clarus infrarl Directors report
Dear Shareholders,
Your directors have pleasure in presenting the Thirtieth Annual Report of your Company together with the Audited Financial Statements for the year ended March 31,2023.
FINANCIAL HIGHLIGHTS / RESULTS
Your directors take pleasure in presenting the 30th Annual Report on the business and operations of your Company along with the financial statements for the year ended 31 March, 2023.
( in Lacs)
Financial Results |
2022-2023 | 2021-2022 |
Total Income |
109,677.52 | 100,233.60 |
Profit / (Loss) before Tax |
2199.90 | 6,585.67 |
Less : Tax Expenses |
||
Current Tax |
500.00 | 453.10 |
Deferred Tax (Charge)/ Credit |
167.99 | 1,055.14 |
Profit After Tax |
1531.90 | 5,077.42 |
Less : Prior Period Expenses |
- | -- |
Net Profit/(Loss) for the year |
1531.90 | 5,077.42 |
Add: Other Comprehensive Income |
(19.14) | (8.43) |
Total Comprehensive Income for the year |
(19.14) | (8.43) |
Surplus Brought Forward from last balance sheet |
8076.42 | 2,999.00 |
Add: Earlier Year Adjustment (Tax) |
- | - |
Less: Adjustment for net carrying amount of tangible fixed assets |
- | - |
Balance at the end of the year (excluding comprehensive income) |
9608.32 | 8,076.42 |
INDIAN ACCOUNTING STANDARD (IND AS)
In accordance with the notification issued by the Ministry of Corporate Affairs (MCA), your Company has complied with the new Accounting Standards, IND AS in preparation of financial statements under Indian Accounting Standards (Ind AS) prescribed under section 1 33 of the Companies Act 2013 read with rule 3 of the Companies (Indian Accounting Standards Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016 with effect
from 1st April 2016. Ind AS has replaced the existing Indian GAAP prescribed under section 133 of the Companies Act, 2013, read with rule 7 of Companies (Accounts) Rules, 2014.
Accordingly, the Company has adopted Indian Accounting Standard (“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 2023 has been prepared in accordance with Ind AS.
RESULTS OF OPERATIONS & STATE OF AFFAIRS OF THE COMPANY
Gross Turnover including other incomes for the year 2023 was stood at 1096.78 Lakhs which was around 9.42 % upward side in comparison to fiscal 2022. During the year the company initiated the trading of steel products and installation of new rolling mill and achieved a trading turnover of 7333.24 lakhs against 145.66 lakhs for last fiscal 2022. Your company continues with its focus on quality and strength of its products. Your Company has initiated steps to explore new markets in addition to developing existing ones.
The Company has produced 166075.280 metric tonnes (MT) and 177956.000 MT of M S Billets & Sponge Iron respectively in FY 2022-23, the same is increased by 15.41 % & (- 10.42%) respectively in comparison to the previous year. The company has installed a new rolling mill having an installed
capacity of 38 TPH within a existing facility located at Budhakata unit, in Odisha. The company is in the growth path by utilizing the better capacity installed.
The Companys sustained efforts towards back-end cost control, efficiency improvement measures, supported the insulation and limited the impact on the profitability margins. The Companys ability to better utilisation of capacities will help derive better margins out of the businesses. The outlook of each business has been discussed in detail in the ‘Management Discussion & Analysis which forms a part of this Annual Report.
PRODUCTION & TURNOVER / SALES
The production of steel product during the year under report, compared to the previous year is given below.
Item |
Production (Qty in MT) |
Turnover (Qty in MT) |
||
| Years ended 31st March, 2023 | Years ended 31st March, 2022 | Years ended 31st March, 2023 | Years ended 31st March, 2022 | |
Sponge Iron |
1,77,956 | 1,98,663 | 44,356 | 75,456 |
MS Ingot/ Billet |
1,66,075 | 1,43,894 | 59,174 | 43,974 |
Long and Flat Products |
1,01,410 | 1,07,715 | 1,01,599 | 1,09,469 |
OUTLOOK
FY 2022-23 was a year of two halves. The first half witnessed high volatility in raw material costs, especially coking coal and energy, aggravated by supply chain bottlenecks. A series of aggressive interest rates hikes by major central banks to rein in runaway inflation dampened steel demand, leading to inventory build-up and softening steel prices. However, the third and fourth quarters saw improved sentiment with easing inflation and raw material costs, coupled with the reopening of China post its stringent ‘Zero COVID policy.
India too experienced high inflation for some time. Steel spreads came under pressure due to higher coking coal and other input costs. The imposition of export duty on steel in May 2022 made Indian steel uncompetitive in global markets while cheaper steel from overseas made its way into the country, putting pricing pressure on domestic steelmakers. However, buoyant steel demand in India throughout the year provided some respite. The withdrawal of export duty in November 2022 opened up opportunities to tap the overseas markets, though global demand remained a bit subdued.
India is forecasted to become a $10 trillion economy by 2033, growing almost three times. As India accelerates its growth trajectory in its ‘nation building phase, steel demand is expected to see a step up. The National Steel Policy envisages Indias installed crude steel capacity at 300 MTPA by 2030-31. Scan Steels is striving to align with this progress.
India is the second-largest producer and consumer of crude steel globally with an installed capacity of ~160 MTPA at present. To meet the growing demand, the National Steel Policy (2017) envisages the countrys steel capacity to grow to ~300 MTPA by FY 2030-31. Further, Indias per capita finished steel consumption is significantly below the global average, which suggests a buoyant demand outlook. Near-term challenges exist especially in overseas markets, the long term growth story of Indian steel remains intact with an estimated 8-10 MnT annual incremental growth in domestic consumption.
The Indian automotive industry has evolved over the past decade to emerge as one of the fastest-growing markets in the world. With steel accounting for the majority of raw material content in vehicles and the highest safety ratings becoming a top consideration in buying decisions, demand for Advanced High-Strength Steel (AHSS) has been steadily rising in India. Further, with high-tensile strength and optimal formability, AHSS enables a low-cost solution, compared to aluminium and carbon fibre, to achieve 5-star safety ratings.
According to a NITI Aayog report, India is likely to be the worlds manufacturing hub for low- emission steel by 2030 and pave the way for wider adoption globally. Traditional coal-based production methods such as blast furnace/basic oxygen furnace and electric arc furnace (EAF) are being replaced with technologies like DRI and gas turbine generators
The fourth industrial revolution, Industry 4.0 is underway, and the steel industry is also witnessing the increased deployment of artificial intelligence (AI), Industrial IoT, AR/VR, and machine learning, among others, into everyday practices to make manufacturing smarter, safer, and more efficient.
As we forge ahead, guided by our unwavering commitment to excellence and sustainability, we remain steadfast in our pursuit of contributing to the growth and development of the Indian economy. We will continue to embrace innovation, pursue responsible business practices, and create value for all our stakeholders.
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
Scan Steelss commitment to excellence in Health, safety, and the environment is one of the companys core values. The company complies with the Laws and Regulations first, then goes beyond the mandate to keep our planet safe for future generations. We firmly believe that sustainable waste management practises are essential for safeguarding the planets future. Minimising the environmental impact of our operations assumes the utmost priority. We remain committed to reducing our environmental footprint and fostering a cleaner, greener, and more sustainable future for all.
As the world moves to a low-carbon economy, it will always remain a challenge to decouple growth from emissions in a hard-to-abate sector like ours. We are dedicated to preventing and
mitigating air pollution by enhancing the efficiency of our operations and reducing emissions. We strictly adhere to emission regulations, ensuring our emissions remain within legal limits, and continually strive to surpass these standards.
As a responsible organisation, we understand the significance of nurturing a safe and pristine environment and safeguarding the invaluable ecosystems that support us. Following a proactive approach, we have embraced innovation, adopted the best available technologies, and implemented operational changes to mitigate long-term environmental risks and promote sustainability. Further, we remain focused on reducing our emission intensities through the establishment of a robust environment management system and conscious efforts by prioritising actions such as energy transition towards renewable energy, adoption and promotion of efficiency improvements in energy consumption, process optimisation, increased use of available scraps, and supporting circularity through better resource management, Planting more and more trees, efficiently managing water resources, and minimising waste generation. Dedicated to advancing on the path of decarbonization guided by well-defined targets. We strive to be recognised for promoting sustainable practises in our industry.
CLIMATE CHANGE
Climate change is a global phenomenon with far-reaching consequences for various sectors, including steel. Rising temperatures, extreme weather events, and shifting climate patterns pose significant challenges to steel production and its environmental impact. Being part of the steel industry, we are cognizant of this. As the need to combat climate change becomes more urgent, the steel industry is facing increasing pressure to reduce its carbon footprint, adopt cleaner technologies, and embrace sustainable practises. Balancing the demand for steel with
the imperative to mitigate climate change poses a critical challenge as well as an opportunity for the future sustainability of the industry. The shift towards sustainable energy sources is a global phenomenon that is gaining momentum. It presents a major opportunity for businesses that have traditionally relied on non-renewable energy sources to rethink their energy mix and plan for the future. With the rising cost of energy and the growing demand for a better standard of living, companies must take measures to ensure they can access affordable and sustainable energy to power their operations.
As a heavy industry, steel manufacturing involves a complex series of processes that produce significant amounts of noise, dust, fumes, smoke, and odours, all of which have the potential to affect local communities. As a responsible steel maker with a decided focus on sustainability, we proactively contribute to worldwide efforts to address climate change. We have developed a strong roadmap for reducing our carbon footprints, setting well-defined targets, and measuring our progress. We are committed to reducing our carbon footprint by adopting energy- efficient technologies that minimise our overall energy consumption. In addition, we are actively working towards incorporating renewable energy sources into our energy mix. By doing so, we are not only reducing our impact on the environment but also conserving valuable resources.
RESEARCH AND DEVELOPMENT
The competitive business environment in which the Company operates makes innovation imperative for success of the business. Recognizing the need to improve, expand and innovate, the Company is concentrating efforts on research and development of alternate materials and new products.
The Company has started working on the technology roadmap that aligns with its vision of becoming a leader among the innovation driven organizations. Venturing into new market areas is another focus area for research and development and accordingly, a number of new product developments have been targeted. R&D continues to help the Company in its drive to become more sustainable and more environmentally friendly.
DIVIDEND
For the F.Y 22-23 your Board of Directors has not recommended any dividend on equity shares as well as on preference shares as your company has installed a new rolling mill having 38TPH capacity towards business expansion at a cost of Rs. 3339.94 lakhs out of own fund.
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 2022-23, 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, Joint Ventures Company or any other Associates Company therefore the Consolidation of Financial Statements is not applicable.
DETAILS OF SUBSIDIARY/JOINT VENTURES/ ASSOCIATE COMPANIES
The Company does not have any Subsidiary, Associates and Joint venture Companies there by; there are no details to be provided under [Rule 8 of the Companies (Accounts) Rules, 201 4]. Read with section 129 (3) of the Companies Act, 2013.during the year under review, no company has become or ceased as subsidiary, associate or joint venture companies.
FIXED DEPOSITS COVERED UNDER CHAPTER V OF THE COMPANIES ACT, 2013
Pursuant to Section 73, 74 & 76 Rule 8(5)(v) of Companies (Accounts) Rules, 2014. The details relating to deposits, covered under Chapter V of the Act are as follows: -
a. accepted during the year - Nil
b. remained unpaid or unclaimed as at the end of the year -Nil
c. whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved -
i. at the beginning of the year - Nil
ii. maximum during the year - Nil
iii. at the end of the year - Nil
There was No default in repayment of deposits or payment of interest thereon during the year by Company and accordingly No details to be provided by the Company in this regard.
The details of deposits which are not in compliance with the requirements of Chapter V of the Act -
Your Company has not accepted any deposits which are not in Compliance with the requirement of Chapter V of the Act.
CHANGE IN THE NATURE OF BUSINESS, IF ANY
During the year under review, there are no changes in the nature of business. The Company is continuing into the Steel Manufacturing Business.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS.
INTERNAL CONTROL SYSTEMS AND AUDIT OVERVIEW
The Company has in place adequate internal financial controls with reference to financial statements, commensurate with the size and nature of its business, forms an integral part of the Companys 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 Companys corporate governance policy.
Some of the significant features of internal control systems include:
• Documenting of policies, guidelines, authorities and approval procedures, encompassing the Companys all primary functions.
• Ensuring complete compliance with laws, regulations, standards and internal procedures and systems.
• De-risking the Companys assets/resources and protecting them from any loss.
• Ensuring the accounting systems integrity proper and authorised recording and reporting of all transactions.
• Preparing and monitoring of annual budgets for all operating and service functions.
• Ensuring the reliability of all financial and operational information.
• Forming an Audit committee of the Board of Directors, comprising majority of Independent Directors. The Audit Committee regularly reviews audit plans, significant audit findings, adequacy of internal controls, and compliance with accounting standards and so on.
• Forming a comprehensive Information Security Policy and continuous up-gradation of IT Systems.
As per the Regulation 9A - Institutional Mechanism
for Prevention of Insider trading via Notification
31.12.2018 SEBI (Prohibition of Insider Trading)
(Amendment) Regulation, 2018 below mentioned
points also included in internal controls:
a) all employees who have access to unpublished price sensitive information are identified as designated employee;
b) all the unpublished price sensitive information shall be identified and its confidentiality shall be maintained as per the requirements of these regulations;
c) adequate restrictions shall be placed on communication or procurement of unpublished price sensitive information as required by these regulations;
d) lists of all employees and other persons with whom unpublished price sensitive information is shared shall be maintained and confidentiality agreements shall be signed or notice shall be served to all such employees and persons;
e) all other relevant requirements specified under these regulations shall be complied with;
f) periodic process review to evaluate effectiveness of such internal controls.
The internal control systems and procedures are designed to assist in the identification and management of risks, the procedure- led verification of all compliance as well as an enhanced control consciousness.
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. Dalaniya & Associates, the Internal Auditor of the Company.
The Company continued to implement their suggestions and recommendations to improve the control environment. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Internal Auditors findings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations.
Through IA function the Board obtains the assurance it requires to ensure that risks to the business are properly identified, evaluated and managed. IA also provides assurance to the Board on the effectiveness of relevant internal controls.
Audit plan and execution
Internal Audit department has prepared a risk- based Audit Plan. The frequency of audit is decided by risk ratings of areas functions. The audit plan is carried out by the internal team. The audit plan is reviewed periodically to include areas which have assumed significant importance in line with the emerging industry trend and the aggressive growth of the Company.
In addition, the audit committee also places reliance on internal customer feedback and other external events for inclusion of areas into the audit plan.
INTERNAL FINANCIAL CONTROLS
As per Section 134 (5) (e) of the Companies Act 2013, the Directors have an overall responsibility for ensuring that the Company has implemented robust systems and framework of internal financial controls. This provides the Directors with reasonable assurance regarding the adequacy and operating effectiveness of controls with regards to reporting, operational and compliance risks. To enable them to meet these responsibilities, the Company has devised appropriate systems and framework including proper delegation of authority, policies and procedures, effective IT systems aligned to business requirements, risk based internal audit framework, risk management framework and whistle blower mechanism.
The Audit Committee regularly reviews the internal control system to ensure that it remains effective and aligned with the business requirements. Where weaknesses are identified as a result of the reviews, new procedures are put in place to strengthen controls. These are in turn reviewed at regular intervals.
The Company has developed a framework for designing and assessing effectiveness of internal controls over financial reporting and 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 Companys internal financial controls were adequate and effective during FY 2023.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
SEBI carried out amendments to the SEBI (LODR) Regulations, 2015 (SEBI Listing Regulations) vide the SEBI (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2021 wherein certain amendments into force from April 1, 2022 while remaining would come into force from April 1, 2023.
Regulation 23(1) and (4) states that all RPTs with an aggregate value exceeding 1,000 crores or 10% of annual consolidated turnover of the Company as per the last audited financial statements of the Company, whichever is lower, shall be treated as Material Related Party Transaction (MRPTs) and shall require approval of shareholders by means of an ordinary resolution. The provisions of Regulations 23(4) requiring approval of the shareholders are not applicable for the RPTs entered into between a holding company and its wholly owned subsidiary and RPT transactions entered into between two wholly-owned subsidiaries of the listed holding company, whose accounts are consolidated with such holding company and placed before the shareholders at the general meeting for approval.
The said limits are applicable, even if the transactions are in the ordinary course of business of the concerned company and at an arms length basis. The amended Regulation 2(1)(zc) of the SEBI Listing Regulations has also enhanced the definition of related party transactions which now includes a transaction involving a transfer of resources, services or obligations between a listed entity or any of its subsidiaries on one hand and a related party of the listed entity or any of its subsidiaries on the other hand, regardless of whether a price is charged or not.
Accordingly, RPTs of the Company and RPTs of the subsidiary entities exceeding the threshold of 1,000 crores or 10% of annual consolidated turnover of the Company as per the last audited financial statements of the Company, whichever is lower, shall require approval of the Shareholders of the Company with effect from April 1, 2022.
(Note: Company has no subsidiaries hence provisions related to subsidiary companies are not applicable.)
All contracts / arrangements / transactions entered by the Company during the financial year with related parties referred to in Section 188 (1) of the Companies Act, 2013 read with SEBI Listing Regulations were approved by Audit Committee and were in the ordinary course of business and on an arms 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 3rd amendment Reg. 2021) as also the Board for approval.
The Company has developed an Internal Guide on Related Party Transactions Manual and prescribed, Standard Operating Procedures for purpose of identification and monitoring of such transactions. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.
Moreover, on the recommendations of the Audit Committee, your Board time to time revised the Policy on Related Party Transactions to incorporate the regulatory amendments to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with provisions of the Companies Act, 2013.The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Companys website at https://scansteels.com/policies-and- code/- Investor Relations Segment.
The Policy intends to ensure that proper reporting; approval and disclosure processes are in place for all transactions between the Company and Related Parties. This Policy specifically deals with the review and approval of Related Party Transactions keeping in mind the potential or actual conflicts of interest that may arise because of entering into these transactions.
All Related Party Transactions are placed before the Audit Committee for review and approval (read with SEBI LODR 3rd amendment Reg. 2021). All Related Party Transactions are subjected to independent review by a reputed accounting firm to establish compliance with the requirements of Related Party Transactions under the Companies Act, 2013 and Regulation 23 of the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 201 5. Your directors draw attention of the members to Note No. 32 to the financial statement which sets out related party disclosures.
ISO 9002 CERTIFICATION
Your company is having status of ISO 9001, ISO 14001 and ISO 18001 certification, which is internationally recognized for the production, quality control and Environmental as well as OHSAS respectively.
CREDIT RATING
During the year, the rating of the company has been re-affirmed to IVR BBB+/Negative Outlook (IVR Triple B Plus with Negative Outlook) for Long Term Debt and Fund Based Facilities and IVR A2 (IVR A Two) for Short Term Non-Fund based Facilities from Informatics Valuation and Rating Pvt Ltd.
The Ratings derives strength from the experienced promoters and management team, long track record and established presence in the steel making, diversified product portfolio, growth in scale of operation along with moderate capital structure and debt protection metrics.
AUTHORITY TO DETERMINE MATERIALITY OF AN EVENT AND DISCLOSURE OF THE SAME TO STOCK EXCHANGE UNDER REGUALTION 30(5) OF SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGAULTION, 2015
Mr. Ankur Madaan, Whole- Time Director, of the Company, and Mr. Prabir Kumar Das, Company Secretary and Compliance Officer of the Company and Mr. Gobinda Chandra Nayak, Chief Financial Officer of the Company authorized by the Board for the purpose of determining the materiality of an event or information, in terms with the Companys 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 brands worth through carefully crafted marketing initiatives that aim to increase awareness and consideration. Our marketing strategy aligns seamlessly with our organisational objective of emerging as the one of the leading producer in the market, specialising in premium products that provide exceptional value to our customers.
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
Customers are valuable aspects of our business. We organise customer meetings and events from time to time to interact with our customers, recognise their needs, and hold satisfaction surveys to get their valuable feedback. We also keep in touch with them through Customer visits, phone calls, emails, and meetings. We focus
on Timely delivery, a wide range of high-quality products that meet customer requirements at Competitive pricing, and post-sales support. We emphasise areas like Easy availability through a large distribution network, Value-added products, Offerings based on solutions, Sustainable and low- carbon steel, Human rights and safety, warranties, and quality assurances.
FINANCE
During the year, the company has availed a term loan in the tune of Rs 30 Lakhs from the lenders towards purchase of vehicle & equipment.
BANKERS AND CONSORTIUM ARRANGEMENT
The Company has a consortium arrangement with its bankers with State Bank of India and Punjab National Bank. The State Bank of India is the lead bank. This consortium arrangement is well defined and takes care of the companys credit facility requirements from time to time. The consortium meetings are held quarterly on a regular basis, and they also visit the companys plant from time to time as per their requirements.
SAFETY
At Scan Steel, health and safety continue to be of the utmost priority. We strive to maintain a secure, safe, and healthy environment for our workforce, partners, and the communities we serve. We have established strong safety systems that ensure the well-being of our workforce. These systems are designed to identify and mitigate risks. We constantly strive to achieve our ultimate goal of zero harm, zero major incidents, and zero injuries. With effective leadership, robust systems, and a competent workforce, we aspire to be recognised as one of the safest organisations in the coming years, where the implementation of the highest standards of safety leads to the greatest levels of productivity.
The company is unwavering in its policy that ‘safety of persons overrides all production targets, which
drives all employees to continuously break new ground in safety management for the benefit of the people, property, environment, and communities in which Scan Steels operates. Our dedicated measures include conducting a Risk Assessment, identifying significant environmental aspects of all manufacturing plants, and signing a commitment to Responsible care.
The greatest emphasis is given to safety measures aimed at minimising accidents and incidents. With this backdrop, the overall safety performance of the Company improved, and the Company reported no fatalities during the year. Good safety performance is being rewarded.
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 practises. This is overseen by the Risk Management Board Committee.
HUMAN RESOURCE DEVELOPMENT AND PERSONNEL
The Companys Human Resources (HR) management practices ensure fair and reasonable process that are compliant with regulatory and governance requirements. Processes that endured the uncertainty of the last two-Three years and utilised it as a competitive advantage to enable continuous progress. The company has been given much emphasis on Human Resources Development and thus has been well recognized in the steel industrial for sound Human Resources Management.
Safety, diversity, inclusion, and overall employee growth are the important values of the organisational culture. Over a period of time, we have built and nurtured a dedicated and excellent workforce and also recruiting new people in order to meet the revival plans of the company. The Company has emerged as a true national firm with cosmopolitan atmosphere.
The companys HR polices and remuneration practices aim to attract and retain top talent, thus supporting the Companys long-term strategy and driving a sustainable performance. Finding, retaining and developing the right talent has always been a core strategy in order to maintain high-productivity and a value-driven organisational culture. We also believe in Women Empowerment and encourage women employees to come forward and take a lead. The HR policy is well aligned to effectively suit its expanding business horizons and future manpower requirement.
We continued to focus on building, nurturing and retaining a talented workforce during the year. This has been achieved by continuously stressing upon training & development, empowerment and aids them with tools that help in continuously learning and the development of new skills and creating a compelling work environment and maintaining well-structured reward & recognition mechanism. Company is committed to the welfare of its people and their families and to improve the quality of their life by providing the required facilities. During the year under the review, industrial relations at all units of the Company continued to be cordial and peaceful.
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility is the continuing commitment by the business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large. As a part of its policy for corporate social responsibility, the Company is associated with charitable and social activities and Thereby playing a pro-active role in the socioeconomic
growth. In structuring its efforts to the various aspects of Corporate Social Responsibilities, the Company takes in to account guidelines and statements issued by stakeholders and other regulatory bodies.
The management has adopted corporate social responsibility (CSR) well at par with its business, with the objective of creating wealth in the community with focus on education, health, animal welfare, water and society. Social welfare, community development, economic and environmental responsibilities are at the core of the CSR of the Company.
The Corporate Social Responsibility Committee (CSR Committee) Composition and Terms of reference of which is detailed in the Corporate Governance Part of this Annual Report, has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board.
The key philosophy of all CSR initiatives of the Company is guided by three core commitments of Scale, Impact and Sustainability.
The Company has identified Following focus areas of engagement:
• Rural Transformation: Creating sustainable livelihood solutions, Infrastructure support for rural development, addressing poverty.
• Animal Welfare: Aim to address material issues for each livestock industry. disease prevention and veterinary treatment, appropriate shelter, management, nutrition, humane handling, and humane Slaughter.
• Health: Affordable solutions for healthcare through improved access, awareness and health seeking behaviour. Eradicating hunger, poverty and malnutrition, promoting preventive health care and making available safe drinking water.
• Education: Access to quality education,
promoting education including special education to poor children in rural area. Improving literacy amongst the children, women, elderly and the differently abled, training and skill enhancement, career guidance, Specially in Nearby Villages where the Plants of the Company Located.
• Environment: Environmental sustainability, ecological balance, conservation of natural resources.
• Water: The Company makes affordable solution for water crises in the local area.
The Company would also undertake other need- based initiatives in compliance with Schedule VII to the Act as amended.
The CSR activities are monitored by internal / CSR Committee. As per the CSR policy, progress of the CSR activities is reviewed periodically or as and when needed by the Board-level CSR Committee, as well as by the management at the sites. Also, The Company through its Board and the CSR Committee follows a comprehensive approach to deliver socially inclusive and holistic interventions that help create equitable opportunities for the underprivileged and contribute to nation building.
The disclosures required to be made as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 or Details of CSR expenditure spent During the financial year 2022-23 by the Company is annexed to this report as Annexure ‘B.
Pursuant to the Companies (Corporate Social Responsibilities Policy) Amendment Rules, 2021, Company has adopted a revised CSR policy in line with the above amendment. The policy has been approved by the Companys Board of Directors and the same is available on the website of the Company at https://scansteels.com/wp- content/uploads/2023/06/CSR-POLICIES.pdf
RISK MANAGEMENT
The Companys robust risk management framework identifies and evaluates business risks and opportunities. The Company recognizes that these risks need to be managed and mitigated to protect its shareholders and other stakeholders interest, to achieve its business objectives and enable sustainable growth. The risk frame work is aimed at effectively mitigating the Companys various business and operational risks, through strategic actions. Risk management is embedded in our critical business activities, functions and processes.
The risks are reviewed for the change in the nature and extent of the major risks identified since the last assessment. It also provides control measures for risks and future action plans. Pursuant to the requirement of Regulation 21 of the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015, the Company has constituted a sub-committee of Directors to oversee Enterprise Risk Management Framework to ensure execution of decided strategies with focus on action and monitoring risks arising out of unintended consequences of decisions or actions and related to performance, operations, compliance, incidents, processes, systems and transactions are managed appropriately.
The Audit Committee has additional oversight in the area of financial risks, controls and Internal Audit reviews. The Company believes that the overall risk exposure of present and future risks remains within risk capacity.
The Companys 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 Companys risk profile in the financial year 2022-23. Despite the challenges posed by the competitive environment, the company has tried to maintain its liquidity position and has adequate resources to service the debt.
The Company continues to be vigilant specifically after pandemic situation to proactively manage risks, as they emerge in financial year 202324. Health and safety of employees and the communities in the vicinity of our operations, continues to be the top-most priority for the Company, whilst simultaneously ensuring continuity of our business operations.
The Company had developed and Implemented a Risk Management Policy which was reviewed and approved by the Committee and Board, which can be accessed on the website of the Company at https://scansteels.com/wp-content/ uploads/2022/08/RISK-MANAGEMENT- POLICY..pdf Investor Relations Segment.
CORPORATE GOVERNANCE
Transparency is the cornerstone of your Companys philosophy and all requirements of Corporate Governance are adhered to both in letter and spirit. The Board is conscious of its inherent responsibility to disclose timely and accurate information on the Companys 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.
SHARE CAPITAL
ISSUED/SUBSCRIBED/PAID UP CAPITAL
The authorized share capital of the Company is 70,00,00,000/- (Rupees Seventy Crores only) divided into 5,50,00,000 (Five Crore Fifty Lacs) equity shares of 10/- (Rupees Ten) each and 1,50,00,000 (One Crore Fifty Lacs only) Noncumulative Redeemable Preference Share of 10/- (Rupees Ten) each.
The paid-up equity share capital as on March 31, 2023 and as on date is 52,35,22,950 (Fifty Two Crore Thirty Five Lakhs Twenty Two Thousand Nine Fifty) divided into 5,23,52,295 (Five Crore Twenty Three Lakhs Fifty Two Thousand Two Hundred Ninety Five) fully paid up Equity Shares of 10/- (Rupees Ten Only) each and the preference share capital is 12,84,96,050/- (Twelve Crore Eighty Four Lacs Ninety Six Thousand Fifty) divided into 1,28,49,605 (One crore Twenty Eight Lacs Forty Nine Thousand Six Hundred Five only) fully paid up NCRPS of 10/- (Rupees Ten) each.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
• In accordance with the provisions of Section 152 of the Companies Act, 2013 and in terms of the Articles of Association of the Company, Mr. Praveen Kumar Patro (DIN: 02469361), retires by rotation at the forthcoming Annual
General Meeting and being eligible, offers himself for re-appointment.
Mr. Praveen Patro is not related to any of the Directors of the Company. Brief resume and nature of his expertise in specific functional areas are provided in Corporate Governance Report. Names of companies in which he holds directorships and memberships/ chairmanships of Board Committees and his shareholding and other information of the concerned director(s), in terms of the Regulation 36 (3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 201 5 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.
Suitable resolution(s) for appointment / reappointment of Director(s), as referred above, will be placed for approval of the members in the forthcoming Annual General Meeting, The Board of Directors recommends his re-appointment.
• During the year under review (2022-2023) (at the 29th Annual General Meeting of the Company) Mr. Praveen Kumar Patro (DIN: 02469361) was appointed as an Executive Director of the Company designated as Director - Project, for a second term of 5 (five) consecutive years with effect from 30th May 2023 to 29th May 2028
In terms of the Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, read with Amendment Rules from time to time, all Independent Directors of the Company have enrolled themselves on the Independent Directors Databank and have cleared the online proficiency self-assessment test within the specified timeline unless exempted under the aforesaid Rules.
None of the Directors are disqualified under Section 164[2) of the Companies Act, 2013. During the year, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, and reimbursement of expenses incurred by them for the purpose of attending meetings of the Company. Further, there were no changes in the Key Managerial Personnel of the Company during the year under review.
The following policies of the Company are attached herewith marked as ANNEXURE ‘C and ANNEXURE ‘D: a) Policy for selection of Directors and determining Directors independence; and b) Nomination and Remuneration Policy.
KEY MANAGERIAL PERSONNEL
Mr. Ankur Madaan, Whole Time Director, Mr. Prabir Kumar Das, President & Company Secretary and Mr. Gobinda Chandra Nayak, Chief Financial Officer are the Key Managerial Personnel of your company in accordance with the provision of Section 2[51) and 203 of the companys act,
2013 read with Companies [Appointment and Remuneration of Managerial Personnel) Rules,
2014 read with SEBI [LODR) Regulations, 2015. During the year under review, there has been no change in Key Managerial Personnel.
Companys policy of appointment and remuneration for directors, KMP and other employees including criteria for determining qualifications, positive attributes, directors independence (read with Sections 178 (1) (3)
(4)) The Nomination and Remuneration Committee works with the Board to determine the appropriate characteristics, skills and experience for the Board as a whole and its individual members with the objective of having a Board with diverse backgrounds and experience in business, government, education and public service. Characteristics expected of all Directors
include independence, integrity, high personal and professional ethics, sound business judgment, ability to participate constructively in deliberations and willingness to exercise authority in a collective manner.
The current policy is to have a balanced mix of executive and non-executive Independent Directors to maintain the independence of the Board, and separate its functions of governance and management. As at March 31, 2023 the Board of Directors comprises 6 Directors, of which 4 are non-executive, including one women director. The number of Independent Directors is 3, which is one half of the total number of Directors.
The Companys 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, 201 3 is furnished in Annexure ‘C and is attached to this report.
Further, Nomination and Remuneration Policy for Directors, Key Managerial Personnel and other employees is furnished in Annexure ‘D and is attached to this report. During the year under review, there were no substantive changes in the Policy except to align the Policy with amendments made to applicable laws.
Declaration by Independent Director(s)
As required under section 149[7) of the Companies Act, 2013, The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence and / or to qualify themselves to be appointed as an Independent Directors as prescribed both under Section 149 [6) of the Companies 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/wp- content/uploads/2023/05/DECLARATION-BY- ID-1496.pdf - Investor Relations Segment.
In the opinion of the Board, there has been no change in the circumstances which may affect their status as independent directors of the Company and the Board is satisfied of the integrity, expertise, and experience (including proficiency in terms of Section 150(1) of the Act and applicable rules thereunder) of all Independent Directors on the Board. Further, in terms of Section 150 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 201 4, as amended, Independent Directors of the Company have included their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs.
Familliarisation Programme for Independent Directors.
All New Independent Directors (IDs) whenever inducted into the Board are given an orientation. Presentations are made by Executive Directors (EDs) and Senior Management giving an overview of our operations, to familiarize the new IDs with the Companys business operations. The new IDs are given an orientation on our products, group structure, Board constitution and Procedures, matters reserved for the Board, and our major risks and risk management strategy. Visits to Plant and Factory locations are organized for the IDs to enable them to understand the business better.
The company familiarises the New and Existing Independent Directors of the Company from time to time with their roles, rights, responsibilities in the company, nature of the industry in which the company operates, business model of the company, etc. and also, by updating them about
latest amendments in Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and other Laws related to Company. Details of Same are put up on the website of the Company at https://scansteels. com/wp-content/uploads/2023/06/DETAILS- OF-FAMILIARISATION-PROGRAMMES.pdf -
Investor Relations Segment.
Separate Independent Director Meeting
In term of requirements of Schedule IV of the Companies Act, 201 3 and Regulation 25 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate meeting of the independent directors (“Annual ID meeting”) was convened on 31st January, 2023 and All the Independent Directors were present at the said Meeting.
The Independent Directors at the meeting reviewed the following:
a. Performance of Non-Independent Directors and the Board as a whole;
b. Performance of the Chairman of the Company, taking into account the views of Executive Directors and Non-Executive Directors; and
c. Assess the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
Post the Annual ID meeting, the collective feedback of each of the Independent Directors was discussed by the Chairperson of the Nomination Remuneration Committee with the Board covering performance of the Board as a whole, performance of the non-independent directors and performance of the Board Chairman. In addition to formal meetings, interactions outside the Board meetings also take place between the Chairman and Independent Directors.
BOARD ANNUAL EVALUATION
Pursuant to Regulation 17(10) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, and in compliance with the Section 134(3) (p) Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which include criteria for performance evaluation of the non-executive directors and executive directors.
The Board carried out an annual performance evaluation of its own performance, the individual Directors, as well as the 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 Boards functioning such as adequacy of the composition and structure and quality of the Board, time devoted by the Board to Companys longterm strategic issues, quality and transparency of Board discussions, execution and performance of specific duties, obligations and governance and effectiveness of board processes, information and functioning were taken into consideration. Committee performance was evaluated by the Board on the basis of their effectiveness in carrying out respective mandates, and after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc..
A separate exercise was carried out to evaluate the performance of Independent Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution to Board deliberations, independence of judgment, safeguarding the interest of the Company and focus on creation of shareholders value, ability to guide the Company in key matters, attendance at meetings, etc. The Executive Directors were evaluated on parameters such as strategy implementation, leadership skills, quality, quantity and timeliness of the information flow to the Board, etc.
The Board considered and discussed the inputs received from the Directors. Further, the IDs at their meeting reviewed the performance of 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 resilience of the Board and Management in navigating the Company during challenging times, cohesiveness amongst the Board Members, constructive relationship between the Board and the Management and the openness of the Management in sharing strategic information to enable the Board Members to discharge their responsibilities.
The Detailed Policy on Performance Evaluation of Independent Directors, Board, Committees and other individual Directors can be accessed from the website of the Company at https://scansteels. com/wp-content/uploads/2 016/06/ PERFORMANCE-EVALUATION-POLICY-FOR-BOD. pdf - Investor Relations Segment.
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/wp-content/uploads/2022/12/POLICY- ON-BOARD-DIVERSITY.pdf
SCAN STEELSS CODE OF CONDUCT FOR THE PREVENTION OF INSIDER TRADING
The Board of Directors has adopted the Insider Trading Policy in accordance with the requirements of the SEBI (Prohibition of Insider Trading) Regulations, 2015.
The Insider Trading Policy of the Company lays down guidelines and procedures to be followed, and disclosures to be made while dealing with shares of the Company. As well as the consequences of violation. The Policies/Code has been formulated to regulate, monitor and ensure reporting of deals by employees and to maintain the highest ethical standards of dealing in Company Securities.
The Code of Conduct to Regulate, Monitor and Report Trading by Designated Persons and their Immediate Relatives in terms of Regulation 9 of the SEBI (Prohibition of Insider Trading), Regulations, 2015, Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information formulated in terms of Regulation 8 of the SEBI (Prohibition of Insider Trading), Regulations, 2015, Policies and Procedural for inquiry in case of leak of Unpublished Price Sensitive Information, or Suspected Leak of Unpublished Price Sensitive Information in terms of Regulation 9A the SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2O18, and
Vigil Mechanism / Whistle Blower Policy in terms of Regulation 9A of the SEBI (Prohibition of Insider Trading), Regulations, 2015 is available on our website at https://scansteels.com/ssl-policies/ - Investor Relations Segment.
COMPLIANCE WITH CODE OF ETHICS FOR BOARD OF DIRECTORS AND SENIOR EXECUTIVES
All Directors and Senior Management Personnel have affirmed Compliance with the Code of Ethics for Board of Directors and Senior Executives. A Declaration to that effect is attached with The Corporate Governance Report.
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 Companys internal financial controls were adequate and effective during financial year 202223.
Accordingly, Pursuant to the requirements under section 134(3)(c) and 134(5) of the Companies Act, 2013, your directors hereby state and confirm that ?
a) In the preparation of the annual accounts for the year ended March 31, 2023, the applicable accounting standards read with requirements set out under Schedule III to the Act (as amended from time to time) have been followed and there are no material departures from the same;
b) The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31, 2023 and of the profit and loss of the company for the year ended on that date;
c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
d) The directors had prepared the annual accounts on a going concern basis; and
e) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and
f) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
AUDITORS AND AUDITORS REPORT
STATUTORY AUDITORS
At the Companys 21st AGM held on 30.12.2014, M/s. SRB & Associates (Firms Registration No. 310009E), Chartered Accountants, Bhubaneswar, were appointed as the Statutory Auditors of the Company for a term of 5 years to hold office from the conclusion of the 21st Annual General Meeting until the conclusion of the 26th Annual General Meeting of the Company.
The Board of Directors at its meeting held on 30th May, 2019 had recommended the re-appointment of M/s. SRB & Associates, Chartered Accountants, Bhubaneswar, for the Second Term and they were re-appointed with Members approval soughed at the 26th AGM for the second term of 5 (five) consecutive financial years i.e., up to 2023-24. And CA K P Swain, CP No 306323, Chartered Accountant has been authorized as an auditor on behalf of the firm to conduct the audit as per the Act.
In terms of the provisions relating to statutory auditors forming part of the Companies Amendment Act, 2017, notified on May 7, 2018, ratification of appointment of Statutory Auditors at every AGM is no more a legal requirement. Accordingly, the Notice convening the ensuing AGM does not carry any resolution on ratification of appointment of Statutory Auditors.
Statutory Auditors continue to satisfy the criteria provided in section 141 of the Companies Act, 13 read with Cos. (Audit &Auditors) Rules, 2014 including any statutory modification or reenactment thereof for the time being in force.
No frauds have been reported by the Auditors under Section 143 (12) of the Companies Act, 2013 requiring disclosure in the Board Report as per section 134(3)(ca) of the Act..
AUDITORS REPORT
Auditors did not emphasis on any matter on which directors were required to give any explanation; hence, no details regarding the same are to be provided. all other observations made by the Statutory Auditors in their report for the financial year ended 31 st March 2023 read with the explanatory notes therein are self-explanatory and therefore, do not call for any further explanation or comments from the Board under Section 134(3) of the Companies Act, 2013. The Auditors 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 accounts and records are made and maintained.
Pursuant to Section 148(2) of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Company is also required to get its cost accounting records audited by a Cost Auditor Accordingly, the Board at its meeting held on May 13, 2023 has on the recommendation of the Audit Committee, reappointed M/s. Ray, Nayak & Associates, Partner CMA. Chaitanya Kumar Ray, Cost Accountants, having office at MIG-26, Manorama Estate, Rasulgarh, Bhubaneswar - 751010 [Odisha), as the Cost Auditors of the Company to conduct the audit of the cost accounting records of the Company for the financial year 2023-24 on a remuneration of 55,000/- plus service tax as applicable and reimbursement of actual travel and out of pocket expenses.
M/s. Ray, Nayak & Associates have vast experience in the field of cost audit and have been conducting the audit of the cost records of the Company for the past several years.
The remuneration is subject to the ratification of the members in terms of Section 148 read with Rule 14 of the Companies [Audit and Auditors) Rules, 201 4 and is accordingly placed for your ratification.
The Cost Audit Report for the financial year ended 31st March, 2022 was filed in XBRL mode on 22nd September, 2022.
SECRETARIAL AUDITORS AND AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act, 201 3, and the Companies
[Appointment and Remuneration of Managerial Personnel) Rules, 201 4, the Company had appointed M/s. Amarendra Mohapatra & Associates., a firm of Company Secretaries in Practice, to undertake the Secretarial Audit of the Company for the FY 2022 - 23. The Report of the Secretarial Audit carried out by M/s. Amarendra Mohapatra & Associates is annexed herewith as Annexure “E”.
The Board at its meeting held on May 13, 2023, has re-appointed M/s. Amarendra Mohapatra & Associates, Prop. CS. Amarendra Mohapatra, a Practicing Company Secretary [CP No- 14901) having office at House No. 56/1, MIG II, Phase I, Chandrasekharpur Housing Board Colony CS. Pur, Bhubaneswar, Odisha - 751016, as Secretarial Auditor, of the Company for F.Y. 2023-24 to undertake the Secretarial Audit of the Company Pursuant to the provisions of Section 204 of the Companies Act, 201 3 read with Rule 9 of the Companies [Appointment and Remuneration of Managerial Personnel) Rules, 201 4, and Regulation 24A of SEBI [Listing Obligations and Disclosure Requirements) Regulations, 2015.
During the period under review, the Company has complied with the applicable Secretarial Standards notified by the Institute of Company Secretaries of India.
Further, The Company has also undertaken an audit for the FY 2022- 23 Pursuant to SEBI Circular No. CIR/CFD/CMD1/27/201 9 dated February 8, 2019 for all applicable compliances as per the Securities and Exchange Board of India Regulations and Circular/ Guidelines issued thereunder.
The company has received Annual Secretarial Compliance Report issued by M/s. Amarendra Mohapatra & Associates, Prop. CS. Amarendra Mohapatra, Practicing Company Secretary for the Year ended on 31st March, 2023 which was duly filed with Bombay Stock Exchange Limited. The
same can be accessed at https://scansteels. com/wp-content/uploads/2023/05/ MARCH-2023.pdf
The Annual Secretarial Compliance Report and Secretarial Audit report contains No observation or qualification requiring explanation or comments or action to be taken by the Board under Section 134(3)(f)(ii) of the Companies Act, 2013.
INTERNAL AUDITORS
on the recommendation of the Audit Committee, The Board at its meeting held on 25th August, 2023 has appointed M/s. P.A. & Associates; Chartered Accountants, having office at - 2nd Floor, Balaji Towers, G.M. Collage Road, Sambalpur - 768001 (Odisha), PAN No. of the Firm - AAFFP2414G, ICAI Registration No. 313085E, as an Internal Auditor of the Company for the financial year 2023-24. pursuant to Section 138 of the Companies Act, 2013 read with Rule No. 13 of the Companies (Accounts) Rules, 2014.
AUDIT COMMITTEE.
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 Companys financial reporting process, approves related-party transactions and regularly reviews financial statements, changes in accounting policies and practices if any, audit plans, significant audit findings, adequacy of internal controls, compliance with accounting standards, appointment of statutory auditors among others. Composition, Terms of reference and Details of Meeting of the Committee is explained in Detail in the Corporate Governance Part of this Annual Report.
There was no recommendation as such in the Financial Year 2022-2023 from the Audit Committee which was not accepted by the Board.
VIGIL MECHNISM
In pursuance of Section 177(9) of the Companies Act, 2013 and Regulation 22 read with Regulation 4(2)(d)(iv) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, Vigil Mechanism has been Constituted for directors and employees to report genuine concerns and Audit committee shall oversee the vigil mechanism through the committee and provide adequate safeguards against victimization of employees and directors who availed of the vigil mechanism and have a direct access to the chairman of the audit committee in exceptional case. In case of repeated frivolous complaints being filed by the director or an employee the audit committee may take suitable action including reprimand if necessary.
Further, Vigil Mechanism / Whistle Blower Policy in terms of Regulation 9A of the SEBI (Prohibition of Insider Trading), Regulations, 2015, can be accessed from our website at https://scansteels. com/wp-content/uploads/2023/01/SCAN- STEELS-LIMITED-WB-OR-VM-POLICY.pdf - Investor Relations Segment.
CONSTITUTION OF STAKEHOLDERS RELATIONSHIP COMMITTEE
The Board has constituted a Stakeholders Relationship Committee According to 178 (5) of the Companies Act 2013 and Regulation 20 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The SR
Committee is primarily responsible to review all matters connected with the Companys 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 Infrastructural Development environmental sustainability, Empower communities with sustainable livelihoods and more.
In View of the above The Board has Constituted Corporate Social Responsibility Committee to Comply the Section 1 35 of the Companies Act, 2013. Corporate Social Responsibility Committee formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate a list of CSR projects or programmes which a Company plans to undertake while also recommending the amount of expenditure to be incurred on each of the activities and to monitor the CSR policy of the Company from time to time. Composition and Terms of Reference of the Committee is Detailed in Corporate Governance Report Part of this Annual Report.
DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.
The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under.
Further, company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Your directors state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
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 30th Annual Report of the company and the business may be transacted through e-voting. The company has engaged the services of Central Depository Services Limited (CDSL) as the authorized agency to provide the e-voting facility.
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, Twelve Board Meeting were convened and held, details of the meetings of the Board and various Committees of your Company are set out in the Corporate Governance Report which forms part of this Annual Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and Regulation 17 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
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/wp-content/ uploads/2023/07/MARCH-2023-1.pdf
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
There were no loans, made by the Company under Section 186 of the Companies Act, 2013 during the year under review also no loans were given to any firms or companies in which Directors are interested. However, the company has made investment in quoted securities as a long-term investment and the details of the investments covered under the provisions of section 1 86 of the companys 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, 2023 stood at 2002.
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) 5(2) and 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are provided in the Annexure ‘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. No significant or material orders were passed by the Courts or Tribunals which impact the going concern status and Companys operations in future.
iv. There is No Revision of Financial Statement or Board Report Adopted by the Company, thereby there is no Disclosures to be made by the Company u/s 131 of the Companies Act, 2013 for Voluntary Revision of Financial Statement.
v. Your Company has No Holding or Subsidiary Company and thereby, Whole time Director of the Company do not receive any commission or remuneration from the same. Accordingly, there are no Details to be provided by the Company pursuant to Section 197 [14) of the Companies Act, 2013.
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 Companys success. The Directors look forward to their continued support in future.
FOR AND ON BEHALF OF THE BOARD
Sd/- |
Sd/ |
|
Ankur Madaan, |
Praveen Patro, |
|
Place: Bhubaneswar |
Whole- Time Director |
Director |
Date: 25th August, 2023 |
[DIN: 07002199) |
[DIN: 02469361) |
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Risk Disclosure on Derivatives
- 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
- On an average, loss makers registered net trading loss close to Rs. 50,000.
- Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
- Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.
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2024, IIFL Securities Ltd. All Rights Reserved
Follow us on
ATTENTION INVESTORS
- Prevent Unauthorized Transactions in your demat / trading account Update your Mobile Number/ email Id with your stock broker / Depository Participant. Receive information of your transactions directly from Exchanges on your mobile / email at the end of day and alerts on your registered mobile for all debits and other important transactions in your demat account directly from NSDL/ CDSL on the same day." - Issued in the interest of investors.
- KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.
- No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."
www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.
Risk Disclosure on Derivatives
- 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
- On an average, loss makers registered net trading loss close to Rs. 50,000.
- Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
- Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.
Copyright © IIFL Securities Ltd. All rights Reserved.
Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213, IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
We are ISO 27001:2013 Certified.
This certificate demonstrates that IIFL as an organization has defined and put in place best-practice information security processes.