Scan Steels Ltd Directors Report.

Dear Shareholders,

Your Directors have pleasure in presenting the Twenty Seventh Annual Report of your Company together with the Audited Financial Statements for the year ended March 31, 2020.

FINANCIAL HIGHLIGHTS / RESULTS

Your Directors take pleasure in presenting the 27th Annual Report on the business and operations of your Company along with the financial statements for the year ended 31 March, 2020.

( n Lacs)

2019-2020 2018-2019
Gross Turnover and other Income 66853.68 69,620.70
Profit / (Loss) before Tax 1322.50 1,709.33
Less : Tax Expenses
Current Tax -- 396.00
Deferred Tax (Charge)/ Credit 1290.61 648.77
Profit After Tax 31.90 664.56
Less : Prior Period Expenses -- -
Net Profit/(Loss) for the year 31.90 664.56
Add: Other Comprehensive Income 12.73 (99.72)
Total Comprehensive Income for the year 44.63 564.83
Surplus Brought Forward from last balance sheet (107.46) (772.02)
Add: Earlier Year Adjustment (Tax) - -
Less: Adjustment for net carrying amount of tangible fixed assets - -
Balance at the end of the year (excluding comprehen- sive income) (75.56) (107.46)

INDIAN ACCOUNTING STANDARD (IND AS)

In accordance with the notification issued by the Ministry of Corporate Affairs (MCA), your Company has complied with the new Accounting Standards, IND AS in preparation of financial statements under Indian Accounting Standards (Ind AS) prescribed under section 133 of the Companies Act 2013 read with rule 3 of the Companies (Indian Accounting Standards Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016 with effect from 1st April 2016. Ind AS has replaced the existing Indian GAAP prescribed under section 133 of the Companies Act, 2013, read with rule 7 of Companies (Accounts) Rules, 2014.

Accordingly the Company has adopted Indian Accounting Standard ("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 2020 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 2020 was stood at 66,853.68 Crores which was around 4% downward side in comparison to fiscal 2019. But in the better part of the company is, the company has able to achieve 1.36% incremental manufacturing sales against last fiscal. 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 1,22,355 metric tonnes (MT) of TMT Rods in FY 2019-20, increased by 26.78% in comparison to the previous year. 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, 2020 Years ended 31st March, 2019 Years ended 31st March, 2020 Years ended 31st March, 2019
Sponge Iron 1,78,155 1,49,813 65,710.250 72,023.380
MS Ingot/ Billet 1,32,193 97,024 17,185.000 20,613.570
Long and Flat Products 1,22,355 96,507 1,24,011.610 97,290.950

OUTLOOK

The outlook for its margins and profitability for this business depends on overall economic outlook. The outbreak of Coronavirus (COVID-19) pandemic globally and in India is causing a significant disruption and slowdown of economic activity. Measures taken to contain the spread of the virus, including travel bans, quarantines, social distancing and closures of non-essential services and the uncertainty associated with the lifting or reimposition of these restrictions, have further aggravated the business environment.

The phased easing of restrictions in India also augurs well for the economic revival. Further, India unleashed policy stimulus equivalent to 10% of GDP or 20 trillion to revive the economy.

Workforce remobilisation will be a key challenge for the core sectors of the economy. However, lower energy prices and expectations of a normal monsoon are positive for consumption outlook. With this a gradual recovery in economic activities is expected in the second half of FY 2020-21. Indias annual consumption of steel is now 100 MnT. Given the large market size it attracts imports of steel from various countries notably FTA nations (South Korea, Japan, ASEAN). As on March 2020, about 64% of steel imports originates from the FTA countries where the import duty is nil. This poses a threat to the health of domestic steel industry necessitating close monitoring and effective remedial measures.

For India to become a U.S.$5 trillion economy, the infrastructure sector will serve as a critical pillar of economic growth. Indias growing urban infrastructure and manufacturing sectors indicate that demand for steel is likely to remain robust in the coming years. Several government initiatives, such as providing affordable housing, expanding road and railway networks, developing the domestic shipbuilding industry, opening up the defence sector to private participation, and growth in the automobile sector are expected to create significant demand for steel in the country. The National Steel Policy 2017 envisages construction & infrastructure to grow at a CAGR of 7%. from FY 2015-16 to FY 2030-31. Under the New Steel Policy, the government targets to increase steel production capacity to about 300 MTPA by 2030. To participate in the strong India growth story, the Company laid out an expansion plan making innovative changes and technological improvements, leaving no stone, unturned in fulfilling dreams of its founding fathers, tuning every activity to meet the subtle demands of its customers.

In the Union Budget 2020-21, the government announced its plan to invest 100 trillion in infrastructures over the next five years. The government is also targeting to attract 50 trillion investments in the railways sector via public-private partnerships by FY 2029-30. Blueprints are also being prepared for the development of gas-grids, water-grids, i-ways (communication networks) and regional airports, on the lines of ‘One Nation-One Grid for power.

BUSINESS IMPACT OF COVID-19

The revenue of the Company has been impacted and the most of the manufacturing facilities of the Company were disrupted during the First half of this year whereas the company continued to incurring its revenue and fixed expenses as well.

The Company is not facing any migrant labour issues as most of the labours are from local areas/villages. Our domestic despatches in few territories have resumed. However it is expected to improve gradually as and when markets are fully opened and logistics are improved in due course of time.

We estimate that future impact of COVID -19 on its operations may move either side depending on the normalization of its business and demand of products.

At present Company is not planning for any capital restructuring, and profit margin would be impacted to the extent due to loss of revenue during the lockdown period. Though the Company has tried to maintain the liquidity position in spite of the negative impact due to fund flow stalled, also Company has adequate resources to service the debt.

Company is engaged in manufacturing of the basic essential TMT Rod product and demand for the same is expected to increase gradually with lockdown relaxations and measures to be taken to curb COVID 19 Impact in future.

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

The Company aims to be the benchmark for environmental stewardship in Steel Industry by focusing on climate change mitigation and reducing its resource footprint. Given the nature of the business and the industry that we operate in, the Company recognises its impact on the environment and is conscious of its duty towards safeguarding the environment. The Company is committed to responsible use and protection of the natural environment through conservation and sustainable practices. The Company focuses on operational excellence aimed at resource efficiency through a ‘Prevent, Minimise, Recover, Reuse and Recycle hierarchical approach to reducing its ecological footprint.

RESEARCH AND DEVELOPMENT

The competitive business environment in which the Company operates makes innovation imperative for success of the business. Recognizing the need to improve, expand and innovate, the Company is concentrating efforts on research and development of alternate materials and new products.

The Company has started working on the technology roadmap that aligns with 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.

DIVIDEND

Your Company is gradually overcoming its losses of Past years and looking forward to declare the dividend in the coming years. Hence for the F.Y 19-20 your Board of Directors has not recommended any dividend on equity shares as well as on preference shares.

PROSPECTS

In terms of Regulation 34(2)(e) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a report on the Management Discussion and Analysis covering prospects is provided as a separate section in this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed report on the Management iscussion & Analysis 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 2019-20, no amount has been transferred to reserve account. There is a loss of (75.56) Lacs in retained earning accounts is to be carried forward to next year.

CONSOLIDATED FINANCIAL STATEMENT

As per the definition in the Companies Act, 2013 ("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, 2014]. Read with section 129 (3) of the Companies Act, 2013.during the year under review, no company has become or ceased as subsidiary, associate or joint venture companies.

FIXED DEPOSITS COVERED UNDER CHAPTER V OF THE COMPANIES ACT, 2013

Pursuant to Section 73, 74 & 76 Rule 8(5)(v) of Companies (Accounts) Rules, 2014. The details relating to deposits, covered under Chapter V of the Act are as follows:-a. accepted during the year – Nil b. remained unpaid or unclaimed as at the end of the year –Nil c. whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved –i. at the beginning of the year - Nil ii. maximum during the year - Nil iii. at the end of the year - Nil There was No default in repayment of deposits or payment of interest thereon during the year by Company and accordingly No details to be provided by the Company in this regard.

The details of deposits which are not in compliance with the requirements of Chapter V of the Act –

Your Company has not accepted any deposits which are not in Compliance with the requirement of Chapter V of the Act.

CHANGE IN THE NATURE OF BUSINESS, IF ANY

During the year under review, there are no changes in the nature of business. The Company is continuing into the Steel Manufacturing Business.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS. INTERNAL CONTROL SYSTEMS AND AUDIT OVERVIEW

The Company has in place adequate internal financial controls with reference to financial statements, commensurate with the size and nature of its business, forms an integral part of the 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 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 upgradation of IT Systems.

As per the newly inserted 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. C B A & 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 2020.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All contracts / arrangements / transactions entered by the Company during the financial year with related parties referred to in Section 188 (1) of the Companies Act, 2013 were in the ordinary course of business and on an 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 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--vis the Company. Moreover, on the recommendations of the Audit Committee, your Board had revised the Policy on Related Party Transactions in accordance with Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and as per the amended provisions of the Companies Act, 2013.The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Companys website at www.scansteels. com - Investor Relations Segment. The Policy intends to ensure that proper reporting; approval and disclosure processes are in place for all transactions between the Company and Related Parties. This Policy specifically deals with the review and approval of Related Party Transactions keeping in mind the potential or actual conflicts of interest that may arise because of entering into these transactions. All Related Party Transactions are placed before the Audit Committee for review and approval. All Related Party Transactions are subjected to independent review by a reputed accounting firm to establish compliance with the requirements of Related Party Transactions under the Companies Act, 2013 and Regulation 23 of the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015.

Your Directors draw attention of the members to Note No. 28 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 upgraded to IVR BB / Stable Outlook ( IVR Double B with Stable Outlook) for Long Term Debt and Fund Based Facilities and IVR A4 (IVR A Four) for Short Term Non Fund based Facilities from Informerics Valuation and Rating Pvt Ltd.

The Ratings derives strength from the experienced promoters and management team, long track record and established presence in the steel making, diversified product portfolio, growth in scale of operation along with moderate capital structure and debt protection metrics.

AUTHORITY TO DETERMINE MATERIALITY OF AN EVENT AND DISCLOSURE OF THE SAME TO STOCK EXCHANGE UNDER REGUALTION 30(5) OF SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGAULTION, 2015

Mr. Ankur Madaan, Whole- Time Director, of the Company, and Mr. Prabir Kumar Das, Company Secretary and Compliance Officer of the Company and Mr. Gobinda Chandra Nayak, Chief Financial Officer of the Company authorized by the Board for the purpose of determining the materiality of an event or information, in terms with the 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 are well accepted in the market in varied segments and sectors with wide customer base.

INSURANCE

The Assets of the company are adequately insured against the loss of fire, riot, earthquake, loss of profit etc, and other risk which is considered by management, In addition to this coverage, a statutory public liability insurance policy has been taken by the company for providing coverage against the public liability arising out of industrial accidents for employees working in plants.

CUSTOMER RELATIONSHIP

The Company endeavors to develop and sustain long-term value-creating partnerships with our customers and channel partners through a wide range of product offerings, innovative services and unique solutions.

FINANCE

During the year, the company has not availed any further finance. Rather believe in and taken steps towards reduction of debt level and repaid a tune of . 10 crore by the company to the lenders.

BANKERS AND CONSORTIUM ARRANGEMENT

TThe Company has consortium arrangement of their bankers with State Bank of India as Lead Bank. This consortium arrangement is well defined and takes care of companys credit facilities requirement from time to time. The consortium meetings are hold quarterly on regular basis and they also visit companys plant from time to time as per their requirement.

SAFETY

The company has continued to scale up safety performance at all locations. Safety measures have been strengthened and employees are being trained to think on hazards/risks associated with their job. Systems have been established to make employees responsible and accountable for safety. Good safety performance is being rewarded. While Safety has been included as a corporate value, the main objective is to achieve better standard of safety in the shortest possible time.

HUMAN RESOURCE DEVELOPMENT AND PERSONNEL

The Companys Human Resources (HR) management practices ensure fair and reasonable process that are compliant with regulatory and governance requirements. The company has been given much emphasis on Human Resources Development and thus has been well recognized in the steel industrial for sound Human Resources Management. Over a period of time, we have built and nurtured a dedicated and excellent workforce and also recruiting new people in order to meet the revival plans of the company. The Company has emerged as a true national firm with cosmopolitan atmosphere. The 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. The policy is well aligned to effectively suit its expanding business horizons and future manpower requirement. This has been achieved by continuously stressing upon training & development, empowerment and 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 account guidelines and statements issued by stakeholders and other regulatory bodies.

The management has adopted corporate social responsibility (CSR) well at par with its business, with the objective of creating wealth in the community with focus on education, health, water and society. Social welfare, community development, economic and environmental responsibilities are at the core of the CSR of the Company.

The Corporate Social Responsibility Committee (CSR Committee) Composition and Terms of reference of which is detailed in the Corporate Governance Part of this Annual Report, has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board. The key philosophy of all CSR initiatives of the Company is guided by three core commitments of Scale, Impact and Sustainability.

The Company has identified six focus areas of engagement which are as under:

Rural Transformation : Creating sustainable livelihood solutions, addressing poverty, hunger, malnutrition and Drinking Water Facility.

Health: Affordable solutions for healthcare through improved access, awareness and health seeking behavior.

Education: Access to quality education, training and skill enhancement, 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 within the factory. 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 current financial year 2019-20 by the Company is annexed to this report as Annexure ‘B.

The CSR Policy of the Company is available on the companys website at www.scansteels.com - Investor Relations Segment.

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 and controls. The Company believes that the overall risk exposure of present and future risks remains within risk capacity. A Risk Management Policy was reviewed and approved by the Committee and which can be accessed on the website of the Company at www. scansteels.com - Investor Relations Segment.

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 ‘I. 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) Non-cumulative Redeemable Preference Share of 10/- (Rupees Ten) each.

The paid-up equity share capital as on March 31, 2020 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 reappointment. The proposal / resolution regarding the re-appointment of the aforesaid Director is placed for shareholders approval. The Board of Directors recommends his reappointment.

The first term of office of Mr. Punit Kedia (DIN 07501851) as an Independent Director is up to /expires on 23.05.2021. The Board of Directors on the recommendation of the Nomination and Remuneration Committee has recommended re-appointment of Mr. Punit Kedia as an Independent Director of the Company for a second term of 5 (five) consecutive years with effect from March 24, 2021 at the ensuing AGM for the approval of the Members by way of special resolution. Further, in the opinion of the Board, Mr. Punit Kedia is a person of high integrity, expertise and experience and qualify to be appointed as an Independent Director of the Company Pursuant to the provisions of Section 149 of the Act, Mr. Punit Kedia, have submitted declaration that he meet 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"). There has been no change in the circumstances affecting his status as an independent director of the Company.

Your company has received a notice under section 160 of the companies act, 2013 from a member, signifying his intension to propose the name of Mr. Punit Kedia, for reappointment as an Independent Director of the company in the forthcoming Annual General Meeting. 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 will undergo the online proficiency self-assessment test within the specified timeline unless exempted under the aforesaid Rules.

The first term of office of Mr. Ankur Madaan (DIN 07002199) as a Whole Time Director is up to /expires on 23.05.2021. The Board of Directors at its meeting held on 27th August, 2020, on the recommendation of the Nomination and Remuneration Committee has recommended re-appointment of Mr. Ankur Madaan as a Whole Time Director of the Company, designated as Executive Director, for a second term of 5 (five) consecutive years with effect from March 24, 2021 In compliance with the provisions of Sections 196, 197 and other applicable provisions of the Act, read with Schedule V to the Act and on terms and conditions including remuneration as recommended by the Nomination and Remuneration Committee (the ‘NRC Committee) of the Board and approved by the Board at the ensuing AGM for the approval of the Members by way of Ordinary resolution.

Mr. Ankur Madaan satisfies all the conditions set out in Part-I of Schedule V to the Act as also conditions set out under subsection (3) of Section 196 of the Act for being eligible for his reappointment. He is not disqualified from being appointed as Director in terms of Section 164 of the Act. Mr. Punit Kedia and Mr. Ankur Madaan are not debarred from holding the office of Director by virtue of any SEBI order or any other such authority.

During the year under review at the 26th Annual General Meeting of the Company Mr. Vinay Goyal (DIN 07002206) and Mrs. Debjani Sahu (DIN:02674022) was re-appointed as an Independent Directors of the Company for a second term of 5 (five) consecutive years with effect from the conclusion of the 26th Annual General Meeting and March 26, 2020 respectively.

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.

Suitable resolution(s) for appointment / reappointment of Director(s), as referred above, will be placed for approval of the members in the forthcoming Annual General Meeting. The brief resume and other information of the concerned director(s), in terms of the Regulation 26(4) and 36 (3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with Secretarial Standard on General Meetings ("SS-2") have been detailed as an annexure in the notice convening the forthcoming Annual General Meeting.

During the year, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, and reimbursement of expenses incurred by them for the purpose of attending meetings of the Company.

KEY MANAGERIAL PERSONNEL

Mr. Ankur Madaan, Whole Time Director, Mr. Prabir Kumar Das, President & Company Secretary and Mr. Gobinda Chandra Nayak, Chief Financial Officer are the Key Managerial Personnel of your company in accordance with the provision of Section 2(51) and 203 of the companies act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 read with SEBI (LODR) Regulations, 2015.

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, 2020 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, 2013 is furnished in Annexure ‘C and is attached to this report.

Further, Nomination and Remuneration Policy for Directors, Key Managerial Personnel and other employees is furnished in Annexure ‘D and is attached to this report.

Declaration by 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. And the declarations are put up on the website of the Company at www.scansteels. com - Investor Relations Segment.

Familliarisation Programme for Independent Directors.

All New Independent Directors (IDs) whenever inducted into the Board are given an orientation. Presentations are made by Executive Directors (EDs) and Senior Management giving an overview of our operations, to familiarize the new IDs with the 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 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Details of Same are put up on the website of the Company at www.scansteels.com - Investor Relations Segment.

Separate Independent Director Meeting

In term of requirements of Schedule IV of the Companies Act, 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 20th February, 2020 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 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 resilience of the Board and Management in navigating the Company during challenging times, cohesiveness amongst the Board Members, constructive relationship between the Board and the Management and the openness of the Management in sharing strategic information to enable the Board Members to discharge their responsibilities.

The Detailed Policy on Performance Evaluation of Independent Directors, Board, Committees and other individual Directors can be accessed from the website of the Company at www.scansteels. com - Investor Relations Segment.

MANAGERIAL REMUNERATION:

Based on the recommendations of the NRC, the Board has approved the Remuneration Policy for Directors, Key Managerial Personnel (‘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.

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 www.scansteels.com - Investor Relations Segment.

COMPLIANCE WITH CODE OF ETHICS FOR BOARD OF DIRECTORS AND SENIOR EXECUTIVES

All Directors and Senior Management Personnel have affirmed Compliance with the Code of Ethics for Board of Directors and Senior Executives. A Declaration to that effect is attached with The Corporate Governance Report.

SECRETARIAL STANDARDS

The Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors and ‘General Meetings, respectively, have been duly followed by the Company.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirements under section 134(3) (c) and 134(5) of the Companies Act, 2013, your directors hereby state and confirm that —

a) In the preparation of the annual accounts for the year ended March 31, 2020, 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, 2020 and of the profit and loss of the company for the year ended on that date;

c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) The directors had prepared the annual accounts on a going concern basis; and

e) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

f) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

AUDITORS AND AUDITORS REPORT STATUTORY AUDITORS

The Auditors, M/s. SRB & Associates, Chartered Accountants, (Firms Registration No. 310009E), Bhubaneswar, 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. The Company has received necessary consent and certificates under Section 139 from the above Auditors to the effect that they satisfied the criteria provided in section 141 of the Companies Act, 2013 read with Cos. (Audit &Auditors) Rules, 2014 including any statutory modification or re-enactment 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.

AUDITORS REPORT

Explanation to Auditors emphasis of matter:

Auditors have in their report drawn attention to Note No- 38 to the financial statements which describes on steps taken by the company for transition to the Ind AS compliances.

In the opinion of the Board, the company has implemented / adopted the following policies and procedures for accounting: Componentization: As per prevailing practice, company componentized fixed assets as detailed in the Invoice. It does not have a separate componentization policy. Accordingly, components identified (as mentioned above) are also depreciated based on the useful lives prescribed under Schedule-II ( of the Companies Act. ) for the main asset. Steps: The Company is in the process of identification of the major components significant to the total cost of the asset accordingly necessary requirements to be complied.

Stores and Spares: The Company on purchases of stores and spares, if it relates to an item of PPE, the same are capitalized on the date of issue, and which are issued for revenue expenditure purpose, are charged to Profit & Loss Account on the date of consumption.

Auditors have in their report drawn attention to Note No- 39 to the financial statements which describes the impact of expected credit loss on trade receivables.

The company after considering the general nature of the industry and average collection period of trade receivables being 30-60 days, the receivables are considered as having low credit risk. Accordingly, the impact of the expected credit loss arises to an insignificant amount. Except of the emphasis of matters mentioned above all other observations made by the Statutory Auditors in their report for the financial year ended 31st March 2020 read with the explanatory notes therein are self-explanatory and therefore, do not call for any further explanation or comments from the Board under Section 134(3) of the Companies Act, 2013.

COST AUDITORS

Pursuant to Section 148 (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 June 30, 2020 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 2020-21 on a remuneration of 55,000/- plus service tax as applicable and reimbursement of actual travel and out of pocket expenses. The remuneration is subject to the ratification of the members in terms of Section 148 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014 and is accordingly placed for your ratification. The Cost Audit Report for the financial year ended 31st March, 2019 was filed in XBRL mode on 26/12/2019.

SECRETARIAL AUDITORS AND AUDIT REPORT

M/s. K.K. Giri and Associates, who was appointed by the Board at their Meeting held on 30.05.2019 as a Secretarial Auditors of the Company for the financial year 2019-2020, desired not to continue their services as Secretarial Auditors of the Company due to some Pre-occupational Assignment, thereby, In supersession of the resolution passed by the Board as per recommendation of the audit committee the name of M/s. Amarendra Mohapatra & Associates, Prop. CS. Amarendra Mohapatra, Practicing Company Secretaries, of House No. 56/1, MIG II, Phase I, Chandrasekharpur Housing Board Colony CS. Pur, Bhubaneswar, Odisha - 751016, was suggested for appointment as Secretarial Auditor of the Company for financial year 2019-20 in place of M/s. K.K. Giri and Associates which was approved by the Board in their meeting held on 14.08.2019, 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. The Report of the Secretarial Audit carried out by M/s. Amarendra Mohapatra & Associates is annexed herewith as Annexure"E". During the period under review, the Company has complied with the applicable Secretarial Standards notified by the Institute of Company Secretaries of India.

Further Pursuant to SEBI Circular No. CIR/CFD/ CMD1/27/2019 dated February 8, 2019. The company has also 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, 2020 which was duly filed with Bombay Stock Exchange Limited. The Annual Secretarial Compliance Report and Secretarial Audit report contains the following 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.

SEBI - by ADJUDICATION ORDER NO. - Order / KS/AA/2019-20/6513 dated 23.01.2020 has levied a penalty of Rs. 18.80 lakh on scan steels limited under the provisions of section 15HA of the SEBI Act for indulging in fraudulent trading in the stock options segment of the BSE, between April 2014 and September 2015 that created large scale reversal of trades in stock options segment of the BSE and led to creation of artificial trading volumes in the stock options contracts that violated the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms. As per the Auditors discussion held with the company Management it was observed that The Company is aggrieved with the said order, and has filed appeal under Securities Appellate Tribunal against the aforementioned order.

The Board at its meeting held on June 30, 2020, 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, for conducting Secretarial Audit of the Company for F.Y. 2020-21.

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.

Composition and Terms of reference of the Committee is explained in Detail in the Corporate Governance Part of this Annual Report.

There was no recommendation as such in the Financial Year 2019-2020 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.

Further, Audit Committee revised the Vigil Mechanism / Whistle Blower Policy in terms of Regulation 9A of the SEBI (Prohibition of Insider Trading), Regulations, 2015, which can be accessed from our website at www.scansteels. com - Investor Relations Segment.

In case of repeated frivolous complaints being filed by the director or an employee the audit committee may take suitable action including reprimand if necessary.

CONSTITUTION OF STAKEHOLDERS RELATIONSHIP COMMITTEE

The Board has constituted a Stakeholders Relationship Committee According to 178 (5) of the Companies Act 2013 and Regulation 20 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The SR Committee is primarily responsible to review all matters connected with the 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 after reviewing their performance and also to decide the Criteria for determining appointment Qualifications, Positive attributes, and Independence of a Director.

The Details Regarding the Composition of the Committee, Meetings held and Terms Of reference etc.. is Detailed in Corporate Governance Report Part of this Annual Report. And the Detailed Nomination and Remuneration Policy is attached as Annexure ‘D to this Report.

CONSTITUTION OF CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

Scan Steelss commitment towards excellence in Health, Safety and Environment is one of the companys core values by complying with the Laws and Regulations first, and then going beyond the mandate to keep our planet safe for future generations. Minimizing the environment impact of our operations assumes utmost priority. The company is unwavering in its policy of ‘safety of persons overrides all production targets which drives all employees to continuously break new grounds in safety management for the benefit of the people, property, environment and the communities in which Scan Steels operate. Our dedicated measures by conducting the Risk Assessment, Identification of significant environment aspects of all manufacturing plants and signatory commitment of Responsible Care, Greatest emphasis is given to safety measures for minimizing accidents and incidents.

In View of the above The Board has Constituted Corporate Social Responsibility Committee to Comply the Section 135 of the Companies Act, 2013. Composition and Terms of Reference of which is Detailed in Corporate Governance Report Part of this Annual Report.

DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,PROHIBITIONANDREDRESSAL) 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 27th 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, Nine 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.

EXTRACT OF THE ANNUAL RETURN

The extracts of Annual Return pursuant to the provisions of Section 92(3) read with Rule 12 of the Companies (Management and administration) Rules, 2014 and Section 134(3)(a) of Companies Act, 2013 is furnished in Form No. MGT–9 as Annexure ‘F and is attached to this Report. The same can be downloaded from the https://scansteels.com/wp-content/uploads/2020/08/2019-20-1.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. However the company has given the corporate guarantee and made investment in quoted securities as a long term investments and the details of the guarantees and investments covered under the provisions of section 186 of the companies act, 2013 are given in the financial statements.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The details of conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure ‘G and is attached to this report.

PARTICULARSOFEMPLOYEES(RULE5(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, 2020 stood at 1591.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1), 5(2) and 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are provided in the Annexure ‘H in this Report.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN 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.

Although, due to adverse impact of COVID 19, The revenue of the Company has been impacted and the most of the manufacturing facilities of the Company were disrupted during the First half of this year whereas the company continued to incurring its revenue and fixed expenses as well.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

3. SEBI - by ADJUDICATION ORDER NO. - Order / KS/AA/2019-20/6513 dated 23.01.2020 has levied a penalty of Rs. 18.80 lakh on scan steels limited under the provisions of section 15HA of the SEBI Act for indulging in fraudulent trading in the stock options segment of the BSE, between April 2014 and September 2015 that created large scale reversal of trades in stock options segment of the BSE and led to creation of artificial trading volumes in the stock options contracts that violated the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms. - The Company is aggrieved with this order, and has filed appeal under Securities Appellate Tribunal against the aforementioned order.

No other significant or material orders were passed by the Courts or Tribunals which impact the going concern status and Companys operations in future.

4. There is No Revision of Financial Statement or Board Report Adopted by the Company, thereby there is no Disclosures to be made by the Company u/s 131 of the Companies Act, 2013 for Voluntary Revision of Financial Statement.

5. Your Company has No Holding or Subsidiary Company and thereby, Whole time Director of the Company do not receive any commission or remuneration from the same. Accordingly there 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.

Place: Bhubaneswar FOR AND ON BEHALF OF THE BOARD
Date: 27th August, 2020 Ankur Madaan, Whole- Time Director
(DIN: 07002199)
Praveen Patro, Director
(DIN: 02469361)