Consequently, she will also be stepping down as the Member of the Nomination and Remuneration Committee and Risk Management Committee. there were no other material reasons for resignation other than those provided by the Director. Your directors would like to record their deep sense of appreciation for the enormous contributions made by her during her tenure.
• SEBI, vide SEBI(LODR)(second Amendment) Reg. 2023 dated June 14, 2023, inserted a new sub-regulation to Reg. 17 i.e., 1D, which has come into effect from July 15, 2023. The said sub-regulation mandates that, with effect from April 1, 2024, the continuation of a director serving on the board of directors of a listed entity shall be subject to the approval by the shareholders in a general meeting at least once in every five years from the date of their appointment or reappointment, as the case may be. Further, continuation of the director serving on the board of directors of a listed entity as on March 31, 2024, without the approval of the shareholders for a period of last five years or more shall be subject to the approval of shareholders in the first general meeting to be held after March 31, 2024. Provided further that the requirement specified in this regulation shall not be applicable to the Whole-Time Director, Managing Director, Manager, Independent Director, or a Director retiring as per sub-section (6) of section 152
of the Companies Act, 2013, if the approval of the shareholders for the reappointment or continuation of the aforesaid directors or managers is otherwise provided for by the provisions of these regulations or the Companies Act, 2013 and has been complied with.
Mr. Rajesh Gadodia is the non-executive chairman of the company and has been serving on the board of the company for more than five years, but as stated above, the said new sub-regulation is not applicable to the re- appointment of Mr. Rajesh Gadodia as he is a director retiring as per the sub-section (6) of Section 152 of the Companies Act, 2013, read with rules made thereunder; hence, no shareholder approval is required for his re- appointment as per Reg. 17(1D) of SEBI (LODR) Reg. 2015. The company does not have any other director (i.e., non-executive, non-independent directors) who was appointed without any defined tenure and is not liable to ‘retirement by rotation' for whom shareholder approval is required to be sought in the ensuing annual general meeting as per the aforementioned provision.
• 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.
Apart from the changes as mentioned above, there were no changes in the composition of the Board of the Company during the year under review. Further, there were no changes in the Key Managerial Personnel of the Company during the year under review.
None of the Directors of the Company are disqualified under Section 164(2) of the Companies Act, 2013. During the year, the non-executive directors of the Company had no material pecuniary relationship or transactions with the Company. They are paid sitting fees, and reimbursement of expenses incurred by them for the purpose of attending meetings of the Company.
The following policies of the Company are attached herewith marked as ANNEXURE ‘C' and ANNEXURE ‘D': a) Policy for selection of Directors and determining Director's independence; and b) Nomination and Remuneration Policy.
SENIOR MANAGEMENT - 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 company's act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Clause 5B of Schedule V of SEBI Listing Regulations/ SEBI (LODR) Regulations, 2015., During the year under review, there has been no change in Key Managerial Personnel.
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 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, 2024 the Board of Directors comprises 6 Directors, of which 4 are non-executive, including Two women director. The number of Independent Directors is 3, which is one half of the total number of Directors.
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. The remuneration paid to the directors is in accordance with the remuneration policy of the Company. More details on the Company's policy on Director's appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the Corporate Governance Report, which forms part of 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. During the year under review, there were no substantive changes in the Policy except to align the Policy with amendments if any, 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 Act' 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/independent-directors/ - InvestorRelations 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, 2014, 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 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. 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/independent-directors/ - 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 30th January, 2024 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 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 (including Independent 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 Directors' inputs on effectiveness of the Board/ Committee processes.
While evaluating the performance and effectiveness of the Board, various aspects of the Board's functioning such as adequacy of the composition and structure 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 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 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 Members' confidence in the ethical standards of the Company.
The evaluation process endorsed the Board Members' 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/ssl-policies/ - Investor Relations Segment.
MANAGERIAL REMUNERATION:
Based on the recommendations of the NRC, the Board has approved the Remuneration Policy for Directors, Key Managerial Personnel (‘KMPs') 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 "Corporate Governance", part of this Annual Report: —
(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 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.
BOARD DIVERSITY
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/ssl-policies/
SCAN STEELS'S 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, is available on our website at https://scansteels.com/ssl-policies/ 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/policies-and- code/ - 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 ‘Meetings of the Board of Directors' and ‘General Meetings', respectively, have been duly followed by the Company.
DIRECTORS RESPONSIBILITY STATEMENT
Directors' 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 Company's internal financial controls were adequate and effective during financial year 2023-24.
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 —
a) In the preparation of the annual accounts for the year ended March 31, 2024, 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, 2024 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 AUDITOR'S REPORT STATUTORY AUDITORS
At the Company's 21st AGM held on 30.12.2014, M/s. SRB & Associates (Firm's Registration No. 310009E),CharteredAccountants,Bhubaneswar, were appointed as the Statutory Auditors of the Company for a term of 5 Consecutive 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 Member's approval soughed at the 26th AGM for the second term of 5 (five) consecutive years to hold office from the conclusion of the 26th Annual General Meeting until the conclusion of the 31st Annual General Meeting of the Company.
As per the provisions of the Companies Act, 2013 ("the Act"), no listed company shall appoint an audit firm (including its affiliate firms) as auditors for more than two terms of five consecutive years. M/s. SRB & Associates, will complete their present (Second) term on conclusion of this 31st Annual General Meeting. Accordingly, they will complete the period of ten years at the conclusion of the 31st Annual General Meeting. M/s. SRB & Associates was present at the last Annual General Meeting held on September 29, 2023.
For the purpose of appointment of new Auditors, The Board of Directors of the Company ("the Board"), at its meeting held on August 24th, 2024 has, considering the experience and expertise and on the basis of recommendation of the Audit Committee, proposed to the Members of the Company for their approval appointment of M/s Das Pattnaik & Co., Chartered Accountants, (FRN: 321097E), Odisha as the Statutory Auditors of the Company in place of M/s. SRB & Associates (Firm's Registration No. 310009E), Chartered Accountants, for a period of five consecutive years commencing from the conclusion of ensuing Thirty First Annual General Meeting until the conclusion of the Thirty-Six Annual General Meeting of the Company to be held in the calendar year 2029, in terms of Section 139(1) of the Companies Act, 2013.
M/s Das Pattnaik & Co., Chartered Accountants have expressed their willingness to be appointed as Statutory Auditors of the Company. They have further confirmed that their appointment, if made, would be within the limits specified under Section 141(3)(g) of the Companies Act, 2013 read with Cos. (Audit &Auditors) Rules, 2014 including any statutory modification or re-enactment thereof for the time being in force and that they are not disqualified for appointment.
The Statutory Auditors have not reported any instance of fraud committed in the Company by its Officers or Employees to the Audit Committee under section 143(12) of the Companies Act, 2013, details of which needs to be mentioned in this Report as per section 134(3) (ca) of the Act.
AUDITORS' REPORT
The Statutory Auditors have issued an unmodified audit opinion on the Company's financial statements for the year ended 31st March, 2024. 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 31st March 2024 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 Auditor's Report for the year under review does not contain any qualification, reservation, adverse remark, or disclaimer.
COST AUDITORS
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
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 August 24th, 2024 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 2024-25 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 Cost Auditors have submitted a certificate of their eligibility for such re-appointment and confirmed that their re-appointment is within the limits of section 141(3)(g) of the Companies Act, 2013 and have also certified that they are free from any disqualifications specified under section 141(3) and proviso to section 148(3) read with section 141(4) of the Companies Act, 2013.
The 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 ratification of Members and forms part of the Notice of the ensuing AGM.
The Cost Audit Report for the financial year ended 31st March, 2023 was filed in XBRL mode on 06th October, 2023.
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. Amarendra Mohapatra & Associates., a firm of Company Secretaries in Practice, to undertake the Secretarial Audit of the Company for the FY 2023 – 24. The Report of the Secretarial Audit carried out by M/s. Amarendra Mohapatra & Associates is annexed herewith as Annexure "E".
The Board at its meeting held on May 11, 2024, 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. 2024-25 to undertake the Secretarial Audit of the Company Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, 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 2023–24 Pursuant to SEBI Circular No. CIR/CFD/CMD1/27/2019 dated February 8, 2019 read with Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 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, 2024 which was duly filed with Bombay Stock Exchange Limited within the stipulated time period. The same can be accessed at https://scansteels.com/wp- content/uploads/2024/06/MARCH-2024.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.
INTERNAL AUDITORS
on the recommendation of the Audit Committee, The Board at its meeting held on May 11, 2024 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 2024-25. pursuant to Section 138 of the Companies Act, 2013 read with Rule No. 13 of the Companies (Accounts) Rules, 2014.
AUDIT COMMITTEE.
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 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 Company's 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 2023-2024 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, a Vigil Mechanism has been constituted for directors and employees to report genuine concerns and to make protected disclosures about any unethical behaviour, actual or suspected fraud, or violation of the Code of Conduct of the company. The audit committee shall oversee the vigil mechanism through the committee and provide adequate safeguards against victimization of employees and directors and any other person who availed of the vigil mechanism and have direct access to the chairman of the audit committee in exceptional cases. No personnel have been denied access to the Audit Committee. In case of repeated frivolous complaints being filed by the director or an employee, the audit committee may take suitable action, including reprimanding 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/policies-and-code/ - 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 Company's transfer of securities and redressal of shareholders' / investors' / security holders' 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 ‘D' 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 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 135 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.
E-VOTING FACILITY AT 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 31st 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, Thirteen Board Meeting were convened and held, Details of composition of the Board and its Committees as well as details of the meetings of the Board and various Committees of your Company and Directors attending the same 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. The Committees of the Board usually meet the day before or on the day of the Board meeting, or whenever the need arises for transacting business.
ANNUAL RETURN
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/annual- return/
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 and unquoted securities as a long-term investment following the provisions of section 186 of the Act. details of the investments covered under the provisions of section 186 of the company's 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 ‘F' 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, 2024 stood at 1752.
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 ‘G' 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:
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. Buy back of the equity shares.
iv. Receipt of secured/unsecured loans from its directors.
v. No significant or material orders were passed by the Courts or Tribunals which impact the going concern status and Company's operations in future.
vi. 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.
vii. 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.
viii. Details regarding the difference in valuation between a one-time settlement and valuation for obtaining loans from banks or financial institutions.
ix. Details of any application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) along with their status as at the end of the financial year.
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
Place: Bhubaneswar Date: 24th August, 2024